Company registration No 04095614 (England & Wales)
IRONVELD PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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
12-15
16
17
18
19
20
22
23
24
25-47
YEAR ENDED
30 JUNE
2017
DIRECTORS
Giles Clarke - Chairman
Giles Clarke is Chairman of Amerisur Resources plc, Kennedy Ventures Plc, Westleigh Investments Holdings
Limited and of several 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 38 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
2017
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
2017
CHAIRMAN'S STATEMENT - STRATEGIC REPORT
During the year, there have been a number of operational achievements that ensured the Company exited the
period in a position of strength with highly deliverable goals focused on developing the HPI, Vanadium and
Titanium Project.
During the Period, the Company acquired ownership of the magnetite resources via Section 11 transfer of the
mining licences for heavy minerals, iron and vanadium. The Company now holds unfettered rights to 56.4
million tons of magnetite ore on the Main Magnetite Layer of the Bushveld Igneous Complex grading 48%
Fe,14.7% TiO2 and 1.12% V2o% giving 27 million tons of in situ iron, 8.3 million tons of TiO2 and 632 thousand
tons of V2O5. The mining licences are held by the Companies subsidiaries HW Iron (Pty) Ltd and Lapon (Pty)
Ltd. Post year-end the prospecting right for the Luge (Pty) Ltd properties has been granted, which is expected to
increase the magnetite ore available to the Company to feed the Middelburg smelter and eventual larger scale
operations.
The Period also saw the granting of the Air Emissions licence by the Department of Economic Development and
Tourism and the Water Use licence for HW Iron being submitted to the Department of Water Affairs, which is
anticipated to be granted in the first quarter of 2018. The Company places significant importance on community
engagement and engagement is ongoing to conclude access and lease agreements for the areas that will be
mined in the first 5 years.
In line with the Company’s intention of building and operating a 15MW smelter, during the Period, it successfully
concluded a R 244.08m funding package with the Industrial Development Corporation (IDC), relating specifically
to the 15MW smelter. To have the support of the IDC is a significant achievement as the organisation is owned
by the South African government under the supervision of the Economic Development Department and its
vision is aligned with ours in supporting and contributing to the creation of sustainable economic growth in
South Africa.
In April 2017, the Board took the strategic decision to shift the immediate focus from constructing a 15 MW
smelter to acquiring a 7.5 MW smelting facility and associated independent power plant in Middelburg, South
Africa. This took effect through the signing of two non-binding memorandum of understanding (“MOUs”). The
acquisition of the Middelburg facility would provide the Company with a readymade smelter, enabling early
production of HPI, Vanadium and Titanium and facilitating supply into the offtake agreements, which have been
agreed for the first five years of production with highly reputable partners. We also believe the acquisition would
significantly de-risk the Project, whilst delivering attractive economic returns and cash flow.
Shortly after the year-end and following the signing of the two MOUs relating to Middelburg, the Company put
down a R8.8m refundable deposit towards the potential acquisition in exchange for exclusivity. Although the
negotiations and due diligence of the acquisition have taken longer than planned, the Directors remain confident
of successfully concluding discussions and securing the required funding. Once the necessary upgrades and
refurbishments have been made, the Company’s own magnetite ore can be processed through the Middelburg
smelting facility and the Company will then supply products to its offtake partners. Considerable time has been
spent by management on site at the Middelburg Smelting facility, preparing for the commencement of
operations. However, no further work will be done until the funding for the acquisition has been concluded and
the necessary upgrades have been made.
The Company plans to produce High Purity Iron as a water atomised powder. This product is widely used in the
automotive industry, and has applications in powder metallurgy and magnetic materials and in a variety of
specialist applications. There is a growing market for this product 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 has also been investigating the possibility of
producing titanium metal powders for the additive manufacturing industry and once production commences at
the Middelburg facility this will be pursued further.
IRONVELD PLC
3
YEAR ENDED
30 JUNE
2017
CHAIRMAN'S STATEMENT - STRATEGIC REPORT (continued)
The continued support of our shareholders has enabled us to successfully complete two placings during the
year. These have provided us with the working capital required to support ongoing project development, as well
as repay the R15 million loan facility with Sylvania Metals Pty Limited. Furthermore, post-period end, we were
able to close a third successful fundraise to strengthen our balance sheet and working capital position, as we
remain focused on the potential acquisition of the Middelburg Smelting facility and moving towards commencing
production.
We continue to work closely with the local communities to improve standards of living. We are incredibly proud
of our Keep a Girl in School Programme, in which we work closely with our partners, the Imbumba Foundation
and the Nelson Mandela Foundation, to provide hygiene support to some 600 female students at schools in the
Project area. Work to introduce a support program to similarly encourage academic excellence amongst male
students in the project area ongoing with the support of the Imbumba foundation.
