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FSE - Firestone Energy - Reviewed Half Yearly Report For 6 Months Ended 31

Release Date: 16/03/2009 16:30
Code(s): FSE
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FSE - Firestone Energy - Reviewed Half Yearly Report For 6 Months Ended 31 December 2008 FIRESTONE ENERGY LIMITED (formerly: Centralian Minerals Limited) (Incorporated in Australia) (Registration number ABN 058 436 794) Share code on the JSE Limited: FSE Share code on the ASX: FSE ISIN: AU000000FSE6 (SA company registration number 2008/023973/10) ("FSE" or "the Company") Reviewed half yearly report for 6 months ended 31 December 2008 INCOME STATEMENT Reviewed for the half-year ended 31 December 2008 Reviewed Consolidated Company 31 Dec 08 31 Dec 07
Note $ $ Continuing operations Interest revenue 2 51,808 49,107 Rental revenue - 77,362 Occupancy costs (74,986) (20,590) Legal fees (76,411) (102,594) Administration costs (118,563) (159,637) Directors fees (64,914) (61,537) Project Generation costs - (280,807) Equity-based payments - (1,110,000) Loss from continuing operations before income tax (283,066) (1,608,696) Income tax expense - - Net Loss attributable to members of Company (283,066) (1,608,696) Loss per share on loss from continuing operations attributable to the ordinary equity holders of the company Basic loss per share (cents per share) (0.003) (0.026) Diluted loss per share (cents per share) N/a N/a The above income statement should be read in conjunction with the accompanying notes. BALANCE SHEET As at 31 December 2008 Reviewed Consolidated Company
Note 31 Dec 08 30 Jun 08 $ $ Current Assets Cash and cash equivalents 5 555,733 2,169,804 Trade and other receivables 649 107,145 Prepayments 8,532 - Other assets (GST) 33,679 - Total Current Assets 598,593 2,276,949 Non-Current Assets Property, plant and equipment 35,667 34,758 Interest in joint venture 12 16,354,271 176,000 Intangible - 75,307 Bonds 34,758 - Total Non-Current Assets 16,424,696 286,065 Total Assets 17,023,289 2,563,014 Current Liabilities Trade and other payables 575,867 451,526 Provisions 105,375 - Other - Bonds 35,791 - Total Current Liabilities 717,033 451,526 Total Liabilities 717,033 451,526 Net Assets 16,306,256 2,111,488 Equity Issued capital 8 12,519,322 57,819,281 Reserves 4 4,070,000 2,590,000 Accumulated losses (283,066) (58,297,793) Total Equity 16,306,256 2,111,488 The above balance sheet should be read in conjunction with the accompanying notes. STATEMENT OF CHANGES IN EQUITY Reviewed for the half-year ended 31 December 2007 Accumulated
Company Issued Capital losses Reserves Total $ $ $ $ Balance at beginning of the half-year (1 July 2007) 55,756,782 (56,110,795) 1,480,000 1,125,987 Net loss for the period - (1,608,696) (1,608,696) Total Income and expense recognised in period (1,608,696) (1,608,696) Transactions with equity holders in their capacity as equity holders Equity-based payments - - 1,110,000 1,110,000 Issue of shares (Option Conversions) 1,062,500 - - 1,062,500 Balance at end of the half- year 56,819,282 (57,719,491) 2,590,000 1,689,791 Reviewed for the half-year ended 31 December 2008 Accumulated Consolidated Issued Capital losses Reserves Total $ $ $ $
Balance at beginning of the half-year (1 July 2008) 57,819,282 (58,297,793) 2,590,000 2,111,488 Net loss for the period - (283,066) - (283,066) Total Income and expense - (283,066) - (283,066) recognised in period Transactions with equity holders in their capacity as equity holders Issue of shares 11,335,333 - - 11,335,333 Equity Based Payments - - 1,480,000 1,480,000 Issue of shares (Option Conversions) 1,662,500 - - 1,662,500 Reduction of Capital / accumulated losses (58,297,793) 58,297,793 - - Balance at end of the half-year 12,519,322 (283,066) 4,070,000 16,306,256 The above statement of changes in equity should be read in conjunction with the accompanying notes. CONDENSED CASH FLOW STATEMENT Reviewed for the half-year ended 31 December 2008 Reviewed Consolidated Company Note 31 Dec 08 31 Dec 07
$ $ Cash flows from operating activities Cash payments in the course of operations (258,605) (298,278) Payments for project generation and due diligence - (280,807) Interest received 51,808 15,616 Net cash flows used in operating activities (206,797) (563,469) Cash flows from investing activities Expenditure to acquire JV interest (3,212,938) (77,362) Loans repaid by other entities 106,496 - Payments to acquire fixed assets (21,436) (12,087) Sale of office property plant and equipment 58,104 - Net cash flows used in investing activities (3,069,774) (89,449) Cash flows from financing activities Proceeds from issue of shares 1,662,500 1,062,500 Capital raising costs - - Net cash flows from financing activities 1,662,500 1,062,500 Net increase / (decrease) in cash and cash equivalents (1,614,071) 409,582 Cash and cash equivalents at beginning of the half-year 2,169,804 1,127,076 Cash and cash equivalents at end