Company registration No 04095614 (England & Wales)
IRONVELD PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
CONTENTS
Directors
Advisors
Chairman's Statement - Strategic Report
Directors' Report
Corporate Governance Statement
Directors' Remuneration Report
Statement of Directors' Responsibilities
Independent Auditors' Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Parent Company Balance Sheet
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Cash Flow Statement
Company Cash Flow Statement
Notes to the Accounts
1
2
3-4
5-6
7-8
9-10
11
12-13
14
15
16
17
18
20
21
22
23-45
YEAR ENDED
30 JUNE
2016
DIRECTORS
Giles Clarke - Chairman
Giles Clarke is Chairman of Amerisur Resources plc, Kennedy Ventures Plc, Westleigh Investments Holdings
Ltd, and of several other private organisations. He founded Majestic Wine in 1981 and built it into a national
chain of wine warehouses. He also co-founded Pet City in 1990, which he expanded nationwide before it was
listed and subsequently sold in 1996 for £150 million and co-founded Safestore which was sold in 2003 for £40
million. Giles is also President of the England and Wales Cricket Board and a Director of the International
Cricket Council.
Peter Cox - Chief Executive
Peter Cox started his career in the mining industry 37 years ago as a learner surveyor. After studying mining
engineering as a JCI bursar, he worked for that company in various positions at gold and platinum mines,
ending as a senior section manager. In 1987, he joined a privately owned mining and exploration company,
Severin Southern Sphere Mining, as consulting engineer and general manager. Since mid-1991 he has been
the managing director of Goldline Global Consulting (Pty) Ltd, an engineering consulting company which serves
the mining industry worldwide. He holds a Mine Surveyor's and a Mine Manager's Certificate of Competency.
He has a number of achievements to his name, including being the youngest certificated surveyor in South
African mining history and designing the country's narrow reef opencast mining method.
Vred von Ketelhodt – Chief Financial Officer
Vred has over 20 years experience in the global metals and mining sector working as both a Mining Engineer
and Corporate Finance professional. Vred has extensive corporate and project finance experience and has
negotiated the provision of significant project debt and acquisition finance facilities for metals and mining
ventures globally. He has also worked for a number of years in the investment banking sector managing venture
capital and private equity investment funds. He gained early career experience in the metals and mining sector
as a mining engineer with responsibility for mining operations and metal production leading production teams in
the South Africa mining sector. Vred is a South African citizen, holds a BSc Eng degree and has an MBA from
Heriot-Watt, Edinburgh, Scotland.
Nicholas Harrison - Non-Executive Director
Nicholas Harrison qualified as an accountant with Arthur Andersen and subsequently held a number of senior
positions with other professional services organisations. He was Finance Director of Pet City and has held
finance director and chief executive positions in a number of private businesses. He is a director of Amerisur
Resources plc, Kennedy Ventures Plc and a number of private organisations.
Rupert Fraser - Non-Executive Director
Rupert Fraser has over 20 years of experience in the investment banking industry. Rupert Fraser is a Senior
Partner of Kildare Partners. Previously he was head of Equities at Evolution Securities from 2009 to 2011, prior
to which he spent 16 years at Dresdner Kleinwort, where in 2005 he was appointed Managing Director, Global
Head of Equity Distribution. He is a founding partner of Kildare Partners.
IRONVELD PLC
1
ADVISORS
Company secretary
K J Pinnell
Company number
04095614 (England and Wales)
YEAR ENDED
30 JUNE
2016
Registered office
Nominated Adviser
Broker
Auditors
Bankers
Solicitors
Registrar
Lakeside
Fountain Lane
St. Mellons
Cardiff CF3 0FB
Shore Capital and Corporate Limited
Bond Street House
14 Clifford Street
London W1S 4JU
Shore Capital Stockbrokers Limited
Bond Street House
14 Clifford Street
London W1S 4JU
UHY Hacker Young Manchester LLP
St James Building
79 Oxford Street
Manchester M1 6HT
HSBC
97 Bute Street
Cardiff CF10 5NA
Investec Bank Plc
2 Gresham Street
London EC2V 7QP
Kuit Steinart Levy LLP
3 St Mary's Parsonage
Manchester M3 2RD
Capita IRG Plc
Northern House
Woodsome Park
Fenay Bridge
Huddersfield HD8 0LA
IRONVELD PLC
2
YEAR ENDED
30 JUNE
2016
CHAIRMAN'S STATEMENT - STRATEGIC REPORT
Over the last twelve months we have made strong operational and financial progress across the business as we
continue to transition the Company towards construction of our world class integrated High Purity Iron (“HPI”),
Vanadium and Titanium project on the Northern Limb of the Bushveld complex in the Limpopo province of
South Africa. The focus for the Period remained firmly on de-risking the Project and executing offtake
agreements for our high quality and globally important products. The Period culminated with executing offtake
partnerships on all three products, importantly with international and highly reputable partners.
As I mentioned in my interim Chairman’s statement, the Project is a highly deliverable polymetallic operation
that represents a strategically important project for the South African Government. Post Period we have seen
further government endorsement for the Project with the International Development Corporation (“IDC”), a
national development finance institution set up to promote growth and industrial development, providing Project
debt and equity funding of R244.08 million (approx. US$17.9 million). This accompanies the Project’s inclusion
by the Government in the 12I tax allowance incentive scheme in September 2014, which is estimated to be
worth R 54.6 million (approximately GBP 3.1 million). Both the above are material stamps of approval from the
Government, who we have a strong working relationship with.
There were a number of significant achievements during the Period. In December the Company was informed
by Hacra Mining and Exploration (Pty) Ltd (“HACRA”), a wholly owned subsidiary of Sylvania Platinum Limited,
that the mining right for magnetite on the Harriets Wish, Cracouw and Aurora farms had been executed and the
associated Environmental Management Programme approved by the Department of Mineral Resources. The
Company awaits the execution of the mining right on farms Nonnewerth, La Pucella and Altona for the mining of
magnetite (the Pan Palladium Right). These farms make up the future Project farms that the Company
anticipates mining. In terms of exploration, in December the Company successfully executed the prospecting
right on the Non Plus Ultra farm that sits adjacent to Nonnewerth, La Pucella and Altona and represents a highly
prospective target for future VTM feed to the smelter.
Final approvals were obtained and finalised in May for the Section 11 transfer, transferring the Mineral Right to
HW Iron (Pty) Ltd and the Environmental Impact Assessment for Pan Palladium (Pty) Ltd, a wholly owned
subsidiary of Sylvania Platinum Limited has been granted. The Pan Palladium right relating to the acquisition
from Sylvania is expected to be granted and transferred to Ironveld in the first quarter of 2017.
Power is an important component to the Project and during the Period we received a written undertaking from
Eskom confirming power supply availability. Eskom’s power supply has stabilised significantly during the Period
and their commitment to bring further capacity on line remains strong. As per the Project DFS, it is our intention
to augment this power supply with backup power for critical operations.
Planning is at an advanced stage with draft construction contracts being negotiated and requests for quotes
from mining contractors for mining operations having been circulated. Contracts are currently at the subject of
due diligence by the senior debt providers and will be concluded upon completion of their due diligence.
The land lease agreement for the farm Altona, where the 15MW DC smelter is planned to be constructed, is
currently being finalised by the Department of Rural Development and Land Development, who are the land
owner.
By way of de-risking the Project and allowing for Project funding to be executed, in May and June we finalised
agreements with two partners for the offtake of 100 per cent of all three products for the first 5 years of the LOM.
Oreport, a South African based, majority black owned, global trading company will take 100 per cent of the HPI
and titanium slag representing 42,000 tonnes and 8,269 tons per annum respectively (as projected in the
Projects Definitive Feasibility Study). An established international company will take 100 per cent of the
Vanadium slag product, again from first production and for a period of five years of LOM. These agreements
were executed on attractive price terms for the Company, represent material endorsement for the quality of the
products and are reflective of the strong international market demand across all three products. Importantly they
provide financial security to the Company in the early years of the Project’s long life.
IRONVELD PLC
3
YEAR ENDED
30 JUNE
2016
CHAIRMAN'S STATEMENT - STRATEGIC REPORT (continued)
By way of a reminder, the company will produce HPI in powder form. This product is widely used in powder
metallurgy, magnetic materials and in a variety of specialist applications and is a growing market driven by the
continuous introduction of new materials and technologies. Vanadium has extensive applications including the
grid energy storage market, where vanadium redox flow batteries are under development, being heralded as the
“missing-link” in volume storage for clean energy. Titanium, which is used in the pigment industry as well as in
the steel and alloying industries, is a key part of a new battery technology.
The Company is in continual discussions with potential Project funders for the remaining part of the Project
financing and has received specific proposals and ongoing due diligence is taking place. We continue to see
currency movements that benefit project economics and which are expected to result in a positive cash flow
impact.
