Wentworth Resources Limited Interim Condensed Wentworth Resources Limited Interim Condensed Consolidated Financial ... The interim condensed consolidated financial statements ... Act of the United Republic ...

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<ul><li><p>Wentworth Resources Limited Interim Condensed Consolidated Financial </p><p>Statements June 30, 2011 </p></li><li><p>WENTWORTHRESOURCESLIMITEDUnauditedInterimCondensedConsolidatedStatementofFinancialPositionAsat</p><p>1 </p><p>US $000s, unless otherwise stated June 30, 2011December </p><p>31, 2010 January 1, </p><p>2010 Note $ $ $ (note 18) (note 18)ASSETS Current assets Cash and cash equivalents 5 13,932 4,587 2,144Cash held in trust 5 - - 3,340Trade and other receivables 4,853 6,043 4,113Prepaid expenses and deposits 852 875 814Inventories 572 366 697 20,209 11,871 11,108Non-current assets Long-term receivable 6 18,711 17,399 19,556Evaluation and exploration assets 7 17,389 17,418 18,524Property and equipment 8 37,301 37,135 36,138 73,401 71,952 74,218Total assets 93,610 83,823 85,326 LIABILITIES Current liabilities Trade and other payables 5,734 8,353 6,289Current portion of long-term debt 9 586 - -Convertible bonds - - 3,240 6,320 8,353 9,529Non-current liabilities Long-term loan 9 6,134 7,427 1,273Derivative financial liability 4,551 5,008 -Provisions 3,347 3,679 93 14,032 16,114 1,366EQUITY Share capital 10b 360,250 344,246 335,421Contributed surplus 10d 16,533 15,958 9,037Warrants - - 7,522Deficit (310,293) (307,232) (284,803)Equity Attributable to Shareholders 66,490 52,972 67,177Non-controlling interest 6,768 6,384 7,254Total Equity 73,258 59,356 74,431Total Liabilities and Equity 93,610 83,823 85,326 The accompanying notes are an integral part of these interim condensed consolidated financial statements. The interim condensed consolidated financial statements were approved by the Board on August 17, 2011 and were signed on its behalf by: (Signed) Cameron Barton (Signed) Neil Kelly Director Director </p></li><li><p>WENTWORTHRESOURCESLIMITEDUnauditedInterimCondensedConsolidatedStatementofComprehensiveIncome(Loss)FortheperiodendedJune30</p><p>2 </p><p> 3 months ended June 30, 6 months ended June 30, US $000s, unless otherwise stated </p><p>2011 2010 2011 2010</p><p> Note $ $ $ $ Total revenue 12 1,934 1,301 3,805 2,382 Operating expenses </p><p>Production and operating (1,300) (1,392) (2,409) (2,177)Depreciation and depletion (505) (1,010) (1,111) (2,079)Gain (loss) on disposal of </p><p>property and equipment </p><p>7,8 (1) 2 (1) (41)General and administrative (1,951) (2,757) (4,617) (10,885)Other income 423 169 969 807Total operating expenses (3,334) (4,988) (7,169) (14,375) Total other income (expenses) Financing costs (145) (21) (302) (21)Gain on derivative financial liability </p><p> 2,347 - 457 -</p><p>Redemption of bonds - - - 162 Net foreign exchange gain 274 28 532 11Total other income 2,476 7 687 152 Income (loss) and comprehensive income (loss) </p><p> 1,076 (3,680) (2,677) (11,841)</p><p> Income (loss) and comprehensive income (loss) attributable to: </p><p> Owners of the Company 760 (3,531) (3,061) (11,642)Non-controlling interest 316 (149) 384 (199)Income (loss) and comprehensive income (loss) </p><p> 1,076 (3,680) (2,677) (11,841)</p><p> Earnings (loss) per share 16 Basic 0.01 (0.11) (0.04) (0.35)Diluted 0.01 (0.11) (0.04) (0.35) The accompanying notes are an integral part of these interim condensed consolidated financial statements. </p></li><li><p>WENTWORTHRESOURCESLIMITEDUnauditedInterimCondensedConsolidatedStatementofChangesinEquity</p><p>3 </p><p>US $000s, unless otherwise stated </p><p>Note Share </p><p>Capital Contributed </p><p>surplus Warrants Deficit </p><p>Total </p><p>Non-controlling </p><p>interest Total Equity $ $ $ $ $ $ $ As at January 1, 2010 335,421 9,037 7,522 (284,803) 67,177 7,254 74,431 Loss and comprehensive loss - - - (11,642) (11,642) (199) (11,841)Share-based compensation - (776) - - (776) - (776)Share issuance 764 - - - 764 - 764 As at June 30, 2010 336,185 8,261 7,522 (296,445) 55,523 7,055 62,578 As at December 31, 2010 344,246 15,958 - (307,232) 52,972 6,384 59,356 Loss and comprehensive loss - - - (3,061) (3,061) 384 (2,677)Share-based compensation expense 11 - 575 - - 575 - 575 Share issuance 17,081 - - - 17,081 - 17,081 Share issue costs (1,077) - - - (1,077) - (1,077)As at June 30, 2011 360,250 16,533 - (310,293) 66,490 6,768 73,258 </p></li><li><p>WENTWORTHRESOURCESLIMITEDUnauditedInterimCondensedConsolidatedStatementofCashflowsFortheperiodendedJune30</p><p>4 </p><p> 3 months ended June 30, 6 months ended June 30,US $000s, unless otherwise stated 2011 2010 2011 2010 Note $ $ $ $ Cash provided by (used