Armadale Capital Plc
Annual Report and Accounts
31 December 2020
Armadale Capital Plc
Contents
Officers and Professional Advisers ............................................................................................................. 3
Strategic Report ......................................................................................................................................... 4
Directors’ Report ...................................................................................................................................... 11
Independent Auditor’s Report ................................................................................................................. 17
Consolidated Statement of Comprehensive Income ............................................................................... 24
Consolidated Statement of Financial Position ......................................................................................... 25
Company Statement of Financial Position ............................................................................................... 26
Consolidated Statement of Changes in Equity ......................................................................................... 27
Company Statement of Changes in Equity .............................................................................................. 28
Consolidated Statement of Cash Flows ................................................................................................... 29
Company Statement of Cash Flows ......................................................................................................... 30
Notes to the financial statements ........................................................................................................... 31
Notice of Annual General Meeting .......................................................................................................... 57
Page | 2
Officers and Professional Advisers
Directors
Nicholas Johansen – Chairman
Matt Bull
Secretary
Timothy Jones
Registered office
I Arbrook Lane
Esher
Surrey, KT10 9EG
Nominated Adviser and Broker
finnCap Ltd
60 New Broad Street
London EC2M 1JJ
Auditors
James Cowper Kreston
Reading Bridge House
George Street
Reading
Berkshire
RG1 8LS
Solicitors
Druces LLP
Salisbury House
London Wall
London EC2M 5PS
Registrars
Share Registrars Limited
Craven House
West Street
Farnham
Surrey GU9 7E
Armadale Capital Plc
Page | 3
Armadale Capital Plc
Strategic Report
For the year ended 31 December 2020
Armadale Capital plc (LON: ACP), the AIM quoted investment group focused on natural resource projects
in Africa and actively developing the long-life low-cost Mahenge Liandu Graphite Project in Tanzania is
pleased to announce its Final Results for the Year Ended 31 December 2020.
Operational and Corporate Highlights for Period Ended 31 December 2020
Significant progress made in delivering key accretive milestones in advancing the Mahenge Liandu
Graphite Project in Tanzania
1. Completed Definitive Feasibility Study for Mahenge Liandu graphite project (March 2020)
2. Updated Mine Plan to materially increase production increasing average annual output from
80ktpa to 109ktpa of concentrate over life of mine
3. Delivered update to Definitive Feasibility Study (June 2020) folding in results from revised Mine
Schedule using higher-grade cut off of 9% Total Graphitic Carbon (‘TGC’), higher strip ratio of
1.95:1, and a rescheduled Stage 2 expansion. A significantly increased production profile (30%)
over the March 2020 Definitive Feasibility Study
Updated Definitive Feasibility Study – Key Data
i) US$985m pre‐tax cashflow generated from initial 15 year mine life
ii) Estimated pre‐tax NPV of US$430m (utilising a discount rate of 10%) and IRR of 91%
iii) Staged ramp‐up planned to facilitate near term production with 60,000tpa graphite concentrate
to be produced for the first three years (Stage 1) before increasing to 109,000tpa (Stage 2)
iv) Capital cost estimate for Stage 1 is US$39.7m, which includes a contingency of U$S4.1m or 15%
of total direct capital cost
v) 1.6-year payback for Stage 1 (after tax) based on an average sales price of US$1,112/tonne.
Stage 2 expansion is expected to be funded from cashflow
4. Metallurgical test work carried out by Bureau Veritas in Perth confirms Mahenge can produce
high quality, high purity graphite, with conventional technology achieving consistent purity of
above 97% TGC, some of the highest grades in the sector.
This work also confirmed:
i)
ii)
iii)
Large proportion of concentrates in the medium size fractions, ideally suited to the
battery market
Coarser grind sizes can retain a larger proportion of larger flake sizes, suited to the
expandable and graphite foil markets
Results are typical of the high purity smaller and medium flake size in the Mahenge
graphite province
Page | 4
Strategic Report (continued)
For the year ended 31 December 2020
Armadale Capital Plc
5. Engagement of leading supplier of graphite process plants Xinhai Mineral EPC, to commence
metallurgical bulk test work as part of the first phase of the Front-End Engineering Design
Studies ('FEED Studies')
6. Mining licence application submitted
7. Advancing workstream to secure project level funding mandate, with NDAs signed with a
number of parties (strategic investors, debt providers and potential JV partners)
8. Offtakes MOU signed with a number of parties with significant interest shown from additional
offtake partners keen to secure high-grade, high-purity Mahenge graphite. Advancing
workstream to progress to binding offtakes
Post Period End – advancing all workstreams
1. CSIRO (Australia's Commonwealth Scientific and Industrial Research Organisation) testwork
confirmed natural flake graphite from Mahenge graphite project as a premium quality product
with the exceptionally high purity and characteristics required for use in lithium-ion batteries
2. Successful results from first phase FEED studies by Xinhai establishes that the selection of
equipment used in the feasibility study and confirms the low capex high margin project
economics. Positive testwork a major de-risking step in confirming process flowsheet as per
Definitive Feasibility Study
3. Environmental and Social Impact Assessment ('ESIA') formally granted by National Environment
Management Council ('NEMC') of Tanzania
4. Ongoing review of quoted portfolio, where the Directors believe there are opportunities for
capital gains
5. Continue to actively review other exciting investment opportunities
During the year under review, Armadale continued to operate as a diversified investing company natural
resource projects in Africa. To this end, its portfolio is divided into two groups:
• Actively managed investments where the Company has majority ownership of the investment;
and
• Passively managed investments where the Company has a minority investment, typically in a
quoted company, and does not have management control.
Currently, the Company’s key actively managed investment is the Mahenge Liandu Graphite Project in
Tanzania.
Page | 5
Armadale Capital Plc
Strategic Report (continued)
For the year ended 31 December 2020
PASSIVELY MANAGED INVESTMENTS
Mine Restoration Investments Limited (‘MRI’), South Africa
The shares in MRI are being carried at Nil market value (2019: Nil) as MRI shares were suspended from
trading on the Johannesburg Stock Exchange. The MRI shares continued to be suspended throughout
the year.
Quoted Portfolio
The Company has a small portfolio of quoted investments, principally in resource companies where the
Directors believe there are opportunities for capital gain. The Company continues to keep its portfolio
under review. The Company’s strategy with its quoted portfolio is to gain exposure in projects that have
the potential to create short to medium term returns for the Company as well as diversify the Company’s
exposure to a broader range of commodities while being able to enter and exit the position with minimal
cost and time.
The Company continues to hold its strategic investment in Forum Energy Metals Corp, a company
incorporated in Canada and listed on the Toronto Stock Exchange, which the Company acquired in 2019.
SUSTAINABLE DEVELOPMENT
The Company is committed to sustainable development and conducting its business ethically. Given that
the Company invests in the mining industry, one of its key focuses is on maintaining a high level of health
and safety, environmentally responsibility, and support for the communities close to its investments.
CORPORATE INFORMATION
Principal risks and uncertainties
There are known risks associated with the mineral industry, especially in Africa. The Board regularly
reviews the risks to which the Group is exposed and endeavours to minimise them as far as possible.
The following summary, which is not exhaustive, outlines some of the risks and uncertainties currently
facing the Group:
• The COVID-19 pandemic has risks for the Group in terms of its ability to travel to and from its
projects and ability for key personnel to access its projects. As previously reported, the impact
of COVID-19 pandemic on the project is so far minimal as the Company’s site activities were
substantially completed in 2019. However, the financial impact on the Company is continuing
to be evaluated and strategies implemented to reduce cash outflow.
• The Group is exposed to graphite. Graphite is a relatively new commodity whose market is being
•
driven by demand in renewable energy. It is thus vulnerable to global energy policies.
In order to achieve its long term strategy of developing its exploration project, the Group
depends on the availability of and access to future funding within the global economic
environment.
Page | 6
Armadale Capital Plc
Strategic Report (continued)
For the year ended 31 December 2020
• The impact of Brexit on companies operating in the UK is still being monitored. Thus far Brexit
has not impacted the Group’s ability to raise funds.
• The exploration for and development of mineral resources
involves technical risks,
infrastructure risks and logistical challenges, which even a combination of careful evaluation
and knowledge may not eliminate.
• There can be no assurance that the Group’s project will be fully developed in accordance with
•
current plans.
Future development work and subsequent financial returns arising may be adversely affected
by factors outside the control of the Group.
• The Group operates in multiple national jurisdictions and is therefore vulnerable to changes in
its control. The mining regulation changes
government policies which are outside
in Tanzania are still being evaluated, however they seem to have minimal impact on investment
in graphite mining. The Group continues to monitor the implementation of the changes to
evaluate and mitigate sovereign risks.
Some of the mitigation strategies the Group applies in its present stage of development include, among
others:
• Proactive management to reducing fixed costs.
• Rationalisation of all capital expenditures.
• Maintaining strong relationships with government (employing
local staff and partial
government ownership), which improves the Group’s position as a preferred small mining
partner.
• Engagement with local communities to ensure our activities provide value to the communities
where we operate.
• Alternative and continued funding activities with a number of options to secure future funding
to continue as a going concern.
The Directors regularly monitor such risks and will take actions as appropriate to mitigate them. The
Group manages its risks by seeking to ensure that it complies with the terms of its agreements, and
through the application of appropriate policies and procedures, and via the recruitment and retention
of a team of skilled and experienced professionals.
Key Performance Indicators
The Group’s current key performance indicators (‘KPIs’) are the performance of its underlying
investments, measured in terms of the development of the specific projects they relate to, the increase
in capital value since investment and the earnings generated for the Group from the investment. The
Directors consider that it is still too early in the investment cycle of any of the investments held, for
meaningful KPIs to be given.
Success is also measured through the identification and investment in suitable additional opportunities
that fit the Group’s investment objectives.
Page | 7
Armadale Capital Plc
Strategic Report (continued)
For the year ended 31 December 2020
Section 172 Statement
Section 172(1): A director of a company must act in the way he considers, in good faith, would be most
likely to promote the success of the company for the benefit of its members as a whole, and in doing so
have regard (amongst other matters) to —
Section 172(1) (b) the interests of the company's employees,
Company’s Comment: While the company is largely staffed by contractor employees (rather than direct
employees of the Company), the directors consider that continuing active work on the Mahenge Liandu
Graphite Project to be in the best interest of such staff to utilise their skills and develop their local
communities. The board seeks regular feedback from its key stakeholders (including staff and advisers)
to ensure that the corporate culture of the Company remains highly ethical in terms of our Company’s
values and behaviours.
Section 172(1) (c) the need to foster the company's business relationships with suppliers, customers
and others,
Company’s Comment: The directors ensure that suppliers are available and meeting commitments and
there is good communication with staff as a key requirement for high levels of engagement. This is done
by periodic and ad-hoc briefings and discussions.
Reasons to engage shareholders are to meet regulatory requirements and understand shareholder
sentiments on the business, its prospects and performance of management.
This is done by regulatory news releases, keeping the investor relations section of the website up to
date, annual and half-year reports and presentations and AGM.