We continue to work closely with the local communities in our project area and on our efforts to improve
community engagement and standards of living. Our Keep a Girl in School Programme goes from strength to
strength as we work closely with our partners, the Imbumba Foundation and the Nelson Mandela Foundation, to
provide hygiene support to 605 female student at schools in the Project area. The Company has received
supporting letters from both parents and girls as to the impact the programme has made to their lives. As a
result of this success, the Company is in the process of starting a programme for male students encouraging
academic and sporting achievement.
Financial
The group recorded a loss before tax of £0.6m (2015: £0.6m) and cash balances of £0.1m (2015: £1.4m) at the
end of the period. The Company does not plan to pay a dividend for the year ended 30 June 2016.
Management
During the Period, we were delighted to strengthen the management team and welcome Mr Vred von Ketelhodt
as CFO and Mr Thamaga Mphahlele as CEO designate to Ironveld Smelting (Pty) Ltd, a subsidiary of Ironveld
plc, responsible for managing operations and the team during the development of the Project.
Mr von Ketelhodt has a 25 year career in the mining industry with significant management, financial and project
management expertise and has been providing consultancy services to the Company since February 2013.
Thamaga is a registered professional electrical engineer, most recently at Eskom SOC in a variety of technical
engineering roles.
Outlook
Management are working tirelessly to conclude financing for the Project and the Company is now in as strong a
position as it has ever been with respect to executing this key milestone. In addition, we continue to make
excellent headway on the ground as we look to begin construction during 2017.
The Board is confident of the fundamentals of the Project and its ability to generate significant cash flow
supported by strong market demand for the end products. We would like to thank all of our shareholders for
their continued support as we enter a transformational period for the Company. We look forward to updating
shareholders in the near future.
Giles Clarke
Chairman
6 December 2016
IRONVELD PLC
4
DIRECTORS' REPORT
The Directors present their annual report, together with the audited financial statements for the year ended 30
June 2016. The Corporate Governance Statement set out on pages 7 and 8 forms part of this report.
Principal activity
The principal activity of the Group for the period continued to be mining, exploration, processing and smelting of
Vanadiferous and Titaniferous Magnite in South Africa. The principal activity of the Company for the period was
that of a holding company.
YEAR ENDED
30 JUNE
2016
Dividends
The Directors do not propose the payment of a dividend for the period.
Directors and their interests
The Directors, who served during the year were as follows:-
G Clarke
N Harrison
P Cox
R Fraser
V von Ketelhodt (appointed 7 July 2015)
The beneficial and other interests of the Directors at the period end and their families in the shares of the
Company and its subsidiary undertakings were as follows:
G Clarke
N Harrison
P Cox
R Fraser
V von Ketelhodt
30 June 2016
1p ordinary
shares
Number
30 June 2015
1p ordinary
shares
Number
17,544,383 16,752,151
11,973,633
12,765,865
259,161
259,161
500,052
500,052
-
262,500
V von Ketelhodt held 262,500 shares in the company at appointment on 7 July 2015.
G Clarke and N Harrison's interests in 9,173,581 (2015 - 9,173,581) shares are through their shareholding in
Westleigh Investments Holdings Limited.
Details of Directors' interest in share options are provided in the Directors' remuneration report on pages 9 and
10.
In addition to the above interests, G Clarke and N Harrison have an interest in 8,399,966 (2015 - 8,399,966)
shares through share warrants held by Westleigh Investments Holdings Limited.
IRONVELD PLC
5
DIRECTORS' REPORT (continued)
Political contributions
The Group made no political contributions during this or the preceding period.
Substantial shareholdings
As at 29 November 2016 the Company had been notified of the following holdings of 3% or more of its issued
share capital other than the Directors' direct holdings on page 5:
YEAR ENDED
30 JUNE
2016
HSBC Global Custody Nominee (UK)
Rene Nominees (IoM) Limited
Hargreaves Lansdown (Nominees)
Fiske Nominees Limited
Chase Nominees Limited
Ghc Nominees Limited
Barclayshare Nominees Limited
Hsdl Nominees Limited
Td Direct Investing Nominees
Number of
ordinary shares Percentage
49,192,956
39,866,892
25,937,013
22,400,314
18,725,734
17,441,933
15,732,432
14,139,492
12,429,698
13.3%
10.8%
7.0%
6.0%
5.1%
4.7%
4.2%
3.8%
3.4%
Going concern
The Group’s present resources and existing facilities are only considered adequate to meet committed
overhead expenditure for the period to 30 June 2017 by which time the Directors expect to have completed the
full funding of the Project (the High Purity Iron, Vanadium and Titanium project located on the Northern Limb of
the Bushveld Complex in Limpopo Province, South Africa owned by the Group). The Group announced on 6
October 2016 that they have received approval for a ZAR244m funding package for the Project and were in the
process of executing formal funding agreements. The Group is also in advanced stages of negotiating the
remaining debt agreements for the Project. Overall a ZAR 871m financing package is proposed.
The Directors are confident that sufficient funds can be raised for this additional planned activity and
therefore have a reasonable expectation that the Group will have adequate resources to continue in operational
existence for the foreseeable future, being twelve months from the date of the approval of the financial
statements. The Group is committed to developing the Project and is actively engaged in raising finance to allow
the development to proceed. For this reason, the Board continues to adopt the going concern basis in the
preparation of the financial statements.
Directors' indemnities
The Company has made qualifying third party indemnity provisions for the benefit of its Directors which were in
place during the period and remain in force at the date of this report.
Statement of disclosure to auditors
Each of the persons who is a Director at the date of approval of this annual report confirms that:
•
•
so far as the Director is aware, there is no relevant audit information of which the Company's auditors are
unaware; and
the Director has taken all the steps that he ought to have taken as a director in order to make himself
aware of the relevant audit information and to establish that the Company's auditors are aware of that
information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies
Act 2006.
This report was approved by the Board on 6 December 2016 and signed on its behalf by:
K J Pinnell
Company secretary
IRONVELD PLC
6
YEAR ENDED
30 JUNE
2016
CORPORATE GOVERNANCE STATEMENT
Code of best practice
The Board acknowledges the importance of the UK Corporate Governance Code ("the Code") and has reviewed
the Group's consistency with the provisions of the Code as appended to the Listing Rules of the Financial
Conduct Authority. This statement explains how the Group has voluntarily applied principles of the Code and
confirms that it has consistently complied with these throughout the period.
The Board of Directors
The Group is controlled and led by the Board of Directors with an established schedule of matters reserved for
their specific approval. The Board meets regularly throughout the year and is responsible for the overall Group
strategy, acquisition and divestment policy, approval of major capital expenditure and consideration of
significant financial matters. It reviews the strategic direction of the Company and its individual subsidiaries,
their annual budgets, their progress towards achievement of these budgets and their capital expenditure
programmes.
The role of the Chairman is to supervise the Board and to ensure its effective control of the business, and that of
the Chief Executive is to manage the Group on the Board's behalf.
All Board members have access, at all times, to sufficient information about the business, to enable them to fully
discharge their duties. Also, procedures exist covering the circumstances under which the Directors may need
to obtain independent professional advice.
The Board has established the following committees to fulfil specific functions:
The Audit Committee comprises Giles Clarke, Nicholas Harrison and Rupert Fraser. It has been established to
determine the terms of engagement of the group's auditors and will determine, in consultation with the auditors,
the scope of the audit. The Audit Committee will receive and review reports from management and the group's
auditors relating to the interim and annual accounts and the accounting and internal control systems in use
throughout the group. The Audit Committee will have unrestricted access to the group's auditors and internal
control procedures.
Due to the nature and size of the Group at present it would not be appropriate for the Group to have its own
internal audit department reporting directly to the Audit Committee, this situation is reviewed annually.
The Remuneration Committee comprises Giles Clarke, Nicholas Harrison and Rupert Fraser. It has been
established to review the scale and structure of the executive directors' and senior employees' remuneration
and the terms of their respective service or employment contracts, including share option schemes and other
bonus arrangements. The remuneration and terms and conditions of the non-executive directors of the
Company will be set by the Board.
The Nomination Committee comprises Giles Clarke, Nicholas Harrison and Rupert Fraser. It has been
established to review the structure, size and composition (including the skills, knowledge and experience)
required of the Board compared to its current position and make recommendations to the Board with regard to
any changes.
Status of Non-Executive directors
None of the Non-Executive Directors would be deemed independent under the UK Corporate Governance
Code, however, the Non-Executive Directors have considerable experience which the Company draws upon on
a regular basis. In addition, the Non-Executive Directors are sufficiently independent of management so as to be
able to exercise independent judgement and bring an objective viewpoint and, thereby, protect and promote the
interest of shareholders.
IRONVELD PLC
7
YEAR ENDED
30 JUNE
2016
CORPORATE GOVERNANCE STATEMENT (continued)
Internal control
The Board is responsible for ensuring that the Group maintains adequate internal control over the business and
its assets.
