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FSE
FSE
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 Produced by the JSE SENS Department.
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