Armadale Capital Plc
Annual Report and Accounts
31 December 2022
Armadale Capital Plc
Contents
Officers and Professional Advisers ............................................................................................................. 3
Strategic Report ......................................................................................................................................... 4
Directors’ Report ...................................................................................................................................... 10
Independent Auditor’s Report ................................................................................................................. 16
Consolidated Statement of Comprehensive Income ............................................................................... 22
Consolidated Statement of Financial Position ......................................................................................... 23
Company Statement of Financial Position ............................................................................................... 24
Consolidated Statement of Changes in Equity ......................................................................................... 25
Company Statement of Changes in Equity .............................................................................................. 26
Consolidated Statement of Cash Flows ................................................................................................... 27
Company Statement of Cash Flows ......................................................................................................... 28
Notes to the financial statements ........................................................................................................... 29
Notice of Annual General Meeting .......................................................................................................... 49
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
1 Bartholomew Close
London EC1A 7BL
Auditors
James Cowper Kreston Audit
Reading Bridge House
George Street
Reading
RG1 8LS
Solicitors
Druces LLP
Salisbury House
London Wall
London EC2M 5PS
Registrars
Share Registrars Limited
3 Millennium Centre
Crosby Way
Farnham
Surrey GU9 7XX
Armadale Capital Plc
Page | 3
Armadale Capital Plc
Strategic Report
For the year ended 31 December 2022
Armadale Capital plc (LON: ACP), the AIM quoted investment group focused on natural resource projects
in Africa and the development of the long‐life low‐cost Mahenge Liandu Graphite Project in Tanzania is
pleased to announce its Final Results for the Year Ended 31 December 2022.
Operational and Corporate Highlights for Period Ending 31 December 2022
Significant progress made in delivering key accretive milestones in advancing the Mahenge Liandu
Graphite Project in Tanzania
1.
2.
3.
for graphite mineralisation and materially enhance
In February 2022 the Company applied for three incremental exploration licences which are
the Mahenge Liandu
prospective
Project's exploration potential.
In March, the Company, pursuant to environmental compliance requirements of the mining license,
successfully completed the installation of a weather station and has commenced the monthly
collection of data. The station records data at 5 second intervals and covers all weather parameters
including temperature, pressure, wind, moon phase, humidity, solar radiation and rainfall. All data
is automatically uploaded to the cloud. This data is critical to establishing the base line information
required to assist with the planning of the mining operations on the Project.
In addition, the Company has also installed a total of 7 stream gauges and one barotroll in the water
streams located at the mine site in March 2022 which will be used for the hydrological studies which
will assist in the location and design of infrastructure for the operations. The devices record 3
parameters which are temperature, pressure and depth at 5 second intervals. The data from all
devices are being manually downloaded at a frequency rate of once per month.
4. As Part of the ongoing FEED study, the Company cleared pads for geotech drilling at the proposed
plant Site and tailing dam location. 10 pads were cleared at the tailing storage facility area and 6
pads were cleared at the plant site area as a part of geotechnical studies and the Company is now
preparing for Diamond Drilling in the proposed areas
5. A test pit program has been completed at the proposed plant site, tailing storage facility and the
access road areas. A total of 41 test pits with 3 meters depth have been excavated, DCP tested,
strata logged, sampled and backfilled. 11 pits have been excavated at plant site, 25 pits excavated
at tailing storage facility and 5 pits excavated at the access road to the mine site.
6. The Company was granted the prospecting license PL 119961/ 2022 by the ministry of minerals on
28 June 2022, for the exploration of graphite minerals. The license area comprises of 19.99 square
kilometres, located at Isongo and Liandu villages of Ulanga District, in Morogoro Region.
7. Through the year, the Company’s primary focus was on securing project development funding for
the Mahenge Liandu Graphite project while advancing the permitting and local community
engagement.
8. The Company has received an encouraging level of interest in funding the Mahenge Liandu Graphite
project and has advanced its discussions with a number of potential finance partners with respect
to securing project development funding.
Page | 4
Armadale Capital Plc
Strategic Report (Continued)
For the year ended 31 December 2022
Post Period End
9. The Company continues to collect environmental baseline data as is required for the compliance of
the mining lease and to assist in the design and planning of the proposed mining operations. In
addition, the base line data for temperature, pressure, wind, moon phase, humidity, solar radiation,
rainfall and stream flow data assists the local community to have access to regional weather data
for local planning requirements in the Mahenge region.