Section 172(1) (d) the impact of the company's operations on the community and the environment,
Company’s Comment: The Company’s activities impact communities in the places where we operate
and elsewhere. The Company engages communities with employment / business development
arrangements within guidelines. Through preparation and compliance with environmental and social
management plans, which include the regulatory requirements for the Company on its Mahenge Liandu
Graphite Project, the directors ensure that wherever possible its activities have a positive impact on the
community and avoid adverse environmental impacts.
The Company has engaged the services of a local contact person in Liandu who provides information to
the community about our intended project activities and is responsible for managing local affairs and
feedback to the Company.
Page | 8
Armadale Capital Plc
Strategic Report (continued)
For the year ended 31 December 2020
Section 172(1) (e) the desirability of the company maintaining a reputation for high standards of
business conduct, and
Company’s Comment: The directors consider standards of business conduct in all dealings of the
Company. The members of the board have a collective responsibility and obligation to promote the
interests of the Company and are collectively responsible for defining standards of business conduct
which includes corporate governance arrangements. The board provides strategic leadership for the
Company and operates within the scope of our corporate governance framework and sets the strategic
goals for the Company.
Section 172(1) (f) the need to act fairly as between members of the company.
Company’s Comment: The board takes feedback from a wide range of shareholders (large and small)
and endeavours at every opportunity to pro-actively engage with all shareholders (via regular news
reporting-RNS) and engage with any specific shareholders in response to particular queries they may
have from time to time. The board considers that its key decisions during the year have impacted equally
on all members of the Company.
Board
Post period end, in March 2021, Ms Amne Suedi and Mr Steve Mahede resigned from the Board as Non-
executive Directors and the Company wishes them well in the future.
The Board is initiating a process to review its composition and consider suitable candidates for the
vacancies made recently.
Financial Results
For the year ended 31 December 2020 the Group did not earn any revenues as its business related solely
to the making of investments in non-revenue producing resource projects and companies.
The Group made a loss after tax of £0.196 million (2019: £0.273 million) for the year ended 31 December
2020. Expenditure on the Mahenge Liandu project during the year amounted to £0.662 million (2019:
£0.593 million), which was capitalised as additional exploration and evaluation assets.
Funds raised during the year amounted in total to £1.218 million of which £0.550 million came from a
placing of shares and £0.668 million came from the exercise of warrants and options. Other share issues
during the year were in respect of loan note conversions.
At 31 December 2020, the Group had cash of £252,000 (2019: £96,000) and debt of £577,000 (2019:
£867,000). Since the year end, the Board has determined that the Company will exercise its right to
convert all the remaining loan notes together with the associated accrued interest into ordinary shares
in the Company with the result that the Group will be debt free.
Page | 9
Armadale Capital Plc
Strategic Report (continued)
For the year ended 31 December 2020
Outlook
The Directors continue to believe that Mahenge Liandu represents an exciting opportunity for the
Group. As identified in the going concern note to the Directors’ Report, the Company’s ability to achieve
its strategy with respect to the project is dependent on the further fundraising. Furthermore, other
notable investment opportunities are under review, which the board believe could replicate this success
and deliver significant value to shareholders.
Nicholas Johansen
Director
28 May 2021
Page | 10
Armadale Capital Plc
Directors’ Report
For the year ended 31 December 2020
The Directors submit their report and the financial statements of Armadale Capital Plc (‘Armadale’ or
the ‘Company’) for the year ended 31 December 2020.
Results and dividends
The financial statements have been prepared in accordance with International Financial Reporting
Standards as adopted by the European Union. The loss of the Group for the year ended 31 December
2020 was £195,925 (2019, £272,548). As part of the process of preparing these accounts, the Directors
are required to review the carrying value of all its assets. As a result of this review the Directors have
concluded that no impairment charge is required (2019, £nil) in the year.
Corporate governance
As an AIM company, Armadale Capital Plc is required to adopt a recognised Corporate Governance Code
and the Company has chosen to apply the Quoted Companies Alliance (“QCA”) Corporate Governance
Code.
The Company has published its compliance with each of the 10 principles of the QCA Code on the
Company’s website, including reasons for departure with certain principles.
The website disclosures can be found at: http://armadalecapitalplc.com/corporate_governance.
Business review
A review of the Group’s operations and plans for the future of the business are included in the Strategic
Report.
Directors
The following Directors have held office during the year:
Nicholas Johansen
Matt Bull (appointed 24 April 2020)
Emmanuel S Mahede (resigned 31 March 2021)
Anne Suedi (appointed 7 January 2020, resigned 31 March 2021)
Ged Hall (resigned 16 April 2020)
Page | 11
Armadale Capital Plc
Directors’ Report (continued)
For the year ended 31 December 2020
Directors’ interests
Directors’ interests, including family interests, in the Ordinary Share capital, were as follows:
N Johansen
ES Mahede
A Suedi
M Bull
*At date of appointment
31 December
2020
No:
2,012,122
1,750,000
-
27,612,311
31 December
2019
No:
2,012,122
1,750,000
-
27,612,311*
Directors’ interests, including family interests, in Warrants to subscribe for Ordinary Shares in the
Company were as follows:
ES Mahede
M Bull
M Bull
(2.2p warrants)
(2.2p warrants)
(3p warrants)
*At date of appointment
Directors also held options over Ordinary Shares as follows:
N Johansen
ES Mahede
Substantial shareholdings
31 December
2020
No:
750,000
7,852,273
1,666,669
31 December
2019
No:
750,000
7,852,273*
1,666,667*
31 December
2020
No:
31 December
2019
No:
-
-
500,000
500,000
At 20 May 2021 the Company was aware of the following interests in 3% or more of the issued share
capital of the Company:
Hargreaves Lansdown Nominees
Interactive Investor Services Nominees
HSDL Nominees
Barclays Nominees
Matt Bull
Lawshare Nominees
Kabunga Holdings Pty Ltd
Vidacos Nominees
JIM Nominees
Wealth Nominees
14.5%
13.0%
11.9%
8.7%
5.7%
4.4%
4.1%
4.0%
3.9%
3.2%
Page | 12
Armadale Capital Plc
Directors’ Report (continued)
For the year ended 31 December 2020
Issue of Shares
Details of Ordinary Shares issued during the year are set out in note 18 to the financial statements.
Shares under option or issued on exercise of options and warrants to subscribe for shares
Shares held under option and warrants to subscribe for shares are detailed in notes 19 and 20 to the
financial statements.
Indemnification of officers of the Company
During the financial year, the Company paid a premium in respect of a contract insuring the Directors
against liability when acting for the Company.
Remuneration of Directors
The directors received the following fees by way of remuneration
N Johansen
ES Mahede
A Suedi
M Bull
G Hall
2020
£’000
2019
£’000
29
29
26
33
11
41
42
-
-
3
The Remuneration of Directors is determined by the Board within the limits set out in the Articles of
Association of the Company.
Page | 13
Armadale Capital Plc
Directors’ Report (continued)
For the year ended 31 December 2020
Statement of Directors’ responsibilities
The Directors are responsible for preparing the strategic report, the annual report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that
law the Directors have elected to prepare the Group and Company financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under
company law the Directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the
Group and Company for that period. The Directors are also required to prepare financial statements in
accordance with the rules of the London Stock Exchange for companies trading securities on the
Alternative Investment Market.
In preparing these financial statements, the Directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
•
state whether the financial statements have been prepared in accordance with IFRS as adopted
by the European Union, subject to any material departures disclosed and explained in the
financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made
available on a website. Financial statements are published on the Company's website in accordance with
legislation in the United Kingdom governing the preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's
website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing
integrity of the financial statements contained therein.
Page | 14
Armadale Capital Plc
Directors’ Report (continued)
For the year ended 31 December 2020
Going Concern
The financial statements have been prepared on the going concern basis as, in the opinion of the
Directors, there is a reasonable expectation that the Group and the Company will continue in
operational existence for the foreseeable future.
At 31 December 2020, the Group had cash of £251,738 (2019, £95,641) and convertible loan notes of
£576,668 (£866,854). During the year, holders of loan notes with a face value of £370,793 elected to
have their notes converted into ordinary shares of the Company. Since the year end, the Board has
determined that the Company will exercise its right to convert all the remaining loan notes together
with the associated accrued interest into ordinary shares in the Company with the result that the
Company will be debt free.
Since the year end, the Company has received £245,000 as a result of warrant exercises. 84.8 million
warrants remain outstanding. They are exercisable at between 2.2p and 3.25p per warrant and will all
have expired by April 2022 if not exercised. Given the Company’s current share price, it is reasonable to
expect that the majority of these warrants will be exercised, potentially generating £2.3 million.
On 30 March 2021, the Company announced that its Environmental and Social Impact Assessment, a
key component of the mining licence application process, had been formally approved by the National
Environment Management Council of Tanzania and on 22 April 2021, the Company announced the
successful completion of phase 1 of the metallurgical bulk test work programme.
At 20 May 2021, the Company had cash of approximately £300,000 and listed investments with a traded
value of approximately £490,000 together with warrants to acquire further shares with a value, net of
the subscription cost, of £373,000. The Directors have prepared a cash flow forecast for the next twelve
months which shows that the cash in hand together with expected further receipts is sufficient to meet
current commitments in respect of exploration expenditure and corporate overheads for a period of at
least twelve months, after which further fundraising will be required.
The Company’s ability to continue as a going concern and to achieve its long term strategy of developing
its exploration projects is dependent on further fundraising. Against the background of the encouraging
progress with the Mahenge Liandu graphite project and the Company’s history of raising funds through
the issue of equity, the Directors consider that there is a reasonable expectation that the required
capital will be raised. However, there are currently no binding agreements in place. Should the Directors
be unable to raise sufficient funds, the Company may be unable to realise its assets and discharge its
liabilities in the normal course of business.
These factors indicate the existence of a material uncertainty which may cast doubt over the Group’s
and Company’s ability to continue as a going concern. The financial statements do not include the
adjustments that would result if the Group or Company were unable to continue as a going concern.
Page | 15
Armadale Capital Plc
Directors’ Report (continued)
For the year ended 31 December 2020
Principal risks and uncertainties
The Group’s risks and use of financial instruments are described in Note 4 to the financial statements.
Other risks are described in the Strategic Report.
Events after the balance sheet date
Since the year end, the Company has allotted a total of 10,467,915 Ordinary Shares of 0.1p in connection
with the exercise by shareholders of warrants issued in conjunction with previous share placings.
Proceeds received were £245,000.
On 30 March 2021, the Company announced that its Environmental and Social Impact Assessment had
been formally approved by the National Environment Management Council of Tanzania.
On 22 April 2021, the Company announced the successful completion of phase 1 of the metallurgical
bulk test work programme.