Financial
The Group recorded a loss before tax of £0.7 (2016: £0.6m) and had cash balances of £0.8m (2016: £0.1m) at
the end of the year. The Company does not plan to pay a dividend for the year ended 30 June 2017.
Going concern
The Directors are confident that the Company has sufficient working capital for the foreseeable future.
Outlook
The Board remains committed to successfully concluding negotiations for the potential acquisition of the
Middelburg Smelting facility which would fulfil the Company’s aim of becoming a production led mining company
through the early production of HPI, Vanadium and Titanium and significantly de-risking the Project.
We would like to thank all of our shareholders for their ongoing support for both the Company and the Project
and we look forward to providing further updates in the near future.
Giles Clarke
Chairman
6 December 2017
IRONVELD PLC
4
YEAR ENDED
30 JUNE
2017
DIRECTORS' REPORT
The Directors present their annual report, together with the audited financial statements for the year ended 30
June 2017. 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 year 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.
Dividends
The Directors do not propose the payment of a dividend for the year.
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
The beneficial and other interests of the Directors and their families in the shares of the Company were as
follows:
G Clarke
N Harrison
P Cox
R Fraser
V von Ketelhodt
30 June 2017
1p ordinary
shares
Number
21,211,050
14,460,310
259,161
500,052
262,500
30 June 2016
1p ordinary
shares
Number
17,544,383
12,765,865
259,161
500,052
262,500
G Clarke and N Harrison's interests in 10,062,470 (2016 - 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 had an interest in 1,666,667 (2016 – 8,399,966) and N Harrison had
an interest in 1,444,445 (2016 – 8,399,966) shares through share warrants held, of which 888,889 (2016 –
8,399,966) were 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 28 October 2017 the Company had been notified of the following holdings of 3% or more of its issued
share capital other than the Directors' holdings set out on page 5:
YEAR ENDED
30 JUNE
2017
Michinoko Limited
Tracarta Limited
Africa Asia Capital Limited
Hargreaves Lansdown Asset Management
Barclays Wealth and Investment Management
SVS Securities
Halifax Share Dealing
Alliance Trust Savings
Number of
ordinary shares Percentage
54,592,653
41,785,767
39,746,892
29,647,017
21,528,656
20,601,540
17,645,383
14,643,598
11.38%
8.71%
8.29%
6.18%
4.49%
4.30%
3.68%
3.05%
Going concern
The Group’s present resources and existing facilities are only considered adequate to meet committed
overhead expenditure for the foreseeable future and at least to 31 December 2018. The Directors are presently
fully engaged with finance providers to raise further funds which will allow them to commit to the next phase of
the Project and the Directors are confident that sufficient funds can be raised for this additional planned activity.
The Directors therefore have a reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future, being twelve months from the date of the approval of the
financial statements and are also optimistic that the Group will be able to raise further funds when required for
any additional planned activities. The Company 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.
Financial instruments
The Group’s exposure to price risk, credit risk, liquidity risk and cash flow is discussed in the notes to the
financial statements. The Group seeks to mitigate foreign currency risk by maintaining sufficient amounts of
currency to satisfy the anticipated expenditure in each currency and does not use hedging instruments.
Directors' indemnities
The Company has made qualifying third party indemnity provisions for the benefit of its Directors which were in
place during the year 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 2017 and signed on its behalf by:
K J Pinnell
Company secretary
IRONVELD PLC
6
YEAR ENDED
30 JUNE
2017
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
2017
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 year to 30 June 2017 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
2017
Emoluments of the Directors
N Harrison*
R Fraser *
G Clarke**
P Cox***
V Von Ketelhodt
Fees/Salary
£000
Benefits
in kind
£000
45
45
45
132
74
341
-
-
-
-
-
-
2017
Total
£000
45
45
45
132
74
341
2016
Total
£000
45
45
45
118
56
309
* 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 (2016 - £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 2017, 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
2016
Exercised/
Granted
30 June
2017
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
2017
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 2017 was 2.03p with a range of 2.03p to 6.25p 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
2017
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 2017
IRONVELD PLC
11
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC
YEAR ENDED
30 JUNE
2017
Our opinion is unmodified
We have audited the financial statements of Ironveld Plc for the year ended 30 June 2017 which comprise the
consolidated income statement, the consolidated statement of comprehensive income, the consolidated and the
parent Company balance sheets, the consolidated and parent Company cash flow statements, the consolidated
and parent Company statements of changes in equity and the related notes 1 to 24. 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.
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 2017 and of the
Group's loss for the year then ended;
have been properly prepared in accordance with IFRSs as adopted by the European Union; and
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 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 SME 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.