10. Planning underway for Geotech drilling, with the sites now prepared for the drill rig. The information
from the proposed drilling program will enable the detailed design of the plant and tails storage
area. This information will enhance the data from the test pits that were completed last year.
11. Logistics routes for the product continue to be assessed to determine the optimum methods to
ensure the final product will enter the market at the desired price level.
12. Discussions are ongoing with the Government of Tanzania regarding the framework for the 16%
ownership, with draft Shareholder agreements, Articles of Association and Joint Financial model
being submitted to both parties for review.
13. Ongoing review of quoted portfolio, where the Directors believe there are opportunities for capital
gains
14. Continue to actively review other exciting investment opportunities.
During the year under review, Armadale continued to operate as a diversified investing group focused
on 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. At present, the Company is actively marketing the Project to potential industry partners and
end users (offtakers) of graphite products. The Company is also pursuing a range of potential options
relating to development finance for the project
PASSIVELY MANAGED INVESTMENTS
Mantengu Mining Limited (formerly Mine Restoration Investments Limited) South Africa
The Company’s holding of shares in Mantengu Mining Limited (“MML”) (formerly Mine Restoration
Investments Limited), which were fully written off when MML entered administration, have been
reinstated at their fair value of £105,000 following a reverse takeover by MML and a relisting of its
shares on the Johannesburg Stock Exchange.
Page | 5
Armadale Capital Plc
Strategic Report (Continued)
For the year ended 31 December 2022
Quoted Portfolio
The Company has a portfolio of quoted investments, valued at £1,245,000 on 4 May 2023, 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.
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, environmental 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:
• Although reducing throughout the year under review, COVID‐19 continues to have 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 on the project is so far
minimal as the Company’s site activities were substantially completed in 2019.
• Through the Mahenge Liandu Graphite Project the Group is very exposed to graphite. Graphite
is a relatively new commodity whose market is being driven by demand in renewable energy.
The Company believes it is thus vulnerable to changing global energy policies.
• 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 availability and access to future funding within the global economic environment.
• The Group operates in multiple national jurisdictions and is therefore vulnerable to changes in
government policies which are outside
its control. The mining regulation changes
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.
Page | 6
Armadale Capital Plc
Strategic Report (Continued)
For the year ended 31 December 2022
Principal Risks and Uncertainties
• The Group is exposed to gold as the holder of a royalty on gold production from its previously
held gold project. The Group’s potential future royalty stream will be affected by fluctuations in
the prevailing market price of gold and to variations of the US dollar in which gold sales will be
denominated.
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.
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 —
Page | 7
Armadale Capital Plc
Strategic Report (Continued)
For the year ended 31 December 2022
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 manager 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.
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.
Page | 8
Armadale Capital Plc
Strategic Report (Continued)
For the year ended 31 December 2022
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
There were no changes in the Board during the year under review or post period end. The Board
continues to consider potential replacements for former Board members with a focus on a potential
appointment of a UK based Board member.
Financial Results
For the year ended 31 December 2022 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 £0.206 million (2021: £0.333 million) for the year ended 31
December 2022. Expenditure on the Mahenge Liandu project during the year amounted to £0.468
million (2021: £0.272 million), which was capitalised as additional exploration and evaluation assets.
Funds raised during the year amounted to £1.3 million from the exercise of warrants and options.
At 31 December 2022, the Group had cash of £1,046,000 (2021: £886,000) and nil debt finance
(2020: nil). At 4 May 2023 the Group had cash of £737,000 and listed investments worth £1,245,000.
Outlook
The year under review shows that Mahenge Liandu continues to represent 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. The Directors
continue to keep other investment opportunities, in line with the Group’s investment objectives, under
review, which the board believe could deliver significant value to shareholders.
Nicholas Johansen
Director
11 May 2023
Page | 9
Armadale Capital Plc
Directors’ Report
For the year ended 31 December 2022
The Directors submit their report and the financial statements of Armadale Capital Plc (‘Armadale’ or
the ‘Company’) for the year ended 31 December 2022.
Results and dividends
The financial statements have been prepared in accordance with International Financial Reporting
Standards as adopted by the United Kingdom. The loss of the Group for the year ended 31 December
2022 was £206,000 (2021, £333,000). 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 (2021, £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 is included in the Strategic
Report.