Directors’ Confirmation
The Directors who held office at the date of approval of this Directors’ Report confirm that so far as each
Director is aware:
(a)
there is no relevant audit information of which the Company’s auditors are unaware; and
(b)
each Director has taken all the steps that ought to have been taken as a director, including
that
making appropriate enquiries of fellow Directors and of the Company’s auditors
purpose, in order to be aware of any information needed by the Company’s auditors in
connection with preparing their report and to establish that the Company’s auditors are aware
of that information.
for
By order of the Board
Timothy Jones
Secretary
28 May 2021
Page | 16
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc
For the year ended 31 December 2020
Opinion
We have audited the financial statements of Armadale Capital Plc (the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the year ended 31 December 2020 which comprise the consolidated
statement of comprehensive income, the consolidated and company statements of financial position,
the consolidated and company statements of changes in equity, the consolidated and company
statements of cash flows, and notes to the financial statements, including a summary of significant
accounting policies.
The financial reporting framework that has been applied in the preparation of the financial statements
is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European
Union and, as regards the Parent Company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent
Company’s affairs as at 31 December 2020 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted
by the European Union ;
the Parent Company financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union and as applied in accordance with the provisions of the Companies
Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of
the Group and the Parent Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty related to going concern
We draw attention note 2.2 to the financial statements which explains that the Parent Company’s and
the Group’s ability to continue as a going concern is dependent on further fundraising. These conditions
indicate the existence of a material uncertainty which may cast significant doubt over the Parent
Company’s and the Group’s ability to continue as a going concern. Our opinion is not modified in respect
of this matter.
We considered going concern to be a key audit matter based on our assessment of the risk and the
effect on our audit.
Page | 17
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (continued)
For the year ended 31 December 2020
How the scope of our audit responded to the risk:
•
•
•
•
•
We reviewed the Directors’ forecasts to assess the Parent Company’s and Group’s ability to
meet their financial obligations as they fall due within the period of twelve months from the
date of approval of the financial statements
We reviewed the assumptions and inputs in the cash flow forecast to assess whether these were
in line with our understanding of the company’s operations and other information obtained by
us during the course of the audit
We assessed whether the forecast overhead expenditure was consistent with budgets and prior
year actual expenditure. We performed a mechanical check on the cash flow forecast model
prepared by management
We challenged the Directors’ expectation that sufficient funds may be secured by reviewing the
potential funding options available to the Company and considering the past success the
Company has had in raising equity and debt finance.
We reviewed the disclosure included within the financial statements.
An overview of the scope of our audit
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (‘ISAs
(UK and Ireland)’). We designed our audit by determining materiality and assessing the risks of material
misstatement in the financial statements. In particular, we looked at where the directors made
subjective judgements, for example in respect of significant accounting estimates that involved making
assumptions and considering future events that are inherently uncertain. As in all our audits we also
addressed the risk of management override of internal controls, including evaluating whether there is
evidence of bias by the directors that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial statements as a whole, taking into account our understanding of the Group and
its environment, the accounting processes and controls, and the industry in which the Group operates.
We planned our work to include sufficient work in respect of the parent company and the subsidiaries
to enable us to provide an opinion on the consolidated financial statements.
The risks of material misstatement that had the greatest effect on our audit, including the allocation of
our resources and effort, are identified in the Key audit matters section below. We have also set out
how we tailored our audit to address these specific areas in order to provide an opinion on the financial
statements as a whole, and any comments we make on the results of our procedures should be read in
this context. This is not a complete list of all risks identified by our audit.
Page | 18
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (continued)
For the year ended 31 December 2020
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Going concern
See relevant section above.
Carrying value of exploration and evaluation assets
The exploration and evaluation assets of the Group represent the key assets on the Group’s statement
of financial position.
There are a large number of estimates and judgements used by management in assessing the
Exploration and Evaluation assets for indicators of impairment under accounting standards. These
estimates and judgements are set out in Note 2.10, note 2.13 and note 3 to the financial statements
and the subjectivity of these estimates along with the material carrying value of the assets make this a
key audit area.
How the scope of our audit responded to the risk:
We considered the indicators of impairment applicable to the Mahenge Liandu exploration asset,
including those indicators identified in IFRS 6: ‘Exploration for and Evaluation of Mineral Resources’ and
reviewed management’s assessment of these indicators. The following work was undertaken:
• We discussed the progress of the project and the progress of the relevant licence application
with management and the directors
• We reviewed relevant documentation pertaining to the above
• We reviewed the appropriateness of the costs capitalised in accordance with IFRS 6:
‘Exploration for and Evaluation of Mineral Resources’.
• We made specific inquires of management and reviewed market announcements which
confirmed the plan to continue investment in the Mahenge Liandu project subject to sufficient
funding being available, as disclosed in note 2.2
• We considered whether the detailed feasibility study suggested any indicators of impairment
for the project.
• We have reviewed the adequacy of disclosures provided within the financial statements in
relation to the impairment assessment against the requirements of the accounting standards.
Key observations:
Based on our work we concur with management’s conclusion that no impairment was required and
consider the disclosures included in the financial statements to be appropriate.
Page | 19
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (continued)
For the year ended 31 December 2020
Management override
In preparing the financial statements management are required to make judgements, estimates and
assumptions that affect the choice and application of accounting policies and the reported amount of
assets, liabilities, income and expenses.
How the scope of our audit responded to the risk:
During the course of our audit we performed the following procedures to address the risk of
management override:
• Gained an understanding of the process in place for posting journal entries;
• Assessed the appropriateness of accounting policy choices and the basis of key judgements,
estimates and assumptions;
• Reviewed journal entries during the period for indicators of management bias, transactions
outside the normal course of business or indicators of fraudulent activity;
• Examined a sample of journal entries to understand the rationale and assess the accuracy of the
postings made; and
• Considered the value, nature and cause of misstatements identified during the audit to identify
any indicators of bias.
Key observations:
The results of our testing were satisfactory and we consider the disclosures surrounding accounting
policy choices and key accounting judgements to be adequate.
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it
probable that the economic decision of a reasonably knowledgeable person would be changed or
influenced. We use materiality both in planning the scope of our audit work and in evaluating the results
of our work.
Based on our professional judgement we determined materiality for the consolidated financial
statements as a whole to be £100,000 and for the parent company financial statements to be £100,000
based upon 2% of net assets.
We consider net assets to be the financial metric of the most interest to shareholders and other users
of the financial statements, given the Group’s status as an exploration entity in natural resources
development and therefore consider this to be an appropriate basis for materiality.
We agreed with the board that we would report to them all individual audit differences identified during
the course of our audit in excess of £5,000. We also agreed to report differences below these thresholds
that, in our view, warranted reporting on qualitative grounds.
Page | 20
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (continued)
For the year ended 31 December 2020
Armadale Capital Plc
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the annual report and accounts, other than the financial statements and our
auditor’s report thereon. Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in the financial statements or a
material misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the Directors’ report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements in the
strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
•
•
adequate accounting records have not been kept by the Parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and
returns; or
•
certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Page | 21
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (continued)
For the year ended 31 December 2020
Armadale Capital Plc
Responsibilities of Directors
As explained more fully in the Statement of directors’ responsibilities the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view,
and for such internal control as the Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the Directors either intend to
liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but
to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law or regulation is removed from the
events and transactions reflected in the financial statements, as we will be less likely to become aware
of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud
involves intentional concealment, forgery, collusion, omission or misrepresentation.
The specific procedures for this engagement that we designed and performed to detect material
misstatements in respect of irregularities, including fraud, were as follows:
• Enquiry of management around actual and potential litigation and claims;
• Enquiry of management to identify any material instances of non-compliance with laws
and regulations;
• Reviewing financial statement disclosures and testing to supporting documentation to assess
compliance with applicable laws and regulations;
• Performing audit work to address the risk of irregularities due to management override of
controls, including testing of journal entries and other adjustments for appropriateness,
evaluating the business rationale of significant transactions outside the normal course of
business and reviewing material financial reporting judgements and accounting estimates
for evidence of bias.
Page | 22
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (continued)
For the year ended 31 December 2020
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our Auditor's report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to
the Parent Company’s members those matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company and the Parent Company’s members as a body,
for our audit work, for this report, or for the opinions we have formed.
Alan Poole BA (Hons) FCA (Senior Statutory Auditor)
For and on behalf of James Cowper Kreston
Statutory Auditors
Reading Bridge House
George Street
Reading
Berkshire RG1 8LS
28 May 2021
Page | 23
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2020
Administrative expenses
Share based payment charges
Change in fair value of derivative
Change in fair value of investments
Operating loss
Finance costs
Loss before taxation
Taxation
Loss for the year from continuing operations
Armadale Capital Plc
Note
2020
£
2019
£
(377,912)
(468,948)
-
37,143
176,006
(22,550)
(45,467)
46,145
(164,763)
(490,820)
(31,162)
(21,241)
(195,925)
(512,061)
-
-
(195,925)
(512,061)
13
6
9
Profit from discontinued operations, net of tax
10
-
239,513
Loss after taxation
(195,925)
(272,548)
Other comprehensive income
Items that may be reclassified to profit or loss:
Reclassification of foreign exchange gain
Exchange differences on translating foreign entities
Total comprehensive loss attributable to the equity
holders of the parent company
Loss per share attributable to the equity holders of the
parent company
Basic and diluted total loss per share
Basic and diluted loss per share from continuing
operations
11
11
The notes on pages 31 to 56 form part of the financial statements.
-
39,070
(239,513)
(93,571)
(156,855)
(605,632)
Pence
Pence
(0.04)
(0.07)
(0.04)
(0.14)
Page | 24
Consolidated Statement of Financial Position
At 31 December 2020
Assets
Non-current assets
Exploration and evaluation assets
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Equity and liabilities
Equity
Share capital
Share premium
Shares to be issued
Share option and warrant reserve
Foreign exchange reserve
Retained earnings
Total equity
Current liabilities
Trade and other payables
Loans
Derivative liability
Total Liabilities
Armadale Capital Plc
Note
2020
£
2019
£
12
13
14
18
21
21
21
21
21
15
16
17
4,417,440
281,761
4,699,201
3,705,210
105,755
3,810,965
121,062
251,738
372,800
159,495
95,641
255,136
5,072,001
4,066,101
3,207,382
22,348,000
286,000
762,347
127,238
(22,406,009)
4,324,958
3,139,135
21,037,478
286,000
661,676
88,168
(22,400,310)
2,812,147
170,375
576,668
-
747,043
267,566
866,854
119,534
1,253,954
Total equity and liabilities
5,072,001
4,066,101
The notes on page 31 to 56 form part of the financial statements.
Approved by the Board and authorised for issue on 28 May 2020
Signed on behalf of the Board
M Bull
Director
N Johansen
Director
Page | 25
Company Statement of Financial Position
At 31 December 2020
Assets
Non-current assets
Investments
Other receivables
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Equity and liabilities
Equity
Share capital
Share premium
Shares to be issued
Share option and warrant reserve
Retained earnings
Total equity
Current liabilities
Trade and other payables
Loans
Derivative liability
Total liabilities
Armadale Capital Plc
Note
2020
£
2019
£
13
14
14
18
21
21
21
21
15
16
17
1,881,761
2,781,448
4,663,209
111,642
218,103
329,745
1,705,755
2,078,657
3,784,412
77,097
88,466
165,563
4,992,954
3,949,975
3,207,382
22,348,000
286,000
762,347
(22,273,018)
4,330,711
3,139,135
21,037,478
286,000
661,676
(22,245,747)
2,878,542
85,575
576,668
-
662,243
85,045
866,854
119,534
1,071,433
Total equity and liabilities
4,992,954
3,949,975
The Company has taken advantage of the exemption conferred by section 408 of Companies Act 2006
from presenting its own statement of comprehensive income. A loss after taxation of £217,497 (2019:
£494,403) has been included in the financial statements of the parent company.