Conclusion relating to going concern
We have nothing to report in respect of the following specific matters in relation to which the ISAs (UK) require
us to report to you where:
•
•
the Directors’ use of the going concern basis of accounting in the preparation of the financial statements
is not appropriate; or
the Directors have not disclosed in the financial statements any identified material uncertainties that
may cast significant doubt about the company’s ability to continue to adopt the going concern basis of
accounting for a period of at least twelve months from the date when the financial statements are
authorised for issue.
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
The Group remains in the exploration and evaluation phase of its activities and is therefore not yet generating
revenue. The Company does not have significant borrowings and is therefore reliant on funding obtained from
its investors to be able to meet its ongoing working capital requirements. Going concern is therefore a risk if the
Company were to have commitments in excess of its available resources. The going concern assessment is
subjective and involves uncertainty about future events.
IRONVELD PLC
12
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
YEAR ENDED
30 JUNE
2017
Key audit matters (continued)
Our procedures included:-
- Review of the Groups budgeting and forecasting procedures;
- Assessment and review of the funds available to the Group;
- Evaluation of the reasonableness of the forecast overheads for the Group;
- Review of the forecasts against historical performance;
- Assessing the adequacy of the disclosures relating to going concern.
Impairment review of exploration and evaluation assets
The Group adopts the accounting requirements of International Financial Reporting Standard 6 “Exploration for
and Evaluation of Mineral Resources”. This standard exempts the Company from an impairment review
providing that the Company has not completed the exploration and evaluation phase of its activities and no
other indicators of impairment exist. These key judgements result in a risk that the incorrect accounting
treatment has been applied in that the intangible asset has not been subjected to an impairment review. In
addition, the carrying amount of the investment in subsidiary companies, held in the parent Company balance
sheet, is underpinned by the exploration and evaluation asset and the existence of such impairment indicators
would indicate an impairment in the carrying amount.
Our procedures included:-
- Review of the Group plans and announcements for the future;
- Consideration of whether the finance is in place and commitments have been made to the development
of the mineral resource;
- Review of the existence of impairment indicators including, access to the mineral asset and the desire
of the Group to continue the Project;
- Evaluating the adequacy and consistency of the disclosures made by the Directors in the annual report.
Our application of materiality and an overview of the scope of our audit.
Materiality for the Group financial statements as a whole was set at £300,000 determined by reference to a
benchmark of total assets. This represents 1.0% of total assets and 1.4% of net assets. As the Group has no
significant trading activity, we consider the asset position of the Group to provide the most appropriate
benchmark. Materiality for the parent Company was also set at £300,000 representing 1.4% of net assets. We
agreed to report to the Audit Committee any corrected and uncorrected identified misstatements exceeding
£15,000, in addition to other identified misstatements that warranted reporting on qualitative grounds.
Our Group audit was scoped based on our understanding of the Group, the work of the component auditors and
by assessing the risks of material misstatement at Group level. Based on that assessment, we identified the
Group as containing 3 reporting components being, United Kingdom, Mauritius and South Africa which
represented 24% of the Groups net assets. The United Kingdom component was subjected to a full scope audit,
the Mauritius component was deemed immaterial to the Group in that its material balances were eliminated on
consolidation and the South Africa component was subject to a full scope audit by component auditors other
than ourselves. We therefore subjected the South Africa component to further specified audit procedures, the
extent of our testing being based on our assessment of the risk of material misstatement and of the materiality
of the area, applying Group materiality.
IRONVELD PLC
13
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
YEAR ENDED
30 JUNE
2017
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the annual report, 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.
Opinion 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 Chairman’s statement and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the Chairman’s statement and the Directors’ report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of
the audit, we have not identified material misstatements in the Chairman’s statement or the Directors’ report.
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 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.
We have nothing to report in these respects
Responsibilities of directors
As explained more fully in the Directors’ responsibilities statement on page 11, 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 and 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 Company or
to cease operations, or have no realistic alternative but to do so.
IRONVELD PLC
14
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
YEAR ENDED
30 JUNE
2017
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.
A fuller 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.
The purpose of our audit work and to whom we owe our responsibilities
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.