Directors
The following Directors have held office during the year:
Nicholas Johansen
Matt Bull
Page | 10
Armadale Capital Plc
Directors’ Report (continued)
For the year ended 31 December 2022
Directors’ interests
Directors’ interests, including family interests, in the Ordinary Share capital, were as follows:
N Johansen
M Bull
31 December
2022
No:
2,012,122
47,783,284
31 December
2021
No:
2,012,122
39,931,011
Directors’ interests, including family interests, in Warrants to subscribe for Ordinary Shares in the
Company were as follows:
M Bull
M Bull
(2.2p warrants)
(3p warrants)
31 December
2022
No:
‐
‐
31 December
2021
No:
7,852,273
1,666,667
The warrants in which the Directors were interested expired during the year.
Substantial shareholdings
At 4 May 2022 the Company was aware of the following interests in 3% or more of the issued share
capital of the Company:
Interactive Investor Services Clients
Hargreaves Lansdown Clients
Halifax Share Dealing Clients
Matt Bull
UBS Nominees
Kabunga Holdings Pty Ltd
Barclays Clients
IG Markets Clients
AJ Bell Clients
14.1%
13.0%
8.5%
8.1%
5.9%
5.9%
3.4%
3.4%
3.2%
Page | 11
Armadale Capital Plc
Directors’ Report (continued)
For the year ended 31 December 2022
Issue of Shares
Details of Ordinary Shares issued during the year are set out in note 15 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 16 and 17 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
M Bull
ES Mahede
A Suedi
2022
£’000
30
93
-
-
2021
£’000
30
69
22
8
The Remuneration of Directors is determined by the Board within the limits set out in the Articles of
Association of the Company.
Page | 12
Armadale Capital Plc
Directors’ Report (continued)
For the year ended 31 December 2022
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 United Kingdom. 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 United Kingdom, 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 | 13
Armadale Capital Plc
Directors’ Report (continued)
For the year ended 31 December 2022
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 2022, the Group had cash of £1,046,000 (2021, £886,000) and no debt finance (2021,
nil).
At 4 May 2023, the Company had cash of £737,000 and listed investments with a traded value of
£1,245,000. 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 | 14
Armadale Capital Plc
Directors’ Report (continued)
For the year ended 31 December 2022
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 subscribed for 1.6 million shares in Celsius Resources Limited, a
company listed on the Alternative Investment Market of the London Stock Exchange, for a consideration
of £125,000 in cash.
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
making appropriate enquiries of fellow Directors and of the Company’s auditors
that
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
11 May 2023
Page | 15
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc
For the year ended 31 December 2022
Opinion
We have audited the financial statements of Armadale Capital Plc (the ‘Parent Company’) and its
subsidiaries (together, the ‘Group’) for the year ended 31 December 2022 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 United
Kingdom 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 2022 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 United Kingdom;
the Parent Company financial statements have been properly prepared in accordance with IFRSs as
adopted by the United Kingdom 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 | 16
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (Continued)
For the year ended 31 December 2022
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 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 | 17
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (Continued)
For the year ended 31 December 2022
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 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 applications
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 enquires 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 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 | 18
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (Continued)
For the year ended 31 December 2022
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 £150,000 and for the parent company financial statements to be £140,000
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 entity in natural resources development and
investment, 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 £6,000. We also agreed to report differences below these thresholds
that, in our view, warranted reporting on qualitative grounds.
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.
Page | 19
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (Continued)
For the year ended 31 December 2022
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.
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.
Page | 20
Armadale Capital Plc
Independent Auditor’s Report to the Shareholders of Armadale Capital Plc (Continued)
For the year ended 31 December 2022
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.
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 Audit
Statutory Auditors
Reading Bridge House
George Street
Reading
RG1 8LS
11 May 2023
Page | 21
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
Armadale Capital Plc
Administrative expenses
Change in fair value of investments
Operating loss
Finance costs
Loss before taxation
Taxation
Loss after taxation
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translating foreign entities
Total comprehensive profit/(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 loss per share
Note
11
5
8
2022
£’000
(309)
103
(206)
‐
(206)
‐
(206)
252
46
Pence
9
(0.04)
2021
£’000
(330)
8
(322)
(11)
(333)
‐
(333)
(61)
(394)
Pence
(0.07)
The notes on pages 29 to 48 form part of the financial statements.