The notes on pages 31 to 56 form part of the financial statements.
Approved by the Board and authorised for issue on 28 May 2021
Signed on behalf of the Board
M Bull
Director
N Johansen
Director Company Registration No. 5541602
Page | 26
Armadale Capital Plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
Share
Capital
Share
Premium
Shares to
be issued
At 1 January 2019
£
3,038,605
£
20,569,844
£
286,000
Loss for the year
Other comprehensive loss
Total comprehensive loss for the
year
Issue of shares and warrants
Expenses of issue
Transfer on exercise of warrants
Share based payment charges
Total other movements
-
-
-
-
100,530
-
-
-
100,530
658,308
(190.674)
-
-
467,634
-
-
-
-
-
-
-
Share
Option and
Warrant
Reserve
£
94,884
-
-
546,420
-
(2,178)
22,550
568,970
Foreign
Exchange
Reserve
Retained
Earnings
Total
£
421,252
£
(21,129,940)
£
2,280,645
-
(333,030)
(272,548)
(272,548)
(333,030)
(333,030)
(272,548)
(605,578)
-
-
-
-
-
-
-
2,178
-
-
1,305,258
(190,674)
-
22,550
1,137,134
At 31 December 2019
3,139,135
21,037,478
286,000
661,676
88,168
(22,400,310)
2,812,147
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Issue of shares and warrants
Release on conversion of loan
notes
Transfer on exercise of warrants
Total other movements
-
-
-
-
-
-
68,247
1,310,522
-
-
-
68,247
-
1,310,522
-
-
-
-
-
-
-
-
-
-
-
39,070
(195,925)
-
(195,925)
39,070
39,070
(195,925)
(156,855)
239,556
-
(138,885)
100,671
-
-
-
-
-
1,618,325
51,341
51,341
138,885
190,226
-
1,669,666
At 31 December 2020
3,207,382
22,348,000
286,000
762,347
127,238
(22,406,009)
4,324,958
The notes on pages 31 to 56 form part of the financial statements.
The following describes the nature and purpose of each reserve within owners’ equity:
Reserve
Share capital
Share premium
Shares to be issued
Share option and warrant
reserve
Foreign exchange reserve
Retained earnings
Description and purpose
amount subscribed for share capital at nominal value
amount subscribed for share capital in excess of nominal value, net of
allowable expenses
share capital to be issued in connection with historical acquisition
cumulative charge recognised under IFRS 2 in respect of share-based
payment awards
gains/losses arising on re-translating the net assets of overseas
operations into sterling
cumulative net gains and losses recognised in the statement of
comprehensive income
Page | 27
Company Statement of Changes in Equity
For the year ended 31 December 2020
Armadale Capital Plc
Share
Capital
Share
Premium
Shares to
be issued
At 1 January 2019
£
3,038,605
£
20,569,844
£
286,000
Share
Option and
Warrant
Reserve
£
94,884
Retained
Earnings
Total
£
(21,753,522)
£
2,235,811
Loss for the year
Total comprehensive loss for the
year
Issue of shares and warrants
Expenses of issue
Transfer on exercise of warrants
Share based payment charges
Total other movements
-
-
-
-
100,530
-
-
-
100,530
658,308
(190.674)
-
-
467,634
-
-
-
-
-
-
-
-
-
(494,403)
(494,403)
(494,403)
(494,403)
546,420
-
(2,178)
22,550
566,792
-
-
2,178
-
2,178
1,305,258
(190,674)
-
22,550
1,137,134
At 31 December 2019
3,139,135
21,037,478
286,000
661,676
(22,245,747)
2,878,542
Loss for the year
Total comprehensive loss for the
year
Issue of shares and warrants
Release on conversion of loan
notes
Transfer on exercise of warrants
Total other movements
-
-
-
-
68,247
1,310,522
-
-
-
68,247
-
1,310,522
-
-
-
-
-
-
-
-
(217,497)
(217,497)
(217,497)
(217,497)
239,556
-
1,618,325
-
51,341
51,341
(138,885)
100,671
138,885
190,226
-
1,669,666
At 31 December 2020
3,207,382
22,348,000
286,000
762,347
(22,273,018)
4,330,711
The notes on pages 31 to 56 form part of the financial statements.
The following describes the nature and purpose of each reserve within owners’ equity:
Reserve
Share capital
Share premium
Shares to be issued
Share option and warrant
reserve
Foreign exchange reserve
Retained earnings
Description and purpose
amount subscribed for share capital at nominal value
amount subscribed for share capital in excess of nominal value, net of
allowable expenses
share capital to be issued in connection with historical acquisition
cumulative charge recognised under IFRS 2 in respect of share-based
payment awards
gains/losses arising on re-translating the net assets of overseas
operations into sterling
cumulative net gains and losses recognised in the statement of
comprehensive income
Page | 28
Consolidated Statement of Cash Flows
For the year ended 31 December 2020
Cash flows from operating activities
Loss before taxation
Adjustment for:
Release of exchange gains on overseas operation
Share based payment charge
Change in fair value of derivative
Change in fair value of investments
Finance costs
Changes in working capital
Receivables
Payables
Net cash used in operating activities
Cash flows from investing activities
Expenditure on exploration and evaluation assets
Purchase of listed investments
Net cash used in investing activities
Cash flows from financing activities
Proceeds from share issues
Issue costs
Issue of loan notes
Proceeds from loan (Note 16)
Loan repayment
Interest paid
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
The notes on pages 31 to 56 form part of the financial statements.
Armadale Capital Plc
2020
£
2019
£
(195,925)
(272,548)
-
-
(37,143)
(176,006)
31,162
(377,912)
11,182
(6,729)
(373,459)
(239,513)
22,550
45,467
(46,145)
21,241
(468,948)
(44,103)
(14,868)
(527,919)
(689,254)
-
(689,254)
(474,049)
(58,637)
(532,686)
1,245,576
-
-
50,000
(50,000)
(26,766)
1,218,810
156,097
95,641
251,738
968,696
(46,500)
400,000
30,000
(235,071)
(5,189)
1,111,936
51,331
44,310
95,641
Page | 29
Company Statement of Cash Flows
For the year ended 31 December 2020
Cash flows from operating activities
Loss before taxation
Adjustment for:
Share based payment charge
Impairment charge
Change in fair value of derivative
Change in fair value of investments
Finance costs
Changes in working capital
Receivables
Payables
Net cash used in operating activities
Cash flows from investing activities
Advances to subsidiaries
Purchase of listed investments
Net cash used in investing activities
Cash flows from financing activities
Proceeds from share issues
Issue costs
Issue of loan notes
Proceeds from loan (Note 16)
Loan repayment
Interest paid
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
The notes on pages 31 to 56 form part of the financial statements.
Armadale Capital Plc
2020
£
2019
£
(217,497)
(494,403)
-
177,827
(37,143)
(196,006)
31,162
(241,657)
(61,796)
530
(302,923)
22,550
168,920
45,467
(46,145)
21,241
(282,370)
(63,658)
9,663
(336,365)
(806,250)
-
(806,250)
(637,897)
(58,637)
(696,534)
1,245,579
-
-
50,000
(50,000)
26,766
1,272,345
129,639
88,466
218,103
968,696
(46,500)
400,000
30,000
(235,071)
-
1,117,125
84,226
4,240
88,466
Page | 30
Armadale Capital Plc
Notes to the financial statements
For the year ended 31 December 2020
1.
Country of incorporation
The Company was incorporated in the United Kingdom as Watermark Global Plc, a Public Limited
Company, on 19 August 2005. The name of the Company was changed to Armadale Capital Plc on
2 July 2013. Its registered office is 1 Arbrook Lane, Esher, Surrey, KT10 9EG. The Company is
domiciled in the UK.
2.
Accounting policies
2.1. Statement of compliance
The financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
The principal accounting policies are set out below.
2.2. Going Concern
The financial statements have been prepared on the going concern basis as, in the opinion of the
Directors, there is a reasonable expectation that the Group and the Company will continue in
operational existence for the foreseeable future.
At 31 December 2020, the Group had cash of £251,738 (2019, £95,641) and convertible loan notes
of £576,668 (£866,854). During the year, holders of loan notes with a face value of £370,793
elected to have their notes converted into ordinary shares of the Company. Since the year end,
the Board has determined that the Company will exercise its right to convert all the remaining
loan notes together with the associated accrued interest into ordinary shares in the Company
with the result that the Company will be debt free.
Since the year end, the Company has received £245,000 as a result of warrant exercises. 84.8
million warrants remain outstanding. They are exercisable at between 2.2p and 3.25p per warrant
and will all have expired by April 2022 if not exercised. Given the Company’s current share price,
it is reasonable to expect that the majority of these warrants will be exercised, potentially
generating £2.3 million.
On 30 March 2021, the Company announced that its Environmental and Social Impact
Assessment, a key component of the mining licence application process, had been formally
approved by the National Environment Management Council of Tanzania and on 22 April 2021,
the Company announced the successful completion of phase 1 of the metallurgical bulk test work
programme.
At 20 May 2021, the Company had cash of approximately £300,000 and listed investments with a
traded value of approximately £490,000 together with warrants to acquire further shares with a
value, net of the subscription cost, of £373,000. The Directors have prepared a cash flow forecast
for the next twelve months which shows that the cash in hand together with expected further
receipts is sufficient to meet current commitments in respect of exploration expenditure and
Page | 31
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
2.2. Going Concern (continued)
corporate overheads for a period of at least twelve months, after which further fundraising will
be required.
The Company’s ability to continue as a going concern and to achieve its long term strategy of
developing its exploration projects is dependent on further fundraising. Against the background
of the encouraging progress with the Mahenge Liandu graphite project and the Company’s history
of raising funds through the issue of equity, the Directors consider that there is a reasonable
expectation that the required capital will be raised. However, there are currently no binding
agreements in place. Should the Directors be unable to raise sufficient funds, the Company may
be unable to realise its assets and discharge its liabilities in the normal course of business.
These factors indicate the existence of a material uncertainty which may cast doubt over the
Group’s and Company’s ability to continue as a going concern. The financial statements do not
include the adjustments that would result if the Group or Company were unable to continue as a
going concern.
2.3. Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities controlled by the Company (its subsidiaries). Control is achieved where the Company has
the power to govern the financial and operating policies of an entity so as to obtain benefits from
its activities.
The results of subsidiaries acquired or disposed of during the year are included in the
Consolidated Statement of Comprehensive Income from the effective date of acquisition and up
to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on
consolidation.