The effectiveness of the Group's system of internal financial controls, for the period to 30 June 2016 and for the
period to the date of approval of the financial statements, has been reviewed by the Directors. Whilst they are
aware that although no system can provide for absolute assurance against material misstatement or loss, they
are satisfied that effective controls are in place.
On the wider aspects of internal control, relating to operational and compliance controls and risk management,
the Board, in setting the control environment, identifies, reviews, and regularly reports on the key areas of
business risk facing the Group.
The Group Board and subsidiary Boards maintain close day to day involvement in all of the Group's activities
which enables control to be achieved and maintained. This includes the comprehensive review of both
management and technical reports, the monitoring of interest rates, environmental considerations, government
and fiscal policy issues, employment and information technology requirements and cash control procedures. In
this way, the key risk areas can be monitored effectively and specialist expertise applied in a timely and
productive manner.
Relations with shareholders
The Company maintains effective contact with its principal shareholders and welcomes communications from its
private investors.
IRONVELD PLC
8
DIRECTORS' REMUNERATION REPORT
Compliance
This report by the Remuneration Committee, on behalf of the Board, contains details of the remuneration of
each Director during the period under review.
Directors' remuneration policy
The Remuneration Committee aims to ensure that the remuneration packages offered are competitive and are
designed to attract, retain and motivate executives of the right calibre.
YEAR ENDED
30 JUNE
2016
Emoluments of the Directors
N Harrison*
R Fraser *
G Clarke**
P Cox***
T McConnachie (resigned 19 March 2015)
V Von Ketelhodt (appointed 7 July 2015)
Fees/Salary
£000
Benefits
in kind
£000
45
45
45
118
-
56
309
-
-
-
-
-
-
-
2016
Total
£000
45
45
45
118
-
56
309
2015
Total
£000
45
45
45
140
32
-
307
* Member of the Remuneration Committee
** Member and Chairman of the Remuneration Committee
*** Highest-paid Director during the year
Pensions
No pension contributions were made during the year (2015 - £Nil).
The Non-Executive Directors' appointments are not pensionable.
Details of the individual share options held by the Directors under the Group’s ‘Long term incentive plan’ as at
30 June 2016, are as follows:
Director
P Cox
G Clarke
N Harrison
P Cox
R Fraser
G Clarke
P Cox
N Harrison
R Fraser
Option
price
1p
1p
1p
1p
1p
1p
1p
1p
1p
Date of
Grant
16/08/2012
16/08/2012
16/08/2012
13/11/2012
16/04/2013
07/11/2013
07/11/2013
07/11/2013
27/01/2016
Expiry
date
1 July
2015
Granted
30 June
2016
16/08/2022
16/08/2022
16/08/2022
13/11/2022
16/04/2023
07/11/2023
07/11/2023
07/11/2023
27/01/2026
1,427,894
1,427,894
1,427,894
6,663,505
1,000,000
600,000
600,000
600,000
-
-
-
-
-
-
-
-
-
445,545
1,427,894
1,427,894
1,427,894
6,663,505
1,000,000
600,000
600,000
600,000
445,545
IRONVELD PLC
9
YEAR ENDED
30 JUNE
2016
DIRECTORS' REMUNERATION REPORT (continued)
Directors' share options (continued)
The share options are exercisable as follows:-
1/3 on the first anniversary of grant.
1/3 on the second anniversary of grant.
1/3 on the third anniversary of grant.
The market price of the Company's shares at 30 June 2016 was 4.5p with a range of 3.75p to 6.5p during the
year.
There were no movements in the Directors' share options after the year end.
G Clarke
Chairman of the Remuneration Committee
IRONVELD PLC
10
YEAR ENDED
30 JUNE
2016
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable laws and regulations.
Company law requires the Directors to prepare such financial statements for each financial period. Under that
law the Directors are required to prepare group financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union and have also chosen to prepare the parent
company financial statements under IFRSs as adopted by the European Union. Under Company law the
Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state
of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial
statements, International Accounting Standard 1 requires that directors:
-
-
-
-
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable
and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to
enable users to understand the impact of particular transactions, other events and conditions on the
entity's financial position and financial performance; and
make an assessment of the Company's ability to continue as a going concern.
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 Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
Directors' responsibility statement
We confirm that to the best of our knowledge:
1. the financial statements, prepared in accordance with International Financial Reporting Standards as adopted
by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of
the company and the undertakings included in the consolidation taken as a whole; and
2. the strategic report includes a fair review of the development and performance of the business and the
position of the company and the undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
3. the annual report and financial statements, taken as a whole, are fair, balanced and understandable and
provide the information necessary for shareholders to assess the company's performance, business model and
strategy.
On behalf of the Board
P Cox
Director
6 December 2016
IRONVELD PLC
11
INDEPENDENT AUDITORS' REPORT
YEAR ENDED
30 JUNE
2016
Registered Auditor
UHY Hacker Young Manchester LLP
St. James Building
79 Oxford Street
Manchester M1 6HT
To the members of Ironveld Plc
We have audited the financial statements of Ironveld Plc for the year ended 30 June 2016 which comprise the
consolidated income statement, the consolidated statement of comprehensive income, the consolidated and the
Parent Company balance sheets, the consolidated and Company cash flow statements, the consolidated and
Parent Company statements of changes in equity and the related notes. The financial reporting framework that
has been applied in their preparation is applicable law and International Financial Reporting Standards
(“IFRSs”) as adopted by the European Union.
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 Company’s
members those matters we are required to state to them in an auditors’ 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.
Respective responsibilities of Directors and Auditors
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. Our
responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the
Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements are free from material misstatement, whether caused
by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the
Group’s and the Parent Company’s circumstances and have been consistently applied and adequately
disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall
presentation of the financial statements. In addition, we read all the financial and non-financial information in the
annual report to identify material inconsistences with the audited financial statements and to identify any
information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for our report.
IRONVELD PLC
12
INDEPENDENT AUDITORS' REPORT (continued)
YEAR ENDED
30 JUNE
2016
Opinion on the financial statements
In our opinion:
•
the financial statements give a true and fair view of the Group and the Parent Company's affairs as at 30
June 2016 and of the Group's and the Parent Company's loss for the year then ended;
the financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
•
•
Emphasis of matter – Going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of
the disclosure made in note 2.2 to the financial statements concerning the Group and Company’s ability to
continue as a going concern. The Group and Company are currently negotiating a finance package to fund the
additional planned activity beyond June 2017 and this indicates the existence of a material uncertainty which
may cast significant doubt about 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 and Company were unable to
continue as a going concern.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, the information given in the Director's Report for the financial period for which the financial
statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required 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 to be audited 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.
David Symonds
Senior Statutory Auditor
for and on behalf of
UHY Hacker Young Manchester LLP
Chartered Accountants
Statutory Auditor
6 December 2016
IRONVELD PLC
13
CONSOLIDATED INCOME STATEMENT
Administrative expenses
Operating loss
Investment revenues
Finance costs
Loss before tax
Tax
Loss for the period
Attributable to:
Owners of the company
Non-controlling interests
Loss per share
Note
4
6
7
8
Year
ended
2016
£000
(494)
(494)
-
(91)
(585)
-
(585)
(584)
(1)
(585)
YEAR ENDED
30 JUNE
2016
As restated
Year
ended
2015
£000
(520)
(520)
1
(74)
(593)
-
(593)
(592)
(1)
(593)
- Basic and diluted 9
(0.18p)
(0.20p)
There is no difference between the results as disclosed above and the results on a historical cost basis. The
income statement has been prepared on the basis that all operations are continuing operations.
IRONVELD PLC
14
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Loss for the period
Exchange difference on translation of foreign operations
YEAR ENDED
30 JUNE
2016
As restated
Year
ended
2015
£000
(593)
(600)
Year
ended
2016
£000
(585)
(525)
Total comprehensive income for the period
(1,110)
(1,193)
Attributable to:
Owners of the company
Non-controlling interests
(954)
(156)
(1,110)
(1,025)
(168)
(1,193)
IRONVELD PLC
15
CONSOLIDATED BALANCE SHEET
Non-current assets
Other intangible assets
Property, plant and equipment
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Borrowings
Non-current liabilities
Deferred tax liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Other reserves
Retained earnings
Equity attributable to owners of the company
Non-controlling interests
Total equity
YEAR ENDED
30 JUNE
2016
As restated
2015
£000
21,743
14
Note
11
12
2016
£000
21,509
9
14
15
16
17
19
20
20
20
23
21,518
21,757
234
113
347
77
1,407
1,484
21,865
23,241
(186)
(992)
(1,178)
(4,699)
(4,699)
(5,877)
(185)
(1,149)
(1,334)
(4,930)
(4,930)
(6,264)
15,988
16,977
6,500
16,136
21
(10,006)
12,651
3,337
15,988
6,474
16,056
21
(8,902)
13,649
3,328
16,977
These financial statements were approved by the Board and authorised for issue on 6 December 2016.