Page | 22
Consolidated Statement of Financial Position
At 31 December 2022
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
Total Liabilities
Armadale Capital Plc
Note
10
11
12
14
17
17
17
17
17
13
2022
£’000
5,483
562
6,045
150
1,046
1,196
7,241
3,324
25,153
286
362
318
(22,279)
7,164
77
77
2021
£’000
4,727
138
4,865
150
886
1,036
5,901
3,275
23,906
286
925
66
(22,636)
5,822
79
79
Total equity and liabilities
7,241
5,901
The notes on page 29 to 48 form part of the financial statements.
Approved by the Board and authorised for issue on 11 May 2023
Signed on behalf of the Board
M Bull
Director
N Johansen
Director
Page | 23
Company Statement of Financial Position
At 31 December 2022
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
Total liabilities
Armadale Capital Plc
Note
11
12
12
14
17
17
17
17
13
2022
£’000
1,769
4,426
6,195
126
650
776
2021
£’000
1,738
3,460
5,198
136
562
698
6,971
5,896
3,324
25,153
286
362
(22,228)
6,897
74
74
3,275
23,906
286
925
(22,553)
5,839
57
57
Total equity and liabilities
6,971
5,896
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 £238,000 (2020:
£383,000) has been included in the financial statements of the parent company.
The notes on pages 29 to 48 form part of the financial statements.
Approved by the Board and authorised for issue on 11 May 2023
Signed on behalf of the Board
M Bull
Director
N Johansen
Director Company Registration No. 5541602
Page | 24
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Share
Capital
Share
Premium
Shares to
be issued
£’000
3,208
£’000
22,348
£’000
286
-
-
-
67
‐
67
-
-
-
1,558
‐
1,558
-
-
-
‐
‐
‐
Share
Option and
Warrant
Reserve
£’000
762
-
-
-
266
(103)
163
At 1 January 2021
Loss for the period
Other comprehensive loss
Total comprehensive loss for the
year
Issue of shares and warrants
Transfer on exercise of warrants
Total other movements
At 31 December 2021
3,275
23,906
286
925
Loss for the period
Other comprehensive income
Total comprehensive income for
the year
Issue of shares
Transfer on exercise and expiry
of warrants
Total other movements
‐
‐
‐
49
‐
49
‐
‐
‐
1,247
‐
1,247
‐
‐
‐
-
‐
‐
‐
‐
‐
-
(563)
(563)
Armadale Capital Plc
Foreign
Exchange
Reserve
£’000
127
‐
(61)
(61)
‐
‐
‐
66
‐
252
252
-
‐
‐
Retained
Earnings
Total
£’000
(22,406)
(333)
‐
(333)
‐
103
103
£’000
4,325
(333)
(61)
(394)
1,891
‐
1,891
(22,636)
5,822
(206)
‐
(206)
-
563
563
(206)
252
46
1,296
‐
1,296
At 31 December 2022
3,324
25,153
286
362
318
22,279
7,164
The notes on pages 29 to 48 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 | 25
Armadale Capital Plc
Company Statement of Changes in Equity
For the year ended 31 December 2022
Share
Capital
Share
Premium
Shares to
be issued
£’000
3,208
£’000
22,348
£’000
286
-
-
67
‐
67
-
-
1,558
‐
1,558
-
-
‐
‐
‐
Share
Option and
Warrant
Reserve
£’000
762
-
-
Retained
Earnings
Total
£’000
(22,273)
(383)
(383)
£’000
4,331
(383)
(383)
266
‐
1,891
(103)
163
103
103
‐
1,891
At 1 January 2021
Loss for the period
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
At 31 December 2021
3,275
23,906
286
925
(22,553)
5,839
Loss for the period
Total comprehensive loss for the
year
Issue of shares
Transfer on exercise and expiry
of warrants
Total other movements
‐
‐
49
‐
49
‐
‐
1,247
‐
1,247
‐
‐
‐
‐
‐
‐
‐
‐
(563)
(563)
(238)
(238)
‐
563
563
(238)
(238)
1,296
‐
1,296
At 31 December 2022
3,324
25,153
286
362
(22,228)
6,897
The notes on pages 29 to 48 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 | 26
Consolidated Statement of Cash Flows
For the year ended 31 December 2022
Cash flows from operating activities
Loss before taxation
Adjustment for:
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
Sale of listed investments
Net cash used in investing activities
Cash flows from financing activities
Proceeds from share issues
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 29 to 48 form part of the financial statements.