of the half-year 5 555,733 1,536,658 The above cash flow statement should be read in conjunction with the accompanying notes. FIRESTONE ENERGY LIMITED Reviewed half yearly report for 6 months ended 31 December 2008 1 Basis of preparation of half-year report This general purpose financial report for the interim financial half-year reporting period ended 31 December 2008 had been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2008 and any public announcements made by Firestone Energy Ltd during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the following Basis of consolidation The consolidated financial statements comprise the financial statements of Firestone Energy Ltd (the Company) and its subsidiaries (the Group) as at 30 June each year. Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether a group controls another entity. The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Investments in subsidiaries are accounted for at cost in the individual financial statements of Firestone Energy Ltd. Investment in joint venture The Group`s investment in a joint venture entity is accounted for using the equity method of accounting in the consolidated financial statements. Under the equity method, the investment in the joint venture is carried in the consolidated balance sheet at cost plus post-acquisition changes in the Group`s share of net assets of the joint venture. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group`s net investment in the joint venture. The Group`s share of the joint venture post-acquisition profits or losses are recognised in the income statement. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. W hen the Group`s share of losses in the joint venture equals or exceeds its interest in the joint venture, including any unsecured long-term receivables and loans, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint venture. The reporting dates of the joint venture and the Group are identical and the joint venture`s accounting policies conform to those used by the Group for like transactions and events in similar circumstances. Going Concern The financial statements have been prepared on the going concern basis of accounting which assumes that the Group will be able to meet its commitments, realise its assets and discharge its liabilities in the ordinary course of business. The directors believe that at the date of signing this report there are reasonable grounds to believe that having regard to matters set out above, the Group will be able to raise sufficient funds to meet its obligations as and when they fall due. In the event that the Group does not achieve the matters set out above there is significant uncertainty whether the Group will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at amounts stated in the interim financial report. The interim financial report does not include any adjustment relating to the recoverability or classification of recorded asset amounts or classifications of liabilities that might be necessary should the Group to be able to continue as a going concern. 31 Dec 08 31 Dec 07 $ $ 2. Revenue Interest received 51,808 49,107 3. Expenses Legal fees 76,411 2,310 Audit fees 14,519 10,034 Share registry costs 32,056 41,713 Directors fees 64,914 61,538 Equity-based payments - 1,110,000 4 Reserves Option Reserve 31 Dec 08 31 Dec 07 $ $ Option Reserve 2,590,000 1,480,000 Options issued to Directors 30 November 2007 - 1,110,000 Options issued in consideration for purchase of Projects 1,480,000 - Total 4,070,000 2,590,000 5. Cash & Cash Equivalents Cash at bank 555,733 2,169,804 6. Dividends No dividend has been paid during or is recommended for the financial period ended 31 December 2008. 7. Commitments There were no outstanding commitments, which are not disclosed in the financial statements as at 31 December 2008 other than: $ Office Lease No later than 1 year 116,616 Later than 1 year but not later than 5 years 58,331 174,947 31 December 2008 Shares $ 8. Contributed Equity Reconciliation of movement in issued capital attributable to equity holders of the Company. (a) Movements in Ordinary Shares At 1 July 2008 709,208,879 57,819,282 17 Jul 08 Options converted 24,000,000 240,000 14 Aug 08 Options converted 67,500,000 675,000 29 Oct 08 Issued Shares 400,000,000 11,200,000 19 Nov 08 Options converted 49,750,000 497,500 24 Nov 08 Issued Shares 4,833,325 135,333 24 Dec 08 Issued Shares 22,727,273 250,000 Reduction of Capital - (58,297,793) Ordinary shares at end of 1,278,019,477 12,519,322 period (b) Movements in Options At 1 July 2008 173,750,000 - Converted as above (171,250,000) - Options at end of period 2,500,000 - 9. Related Party Transactions During the period Mr Boyd`s directors fees of $27,236 as well as fees for the provision of Company Secretarial and associated administrative services by him of $64,004 were paid to The Elovadae Trust and Agri Project Services Pty Ltd (AP Partners), a Company in which Mr Henthorn is a shareholder and a Director, was paid $27,250 being his Directors fees. The Company sold property plant and equipment to Gleneagle Gold Limited, a Company which both Mr Boyd and Mr Smartt are Directors. The total consideration was $58,104 and this was equal to the written down values as at 30 June 2008. Other related party transactions continue without significant variation. For details of these, please refer to the 30 June 2008 financial statements. 