for) the following activities Operating activities Loss for the period 1,076 (3,680) (2,677) (11,841)Add (deduct) non-cash items: </p><p>Depreciation and depletion 7,8 505 1,010 1,111 2,079Loss (gain) on sale of property and equipment 1 (2) 1 41Share-based compensation expense 11 351 (13) 575 (12)Accretion and provision (753) (503) (2,059) 2,903Interest accrued 297 - 297 -Gain on derivative financial liability (2,347) - (457) -Unrealized foreign exchange loss (gain) (1,387) 215 (524) 675</p><p> (2,257) (2,973) (3,733) (6,155)Changes in working capital: </p><p>Change in inventories (100) (168) (206) 333Change in trade and other receivables 408 638 1,630 344Change in prepaid expenses and deposits (179) 147 23 (163)Change in trade and other payables (514) 586 (3,200) (454)</p><p>Cash used in operations (2,642) (1,770) (5,486) (6,095) Investment activities Purchase of property and equipment and evaluation and exploration assets </p><p> 7,8 (293) (1,897) (1,259) (2,570)</p><p>Proceeds from sale of property and equipment - 25 17 35Cash used in investing activities (293) (1,872) (1,242) (2,535) Financing activities Issuance of common shares 10b 3,554 - 17,081 -Share issue costs 10b (231) - (1,077) -(Repayments) proceeds of long term loan 9 54 622 - 5,888Other long term liabilities 69 - 69 -Proceeds from convertible loan - 1,500 - 1,500Repayment of convertible bonds - - - (2,340)Proceeds from redemption of convertible bonds - - - 2,340Cash held in trust release for general use - 60 - 60Finance expense - - - 121Cash provided by financing activities 3,446 2,182 16,073 7,569 Increase (decrease) in cash and cash equivalents 511 (1,460) 9,345 (1,061)Cash and cash equivalents, beginning of the period 13,421 2,543 4,587 2,144Cash and cash equivalents, end of the period 13,932 1,083 13,932 1,083</p></li><li><p>WENTWORTHRESOURCESLIMITEDNotestotheUnauditedInterimCondensedConsolidatedFinancialStatementsFortheperiodendedJune30,2011,US $000s, unless otherwise stated</p><p>5 </p><p>1. Reporting Entity Wentworth Resources Limited (Wentworth or the Company) is an East African-focused oil and natural gas producer and explorer. Wentworth is actively involved in developing commercial opportunities for identified hydrocarbon resources, including Methanol, Ammonia, Urea, and electricity generation. The electricity generation and transmission and distribution activities are governed by the Electricity Act of the United Republic of Tanzania. </p><p>2. Basis of preparation Statement of compliance International Financial Reporting Standards (IFRS) require entities that adopt IFRS to make an explicit and unreserved statement in their first annual IFRS financial statements of compliance with IFRS. The Company will make this statement when it issues its financial statements for the year ending December 31, 2011. These financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting (IAS 34) as issued by the International Accounting Standards Board (IASB) and using the accounting policies the Company expects to adopt in its consolidated financial statements for the year ending December 31, 2011. The Company adopted IFRS in accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards (IFRS 1) with a transition date to IFRS of January 1, 2010. Consequently the comparative figures for 2010 and the Companys statement of financial position as at January 1, 2010 have been restated from accounting principles generally accepted in Canada (Canadian GAAP) to comply with IFRS. The preparation of these interim consolidated financial statements resulted in changes to the Companys accounting policies as presented in the consolidated financial statements for the year ended December 31, 2010 prepared under Canadian GAAP. The Companys accounting policies have been applied consistently to all years presented in these interim consolidated financial statements with the exception of certain IFRS 1 exemptions the Company applied in its transition from Canadian GAAP to IFRS as discussed in Note 18. These interim consolidated financial statements included all necessary disclosures required for interim financial statements but do not include all of the necessary disclosures required for annual financial statements. Therefore, these interim consolidated financial statements should be ready in conjunction with the annual audited consolidated financial statements and notes thereto for the year ended December 31, 2010 and the annual disclosures and accounting policies included in the interim consolidated financial statements as at and for the three months ended March 31, 2011. The standards that will be effective or available for voluntary early adoption in the consolidated financial statements