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## N OTES TO T H E  FINAN C IA L ST A TE M E N TS 

F OR T H E  Y E A R E ND E D 31 D ECE MB ER  2010 

## 11 . T rade and other receivables 

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## 12 . T rade and other payables 

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## 13 . Financial instruments 

## Interest rate risk 

At 31  December 2 0 1 0 the Group had US Dollar cash deposits of $4 1 5,4 21 , Pound Sterling cash deposits of a US Dollar equivalent of $788,8 13 , Euro cash deposits of a US Dollar equivalent of $459, and Uganda Shillings cash deposits of a US Dollar equivalent of $8,7 3 5. The Company’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates on classes of financial assets and financial liabilities, was as follows: 

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The effective weighted average interest rate received during the year was approximately 1 .5%. 

## Financial liabilities 

At 31  December 2 0 1 0, the Group had no debt. 

## Net fair value 

The net fair value of financial assets and financial liabilities approximates to their carrying amount as disclosed in the balance sheet and in the related notes. 

## C urrency R isk 

The functional currency for the Group's operating activities, including drilling activities, is the US Dollar. The Group's objective in managing currency exposures arising from its net investment overseas is to maintain a low level of borrowings. The Group has not hedged against currency depreciation but continues to keep the matter under review. 

## Financial risk management 

The Directors recognise that this is an area in which they may need to develop specific policies should the Group become exposed to further financial risks as the business develops. 