2.4. Acquisitions of exploration licences
The acquisition of the Group’s exploration projects was principally the acquisition of mining
licences effected through non-operating corporate structures. As the structures do not represent
businesses, it is considered that the transactions do not meet the definition of business
combinations. Accordingly each transaction is accounted for as the acquisition of an asset. When
future consideration for shares is contingent, the fair value of the contingent shares at the
acquisition date is recognised as part of the cost of the asset. The probability of the contingent
events being satisfied is included in the calculation of the fair value of the contingent shares. The
fair value of the contingent shares is also recognised in equity as at the acquisition date and is not
subsequently revalued.
Page | 32
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
2.
Accounting policies (continued)
2.5. Foreign currencies
The individual financial statements of each Group entity are presented in the currency of the
primary economic environment in which the entity operates (its functional currency). For the
purpose of the consolidated financial statements, the results and financial position of each Group
entity are expressed in pounds sterling, which is the functional currency of the Company and the
presentation currency for the consolidated financial statements.
Transactions in currencies other than the entity’s functional currency (foreign currencies) are
recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each
reporting period, monetary items denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing at the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated. Exchange differences are recognised in profit or loss in the period in which they
arise. On disposal of foreign subsidiaries, accumulated exchange movements arising in the
revaluation of overseas assets and liabilities are released from foreign exchange reserve to the
profit and loss account.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the
Group’s foreign operations are expressed in Pounds using exchange rates prevailing at the end of
the reporting period. Income and expense items are translated at the average exchange rates for
the period, unless exchange rates fluctuated significantly during that period, in which case the
exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are
recognised in other comprehensive income.
2.6. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, with a maturity date of less than
three months from inception.
2.7. Share-based payments
IFRS 2 ‘Share-based Payment’ requires the recognition of equity-settled share-based payments at
fair value at the date of grant and the recognition of liabilities for cash-settled share based
payments at the current fair value at each reporting date.
The Group provides benefits to employees and service providers (including senior executives) of
the Group in the form of share based payments, whereby employees render services in exchange
for shares or rights over shares (equity-settled transactions).
Where the equity-settled transactions are share options their cost is measured by reference to
the fair value of the equity instruments at the date at which they are granted. The fair value is
determined by using a Black-Scholes model.
Page | 33
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
2. Accounting polices (continued)
2.7. Share-based payments (continued)
In valuing equity-settled transactions, no account is taken of any performance conditions, other
than market conditions linked to the price of the shares of the Company, if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, over the period in which the performance and/or other service conditions are fulfilled,
ending on the date on which the relevant employees become fully entitled to the award (the
vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s
best estimate of the number of equity instruments that will ultimately vest. No adjustment is
made for the likelihood of market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date. The profit and loss account
charge or credit for a period represents the movements in cumulative expense recognised as at
the beginning and end of that period.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new
award is substituted for the cancelled award and designated as a replacement award on the date
that it is granted, the cancelled and new award are treated as if they were a modification of the
original award. The dilutive effect, if any, of outstanding options is reflected as additional share
dilution in the computation of earnings per share.
Share based payments in respect of third party services are measured by reference to the value
of services provided and share price at the relevant date.
2.8. Warrants
Warrants issued as part of financing transactions in which the holder receives a fixed number of
shares on exercise of the warrant are fair valued at the date of grant and recorded within the
warrant reserve. Fair value is measured by the use of the Black Scholes model. On expiry or
exercise, the fair value of warrants is credited to reserves as a change in equity.
Page | 34
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
2. Accounting polices (continued)
2.9. Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current Tax
The tax currently payable is based on taxable profit for the year. The Group’s liability for current
tax is calculated using tax rates that have been enacted or substantively enacted by the end of
the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary
differences. Deferred tax assets are generally recognised for all deductible temporary differences
to the extent that it is probable that taxable profits will be available against which those
deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that
have been enacted or substantively enacted by the end of the reporting period. The measurement
of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax and current tax assets and liabilities are offset when there is a legally enforceable
right to set off when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax are recognised as an expense or income in profit or loss, except when
they relate to items that are recognised outside profit or loss (whether in other comprehensive
income or directly in equity), in which case the tax is also recognised outside profit or loss, or
where they arise from the initial accounting for a business combination. In the case of a business
combination, the tax effect is included in the accounting for the business combination.
Page | 35
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
2.
Accounting polices (continued)
2.10. Exploration and evaluation costs
Once an exploration licence or an option to acquire an exploration licence has been obtained, all
costs associated with exploration and evaluation are capitalised on a project-by-project basis
pending determination of the feasibility of the project. Costs incurred include appropriate
technical and administrative expenses and a pro-rata share of the Group’s finance costs but not
general overheads. If a mining property development project is successful, the related
expenditures will be amortised over the estimated life of the commercial ore reserves on a unit
of production basis. Where a licence is relinquished, a project is abandoned, or is considered to
be of no further commercial value to the Company, the related costs will be written off to the
statement of comprehensive income in the period the impairment is identified. Unevaluated
mineral properties are assessed at reporting date for impairment in accordance with the policy
set out below. If commercial reserves are developed, the related deferred development and
exploration costs are then reclassified as development and production assets within property,
plant and equipment.
2.11. Investments
Investments in subsidiary companies and joint ventures are stated at cost less any provision for
impairment, which is recognised as an expense in the statement of comprehensive income in the
period the impairment is identified.
All other investments are measured at fair value with changes recognised in the statement of
comprehensive income.
2.12. Impairment of assets
At the end of each reporting period, the Directors review the carrying amounts of assets to
determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Where a reasonable and consistent basis of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise they are allocated to the smallest
group of cash-generating units for which a reasonable and consistent allocation basis can be
identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
Page | 36
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
2.
Accounting polices (continued)
2.12. Impairment of assets (continued)
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the
relevant asset is carried at a revalued amount, whereby impairment is first allocated to the
revaluation reserve, to the extent that it has been previously revalued, with any excess taken to
the profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-
generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (or cash-generating unit) in
prior years. A reversal of an impairment loss is recognised immediately profit or loss, unless the
relevant asset is carried at a re-valued amount, in which case the reversal of the impairment loss
is recognised in other comprehensive income.
2.13. Non-current assets held for sale and disposal groups
Non-current assets and disposal groups are classified as held for sale when:
• They are available for immediate sale
• Management is committed to a plan to sell
•
It is unlikely that significant changes to the plan will be made or that the plan will be
withdrawn
• An active programme to locate a buyer has been initiated
• The asset or disposal group is being marketed at a reasonable price in relation to its fair
value, and
• A sale is expected to complete within 12 months from the date of classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of:
• Their carrying amount immediately prior to being classified as held for sale in accordance
with the group's accounting policy; and
• Fair value less costs of disposal.
Following their classification as held for sale, non-current assets (including those in a disposal
group) are not depreciated.
The results of operations disposed during the year are included in the consolidated statement of
comprehensive income up to the date of disposal.
The results of operations disposed during the year are included in the consolidated statement of
comprehensive income up to the date of disposal.
Page | 37
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
2.
Accounting polices (continued)
2.13. Non-current assets held for sale and disposal groups (continued)
A discontinued operation is a component of the Group's business that represents a separate
major line of business or geographical area of operations or is a subsidiary acquired exclusively
with a view to resale, that has been disposed of, has been abandoned or that meets the criteria
to be classified as held for sale.
Discontinued operations are presented in the consolidated statement of comprehensive income
as a single line which comprises the post-tax profit or loss of the discontinued operation along
with the post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or
on disposal of the assets or disposal groups constituting discontinued operations.
2.14. Financial assets
Loans and receivables are recognised when the Company and Group become party to the
contractual provisions of the financial instrument.
Trade receivables, loans, and other receivables that have fixed or determinable payments that
are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables
are measured at amortised cost using the effective interest method, less any impairment. Interest
income is recognised by applying the effective interest rate, except for short-term receivables
when the recognition of interest would be immaterial. Loans and receivables are assessed at each
reporting date to determine a loss allowance under the expected credit loss model.
2.15. Financial liabilities and equity instruments issued by the Group
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance
with the substance of the contractual arrangement.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity
after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the
proceeds received, net of direct issue costs.
Financial liabilities
Financial liabilities are recognised when the Company and Group become party to a financial
liability. Under IFRS 9, where there is a non-substantial modification of financial liabilities an
immediate gain or loss on modification is recognised in the profit and loss account. This gain or
loss is equal to the difference between the present value of cash flows under the original and
modified terms discounted at the original effective interest rate.
Financial liabilities represent trade payables and borrowings.
Page | 38
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
2.
Accounting polices (continued)
2.16. Financial liabilities and equity instruments issued by the Group (continued)
Convertible loan notes
As detailed in note 16, the loan notes issued in 2016 are classified as a compound financial
instrument in accordance with the requirements of IFRS 9. The debt element is calculated as the
present value of future cash flows assuming the loan notes are redeemed at the redemption date,
discounted at the market rate for an equivalent debt instrument with no option to convert to
equity. The difference between the total proceeds and the present value of the debt element is
recognised in equity. The discount is charged over the life of the loan notes to the statement of
comprehensive income and included within finance expenses. When conversion occurs the
associated equity element is released direct to retained earnings.
As detailed in notes 16 and 17, the conversion option in the loan notes issued in 2019 is classified
as a derivative instrument because the holders have alternative conversion options. The
derivative element is fair valued at inception and reported separately in current liabilities. Its fair
value is then redetermined at each balance sheet date and the gain or loss on revaluation taken
to profit and loss account. The amount attributed to derivative at inception is charged over the
life of the loan note to the statement of comprehensive income and included within finance
expenses. When conversion occurs, the derivative and liability element are transferred to equity.
2.16. New accounting standards
Certain new standards, amendments and interpretations to existing standards have been
published that are relevant to the Company’s activities and are mandatory for the Company’s
accounting periods beginning on 1 January 2020. These include:
Amendments to References to Conceptual Framework
IRFS3: Definition of a business
The above standards had no material impact on the Group’s financial statements.
A number of new and amended accounting standards and interpretations have been published
that are not mandatory for the Group’s accounts for the year ended 31 December 2020 and they
have not been adopted early. These standards, which are detailed below, are not expected to
have a material impact on the Group’s consolidated financial statements:
Amendments to IAS1: Classification of liabilities as current or non-current
Amendments to IAS 16: Property, plant and equipment
Amendments to IAS 37: Provisions, contingent liabilities and contingent assets; and
Amendments to IFRS9, IAS 39 IFRS7, IFRS 4 and IFRS 16: Interest rate benchmark reform
Page | 39
Notes to the financial statements (continued)
For the year ended 31 December 2020
3.
Significant judgements and sources of estimation uncertainty
Armadale Capital Plc
In preparing the annual financial statements of the Group, management is required to make
estimates and assumptions that affect the amounts represented in the annual financial
statements and related disclosures. Use of available information and the application of
judgement are inherent in the formation of estimates. Actual results in the future could differ
from these estimates which may be material to the annual financial statements. The Directors
consider that the significant sources of estimation uncertainty relate to the value of the Group’s
exploration assets, to share based payment charges and to the accounting treatment of
compound financial instruments.
The principal significant estimates and judgements are:
Going concern
The financial statements have been prepared on the going concern basis as, in the opinion of the
Directors, there is a reasonable expectation that the Group will continue in operational existence
for the foreseeable future, as explained more fully in note 2.2.