Signed on behalf of the Board
P Cox
Director
Company Registration No: 04095614
IRONVELD PLC
16
PARENT COMPANY BALANCE SHEET
Non-current assets
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
YEAR ENDED
30 JUNE
2016
Note
13
14
2016
£000
2015
£000
18,954
17,776
78
74
152
86
1,381
1,467
Total assets
19,106
19,243
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium
Other reserves
Retained earnings
Total equity
(Attributable to owners of the Company)
15
19
20
20
20
(179)
(179)
(169)
(169)
18,927
19,074
6,500
16,136
21
(3,730)
18,927
6,474
16,056
21
(3,477)
19,074
These financial statements were approved by the Board and authorised for issue on 6 December 2016.
Signed on behalf of the Board
P Cox
Director
Company Registration No: 04095614
IRONVELD PLC
17
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Attributable to owners of the company Capital
Share
Premium
Warrant
Reserve
Retained
Earnings
£000
£000
£000
£000
YEAR ENDED
30 JUNE
2016
Total
£000
As at 1 July 2014
6,097
14,097
Prior period adjusted
-
-
At 1 July 2014 (as restated)
6,097
14,097
Other comprehensive income (as restated)
-
-
Issue of share capital
377
1,959
Credit for equity-settled
share based payments
Adjustment arising from changes
in non-controlling interests as (restated)
Loss for the year (as restated)
-
-
-
-
-
-
21
-
21
-
-
-
-
-
(8,635)
11,580
739
739
(7,896)
12,319
(600)
-
(600)
2,336
221
221
(35)
(592)
(35)
(592)
At 30 June 2015 (as restated)
6,474
16,056
21
(8,902)
13,649
Other comprehensive income
Issue of share capital
Credit for equity-settled
share based payments
Adjustment arising from changes
in non-controlling interests
Loss for the year
-
26
-
-
-
-
80
-
-
-
-
-
-
-
-
(525)
-
(525)
106
171
171
(166)
(584)
(166)
(584)
Balance at 30 June 2016
6,500
16,136
21
(10,006)
12,651
IRONVELD PLC
18
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
YEAR ENDED
30 JUNE
2016
Total equity
As at 1 July 2014
Owners of
the company
£000
Interest
£000
Non-controlling
Total
Equity
£000
11,580
3,410
14,990
Prior period adjustment
739
157
896
At 1 July 2014 (as restated)
12,319
3,567
15,886
Other comprehensive income (as restated)
(600)
(168)
Issue of share capital
Credit for equity-settled share based payments
Adjustment arising from changes in
non-controlling interests (as restated)
Loss for the year (as restated)
2,336
221
(35)
(592)
-
-
(70)
(1)
(768)
2,336
221
(105)
(593)
Balance at 30 June 2015 (as restated)
13,649
3,328
16,977
Other comprehensive income
Issue of share capital
Credit for equity-settled share based payments
Adjustment arising from changes in non-controlling interests
Loss for the year
(525)
106
171
(166)
(584)
(156)
-
-
166
(1)
(681)
106
171
-
(585)
Balance at 30 June 2016
12,651
3,337
15,988
IRONVELD PLC
19
YEAR ENDED
30 JUNE
2016
COMPANY STATEMENT OF CHANGES IN EQUITY
Equity attributable to the equity holders of the Company:
Share
Capital
£000
Share
Premium
£000
Warrant
Reserve
£000
Retained
Earnings
£000
Total
Equity
£000
Balance at 1 July 2014
6,097
14,097
21
(3,246)
16,969
Issue of share capital
377
1,959
Credit for equity-settled
share based payments
Loss for the year
-
-
-
-
-
-
-
-
2,336
221
(452)
221
(452)
Balance at 30 June 2015
6,474
16,056
21
(3,477)
19,074
Credit for equity-settled
share based payments
Issue of share capital
Loss for the year
-
26
-
-
80
-
-
-
-
171
-
171
106
(424)
(424)
Balance at 30 June 2016
6,500
16,136
21
(3,730)
18,927
IRONVELD PLC
20
CONSOLIDATED CASH FLOW STATEMENT
Note
21
Net cash used in operating activities
Investing activities
Purchases of property, plant and equipment
Purchase of exploration and evaluation assets
Contribution to exploration and evaluation assets
Interest received
Net cash used in investing activities
Financing activities
Proceeds on issue of equity (net of costs)
Repayment of borrowings
Net cash (used)/generated by financing activities
Year
ended
2016
£000
(470)
(4)
(821)
187
-
(638)
6
(187)
(181)
Net (decrease)/increase in cash and cash equivalents
(1,289)
Cash and cash equivalents at beginning
of period
21
Effects of foreign exchange rates
Cash and cash equivalents at end of period
21
1,407
(5)
113
YEAR ENDED
30 JUNE
2016
Year
ended
2015
£000
(286)
(1)
(840)
-
1
(840)
2,129
(333)
1,796
670
738
(1)
1,407
IRONVELD PLC
21
COMPANY CASH FLOW STATEMENT
Note
Year
ended
2016
£000
Net cash from operating activities
21
(231)
Investing activities
Interest received
Payments to acquire investments
Net cash used in investing activities
Financing activities
Proceeds on issue of equity (net of costs)
Net cash generated from financing activities
-
(1,082)
(1,082)
6
6
Net (decrease)/increase in cash and cash equivalents
(1,307)
Cash and cash equivalents at
beginning of period
Cash and cash equivalents at end of period
21
21
1,381
74
YEAR ENDED
30 JUNE
2016
Year
ended
2015
£000
(237)
1
(1,230)
(1,229)
2,129
2,129
663
718
1,381
IRONVELD PLC
22
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Ironveld Plc is a public company incorporated in the United Kingdom under the Companies Act 2006 whose
shares are listed on the Alternative Investment Market of the London Stock Exchange. The address of the
registered office is given on page 2. The nature of the Group's operations and its principal activities are set out
in note 3 and in the Strategic Report on pages 3 to 4.
Adoption of new and revised Standards
There were no new or amended IFRS standards or IFRIC interpretations adopted for the first time in these
financial statements that had a material impact on the financial statements.
At the date of authorisation of these financial statements, the following accounting standards, amendments to
existing standards and interpretations are not yet effective and have not been adopted early by the Group.
IFRS 14
IFRS 15
IFRS 11 (amended)
IAS 16 & 38 (amended)
IFRS 9 (2014)
IAS 27 (amended)
IFRS 10, 12 & IAS 28 (amended)
IAS 1 (amended)
IFRS 16
IAS 12 (amended)
IAS 7 (amended)
IFRS 15 (Clarification)
IFRS 2 (amendments)
Regulatory Deferral Accounts
Revenue from Contracts with Customers
Accounting for Acquisitions of Interests in Joint Operations
Clarification of Acceptable Methods of Depreciation and Amortisation
IFRS 9 Financial Instruments (2014)
Equity Method in Separate Financial Statements
Investment Entities: Applying the Consolidation Exception
Disclosure Initiative
Leases
Recognition of Deferred Tax Assets for Unrealised Losses
Disclosure Initiative
Revenue from Contracts with Customers
Classification and Measurement of Share-based Payment Transactions
Annual Improvements to IFRSs 2012-2014 Cycle.
The adoption of these standards, amendments and interpretations is not expected to have a material impact on
the group/company’s result for the year or equity.
2.1 Significant accounting policies
The financial statements are based on the following policies which have been consistently applied:
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
The financial statements have been prepared on the historical cost basis. The principal accounting policies are
set out below:
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all entities
controlled by the Company (its subsidiaries) made up to the year end. Control is achieved where the Company
has power to govern the financial and operating policies of an investee entity so as to obtain benefits from its
activities.
Subsidiaries are consolidated from the date of their acquisition, being the date on which the Company obtains
control and ceases when the Company loses control of the subsidiary. Profit or loss and each component of
other comprehensive income are attributed to the owners of the Company and to the non-controlling interests.
Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-
controlling interests even if this results in the non-controlling interests having a deficit balance.
IRONVELD PLC
23
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Basis of consolidation (continued)
Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Those
interests of non-controlling shareholders are initially measured at their proportionate share of the fair value of
the acquirees identifiable net assets. Subsequent to acquisition, the carrying value of the non-controlling
interests is the amount of initial recognition plus the non-controlling interests' share of the subsequent changes
in equity.
Changes in the Group's interests in subsidiaries that do not result in a loss of control are accounted for as equity
transactions. The carrying amount of the Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which
the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised
directly in equity and attributed to the owners of the company.
Business combinations
Acquisitions of subsidiaries are accounted for using acquisition accounting. The consideration for each
acquisition is measured at the fair value of assets given, liabilities incurred or assumed and equity instruments
issued by the group in exchange for control in the acquiree. Acquisition-related costs are recognised in the
income statement as incurred.