Armadale Capital Plc
2022
£’000
2021
£’000
(206)
(102)
‐
(308)
(11)
12
(307)
(518)
(411)
89
(840)
1,307
1,307
160
886
1,046
(333)
(8)
11
(330)
1
(39)
(368)
(399)
‐
152
(247)
1,249
1,249
634
252
886
Page | 27
Company Statement of Cash Flows
For the year ended 31 December 2022
Cash flows from operating activities
Loss before taxation
Adjustment for:
Impairment charge
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
Sale of listed investments
Net cash used in investing activities
Cash flows from financing activities
Proceeds from share issues
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 29 to 48 form part of the financial statements.
Armadale Capital Plc
2022
£’000
(238)
241
(120)
‐
(117)
(1)
17
(101)
(1,207)
89
(1,118)
1,307
1,307
88
562
650
2021
£’000
(383)
170
(8)
11
(210)
6
(28)
(232)
(825)
152
(673)
1,249
1,249
344
218
562
Page | 28
Armadale Capital Plc
Notes to the financial statements
For the year ended 31 December 2022
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 United Kingdom.
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 2022, the Group had cash of £1,046,000 (2021, £886,000) and no debt finance
(2021, nil).
At 4 May 2023, the Company had cash of £737,000 and listed investments with a traded value of
£1,245,000. 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 | 29
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
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.
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.
Page | 30
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
2.
Accounting policies (continued)
2.6. Foreign currencies (continued)
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.
2.7. 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.
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.
Page | 31
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
2. Accounting polices (continued)
2.7. Share‐based payments (continued)
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.
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.
Page | 32
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
2. Accounting polices (continued)
2.9. Taxation
Deferred tax (continued)
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.
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.
Page | 33
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
2.
Accounting polices (continued)
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.
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.
Page | 34
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
2.
Accounting polices (continued)
2.13. 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.
2.14. 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.
2.15. New accounting standards
There have been no significant changes in accounting standards effective for the year ended
31 December 2022.
A number of amendments to accounting standards have been published that are not yet
effective and have not been adopted early. These changes, which are listed below, are not
expected to have a material impact on the Group’s consolidated financial statements:
Effective for periods commencing on or after 1 January 2023:
•
•
•
IAS 1 – Presentation of Financial Statements – Disclosure of accounting policies
IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors – Definition of
accounting estimates
IAS 12 – Income Taxes – Deferred tax relates to assets and liabilities arising from a
single transaction
Page | 35
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
2.
Accounting polices (continued)
2.15. New accounting standards (continued)
Effective for periods commencing on or after 1 January 2024:
•
•
•
IAS 1 – Presentation of Financial Statements – Classification of liabilities as current or
non‐current
IAS 1 ‐ Presentation of Financial Statements – Non‐current liabilities with covenants
IFRS 16 – Leases – Lease liability in a sale and leaseback
Page | 36
Notes to the financial statements (continued)
For the year ended 31 December 2022
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 13 along with the key assumptions and estimates.
Page | 37
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
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.
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 15.
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.
Page | 38
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
4.
Financial risk management (continued)
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 12. 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 £1,196,000 (2021 ‐
£1,036,000).
The parent Company financial statements include amounts due from subsidiaries as disclosed in
Note 13. 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.
Financial instruments by category
The Group’s financial instruments consist of cash and cash equivalents, trade and other
receivables and trade payables and accruals. 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.
Page | 39
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
4.
Financial risk management (continued)
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 most significant items are the exploration and evaluation
assets relating to the Group’s project in Tanzania amounting to £5,483,000 (2021: £4,727,000).
Other than these, the only material asset category was the Group’s liquid and near liquid
resources, being cash and listed investments, amounting to £1,605,000 (2021, £1,024,000).
5.
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
and after crediting:
Change in fair value of investments
6.
Employees
The average monthly number of persons (including Directors)
employed by the Group and the Company during the year was:
Management
Employment costs
Group
2022
£’000
123
28
3
103
2021
£’000
129
25
3
8
2022
2021
3
3
£’000
£’000
Wages and salaries (including Directors)
136
141
Company
Wages and salaries (including Directors)
77
50
Of the Group wages and salaries £93,000 (2021: £69,000) has been capitalised as exploration
and evaluation expenditure.
Page | 40
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
7.