Exploration and evaluation assets
These represent the accumulated costs, including capitalised finance costs, (calculated as that
proportion of total finance costs that relates to the funding of exploration activity) and the
allocation of wages and salaries to the Group exploration projects. Their commercial realisation
is dependent upon the successful economic development of the graphite deposits and should the
development not be achieved, an impairment of these assets would arise. At the year end, the
Directors having taken into consideration the progress made on the project in respect of
environmental approval and metallurgical test results, were of the opinion that there were no
indicators of impairment in respect of the Mahenge project.
Impairment of investment in and debts owing by subsidiaries
Investments in subsidiaries represent the accumulated costs that the parent Company has
invested in its subsidiaries to fund the mineral projects. The recovery of these investments is
dependent upon the successful economic development of the graphite deposits and should the
development not be achieved, an impairment of these investments would arise.
Management has assessed the intercompany loans in line with IFRS 9 with the calculation of
expected credit losses considered a key judgement. The assessment of the expected credit losses
is included in Note 14 along with the key assumptions and estimates.
Convertible loan notes
The Company has issued convertible loan notes, the terms of which provide the holders with
alternative bases of conversion. The Directors are required to value the derivative element of the
loan notes which requires them to make judgements on the relative likelihood that each basis of
conversion will apply and then to assess the variable inputs for the Black-Scholes model that is
used to perform the valuation.
Page | 40
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
4.
Financial risk management
Policy
The Group and Company regularly monitor the cash position to ensure liabilities can be met. The
policies on other financial risks are set out below.
Financial risk factors
The risk in relation to financial assets is considered to be minimal and is managed on a day-to-day
basis.
The Group and Company is exposed to liquidity risk, currency risk and capital risk management
arising from the financial instruments it holds. The Company has receivables from its subsidiaries
as disclosed in note 14. The recovery of these receivables is dependent on whether the mining
projects are successful and they are not expected to be recovered in the short term. The risk
management policies employed by the Group and Company to manage these risks are discussed
below:
Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. The
Group and Company manages liquidity risk by maintaining adequate reserves and banking
facilities, by monitoring cash flows and managing the maturity profiles of financial assets and
liabilities within the bounds of contractual obligations.
The Group’s loan notes as described in note 16, stated at their gross, contractual and
undiscounted amount of £472,399 were issued on 11 July 2016. Since the year end, the Board
has determined that the Company will exercise its right to convert all the remaining loan notes
together with the associated accrued interest into ordinary shares in the Company.
Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in
foreign exchange rates. Currency risk arises when future commercial transactions and recognised
assets and liabilities are denominated in a foreign currency that is not the relevant Company’s
functional currency. The Group is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the US and Australian Dollar. The Group’s management
monitors the exchange rate fluctuations on a continuous basis. The Group’s loans are
denominated in GBP as disclosed in note 16.
Interest rate risk
The interest rate on current debt is fixed.
Page | 41
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
4.
Financial risk management (continued)
Capital risk management
The Group and Company manages its capital to ensure that it will be able to continue as a going
concern while maximising the return to shareholders through the optimisation of the debt and
equity balance. This is done through the monitoring of cash flows.
The capital structure of the Group and Company consists of cash and cash equivalents, equity
attributable to equity holders of the parent, (comprising issued capital and reserves less
accumulated losses) and loan notes.
Commodity risk
The value of the Group’s exploration and evaluation assets is principally exposed to graphite. The
value of the projects is vulnerable to fluctuations in the prevailing market price of this commodity.
Other market price risk
The Group holds some strategic equity investments in other companies as shown in note 13. The
Group and Company believe that exposure to market price risk from this activity is acceptable.
Credit risk
The Group’s credit risk is primarily attributable to its cash balances. This risk is considered limited
because the Group cash is held by reputable institutions. The Group’s total credit risk amounts to
the total of the sum of receivables and cash. At the year-end this amount was £372,800 (2019 -
£255,136).
The parent Company financial statements include amounts due from subsidiaries as disclosed in
Note 14. The credit risk associated with these receivables has been disclosed as a key estimate
and judgement as discussed in Note 3.
Fair value estimation
The fair values of the Group’s and Company’s financial assets and liabilities approximate to their
carrying amounts at the reporting date.
Non-current asset investments (excluding investments in subsidiaries at the Company level) are
measured at fair value.
Page | 42
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
4.
Financial risk management (continued)
Financial instruments by category
The Group’s financial instruments consist of cash and cash equivalents, trade and other
receivables, borrowings, trade payables and accruals and convertible loan notes. Financial
instruments are initially recognised at fair value with subsequent measurement depending on
classification. Classification of financial instruments depends on the purpose for which the
financial instruments were acquired or issued, their characteristics, and the Company’s
designation of such instruments.
The Group’s and Company’s financial instruments are all subsequently recognised at amortised
cost, save for listed investments and derivative liabilities which are recognised at fair value.
5.
Segmental information
Costs incurred in developing the Group’s exploration projects are capitalised in full, accordingly,
the expenses reported in the Consolidated Statement of Comprehensive Income solely represent
central Group overheads and impairments.
In terms of assets and liabilities, the only material items are the exploration and evaluation assets
relating to the Group’s project in Tanzania amounting to £4,417,440 (2019, £3,705,210).
6.
Loss before tax
This is stated after charging:
Directors’ emoluments - fees
Auditors’ remuneration:
Fees payable to the Company’s auditors for the audit of the
Group and Company financial statements
Fees payable to the Company’s auditors for taxation compliance
services
Share based payment charge
Change in fair value of derivative
and after crediting:
Release of exchange gains on overseas operation*
Change in fair value of investments
Change in fair value of derivative
2020
£
98,768
2019
£
128,704
22,500
32,000
2,500
-
-
-
176,006
37,143
3,850
22,550
45,467
239,513
46,145
-
* The Company’s interest in the Mpokoto gold project was sold on 11 January 2019, at which
point the accumulated net foreign exchange gains arising on historical revaluations of the
investment were released to income from the foreign exchange reserve
Page | 43
Notes to the financial statements (continued)
For the year ended 31 December 2020
7.
Employees
The average monthly number of persons (including Directors)
employed by the Group and the Company during the year was:
Management
Employment costs
Group
Armadale Capital Plc
2020
2019
5
4
£
£
Wages and salaries (including Directors)
156,445
140,704
Company
Wages and salaries (including Directors)
47,155
58,236
Of the Group wages and salaries £52,000 (2019: £56,000) has been capitalised as exploration
and evaluation expenditure.
8.
Remuneration of Directors of the Company
Aggregate emoluments
127,457
128,704
The Directors of the Group and Company are considered to be the key management personnel.
Page | 44
Notes to the financial statements (continued)
For the year ended 31 December 2020
9.
Taxation
Continuing operations
Current Tax
Armadale Capital Plc
2019
£
2018
£
Current tax on loss for the year
-
-
Continuing operations
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation
Loss on ordinary activities before taxation multiplied
by standard rate of UK corporation tax of 19% (2019:
19%)
Effects of :
Expenses disallowed
Gains not taxable
Losses carried forward not recognised as a deferred
tax asset
UK Corporation tax
2020
£
2019
£
(195,925)
(272,548)
(37,226)
(51,784)
-
12,924
(40,498)
(54,275)
77,724
93,135
-
-
A deferred tax asset of approximately £1,667,000 (2019: £1,589,000) has not been recognised
owing to the uncertainty over the timing of future recoverability. The Group has total carried
forward losses of £8,772,000 (2019: £8,363,000).
10. Profit from discontinued operations, net of tax
Release of foreign exchange gains
2020
£
-
2019
£
239,513
On 11 January 2019, the board announced that agreement had been reached to sell the
Company’s interest in the Mpokoto gold project for potential consideration of a 1.5% royalty on
gold sales achieved once in production. The assets in question had been fully impaired by 31
December 2018 and accordingly no further loss arose on disposal. In view of uncertainty in
respect of the receipt of future royalties under the disposal agreement, no value was placed on
them.
Page | 45
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
10. Profit from discontinued operations, net of tax (continued)
Following completion of the sale, in accordance with the Group’s accounting policy, accumulated
net foreign exchange gains were released to income from the foreign exchange reserve.
11.
Loss per share
The calculation of total loss per share is based on a loss of £195,925 (2019: £272,548), and on
443,889,719 ordinary shares (2019: 371,915,241), being the weighted average number of shares
in issue during the year.
There is no difference between basic loss per share and diluted loss per share as the potential
ordinary shares are anti-dilutive.
The Company has issued options over ordinary shares and warrants to subscribe for ordinary
shares which could potentially dilute basic earnings per share in the future.
12.
Exploration and evaluation assets
Group
Cost
At 1 January
Exchange movements
Additions
At 31 December
2020
£
2019
£
3,705,210
49,765
662,465
4,417,440
3,192,999
(80,859)
593,070
3,705,210
Included in additions are capitalised finance costs of £74,367 (2019: £59,245).
As production has not commenced, no amortisation was charged during the year, in accordance
with the Group’s accounting policy.
13.
Investments
Non-current asset investments - Group
Fair value
At 1 January 2019
Additions
Increase in fair value
At 31 December 2019
Increase in fair value
At 31 December 2020
Listed
investments
£
973
58,637
46,145
105,755
176,006
281,761
Page | 46
Notes to the financial statements (continued)
For the year ended 31 December 2020
13.
Investments (continued)
Non-current asset investments - Company
At 1 January 2019
Additions
Increase in fair value
At 31 December 2019
Increase in fair value
At 31 December 2020
Armadale Capital Plc
Subsidiaries
(at cost)
£
1,600,000
-
-
1,600,000
-
1,600
Listed
Investments
(at fair value)
£
Total
£
58,637
46,145
973 1,600,973
58,637
46,145
105,755 1,705,755
176,006
176,006
281,761 1,881,761
The listed investment acquired in 2019 comprises 2 million common shares of Forum Energy
Metals Corp, incorporated in Canada and listed on the Toronto Stock Exchange.
The subsidiary companies are:
Name and nature of business
Registered Office
Pty
Graphite Advancements
(intermediate holding company)
Graphite Advancements (Tanzania)
Limited* (mining project operator)
Water Utilities Limited
(in process of dissolution)
Ltd
216 St Georges Terrace, Perth,
WA 6000, Australia
PO Box 105589, Dar es Salaam,
Tanzania
171 Main Street, Road Town,
British Virgin Islands
Class of
shares
Ordinary
%
held
100
Ordinary
100
Ordinary
100
*Held through Graphite Advancements Pty Ltd
Under the terms of acquisition of Netcom Global Inc, a former subsidiary company, further
ordinary shares in the Company are potentially to be issued to the vendors as follows:
• up to 160 million (now 1.07 million*) Shares to be issued upon the completion of two key
milestones (the “Milestone Shares”):
• 60 million (now 0.4 million*) Ordinary Shares upon the delineation of a JORC reserve of
at least 120,000 ounces of gold; and
• 100 million (now 0.667 million*) Ordinary Shares upon the production of the first 5,000
ounces of gold from the project.
Page | 47
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
13.
