The Financial Reporting Review Panel has had under review the report and accounts of Cambrian Mining Plc for the year ended 30 June 2006.

In the Panel’s view the accounts in question did not comply with the Companies Act 1985 (‘the Act’) as they contained a number of errors and failed to comply with International Financial Reporting Standards in significant respects.

The directors have today acknowledged that the original accounts failed to comply with the Act in significant respects and have accordingly issued revised accounts for the year ended 30 June 2006.

The principal adjustments made in the revised accounts are:

• Revision of the accounting in respect of the 2005 acquisitions of Deepgreen Minerals Corporation Ltd and AGD Mining Ltd to reflect the existing interests already held by the company and revisions to the fair values of net assets acquired.
• Revisions to the accounting for interests in associates, including the impact of dilutions, foreign currency translation and alignment of the results of associates with group accounting policies.
• Revisions to the accounting for associate interests to reflect the fair value of options held in associates upon exercise of those options in exchange for shares.
• Revised accounting for investments in convertible notes and debentures including separate reflection of the conversion option.
• Revisions to the accounting for convertible notes issued.
• Reclassification of profit on the sale of associates, subsidiaries and other investments in the income statement from revenue and operating profit to gains on disposal of interests in associates, gain on disposal of subsidiaries and other gains and losses.
• Recognition by the group of foreign exchange gains of the company arising from intra-group loans as part of movements in equity instead of gains in the income statement.
• Amendment of the statement of changes in equity to reflect the payment of dividends in the year and other movements previously omitted, in addition to the effect of the above.

In addition, the company has made substantial, consequential amendments and additions to the supporting notes reflecting the changes in accounting treatment and improving the clarity of its disclosures.

The Panel welcomes the corrective action taken by the directors and regards its enquiries into the company’s accounts for the year under review, initiated on 14 March 2007, as concluded.

1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy and Actuarial Discipline Board) and by the Committee on Corporate Governance.
2. The role of the Panel is to examine the annual accounts of public and large private companies to see whether they comply with the requirements of the Companies Act 1985 (‘the Act’), including applicable accounting standards. Following implementation of the Accounting Regulation (EC) No. 1606/2002, this may mean compliance with UK or International Financial Reporting Standards.
3. Where breaches of the Act are discovered the Panel seeks to take corrective action that is proportionate to the nature and effect of the defects, taking account of market and user needs. Where a company’s accounts are defective in a material respect the Panel will, wherever possible, try to secure their revision by voluntary means, but if this approach fails the Panel is empowered to make an application to the court under section 245B of the Companies Act 1985 for an order for revision. To date no court applications have been made.
4. Revised accounts and, where appropriate, a revised directors’ report, are required to be sent to all shareholders eligible to have received the original accounts. They must also be laid before the company in general meeting and delivered to the Registrar (the Companies Act 1985 Section 245 and Statutory Instrument 1990/2570 (‘the SI’)). Where copies of the defective accounts have been laid before the company in general meeting or delivered to the Registrar, the revisions must be restricted to those matters in which the previous accounts were not in compliance with the Act. The SI also requires an auditors’ report on the revised accounts which includes a statement whether, in their opinion, the original annual accounts failed to comply with the requirements of the Act (including applicable accounting standards) in the respects identified.
5. The Chairman of the Panel is Bill Knight and the Deputy Chairmen are Ian Brindle and Ian Wright. There are currently 27 other Panel members drawn from a broad spectrum of commerce and the professions. Individual cases are normally dealt with by specially constituted Groups of 5 or more members.
6. All Press enquiries should be directed to: Carol Page tel: 020 7492 2460 or at c.page@frc-frrp.org.uk