Exploration and evaluation
Costs incurred prior to acquiring the rights to explore are charged directly to the income statement.
Licence acquisition costs and all other costs incurred after the rights to explore an area have been obtained,
such as the direct costs of exploration and appraisal (including geological, drilling, trenching, sampling, technical
feasibility and commercial viability activities) are accumulated and capitalised as intangible exploration and
evaluation (E & E) assets, pending determination. Amounts charged to project partners in respect of costs
previously capitalised are deducted as contributions received in determining the accumulated cost of exploration
and evaluation assets.
E & E assets are not amortised prior to the conclusion of the appraisal activities. At completion of appraisal
activities, if financial and technical feasibility is demonstrated and commercial reserves are discovered then,
following development sanctions, the carrying value of the relevant E & E asset will be reclassified as a
development and production asset in intangible assets after the carrying value has been assessed for
impairment and, where appropriate adjusted. If after completion of the appraisal of the area it is not possible to
determine technical and commercial feasibility or if the legal rights have expired or if the Group decide to not
continue activities in the area, then the cost of unsuccessful exploration and evaluation are written off to the
income statement in the relevant period.
The Group's definition of commercial reserves for such purposes is proved and probable reserves on an
entitlement basis. Proved and probable reserves are the estimated quantities of minerals which geological,
geophysical and engineering data demonstrate with a specified degree of certainty to be recoverable in future
years from the known reserves and which are considered to be commercially producible.
Such reserves are considered commercially producible if management has the intention of developing and
producing them and such intention is based upon:
-
-
-
-
-
a reasonable expectation that there is a market for substantially all of the expected production;
a reasonable assessment of the future economics of such production;
evidence that the necessary production, transmission and transportation facilities are available or
can be made available; and
agreement of appropriate funding; and
the making of the final investment decision.
IRONVELD PLC
24
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Exploration and evaluation (continued)
On an annual basis a review for impairment indicators is performed. If an indicator of impairment exists an
impairment review is performed. The recoverable amount is then considered to be the higher of the fair value
less costs of sale or its value in use. Any identified impairment is written off to the income statement in the
period identified.
Development and production assets
Development and production assets, classified within property, plant and equipment, are accumulated generally
on a field basis and represents the cost of developing the commercial reserves discovered and bringing them
into production, together with the E&E expenditure incurred in finding the commercial reserves transferred from
intangible assets.
Depreciation of producing assets
The net book values of producing assets are depreciated generally on the field basis using the unit or
production method by reference to the ratio of production in the period and the related commercial reserves of
the field, taking into account the future development expenditure necessary to bring those reserves to
production.
Research and development
Research expenditure is recognised as an expense in the period in which it is incurred.
An internally-generated asset arising from any development is recognised only if all of the following conditions
are met:
-
-
-
an asset is created that can be identified;
it is probable that the asset created will generate future economic benefits; and
the development cost of the asset can be measured reliably.
Revenue
Revenue is measured at the fair value of the consideration received or receivable for goods and services
provided in the normal course of business, net of discounts and value added tax.
Taxation
The tax expense represents the sum of the tax payable and deferred tax.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of
assets and liabilities in the financial statements and the corresponding tax base used in the calculation of the
taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally
recognised on all appropriate taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against which the deductible timing differences can
be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date.
Deferred tax is calculated at the tax rates that are expected to be applicable in the period when the liability or
asset is realised and is based on tax laws and rates substantially enacted at the balance sheet date. Deferred
tax is charged in the income statement except where it relates to items charged/credited in other comprehensive
income, in which case the tax is also dealt with in other comprehensive income.
IRONVELD PLC
25
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Leases
Rentals payable under operating leases are charged to the income statement on a straight line basis over the
lease term.
Property, plant and equipment
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write
off the cost less the estimated residual value of each asset over its expected useful life, as follows:
Plant and machinery
10% - 25% straight line basis or reducing balance basis
Foreign currencies
The individual financial statements of each group company are presented in the currency of the primary
economic environment in which it operates (its functional currency). For the purposes of the consolidated
financial statements, the results and financial position of each group company are expressed in pounds sterling,
which is the functional currency of the Company, and the presentation currency for the consolidated financial
statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the
entity's functional currency are recognised at the rates of exchange prevailing on the dates of the transactions.
At each balance sheet date, monetary assets and liabilities that are 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 translated at the rates prevailing at the date 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 the income statement in the period in which they arise.
When presenting the consolidated financial statements, the assets and liabilities of the group's foreign
operations are translated at the exchange rates prevailing at the balance sheet date. Income and expense items
are translated at average exchange rates for the period, unless exchange rates have fluctuated significantly in
which case the rates at the date of the transactions are used. Exchange differences arising are recognised in
other comprehensive income and accumulated in equity (attributed to non-controlling interests where
appropriate).
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated using the closing rate.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a
party to the contractual provisions of the instrument.
Other receivables
Other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised
cost using the effective interest rate method except for short-term receivables when recognition of interest would
be immaterial. Appropriate allowances for the estimated irrecoverable amounts are recognised in the income
statement when there is objective evidence that the asset is impaired.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short term highly liquid
investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of
change in value.
IRONVELD PLC
26
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
Financial instruments (continued)
Financial liability and equity
Interest bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs.
Finance charges, including premiums payable on settlement or redemption and direct issue costs, are
accounted for on an accrual basis in the income statement using the effective interest rate method and are
added to the carrying amount of the instrument to the extent that they are not settled in the period in which they
arise.
The group classifies financial instruments, or their component parts, on initial recognition as a financial asset,
financial liability or an equity instrument in accordance with the substance of the contractual arrangement.
Financial instruments are initially recognised at fair value and are subsequently amortised using the effective
interest method. Fair value is estimated from available market data and reference to other instruments
considered to be substantially the same.
Trade and other payables
Trade payables and other financial liabilities are initially measured at fair value, and are subsequently measured
at amortised cost, using the effective interest rate method.
The Group's activities expose it primarily to the financial risks of changes in interest rates on long term
borrowings.
Investments
Investments are stated at cost less any provision for the permanent diminution in value.
Share-based payments
The Group issues equity-settled share-based payments to certain employees and other parties. Equity settled
share-based payments are measured at fair value at the date of grant. In respect of employee related share
based payments, the fair value determined at the grant date is expensed on a straight-line basis over the
vesting period, based on the Group's estimate of shares that will eventually vest. In respect of other share
based payments, the fair value is determined at the date of grant and recognised when the associated goods or
services are received.
Operating segments
The Group considers itself to have one operating segment in the year and further information is provided in note
3.
Going concern
The Directors have, at the time of approving the financial statements, a reasonable expectation that the
Company and the Group have adequate resources to continue in operating existence for the foreseeable future.
Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. Further
details are provided in the note 2.2 and in the Strategic Report on pages 3 to 4.
IRONVELD PLC
27
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.2 Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually
evaluated based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual experience may differ from these
estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Fair value of acquisition
On acquisition of a subsidiary, the company is required to estimate the fair value of the assets and liabilities
acquired and the consideration paid. The estimate in respect of exploration and evaluation assets is affected by
many factors including the future viability of commercial reserves which have been based on the judgement of
directors supported by third party technical reports.
Going concern
The Group’s present resources and existing facilities are only considered adequate to meet committed
overhead expenditure for the period to 30 June 2017 by which time the Directors expect to have completed the
full funding of the Project (the High Purity Iron, Vanadium and Titanium project located on the Northern Limb of
the Bushveld Complex in Limpopo Province, South Africa owned by the Group). The Group announced on 6
October 2016 that they have received approval for a ZAR244m funding package for the Project and were in the
process of executing formal funding agreements. The Group is also in advanced stages of negotiating the
remaining debt agreements for the Project. Overall a ZAR 871m financing package is proposed.
The Directors are confident that sufficient funds can be raised for this additional planned activity and therefore
have a reasonable expectation that the Group will have adequate resources to continue in operational existence
for the foreseeable future, being twelve months from the date of the approval of the financial statements. The
Group is committed to developing the Project and is actively engaged in raising finance to allow the
development to proceed. For this reason, the Board continues to adopt the going concern basis in the
preparation of the financial statements.
Fair value of share based payments
Calculation of the fair value of the share based payments issued requires estimates to be used for the share
price volatility, the risk free rate and the model with which to calculate the fair value.
Exploration and evaluation assets
The group has adopted a policy of capitalising the costs of exploration and evaluation and carrying the amount
without impairment assessment until impairment indicators exist (as permitted by IFRS 6). The directors
consider that the group remains in the exploration and evaluation phase and therefore, under IFRS 6, the
directors have to make judgements as to whether any indicators of impairment exist and the future activities of
the company. No such indicators of impairment were identified and therefore no impairment review has been
carried out.