Investments (continued)
The Directors assessed a 100% likelihood of the first milestone being achieved and a 50%
likelihood of the second milestone being achieved.
The value of the milestone shares was included as part of the cost of the investment in Netcom,
valued at 0.26p per share.
The conditions applying to the Milestone Shares have not yet been fulfilled. Despite the
subsequent disposal of Netcom Global Inc., the Company has retained the obligation to issue the
Milestone Shares should the conditions be fulfilled.
*refer to note 18 for more details on share consolidation and restructure
14.
Trade and other receivables
Group
Other receivables
Total current receivables
Company
Amounts owed by group undertakings
Provision for impairment
Other receivables
Total current receivables
2020
£
2019
£
121,062
121,062
159,495
159,495
3,476,810
(695,362)
2,781,448
2,596,192
(517,535)
2,078,657
111,642
2,893,090
77,097
2,155,754
Page | 48
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
14.
Trade and other receivables (continued)
Mahenge Liandu Graphite Project
The provision against the intercompany loans arises from the application of the expected credit
loss model under IFRS 9. The loans to the subsidiary companies are repayable on demand. As the
subsidiaries do not have sufficient current assets to repay the loans, the loans will be classified as
stage 3 of the expected credit loss model. In the current year £177,827 has been recognised under
the expected credit loss model resulting in an accumulated provision of £695,362.
As part of assessing the intercompany loan receivable, the Directors have considered the
exploration project risks provided in the competent persons report along with the cash flow
scenarios for the repayment of the loan. Notwithstanding the requirements of IFRS 9 in respect
to the assessment of the intercompany loan, the Directors have identified no indicators of
impairment in the Group accounts and the project is highly prospective with significant upside
potential.
15.
Trade and other payables
Group
Trade payables
Other creditors and accruals
Company
Trade payables
Other creditors and accruals
All trade and other payables are due within three months.
2020
£
100,094
70,281
170,375
2019
£
190,245
77,321
267,566
33,354
52,221
85,575
30,212
54,833
85,045
Page | 49
Notes to the financial statements (continued)
For the year ended 31 December 2020
16.
Loans
Group and Company
At 1 January 2019
Drawn down
Notes issued
Transfer to derivative element
Accrued interest
Accretion of liability
Interest paid
Capital repaid
At 31 December 2019
Drawn down
Converted
Accrued interest
Accretion of liability
Interest paid
Capital repaid
At 31 December 2020
10% Notes (issued 2016)
Armadale Capital Plc
Loan
10% Notes
(Issued 2016)
£
£
205,071
30,000
-
-
20,028
-
(20,028)
(235,071)
-
50,000
-
5,000
-
(5,000)
(50,000)
-
472,399
-
-
-
49,466
-
-
-
521,865
-
-
54,803
-
-
-
576,668
10%
Notes
(issued
2019)
£
-
-
400,000
(74,067)
6,712
12,344
-
-
344,989
-
(370,793)
16,897
30,673
(21,766)
-
-
Total
£
677,470
30,000
400,000
(74,067)
76,206
12,344
(20,028)
(235,071)
866,854
50,000
(370,793)
76,700
30,673
(26,766)
(50,000)
576,668
The 10% Loan Notes issued on 11 July 2016 were part of the consideration for the acquisition of
Graphite Advancements Pty Ltd (see note 12). The Loan Notes are unsecured, accrue interest at
10% per annum, and are convertible at the option of the Company into Ordinary Shares at 2p
per Ordinary Share, together with any interest owing. The Loan Notes convert 12 months from
issue, or earlier at the option of the Company, provided such conversion does not result in the
holders owning more than 29.9% of the issued share capital of the Company. On 11 July 2017,
the loan notes matured. 4,343,724 shares of nominal value 0.1p were issued at a share price of
2p. All other loan notes were extended by the holders and, since the year end, the Board has
determined that the Company will exercise its right to convert all the remaining loan notes
together with the associated accrued interest into ordinary shares in the Company.
Page | 50
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
16.
Loans (continued)
10% Notes (issued 2019)
On 30 October 2019, the Company announced the issue of a new £400,000 convertible 10% loan
note with a maturity date of 6 November 2020. Holders were able at any time up to the 11th
trading day prior to maturity, to convert their notes at a fixed price of 3p per share and all holders
chose to do so. Accordingly, the alternative conversion option whereby, in the final ten trading
days, holders would have been able to convert at a price per share set at 90% of the Volume
Weighted Average Share Price of the previous 10 trading days ceased to apply.
Under IFRS 9, the option to convert constitute an embedded derivative which had to be
separated from the underlying obligation on the basis of its fair value, which value had to be
reassessed at each accounting date (see note 17). The remaining liability element had to be
restored to its original face value by means of accretion charged over the life of the notes.
Loan
The 2019 loan was advanced under the terms of a £400,000 facility contracted on 11 October
2017. The loan bore interest at 10% per annum and has been repaid in full in cash.
On 30 October 2019, the Company agreed the terms of a new 12 month facility of £300,000
which may be drawn down in whole or in part, at any time. If an amount were drawn down an
additional 10% was added to the amount drawn and this became the amount to be repaid. There
were no other charges and no facility fee. The lender had conversion options on the same terms
as the 2019 loan note holders.
17. Derivative liability
Group and Company
At 1 January 2019
Transferred from loan note liability
Increase in fair value
At 31 December 2019
Decrease in fair value
Converted
At 31 December 2020
£
-
74,067
45,467
119,534
(37,143)
(82,391)
-
To determine the derivative liability, its value was calculated on the basis of both conversion
options (see note 16) and an average of the two valuations, weighted by reference to the relative
expectations that each would apply, was computed.
Page | 51
Notes to the financial statements (continued)
For the year ended 31 December 2020
17. Derivative liability (continued)
Armadale Capital Plc
The fixed price conversion option was valued using the Black-Scholes model with the following
inputs
Share price at issue (30 October 2019)
Share price at year end
Conversion price
Expected volatility
Risk free rate of interest
Expected dividend yield
Expected life
2.7p
3.7p
3p
82%
0.58%
0%
1 year
The variable price conversion option was valued on the basis of the discount to market price
applicable under this option.
In determining the weighting to be applied the Directors took account of subsequent share price
movements and of the uncertainties associated with projects of this nature. They concluded that
the two options were equally likely to apply.
The valuation exercise was repeated at each reporting date and the resultant change in fair value
was included in the statement of comprehensive income.
Page | 52
Notes to the financial statements (continued)
For the year ended 31 December 2020
18. Share capital
Armadale Capital Plc
Ordinary Shares
of 0.01p/0.1p each*
Number
£
Deferred Shares
of 0.14p each
Deferred Shares
of 1.4p each
Total
Number
£
Number
£
£
At 1 January 2019
Issue of shares:
Placings
On exercise of
warrants
At 31 December 2019
Issue of shares:
Placings
On exercise of
warrants
On conversion of loan
notes
At 31 December 2020
303,033,975
303,034
1,531,374,350 2,143,923
42,260,533 591,648
3,038,605
100,075,506
100,076
-
-
-
-
100,076
453,749
403,563,230
454
403,564
-
-
1,531,374,350 2,143,923
-
-
42,260,533 591,648
454
3,139,135
24,444,444
24,445
30,469,356
30,469
-
-
-
-
-
-
-
-
24,445
30,469
13,333,329
471,810,359
13,333
471,811
-
-
1,531,374,350 2,143,923
-
-
42,260,533 591,648
13,333
3,207,382
*The nominal value of each Ordinary Share was 0.01p until the consolidation and reorganisation
of the share capital on 22 June 2015 and 0.1p thereafter.
In April 2020, 22,222,222 shares were placed at 2.25p per share raising £550,000. During the year
warrants to subscribe for 29,469,356 shares at 2.2p per share and options to subscribe for
1,000,000 shares at 2p per share were exercised raising £668,326 in total. Details of warrants are
in note 19.
Page | 53
Notes to the financial statements (continued)
For the year ended 31 December 2020
19. Warrants to subscribe for Ordinary Shares
Armadale Capital Plc
In connection with the placing of shares in February 2019, 72,297,728 warrants to subscribe for
shares in the Company were issued (one for each share placed) at a price of 2.2p per share with a
life to expiry of three years.
In connection with the placing of shares in September 2019, 27,777,778 warrants to subscribe for
shares in the Company were issued (one for each share placed) at a price of 3.0p per share with a
life to expiry of three years.
In connection with the placing of shares in April 2020, 24,444,444 warrants to subscribe for shares
in the Company were issued (one for each share placed) at a price of 3.25p per share with a life to
expiry of two years.
A summary is as follows
February 2019
Warrants
(2.2p)
-
72,992,728
(453,749)
72,538,979
-
(29,469,356)
43,069,623
September
2019
Warrants
(3.0p)
-
27,777,778
-
27,777,778
-
-
27,777,778
April 2020
Warrants
(3.25p)
-
-
-
24,444,444
-
24,444,444
Total
-
100,770,506
(453,749)
100,316,757
24,444,444
(29,469,356)
95,291,845*
At 1 January 2019
Issued
Exercised
At 31 December 2019
Issued
Exercised
At 31 December 2020
* representing 20.2% of the issued share capital of the Company
The estimated fair value of the April 2020 warrants, calculated using the Black-Scholes model,
was £239,556. This amount was charged to the share premium account to recognise the cost of
issuing the warrants.
The inputs to the model were as follows:
Share price
Subscription price
Expected volatility
Risk free rate of interest
Expected dividend yield
Expected life
2.3p
3.25p
100%
0.6%
0%
2 years
Expected volatility was determined by reference to the historical volatility of the Company’s share
price.
Page | 54
Notes to the financial statements (continued)
For the year ended 31 December 2020
20.
Share based payment arrangements
A summary of outstanding options is as follows:
Exercise
price
At 1
January
2019
Granted
Lapsed
At 31
December
2019
-
-
-
-
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
-
-
-
-
Directors
ES Mahede
Granted
10.08.16
Granted
10.08.16
N Johansen
Granted
18.10.16
Granted
18.10.16
P Johnson
Granted
11.03.19
W Frewen
Granted
21.07.16
Consultants
Granted
01.10.13
Granted
19.11.14
3p
4p
4p
5p
2.2p
2p
15p
15p
Armadale Capital Plc
Exercised
Lapsed
At 31
December
2020
-
-
-
-
-
(250,000)
(250,000)
(250,000)
(250,000)
-
-
-
-
-
-
-
-
5,000,000
-
66,667
300,000
-
(2,500,000)
5,000,000
7,500,000
1,000,000
1,000,000
(1,000,000)
66,667
300,000
-
-
2,366,667 7,500,000
-
-
66,667
300,000
-
-
(2,500,000)
7,366,667
(1,000,000)
(1,000,000)
5,366,667*
The number of options and their exercise prices have been adjusted for the effects of the share
capital sub-division on 28 June 2013 and the share capital consolidation and reorganisation on 22
June 2015
*representing 1.33% (2019, 2.43%) of the issued share capital of the Company
All the outstanding options held at the year-end were exercisable at a weighted average exercise
price of 3p (2019:3p).