Remuneration of Directors of the Company
Aggregate emoluments
2022
123
2021
129
The Directors of the Group and Company are considered to be the key management personnel.
8.
Taxation
Continuing operations
Current Tax
2022
£’000
2021
£’000
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% (2021:
19%)
Effects of :
Gains not taxable
Losses carried forward not recognised as a deferred
tax asset
UK Corporation Tax
2022
£’000
2021
£’000
(206)
(333)
(39)
(20)
59
‐
(63)
(2)
65
‐
A deferred tax asset of approximately £2,338,000 (2021: £2,279,000) has not been recognised
owing to the uncertainty over the timing of future recoverability. The Group has total carried
forward tax losses of £9,422,000 (2021: £9,113,000). The headline rate of UK Corporation Tax
increased to 25% from April 2023.
Page | 41
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
9.
Loss per share
The calculation of total loss per share is based on a loss of £206,000 (2021: £333,000), and on
574,589,300 Ordinary Shares (2021: 505,019,431), being the weighted average number of
Ordinary 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.
10.
Exploration and evaluation assets
Group
Cost
At 1 January
Exchange movements
Additions
At 31 December
2022
£’000
4,727
288
468
5,483
2021
£’000
4,417
38
272
4,727
Included in additions are capitalised finance costs of nil (2021: £24,000).
As production has not commenced, no amortisation was charged during the year, in accordance
with the Group’s accounting policy.
11.
Investments
Non-current asset investments - Group
Fair value
At 1 January 2021
Disposals
Decrease in fair value
At 31 December 2021
Additions
Disposals
Increase in fair value
At 31 December 2022
Listed
investments
£’000
282
(111)
(33)
138
411
(52)
65
562
Page | 42
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
11.
Investments (continued)
The listed investments are:
The Company’s investment acquired in 2019 of, originally, 2 million common shares of Forum
Energy Metal Corp, incorporated in Canada and listed on the Toronto Stock Exchange. During the
year, 550,000 (2021, 529,500) of these shares were sold, realising a profit on original cost of
£72,000 (2021, £137,000).
The Company’s holding of 228.5 million shares of Montengu Mining Limited (formerly Mine
formerly written off when the company entered
Restoration
administration, but now reinstated at fair value following a reverse takeover by the company and
its relisting on the Johannesburg Stock Exchange.
Investments Limited),
A holding, acquired during the year by the Company’s wholly–owned subsidiary Graphite
Advancements Pty Ltd, of 4.5 million shares of Lindian Resources Limited, listed on the Australian
Stock Exchange, for a consideration of A$729,000 (approximately £411,000) in cash.
Non-current asset investments - Company
Subsidiaries
(at cost)
£’000
1,600
‐
‐
1,600
‐
‐
1,600
Listed
Investments
(at fair value)
£’000
282
(111)
(33)
138
(52)
83
169
Total
£’000
1,882
(111)
(33)
1,736
(52)
83
1,769
At 1 January 2021
Disposals
Decrease in fair value
At 31 December 2021
Disposals
Increase in fair value
At 31 December 2022
The subsidiary companies are:
Name and nature of business
Registered Office
Graphite Advancements Pty Ltd
(intermediate holding company)
Armadale Graphite Pty Ltd
(intermediate holding company)
Graphite Advancements (Tanzania)
Limited* (mining project operator)
Battery Graphite Resources Limited†
(mining project operator)
216 St Georges Terrace, Perth,
WA 6000, Australia
216 St Georges Terrace, Perth,
WA 6000, Australia
PO Box 105589, Dar es Salaam,
Tanzania
PO Box 105589, Dar es Salaam,
Tanzania
Class of
shares
Ordinary
%
held
100
Ordinary
100
Ordinary
100
Ordinary
100
*Held through Graphite Advancements Pty Ltd † Held through Armadale Graphite Pty Ltd
Page | 43
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
11.
Investments (continued)
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.
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 15 for more details on share consolidation and restructure
12.
Trade and other receivables
Group
Other receivables
Total current receivables
Company
Amounts owed by group undertakings
Provision for impairment
Other receivables
Total current receivables
2022
£’000
150
150
5,532
(1,106)
4,426
126
4,552
2021
£’000
150
150
4,325
(865)
3,460
136
3,596
Page | 44
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
12.
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 £241,000 (2021: £170,000) has been
recognised under the expected credit loss model resulting in an accumulated provision of
£1,106,000 (2021: £865,000).