for the year ending December 31, 2011 are subject to change and may be affected by additional interpretations. Accordingly the accounting policies will be finalized when the first annual IFRS consolidated financial statements are prepared for the year ending December 31, 2011. The accounting policies the Company expects to adopt in its consolidated financial statements as at and the year ending December 31, 2011 are disclosed in Note 3 of the Companys condensed interim consolidated financial statements as at and for the three months ended March 31, 2011. Basis of measurement These interim consolidated financial statements are presented in US dollars and were prepared on a going concern basis. Use of estimates and judgments The preparation of interim consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on managements best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Areas where estimates are significant to the interim consolidated financial statements are disclosed in Note 4. </p></li><li><p>WENTWORTHRESOURCESLIMITEDNotestotheUnauditedInterimCondensedConsolidatedFinancialStatementsFortheperiodendedJune30,2011,US $000s, unless otherwise stated</p><p>6 </p><p>2. Basis of preparation (continued) Functional and presentation currency These interim consolidated financial statements are presented in US dollars and the Companys functional currency is Canadian dollars. </p><p>3. Recent accounting pronouncements Certain new standards, interpretations, amendments and improvements to existing standards were issued by the IASB or International Financial Reporting Interpretations Committee (IFRIC) that are mandatory for accounting periods beginning after January 1, 2013 or later periods. The standards impacted that are applicable to the Company are as follows: </p><p>i) IAS 12 was amended in December 2010 to remove subjectivity in determining on which basis an entity measures the deferred tax relating to an asset. The amendment introduces a presumption that an entity will assess whether the carrying value of an asset will be recovered through the sale of the asset. The amendment to IAS 12 is effective for reporting periods beginning on or after January 1, 2012. The Company is currently evaluating the impact of this amendment to IAS 12 on its consolidated financial statements. </p><p>ii) IAS 27 replaced the existing IAS 27 Consolidated and Separate Financial Statements. IAS 27 contains accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements. IAS 27 requires an entity preparing separate financial statements to account for those investments at cost or in accordance with IFRS 9 Financial Instruments. IAS 27 is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. </p><p> iii) IAS 28 was amended in 2011 which prescribes the accounting for investments in associates and sets </p><p>out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. IAS 28 is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted. The Company is currently evaluating the impact of this amendment to IAS 28 on its consolidated financial statements. </p><p> iv) IFRS 7 was amended in October 2010 to provide additional disclosure on the transfer of financial </p><p>assets including the possible effects of any residual risks that the transferring entity retains. These amendments are effective as of July 1, 2011. The Company is currently evaluating the impact of these amendments to IFRS 7 on its consolidated financial statements. </p><p> v) IFRS 9 was issued in November 2009 and is the first step to replace current IAS 39, Financial </p><p>Instruments: Recognition and Measurement. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2013. The Company is currently evaluating the impact of IFRS 9 on its consolidated financial statements. </p><p> vi) IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements </p><p>when an entity controls one or more other entities. IFRS 10 supersedes IAS 27 Consolidated and Separate Financial Statements and SIC-12 ConsolidationSpecial Purpose Entities and is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. </p></li><li><p>WENTWORTHRESOURCESLIMITEDNotestotheUnauditedInterimCondensedConsolidatedFinancialStatementsFortheperiodendedJune30,2011,US $000s, unless otherwise stated</p><p>7 </p><p>3. Recent accounting pronouncements (continued) vii) IFRS 11 establishes principles for financial reporting by parties to a joint arrangement. IFRS 11 </p><p>supersedes current IAS 31 Interests in Joint Ventures and SIC-13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers and is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted. The Company is currently eval...</p></li></ul>

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