The Johnson options have a life of three years from the date of grant. The consultant options have
a life of 10 years. All options are time based with no other conditions.
Page | 55
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2020
21. Reserves
A description of the nature of each Reserve and a summary of movements are shown in the
Statements of Changes in Equity on pages 27 and 28.
22.
Related party transactions
In respect of the Company, amounts, net of provisions, due from subsidiary undertakings were
£2,781,448 (2019 £2,078,657), the movement being amounts lent to the subsidiaries less an
increase in provisions.
23. Ultimate controlling party
There was no ultimate controlling party during the year.
24.
Subsequent events
Since the year end, the Company has allotted a total of 10,467,915 Ordinary Shares of 0.1p in
connection with the exercise by shareholders of warrants issued in conjunction with previous
share placings. Proceeds received were £245,000.
On 30 March 2021, the Company announced that its Environmental and Social Impact Assessment
had been formally approved by the National Environment Management Council of Tanzania.
On 22 April 2021, the Company announced the successful completion of phase 1 of the
metallurgical bulk test work programme.
Page | 56
Armadale Capital Plc
Notice of Annual General Meeting
ARMADALE CAPITAL PLC
1 Arbrook Lane, Esher, Surrey, KT10 9EG
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of Armadale Capital Plc (‘the Company’) will be
held at Suite 2, 1 Altona Street, West Perth, Western Australia on 28 June 2021 at 17.00 AWST (10:00
BST) for the purpose of considering and, if thought fit, passing the following Resolutions which will be
proposed as ordinary resolutions in the cases of Resolutions 1 to 4 and as a special resolution in the case
of Resolution 5.
As a result of the ongoing coronavirus global pandemic and the measures put in place to restrict public
gatherings and all but essential travel, for the safety of our shareholders, our advisers and the general
public, attendance at the Annual General Meeting in person will not be possible and shareholders,
proxies and corporate representatives will not be permitted entry. Shareholders are encouraged to
vote by proxy in advance of the meeting following the procedure set out below. Voting at the meeting
will be carried out by way of a poll so that proxy votes can be taken into account. The results of the poll
will be announced as soon as practicable after the meeting.
ORDINARY BUSINESS
1. To receive the report of the Directors and the audited financial statements of the Company for
the year ended 31 December 2020.
2. To reappoint Nicholas Johansen as a Director of the Company, who resigns by rotation and
offers himself for reappointment under the Articles of Association of the Company.
3. To reappoint James Cowper Kreston as auditors of the Company to act until the conclusion of
the next Annual General Meeting and to authorise the Directors to determine the
remuneration of the auditors.
SPECIAL BUSINESS
ORDINARY RESOLUTION
4. That in substitution for all existing and unexercised authorities, the Directors of the Company
be and they are hereby generally and unconditionally authorised for the purpose of section 551
of the Companies Act 2006 (‘the Act’) to exercise all or any of the powers of the Company to
allot Relevant Securities (as defined in this Resolution) up to a maximum nominal amount of
£200,000 provided that this authority shall, unless previously revoked or varied by the Company
in general meeting, expire on the earlier of the conclusion of the next Annual General Meeting
of the Company or 15 months after the passing of this Resolution, unless renewed or extended
prior to such time except that the Directors of the Company may before the expiry of such
period make an offer or agreement which would or might require Relevant Securities to be
allotted after the expiry of such period and the Directors of the Company may allot Relevant
Securities in pursuance of such offer or agreement as if the authority conferred hereby had not
expired. In this Resolution, “Relevant Securities” means any shares in the capital of the Company
and the grant of any right to subscribe for, or to convert any security into, shares in the capital
of the Company (“Shares”) but does not include the allotment of Shares or the grant of a right
to subscribe for Shares in pursuance of an employee’s share scheme or the allotment of Shares
pursuant to any right to subscribe for, or to convert any security into, Shares.
Page | 57
Armadale Capital Plc
SPECIAL RESOLUTION
5. That in substitution for all existing and unexercised authorities and subject to the passing of the
preceding Resolution, the Directors of the Company be and they are hereby empowered
pursuant to section 570 of the Act to allot equity securities (as defined in section 560 of the Act)
for cash pursuant to the authority conferred upon them by the preceding Resolution as if section
561(1) of the Act did not apply to any such allotment provided that the power conferred by this
Resolution, unless previously revoked or varied by special resolution of the Company in general
meeting, shall be limited to:
(a)
(b)
the allotment of ordinary shares of 0.1p each in the capital of the Company arising from the
exercise of options and warrants outstanding at the date of this Resolution;
the allotment of equity securities in connection with a rights issue in favour of ordinary
shareholders
where the equity securities respectively attributable to the interest of all such shareholders are
proportionate (as nearly as may be) to the respective numbers of the ordinary shares held by
them subject only to such exclusions or other arrangements as the Directors of the Company may
consider appropriate to deal with fractional entitlements or legal and practical difficulties under
the laws of, or the requirements of any recognised regulatory body in, any territory; and
(c)
the allotment (otherwise than pursuant to subparagraphs (a) and (b) above) of equity securities
up to an aggregate nominal amount of £200,000;
and shall expire on the earlier of the date of the next Annual General Meeting of the Company or 15
months from the date of the passing of this Resolution save that the Company may before such expiry
make an offer or agreement which would or might require equity securities to be allotted after such
expiry and the Directors may allot equity securities in pursuance of such offer or agreement as if the
power conferred hereby had not expired.
Registered Office:
1 Arbrook Lane
Esher, Surrey, KT10 9EG
28 May 2021
By order of the Board
Timothy Jones
Company Secretary
Notes to the Notice of Annual General Meeting
Entitlement to attend and vote
1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies
that only those members registered on the Company’s register of members 48 hours before the
time of the Meeting shall be entitled to attend and vote at the Meeting.
Page | 58
Armadale Capital Plc
Appointment of proxies
2.
If you are a member of the Company at the time set out in note 1 above, whether or not you are
able to attend the meeting, you may use the enclosed form of proxy to appoint a proxy to exercise
all or any of your rights to attend, speak and vote at the Meeting and you should have received a
proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out
in these notes and the notes to the proxy form.
3. A proxy does not need to be a member of the Company but must attend the Meeting to represent
you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using
the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your
behalf at the Meeting you will need to appoint your own choice of proxy (not the Chairman) and
give your instructions directly to them.
4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached
to different shares. You may not appoint more than one proxy to exercise rights attached to any
one share. To appoint more than one proxy, please contact the registrars of the Company, Share
Registrars Limited on 01252 821 390.
5. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation
of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain
from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks
fit in relation to any other matter which is put before the Meeting.
Appointment of proxy using hard copy proxy form
6. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or
withhold their vote.
To appoint a proxy using the proxy form, the form must be: completed and signed;
sent or delivered to Share Registrars Limited at The Courtyard, 17 West Street, Farnham, Surrey
GU9 7DR or by facsimile transmission to 01252 719 232; and received by Share Registrars Limited
no later than 48 hours (excluding non-business days) prior to the Meeting.
In the case of a member which is a Company, the proxy form must be executed under its common
seal or signed on its behalf by an officer of the Company or an attorney for the Company.
Any power of attorney or any other authority under which the proxy form is signed (or a duly
certified copy of such power or authority) must be included with the proxy form.
Appointment of proxy by joint members
7.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy,
only the appointment submitted by the most senior holder will be accepted. Seniority is determined
by the order in which the names of the joint holders appear in the Company’s register of members
in respect of the joint holding (the first named being the most senior).
Changing proxy instructions
8. To change your proxy instructions simply submit a new proxy appointment using the methods set
out above. Note that the cut-off time for receipt of proxy appointments (see above) also apply in
relation to amended instructions; any amended proxy appointment received after the relevant cut-
off time will be disregarded.
Where you have appointed a proxy using the hardcopy proxy form and would like to change the
instructions using another hardcopy proxy form, please contact Share Registrars Limited on 01252
821 390.
If you submit more than one valid proxy appointment, the appointment received last before the
latest time for the receipt of proxies will take precedence.
Page | 59
Armadale Capital Plc
Termination of proxy appointments
9.
In order to revoke a proxy instruction you will need to inform the Company using one of the
following methods:
By sending a signed hard copy notice clearly stating your intention to revoke your proxy
appointment to Share Registrars Limited at The Courtyard, 17 West Street, Farnham, Surrey GU9
7DR or by facsimile transmission to 01252 719 232. In the case of a member which is a company,
the revocation notice must be executed under its common seal or signed on its behalf by an officer
of the Company or an attorney for the Company. Any power of attorney or any other authority
under which the revocation notice is signed (or a duly certified copy of such power or authority)
must be included with the revocation notice.
In either case, the revocation notice must be received by Share Registrars Limited no later than 48
hours (excluding non-business days) prior to the Meeting.
If you attempt to revoke your proxy appointment but the revocation is received after the time
specified then, subject to the paragraph directly below, your proxy appointment will remain valid.
Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If
you have appointed a proxy and attend the Meeting in person, your proxy appointment will
automatically be terminated.
Issued shares and total voting rights
10. At 26 May 2021 the Company’s issued share capital comprised 482,278,272 Ordinary Shares. Each
Ordinary Share carries the right to one vote at a general meeting of the Company and, therefore,
the total number of voting rights in the Company as at 26 May 2021 is 482,278,272
Communications with the Company
11. Except as provided above, members who have general queries about the Meeting should email the
Company Secretary, Timothy Jones, on tim@timothyjones.co.uk (no other methods of
communication will be accepted). You may not use any other electronic address provided either in
this notice of general meeting; or any related documents (including the chairman’s letter and proxy
form), to communicate with the Company for any purposes other than those expressly stated.
CREST
12. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy
appointment service may do so for the General Meeting and any adjournment(s) thereof by using
the procedures described in the CREST Manual.
CREST Personal Members or other CREST sponsored members, and those CREST members who have
appointed a voting service provider(s) should refer to their CREST sponsor or voting service
provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the
appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in
accordance with Euroclear UK & Ireland Limited’s specifications and must contain the information
required
(available via
euroclear.com/CREST).
instructions, as described
the CREST Manual
for such
in
The message, regardless of whether it relates to the appointment of a proxy or to an amendment
to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted
so as to be received by the issuer’s agent (ID: 7RA36) by the latest time(s) for receipt of proxy
appointments specified above. For this purpose, the time of receipt will be taken to be the time (as
determined by the timestamp applied to the message by the CREST Applications Host) from which
the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by
CREST. After this time, any change of instructions to proxies appointed through CREST should be
communicated to the appointee through other means.
Page | 60
Armadale Capital Plc
CREST members and, where applicable, their CREST sponsors or voting service providers should note
that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any
particular messages. Normal system timings and limitations will therefore apply in relation to the
input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take
(or, if the CREST member is a CREST personal member or sponsored member or has appointed a
voting service provider(s), to procure that his or her CREST sponsor or voting service provider(s)
take(s)) such action as shall be necessary to ensure that a message is transmitted by means of CREST
by any particular time. In this connection, CREST members and, where applicable, their CREST
sponsors or voting service providers are referred, in particular, to those sections of the CREST
Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
Page | 61