10. Events occurring after balance sheet date There were no events occurring after balance date that need to be disclosed. 11. Contingent Liabilities The Company does not have any contingent liabilities other than those previously disclosed. 12. Interest in Joint Venture As at 31 December 2008, the Company had entered into a Joint Venture Agreement with Sekoko Coal (Pty) Ltd for a coal project in the W aterberg locality in South Africa. At the half year, the participation interest is that Checkered Flag (a wholly owned subsidiary) has a total holding of 30% in the projects relating to this joint venture. 13 Business Combination On 18th September 2008, FSE acquired all the issued shares in Checkered Flag Investments 2 (Pty) Ltd, a South African exploration company, for a consideration of 180,000,000 fully paid ordinary shares, 90,000,000 options with an expiry of 30 June 2013, and a payment of up to USD 150,000. Details of net assets acquired are as follows: $
Purchase consideration Issue 180,000,000 fully paid ordinary shares at market value 5,040,000 Issue 90,000,000 options 666,000 Cash - not paid yet 150,000 Total purchase consideration 5,856,000 Fair value of net identifiable assets acquired (refer below) 5,856,000 Goodwill 0 The options were valued using a Black-Scholes option pricing model applying the following inputs: 2008 Weighted average exercise price 0.06 Weighted average life of the option 4.589 years Underlying share price 0.025 Expected share price volatility 60.0% Risk free interest rate 5.79% Fair value per option $0.0074 The assets and liabilities arising from the acquisition are as follows: Acquiree`s carrying Fair value amount
$ $ Cash and cash equivalents 1 1 Option to acquire interest in JV - 5,855,999 Net identifiable assets acquired 1 5,856,000 This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2007, and any public announcements made by Firestone Energy Ltd during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. FIRESTONE ENERGY LIMITED Reviewed half yearly report for 6 months ended 31 December 2008 DIRECTORS` REPORT The Directors present their report together with the consolidated financial report for the half-year ended 31 December 2008 and the review report thereon. Directors The names and details of the Directors of Firestone Energy Limited at the date of this report are: MR LEE BOYD BBus, Dip Mgmt, Adv Cert Bus, CPA, FAICD, ACSA Non-Executive Director Experience: Lee Boyd has considerable Directorial, Company Secretarial and Corporate Financial experience with a number of listed and unlisted public and private companies in the resources and industrial sectors. He is currently a director and
company secretary of ASX listed GSF Corporation Limited and Gleneagle Gold Limited and a director of Australian W ine Holdings Limited. He has been a past director and company secretary of ASX listed Hydrotech International Limited, a
director of Cell Aquaculture Limited and company secretary of St Barbara Mines Limited and NuStar Mining Corporation Limited. Lee is company secretary of Firestone Energy. Lee is a CPA member of CPA Australia, a Fellow of
Australian Institute of Company Directors and an Affiliate of Chartered Secretaries Australia. MR DARYL HENTHORN BSc, MAIPM,MAICD Non-Executive Director Experience: Daryl Henthorn holds a Bachelor of Applied Science and has completed business studies at MBA Level. He is a Director of a number private companies, sits on the compliance committee for a Responsible Entity and is a Member of the
Australian Institute of Company Directors and the Australian Institute of Project Management. Daryl was previously Chief Operating Officer of a funds management division of public listed company. He has a
strong commercial background in corporate finance, project management and operations. MR MALCOLM SM ARTT BBus, Dip Corp Management, FCPA, FCIS, FCIM Non-Executive Director Experience: Mal Smartt is a Corporate Consultant to listed and unlisted public companies. He is a qualified accountant and company secretary having had considerable experience in Directorial, Financial and Company Secretarial roles
with a number of listed companies in the resource sector in Australia, South East Asia and Africa. Mal is a Fellow of CPA Australia and a Fellow of Chartered Secretaries Australia. He is currently a director of