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.
13.
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.
2022
£’000
8
69
77
8
66
74
2021
£’000
22
57
79
6
51
57
Page | 45
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
14. Share capital
Ordinary Shares
of 0.01p/0.1p each*
£’000
Number
Deferred Shares
of 0.14p each
Deferred Shares
of 1.4p each
Total
Number
£’000
Number
£’000
£’000
471,810,357
472
1,531,374,350
2,144
42,260,533
592
3,208
18,888,889
17,369,430
30,592,250
538,660,926
19
17
31
539
‐
‐
‐
‐
‐
‐
‐
‐
19
17
‐
1,531,374,350
‐
2,144
‐
42,260,533
‐
592
31
3,275
48,868,969
49
‐
‐
‐
‐
49
587,529,895
588
1,531,374,350
2,144
42,260,533
592
3,324
At 1 January 2021
Issue of shares:
Placings
On exercise of
warrants
On conversion of loan
notes
At 31 December 2021
Issue of shares:
On exercise of
warrants
At 31 December 2022
*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.
During the year warrants to subscribe for 48,868,969 Ordinary Shares were exercised raising
£1,296,000 in total. Details of warrants are in note 16.
Page | 46
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
15. Warrants to subscribe for Ordinary Shares
In connection with the placing of Ordinary Shares in February 2019, 72,297,728 warrants to
subscribe for Ordinary 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. Outstanding unexercised warrants have
reached their expiry date and lapsed.
In connection with the placing of Ordinary Shares in September 2019, 27,777,778 warrants to
subscribe for Ordinary 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. Outstanding unexercised warrants have
reached their expiry date and lapsed.
In connection with the placing of Ordinary Shares in April 2020, 24,444,444 warrants to subscribe
for Ordinary 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. Outstanding unexercised warrants have reached their
expiry date and lapsed.
In connection with the placing of Ordinary Shares in May 2021, 18,888,889 warrants to subscribe
for Ordinary Shares in the Company were issued (one for each share placed) at a price of 7.0p per
share with a life to expiry of three years.
A summary of outstanding warrants is as follows
February 2019
Warrants
(2.2p)
43,069,623
‐
(12,536,098
30,533,525
(27,591,193)
(2,942,332)
‐
September
2019
Warrants
(3.0p)
27,777,778
‐
(1,499,999
26,277,779
(833,333)
(25,444,446)
‐
April 2020
Warrants
(3.25p)
April 2021
Warrants
(7.0p)
24,444,444
‐
(3,333,333)
21,111,111
20,444,443
(666,668)
‐
‐
18,888,889
‐
18,888,889
‐
‐
18,888,889
Total
95,291,845
18,888,889
(17,369,430
96,811,304
(48,868,969)
(29,053,446)
18,888,889*
At 1 January 2021
Issued
Exercised
At 31 December 2021
Exercised
Expired
At 31 December 2022
* representing 3.21% (2021: 17.9%) of the issued share capital of the Company
Page | 47
Armadale Capital Plc
Notes to the financial statements (continued)
For the year ended 31 December 2022
16.
Share based payment arrangements
A summary of outstanding options is as follows:
Exercise
price
At 1 January 2021
and 31 December
2021
Lapsed
At 31 December
2022
Former Director
P Johnson
Granted
11.03.19
Consultants
Granted
01.10.13
Granted
19.11.14
2.2p
15p
15p
5,000,000
(5,000,000)
‐
66,667
300,000
‐
‐
66,667
300,000
5,366,667
(5,000,000)
3,366,667*
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 0.1% (2021: 1.0%) of the issued share capital of the Company
All the outstanding options held at the year‐end were exercisable at an exercise price of 15p
(2021: weighted average exercise price of 3p).
The outstanding options have a life of 10 years and are time based with no other conditions.
17.
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 25 and 26.
18.
Related party transactions
In respect of the Company, amounts, net of provisions, due from subsidiary undertakings were
£4,426,000 (2021: £3,460,000), the movement being amounts lent to the subsidiaries less an
increase in provisions.
19. Ultimate controlling party
There was no ultimate controlling party during the year.
20.
Subsequent events
Since the year end, the Company has subscribed for 1.6 million shares in Celsius Resources
Limited, a company listed on the Alternative Investment Market of the London Stock Exchange,
for a consideration of £125,000 in cash.
Page | 48