Deferred tax assets
The directors must judge whether the future profitability of the Group is likely in making the decision whether or
not to recognise a deferred tax asset in respect of taxation losses. No deferred tax assets have been
recognised in the year.
Useful lives of property, plant and equipment
Property, plant and equipment are amortised or depreciated over their useful lives. Useful lives are based on the
management's estimates of the period that the assets will generate revenue, which are based on judgement and
experience and periodically reviewed for continued appropriateness. Changes to estimates can result in
significant variations in the carrying value and amounts charged to the consolidated income statement in
specific periods.
IRONVELD PLC
28
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. Business and geographical segments
Information reported to the Group Directors for the purposes of resource allocation and assessment of segment
performance is focused on the activity of each segment and its geographical location. The directors consider
that there is only one business segment, which is the activity of prospecting, exploration and mining based in
South Africa.
4. Operating loss
Operating loss for the period is shown after charging:
Year
Ended
2016
£000
Year
ended
2015
£000
Net foreign exchange (losses)/gains
Depreciation on tangible assets
Operating leases - Land and buildings
Auditors remuneration
Fees payable to the auditors for the audit of the company's accounts
Fees payable to the company's auditors and its associates for other services:-
The audit of the company's subsidiaries
Tax compliance services
Other assurance services
5. Staff costs
Wages and salaries
Social security costs
Share based payments
Directors remuneration and fees
The aggregate remuneration paid to the highest paid director was
(5)
8
25
24
8
3
9
4
8
25
24
8
3
6
Year
ended
2016
£000
Year
ended
2015
£000
519
17
155
691
309
118
652
17
221
890
307
140
The average monthly number of employees, including Directors, during
the period was as follows:
2016
Number
2015
Number
Administration and management
16
14
Further details of the Directors' remuneration are given in the Directors' Remuneration Report on pages 9 and
10.
IRONVELD PLC
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. Investment revenues
Interest on bank deposits
7. Finance costs
Loan interest and similar charges
8. Tax
a) Tax charge for the period
Corporation tax:
Current period
Deferred tax (note 17)
b) Factors affecting the tax charge for the period
Loss on ordinary activities for the period before taxation
Loss on ordinary activities for the period before taxation multiplied by
effective rate of corporation tax of 20% (2015 - 20.75%)
Effects of :
Non-deductible expenses
Unused tax losses not recognised
Tax expense for the period
YEAR ENDED
30 JUNE
2016
Year
ended
2016
£000
Year
ended
2015
£000
-
1
Year
ended
2016
£000
Year
ended
2015
£000
91
91
74
74
Year
ended
2016
£000
As restated
Year
ended
2015
£000
-
-
-
-
-
-
(585)
(593)
(117)
(123)
34
83
-
46
77
-
c) Factors that may affect future tax charges - The Group has estimated unutilised tax losses amounting to
£2,460,000 (2015 - £1,897,000) the values of which are not recognised in the balance sheet. The losses
represent a potential deferred taxation asset of £490,000 (2015 - £400,000) which would be recoverable should
the Group make sufficient suitable taxable profits in the future.
In addition, the group has pooled exploration costs incurred of £4,400,000 (2015 - £3,900,000) which are
expected to be deductible against future trading profits of the group.
IRONVELD PLC
30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. (Loss)/earnings per share
Loss attributable to the owners of the Company
Effect of prior period adjustment
As previously stated
Loss per share – Basic and diluted
Continuing operations
Effect of prior period adjustment
As previously stated
YEAR ENDED
30 JUNE
2016
2016
£000
As restated
2015
£000
(584)
(592)
(236)
(828)
(0.18p)
(0.20p)
(0.08p)
(0.28p)
The prior period adjustment reduced the taxation charge for the year ended 30 June 2015 by £288,000 and the
non-controlling interest of losses by £52,000, resulting in an overall reduction of losses attributable to owners of
the company of £236,000.
The calculation of basic earnings per share is based on 326,938,397 (2015 – 296,115,053) ordinary shares, being the
weighted average number of ordinary shares in issue during the period.
Where the Group reports a loss for the current period, then in accordance with IAS 33, the share options are not
considered dilutive. Details of such instruments which could potentially dilute basic earnings per share in the
future are included in note 19.
Under IAS 33, the share warrants in issue during the period were not considered to be diluting as the market
based vesting conditions of the warrants had not been met at the year end. Further details are provided in note
19.
10. Loss attributable to owners of the parent company
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent Company is
not presented as part of these accounts. The parent Company's loss for the financial year amounted to
£424,000 (2015 - £452,000).
IRONVELD PLC
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. Other intangible assets
Group
Cost:
At 1 July 2014
Additions
Exchange differences
At 30 June 2015
Additions
Contributions received
Exchange differences
At 30 June 2016
Amortisation:
At 1 July 2014, 30 June 2015 and at 30 June 2016
Net book value at 30 June 2016
Net book value at 30 June 2015
YEAR ENDED
30 JUNE
2016
Exploration
and
evaluation
assets
£000
21,787
980
(1,024)
21,743
927
(187)
(974)
21,509
-
21,509
21,743
The Group's exploration and evaluation assets all relate to South Africa.
In respect of the exploration and evaluation assets which remain in the appraisal phase, the group has
performed a review for impairment indicators and in the absence of such indicators no impairment review was
carried out.
IRONVELD PLC
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. Property, plant and equipment
Group
Cost:
At 1 July 2015
Additions
Exchange differences
At 30 June 2016
Depreciation:
At 1 July 2015
Charge for the period
Exchange differences
At 30 June 2016
Net book value at 30 June 2016
Net book value at 30 June 2015
Cost:
At 1 July 2014
Additions
Exchange differences
At 30 June 2015
Depreciation:
At 1 July 2014
Charge for the period
Exchange differences
At 30 June 2015
Net book value at 30 June 2015
Net book value at 30 June 2014
All non-current assets in 2016 and 2015 were located in South Africa.
YEAR ENDED
30 JUNE
2016
Plant
and
machinery
£000
29
4
(1)
32
15
8
-
23
9
14
Plant and
machinery
£000
30
1
(2)
29
8
8
(1)
15
14
22
IRONVELD PLC
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13. Investments
Company
Cost:
At 1 July 2014
Additions
Disposals
At 30 June 2015
Additions
At 30 June 2016
Provisions for impairment
At 1 July 2014
On disposal
At 30 June 2015
At 30 June 2016
Net book value at 30 June 2016
Net book value at 30 June 2015
YEAR ENDED
30 JUNE
2016
Subsidiary
undertakings
£000
16,362
1,414
-
17,776
1,178
18,954
-
-
-
-
18,954
17,776
Additions in the year of £1,414,000 (2015 - £1,178,000) represent further shares issued, and fully paid, by
Ironveld Mauritius Limited, the company’s wholly owned subsidiary.
The Company has investments in the following principal subsidiaries. To avoid a statement of excessive length,
details of the investments which are not significant have been omitted:
Name of company
Shares
Subsidiary undertakings
Ironveld Mauritius Limited
Ordinary
Ironveld Holdings (Proprietary) Limited Ordinary
Ironveld Mining (Proprietary) Limited
Ordinary
Ironveld Smelting (Proprietary) Limited Ordinary
Ordinary
HW Iron (Proprietary) Limited
Ordinary
Lapon Mining (Proprietary) Limited
Luge Prospecting and
Mining (Proprietary) Limited
Ordinary
Proportion of
voting rights
and shares held
Nature of
business
100%+
100%
100%
74%
68%
74%
74%
Holding Company
Holding Company
Mining and exploration
Ore processing and smelting
Prospecting and mining
Prospecting and mining
Prospecting and mining
IRONVELD PLC
34
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13. Investments (continued)
All subsidiary undertakings are incorporated in South Africa, other than Ironveld Mauritius Limited, which is
incorporated in Mauritius.
+ Held directly by Ironveld Plc
Envirolite Limited, Envirolite Midlands Limited, WEEE Recycling Limited and Battnet Limited were dormant
companies which were dissolved during the period.
Further details of non-wholly owned subsidiaries of the Group are provided in note 23.
14. Trade and other receivables
Amounts owed from Group undertakings
Other debtors
Prepayments and accrued income
Credit risk
Group
Company
2016
£000
-
209
25
234
2015
£000
2016
£000
-
68
9
77
39
33
6
78
2015
£000
24
56
6
86
The Group's principal financial assets are bank balances, cash balances, and other receivables. The Group's
credit risk is primarily attributable to its other receivables of which £171,000 is due to a third party financial
institution and further information is provided in note 18. The amounts presented in the balance sheet are net of
allowances for doubtful receivables.