Gleneagle Gold Limited (GLN) and unlisted Discovery Capital Limited and African Strategic Minerals Limited and Company Secretary for Crossland Uranium Mines Limited. MR TIMOTHY TEBEILA Appointed 29 October 2008 Non-Executive Director Experience Tim Tebeila is the founder and currently the Executive Chairman of Sekoko Resources. He is a mining entrepreneur with more than eight years of successful
active involvement in exploring and developing mining projects. He is a former President of Limpopo`s National Federated Chamber of Commerce (NAFCOC). MS AMANDA MATTHEE Appointed 28 October 2008 Non-Executive Director Experience Amanda Matthee is a Chartered Accountant (CA) and holds an Advance Executive Program Diploma from Unisa. She has over 20 years of corporate and business
management experience; and serves as Financial Director of Sekoko Resources. With more than 20 years of financial management experience in the defence technology and mining sectors,
Amanda has worked with many of the industry`s leading companies. Before joining Sekoko in January 2007, Amanda served as Executive and chief financial officer of Khusela Women Investments and prior to that she served
on the Executive Committee of Harmony Gold Limited. Results of Operations The net loss of the consolidated entity for the six months to 31 December 2008, amounted to $283,066 (Half year ended 31 December 2007: Net Loss $1,608,696). Review of Operations As reported to the ASX, the Company was granted shareholder approval at a GM on 19 September 2008 to issue shares, enter into a joint venture with coal operations in South Africa and appoint two South African Directors. Specific details are provided in the Notice of General Meeting released to the ASX on 19 August 2008. The acquired business contributed revenues of $ nil and net profit of $ nil to the group for the period from 19 September to 31 December 2008. Consolidated revenue and consolidated loss for the half year ended 31 December 2008 would have been $ nil and $283,066 respectively. Activities Post 31st December 2008 There were no activities post 31 December 2008 that need to be disclosed. Auditor`s Independence Declaration A copy of the auditor`s independence declaration as required under Section 307C of the Corporations Act is set out on page 12 and forms part of this report. This report is made in accordance with a resolution of directors. Dated at Perth this 12th day of March 2009 Signed in accordance with a resolution of the Directors. ................................................... Malcolm Smartt Director INDEPENDENT AUDITOR`S REVIEW REPORT TO THE MEMBERS OF FIRESTONE ENERGY LIMITED Report on the Half-Year Financial Report We have reviewed the accompanying half-year financial report of Firestone Energy Limited, which comprises the balance sheet as at 31 December 2008, and the income statement, statement of changes in equity and cash flow statement for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors` declaration of the consolidated entity comprising the disclosing entity and the entities it controlled at the half-year end or from time to time during the half-year. Directors` Responsibility for the Half-Year Financial Report The directors of the consolidated entity are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards including the Australian Accounting Interpretations and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor`s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. W e conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of Interim and Other Financial Reports Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity`s financial position as at 31 December 2008 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Firestone Energy Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. BDO Kendalls is a national association of separate partnerships and entities A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Firestone Energy Limited is not in accordance with the Corporations Act 2001 including: (a) giving a true and fair view of the consolidated entity`s financial position as at 31 December 2008 and of its performance for the half-year ended on that date; and (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001. Material Uncertainty Regarding Continuation as a Going Concern Without qualifying our opinion, we draw attention to the fact that, as disclosed in Note 1, the company will have to seek additional funding in order to continue to exploit its exploration assets held in the joint venture. If the company is unable to obtain additional funding it may cast significant doubt about the company`s ability to continue as a going concern and will be able to realise its assets and extinguish its liabilities in the normal course of business and at amounts stated in the report. BDO Kendalls Audit & Assurance (W A) Pty Ltd BG McVeigh Director Perth, Western Australia Dated this 12th day of March 2009 Sponsor River Group 16 March 2009 Date: 16/03/2009 16:30:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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