15. Trade and other payables
Group
Company
Trade payables
Taxation and social security costs
Other payables
Accruals and deferred income
Due within 12 months
Due after more than 12 months
2016
£000
14
25
5
142
186
(186)
-
2015
£000
3
76
5
101
185
(185)
-
2016
£000
14
24
5
136
179
(179)
-
2015
£000
3
65
5
96
169
(169)
-
IRONVELD PLC
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. Borrowings
Other loans
Group
Company
2016
£000
992
2015
£000
2016
£000
1,149
-
The borrowings are repayable as follows:
Group
Company
2016
£000
992
992
(992)
-
2015
£000
1,149
1,149
(1,149)
-
2016
£000
-
-
-
-
On demand or within one year
Due for settlement within 12 months
Due for settlement after more than 12 months
Further details on loans are provided in note 18.
17. Deferred tax
Balance at 1 July – as previously stated
Prior period adjustment
As restated
Exchange differences
Income statement – tax charge
Balance at 30 June
The deferred tax liability is made up as follows:
Fair value adjustments
YEAR ENDED
30 JUNE
2016
2015
£000
-
2015
£000
-
-
-
-
Group
2016
£000
As restated
2015
£000
6,058
(1,128)
4,930
(231)
-
6,069
(896)
5,173
(243)
-
4,699
4,930
Group
As restated
2015
£000
2016
£000
4,699
4,930
IRONVELD PLC
36
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. Financial instruments
The Group's policies as regards derivatives and financial instruments are set out in the accounting policies in
note 2. The Group does not trade in financial instruments.
Capital risk management
The Group manages its capital to ensure that they will be able to continue as a going concern whilst maximising
the return to stakeholders through the optimisation of the debt and equity balance. The Group's overall strategy
remains unchanged from 2015.
The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 16, cash
and cash equivalents and equity attributable to equity holders of the parent company.
The Group is not subject to any externally imposed capital requirements.
Interest rate risk profile
The Group is exposed to interest rate risk because the Group borrows funds at both fixed and floating interest
rates. The Group's exposures to interest rates on financial assets and financial liabilities are detailed in the
liquidity risk management section of this note.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the company. The Group has adopted a policy of only dealing with creditworthy counterparties as a means of
mitigating the risk of financial loss from defaults. The Group's exposure and the credit ratings of its
counterparties are continuously monitored and the aggregate value of the transactions concluded is spread
where possible.
Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an
appropriate liquidity risk management framework for the management of the Group's short, medium and long
term funding and liquidity management requirements. The Group manages liquidity risk by maintaining
adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows, and by
matching the maturity profiles of financial assets and liabilities. Details of additional undrawn facilities that the
group has at its disposal to manage liquidity are set out below.
Financial facilities
The Group did not have any secured bank loan or overdraft facilities during the current or comparative period.
The Group has a loan facility of South African Rand 15m that has been drawn in full at the year end.
Financial assets
The Group has no financial assets, other than short-term receivables and cash deposits of £113,000 (2015 -
£1,407,000). The cash deposits attract variable rates of interest. At the year end the effective rate was 0.04%
(2015 – 0.09%). The cash deposits held were as follows:-
Sterling - United Kingdom banks
USD – United Kingdom banks
South African Rand - United Kingdom banks
South African Rand - South African banks
2016
£000
23
47
3
40
113
2015
£000
1,378
-
3
26
1,407
IRONVELD PLC
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. Financial instruments (continued)
Financial liabilities
The Group's financial liabilities consist of other loans. Interest rates charged on these are as follows:
YEAR ENDED
30 JUNE
2016
Weighted
average
effective
interest rate
(%)
Within 1
year
£000
30 June 2016
Variable interest rates - SA
5.14
992
30 June 2015
Variable interest rates - SA
5.66
1,149
Other loans relate to a loan agreed on the acquisition of the Ironveld Group. The loan of £992,000 (2015 -
£939,000) bears interest at the South African current prime rate, is repayable no later than 31 July 2017 and is
secured against the assets of the group. The loan held at 30 June 2015 of £210,000 was settled during the
period.
Currency exposures
The Group undertakes transactions denominated in foreign currencies and is consequently exposed to
fluctuations in exchange rates.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities
were as follows:-
As at 30 June 2016
British Pound Sterling (£)
USD ($)
South African Rand (ZAR)
As at 30 June 2015
British Pound Sterling (£)
South African Rand (ZAR)
Assets
£000
Liabilities
£000
56
47
218
321
178
-
1,000
1,178
Assets
£000
Liabilities
£000
1,430
169
44
1,165
1,474
1,334
IRONVELD PLC
38
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. Financial instruments (continued)
Financial commitments and guarantee
A rehabilitation guarantee of £599,000 (ZAR 11,993,000) (2015 – Nil) has been issued to the Department of
Mineral Resources from two subsidiaries, HW Iron Proprietary Limited and Luge Prospecting and Mining
Company Proprietary Limited, in order to comply with Section 41 of the Mineral and Petroleum Resources
Development Act, 202 (Act 28 of 2002). Under this agreement the group will pay deposits to a third party
financial institution to be held pending discharge of any potential claim on this guarantee. At 30 June 2016
£171,000 (ZAR 3,426,000) (2015 – Nil) had been deposited in respect of this agreement and is included in other
receivables. This represents a concentration of credit risk and the group is exposed to currency risks on these
amounts. As the project has not yet commenced then no liability is considered to exist at the reporting date and
the amount remains repayable as a current asset.
19. Share capital
Group and Company
Allotted, called up and fully paid
327,544,176 (2015 - 324,919,252) ordinary shares of 1p each
322,447,158 (2015 - 322,447,158) deferred shares of 1p each
2016
£000
3,276
3,224
6,500
2015
£000
3,250
3,224
6,474
In July 2015, 576,667 ordinary shares of 1p each were issued on the exercise of share options.
On 15 July 2015 the company issued 841,547 shares to directors in lieu of salary at 5.38 pence per share. On
7 August 2015 the company issued 315,620 shares to consultants in lieu of payment at 5.67 pence per share.
On 3 February 2016 the company issued 891,090 shares to directors in lieu of salary at 4.2 pence per share.
Following the year end, in November 2016, the company completed a placing of 40,000,003 shares raising
£1,800,000 before expenses of the issue.
Unlike ordinary shares, the deferred shares have no voting rights, no dividend rights and on a return of capital or
winding up are entitled to a return of amounts credited as paid. The deferred shares are not transferrable and
beneficial interest in the deferred shares can be transferred to such persons as the Directors may determine as
custodian for no consideration without sanction of the holder.
Share options
The Company has a share option scheme for certain employees and former employees of the Group. The share
options in issue during the period were as follows:
Date
granted
Exercise
price
10p
21 May 2010
1p
16 August 2012
14 November 2012 1p
1p
16 April 2013
1p
7 November 2013
1p
1 May 2014
1p
1 October 2015
1p
27 January 2016
As at
1 July
2015
No.
1,600,000
6,235,137
6,663,505
1,066,667
2,230,000
600,000
-
-
Granted
in year
No.
-
-
-
-
-
-
2,500,000
445,545
Exercised
in year
No.
Lapsed/
Cancelled
No.
-
-
-
(33,333)
(143,333)
(400,000)
-
-
-
-
-
-
-
-
-
-
As at
30 June
2016
No.
1,600,000
6,235,137
6,663,505
1,033,334
2,086,667
200,000
2,500,000
445,545
IRONVELD PLC
39
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Share capital (continued)
The exercise period of the options is as follows:
Date
granted
Expiry date
Exercise period
21 May 2010
21 May 2020
to 21 May 2020
16 August 2012
14 November 2012
16 April 2013
7 November 2013
1 May 2014
1 October 2015
27 January 2016
16 August 2022
14 November 2022 The options are exercisable 1/3 on the first anniversary
of grant, 1/3 on the second anniversary of grant and the
16 April 2023
7 November 2023
final 1/3 on the first anniversary of grant
1 May 2024
1 October 2025
27 January 2026
Of the options granted on 1 October 2015, 1,000,000 are exercisable following first commercial production from
the 15 MW smelter, which is expected in December 2017.
The group recognised a share based payment expense of £171,000 (2015 - £221,000) in the period.
The aggregate of the estimated fair value of the options granted in the year amounts to £123,000 (2015 - £Nil).
The inputs into the Black Scholes Model are as follows:-
Weighted average share price (pence)
Weighted average exercise price (pence)
Expected volatility
Weighted average vesting period
Risk free rate
2016
5.1
1.0
62% to 64%
2 years
0.47%
Expected volatility was determined by calculating the historical volatility of the group's share price over the 3
years prior to the grant date. The expected life used in the model is based on management’s best estimate.
Share warrants
As at 1 July 2015 and at 30 June 2016 the warrants in issue were; 8,399,966 issued at a price of 0.25p each
with an expiry date of 24 September 2016.
The share warrants were issued as part of the placing pursuant to the terms of a warrant instrument executed
by the Company and dated 24 September 2010. Under the warrant Instrument, 8,399,966 warrants were
created, with each warrant granting the holder the right to subscribe for one ordinary share at a price of 10p per
share (subject to adjustment in limited circumstances such as a subdivision or consolidation of the Company's
share capital) payable in cash on exercise.
The warrants were exercisable within six years of being issued subject to the average closing market price of
the Company's shares having been at least 15p per ordinary share over a period of at least 30 consecutive days
(unless the Board waives this condition). The Company shall procure that the ordinary shares issued pursuant
to the exercise of warrants are admitted to trading on AIM. The warrants themselves will not be dealt with or
admitted to trading on any market and are only transferable in limited circumstances by their holders.
Warrants represent subscription rights for ordinary shares in Ironveld Plc.
Warrants may be exercised in whole or in part (and from time to time) prior to the final expiry date. The warrants
are non-transferable.
IRONVELD PLC
40
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Share capital (continued)
Share warrants continued
In addition to the above warrants, Sylvania Metals Pty Limited entered into a loan facility of 15,000,000 South
African Rand, in consideration for which the Company has undertaken to grant Sylvania warrants with effect
from 16 August 2012 as a guarantee. Sylvania are entitled, pursuant to these warrants, to subscribe for such
number of 1 pence Ordinary Shares as results from dividing £1,500,000 by the volume weighted average price
of the Company’s shares on AIM for the 90 business days ending on the business day immediately prior to the
date of exercise, with such warrants being exercisable during the period commencing on 1 July 2017 and
ending on the earlier of repayment in full of the loan facility monies or the fifth anniversary of admission.
Such warrants are only exercisable to the extent that any amount is then outstanding under the loan facility. The
Company shall procure that any shares issued pursuant to the exercise of the warrants are admitted to trading
on AIM. The proceeds derived from the exercise of the warrants will be used only to repay the associated loan.
20. Reserves
Group
At 1 July 2015
Prior period adjustment
At 1 July 2015 – as restated
Loss for the period
Exchange difference on translation of foreign operations
Issue of share capital
Adjustment arising from change in non-controlling interests
Credit for equity settled share based payments
At 30 June 2016
Warrant
reserve
£000
Share
premium
account
£000
Retained
earnings
£000
21
-
21
-
-
-
-
-
21
16,056
-
(9,750)
848
16,056
-
-
80
-
-
(8,902)
(584)
(525)
-
(166)
171
16,136
(10,006)
Retained earnings is made up of cumulative profits and losses to date, share based payments, adjustments
arising from changes in non-controlling interests and exchange differences on translation of foreign operations.
Prior period adjustment
In the prior period certain subsidiary tax computations have included claims for tax deductions on costs of
exploration incurred in those periods. Under IAS 12 deferred tax provisions were included in the financial
statements for each prior period based on the resulting timing differences.
It has now been agreed with the South African Revenue Service that claims for tax deductions on the relevant
costs of exploration should not be made until profits are generated. Therefore, no timing differences currently
arise. The resulting reversal of the deferred tax provisions has been treated as a prior period adjustment and
comparative figures have been restated, as, in the opinion of the directors, this produces better information to
the shareholders.
The prior period adjustment resulted in a reduction in the loss after tax in 2015 of £288,000 and a reduction of
the non-controlling interest share in that loss of £52,000. The net assets at 1 July 2014 were increased by
£896,000 and those at 30 June 2015 increased by £1,128,000. The net assets attributable to owners of the
company increased by £739,000 at 1 July 2014, and by £848,000 at 30 June 2015, with the difference being
attributed to the non-controlling interest. Further information is given in note 17, note 23 and the consolidated
statement of changes in equity.
IRONVELD PLC
41
YEAR ENDED
30 JUNE
2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. Reserves (continued)
Company
Warrant
reserve
£000
Share
premium
Retained
account earnings
£000
£000
At 1 July 2015
Loss for the period
Issue of share capital
Credit for equity settled share based payments
At 30 June 2016
21
-
-
-
21
16,056
-
80
-
(3,477)
(424)
-
171
16,136
(3,730)
The balance classified as share premium is the premium on the issue of the Group's equity share capital,
comprising 1p ordinary shares and 1p deferred shares less any costs of issuing the shares.
The warrant reserve represents the estimated fair value of share warrants issued.
21. Cash generated from operations
Group
Operating loss
Depreciation on property, plant and equipment
Share based payment expense
Operating cash flows before movements in working capital
Movement in receivables
Movement in payables
Cash used in operations
Interest paid
Net cash used in operations
Cash and cash equivalents
Cash and bank balances
2016
£000
(494)
8
171
(315)
(109)
(46)
(470)
-
(470)
2016
£000
113
2015
£000
(520)
8
221
(291)
(16)
24
(283)
(3)
(286)
2015
£000
1,407
IRONVELD PLC
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. Cash generated from operations (continued)
Company
Operating loss
Share based payment expense
Operating cash flows before movements in working capital
Movement in receivables
Movement in payables
Net cash used in operations
Cash and cash equivalents
Cash and bank balances
22. Related party transactions
Group and Company
YEAR ENDED
30 JUNE
2016
2016
£000
(424)
76
(348)
8
109
2015
£000
(452)
127
(325)
(25)
113
(231)
(237)
2016
£000
74
2015
£000
1,381
The key management personnel of the group are the directors. Directors remuneration is disclosed in Note 5.
During the year the Company paid £55,200 (2015 - £36,000) for accounting services to Westleigh Investments
Holdings Limited, a company in which G Clarke and N Harrison are materially interested.
Other receivable include £2,800 (2015 - £nil) due to Kennedy Ventures Plc, a company in which G Clarke and
N Harrison are materially interested.
All transactions are considered to be on terms equivalent to those that prevail in arm's length transactions.
23. Non-controlling interest
At 1 July – as previously stated
Prior period adjustment
At 1 July – as restated
Exchange adjustments
Adjustment arising from change in non-controlling interest
Share of loss for the period
At 30 June
2016
£000
As restated
2015
£000
(3,048)
(3,410)
(280)
(157)
(3,328)
(3,567)
156
(166)
1
168
70
1
(3,337)
(3,328)
On 12 November 2015 the Group transferred part of its holding in HW Iron (Proprietary) Limited to certain
project partners, resulting in a decrease in its interest from 73% to 68%, for £nil consideration.
IRONVELD PLC
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. Non-controlling interest (continued)
The difference between the consideration paid/received and the change in non-controlling interest has been
adjusted against retained earnings attributable to the owners of the Group in accordance with IFRS 10.
The table below shows details of non-wholly owned subsidiaries of the Group that have material non-controlling
interests:
YEAR ENDED
30 JUNE
2016
Proportion of
of voting rights
and shares held
2016
(2015)
HW Iron (Proprietary) Limited
32%
Lapon Mining (Proprietary) Limited 26%
Other non-controlling interests
(27%)
(26%)
Profit/(loss)
allocated to
non-controlling
interests
2016
£000
As restated
2015
£000
-
-
(1)
(1)
-
-
(1)
(1)
Accumulated
non-controlling
interests
2016
£000
1,061
2,277
(1)
3,337
As restated
2015
£000
939
2,390
(1)
3,328
Summarised financial information in respect of each of the Group's subsidiaries that have material non-
controlling interests is set out below. The summarised financial information below represents amounts before
intragroup eliminations. The accounts of the subsidiaries have been translated from their presentational
currency of South African Rand (Zar) using the Zar:GBP exchange rate prevailing at 30 June 2016 of 20.0272
(2015 - 19.089).
HW Iron (Proprietary) Limited
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity attributable to owners of the Company
Non-controlling interest
Revenue
Expenses
Profit/(loss) for the year
Attributable to the owners of the Company
Attributable to the non-controlling interests
Dividends paid to non-controlling interests
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash inflow from financing activities
Net cash inflow
As restated
2016
£000
171
5,817
2015
£000
1
6,006
(1,480)
(1,291)
(1,480)
(1,290)
2,156
1,061
2,298
939
-
1
(1)
(1)
-
-
(252)
7
245
-
-
-
-
-
-
-
152
(200)
49
1
IRONVELD PLC
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. Non-controlling interest (continued)
Lapon Mining (Proprietary) Limited
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity attributable to owners of the Company
Non-controlling interest
Revenue
Expenses
Profit/(loss) for the year
Attributable to the owners of the Company
Attributable to the non-controlling interests
Dividends paid to non-controlling interests
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash inflow from financing activities
Net cash inflow
24. Control
The Directors consider that there is no overall controlling party.
YEAR ENDED
30 JUNE
2016
2016
£000
-
13,222
(1,056)
(3,407)
6,482
2,277
As restated
2015
£000
-
13,843
(1,077)
(3,575)
6,801
2,390
-
1
(1)
(1)
-
-
(1)
(26)
27
-
-
-
-
-
-
-
-
(128 )
128
-
IRONVELD PLC
45