David Symonds
Senior Statutory Auditor
for and on behalf of
UHY Hacker Young Manchester LLP
Statutory Auditor
Chartered Accountants
St. James Building
79 Oxford Street
Manchester M1 6HT
6 December 2017
IRONVELD PLC
15
CONSOLIDATED INCOME STATEMENT
Administrative expenses
Operating loss
Investment revenues
Finance costs
Loss before tax
Tax
Loss for the year
Attributable to:
Owners of the Company
Non-controlling interests
Note
4
6
7
8
Year
ended
2017
£000
(553)
(553)
1
(185)
(737)
-
(737)
(737)
-
(737)
YEAR ENDED
30 JUNE
2017
Year
ended
2016
£000
(494)
(494)
-
(91)
(585)
-
(585)
(584)
(1)
(585)
Loss per share- Basic and diluted
9
(0.20p)
(0.18p)
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
16
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Loss for the period
Exchange difference on translation of foreign operations
Total comprehensive income for the period
Attributable to:
Owners of the Company
Non-controlling interests
YEAR ENDED
30 JUNE
2017
Year
ended
2016
£000
(585)
(525)
(1,110)
(954)
(156)
(1,110)
Year
ended
2017
£000
(737)
2,380
1,643
1,057
586
1,643
IRONVELD PLC
17
CONSOLIDATED BALANCE SHEET
Non-current assets
Intangible assets
Property, plant and equipment
Note
11
12
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
14
15
16
17
19
20
20
20
23
YEAR ENDED
30 JUNE
2017
2016
£000
21,509
9
21,518
234
113
347
2017
£000
26,750
5
26,755
780
788
1,568
28,323
21,865
(331)
(889)
(1,220)
(5,580)
(6,800)
21,523
7,671
18,211
-
(8,282)
17,600
3,923
21,523
(186)
(992)
(1,178)
(4,699)
(5,877)
15,988
6,500
16,136
21
(10,006)
12,651
3,337
15,988
These financial statements were approved by the Board and authorised for issue on 6 December 2017.
Signed on behalf of the Board
P Cox
Director
Company Registration No: 04095614
IRONVELD PLC
18
PARENT COMPANY BALANCE SHEET
Non-current assets
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
YEAR ENDED
30 JUNE
2017
Note
13
14
2017
£000
2016
£000
21,213
18,954
507
260
767
78
74
152
Total assets
21,980
19,106
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
(205)
(205)
(179)
(179)
21,775
18,927
7,671
18,211
-
(4,107)
21,775
6,500
16,136
21
(3,730)
18,927
The loss for the financial year dealt with in the financial statements of the parent Company was £458,000 (2016
– loss £424,000).
These financial statements were approved by the Board and authorised for issue on 6 December 2017.
Signed on behalf of the Board
P Cox
Director
Company Registration No: 04095614
IRONVELD PLC
19
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
2017
Total
£000
As at 1 July 2015
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)
At 30 June 2016
6,500
16,136
21
(10,006)
12,651
Other comprehensive income
-
-
Issue of share capital
1,171
2,054
-
-
Expiration of share warrants
Credit for equity-settled
share based payments
Loss for the year
-
-
-
Balance at 30 June 2017
7,671
18,211
21
(21)
-
-
-
-
-
2,380
-
-
81
(737)
2,380
3,225
-
81
(737)
(8,282)
17,600
IRONVELD PLC
20
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
YEAR ENDED
30 JUNE
2017
Total equity
As at 1 July 2015
Owners of
the Company
£000
Interest
£000
Non-controlling
13,649
3,328
Total
Equity
£000
16,977
Other comprehensive income (as restated)
(525)
(156)
(681)
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)
Balance at 30 June 2016
Other comprehensive income
Issue of share capital
Credit for equity-settled share based payments
Loss for the year
Balance at 30 June 2017
106
171
(166)
(594)
-
-
166
(1)
106
171
-
(585)
12,651
3,337
15,988
2,380
3225
81
(737)
586
-
-
-
2,966
3,225
81
(737)
17,600
3,923
21,523
IRONVELD PLC
21
YEAR ENDED
30 JUNE
2017
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 2015
6,474
16,056
21
(3,477)
19,074
Issue of share capital
26
80
Credit for equity-settled
share based payments
Loss for the year
-
-
-
-
-
-
-
-
106
171
(424)
171
(424)
Balance at 30 June 2016
6,500
16,136
21
(3,730)
18,927
Credit for equity-settled
share based payments
Expiry of share warrants
-
-
-
21
Issue of share capital
1,171
2,054
Loss for the year
-
-
Balance at 30 June 2017
7,671
18,211
-
(21)
-
-
-
81
-
-
(458)
81
-
3,225
(458)
(4,107)
21,775
IRONVELD PLC
22
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 generated/(used) by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning
of period
21
Effects of foreign exchange rates
Cash and cash equivalents at end of year
21
Year
ended
2017
£000
(641)
(1)
(914)
-
1
(914)
2,552
(312)
2,240
685
113
(10)
788
YEAR ENDED
30 JUNE
2017
Year
ended
2016
£000
(470)
(4)
(821)
187
-
(638)
6
(187)
(181)
(1,289)
1,407
(5)
113
IRONVELD PLC
23
COMPANY CASH FLOW STATEMENT
Note
Year
ended
2017
£000
Net cash from operating activities
21
(390)
Investing activities
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
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at
beginning of period
Cash and cash equivalents at end of year
21
21
(1,976)
(1,976)
2,552
2,552
186
74
260
YEAR ENDED
30 JUNE
2017
Year
ended
2016
£000
(231)
(1,082)
(1,082)
6
6
(1,307)
1,381
74
IRONVELD PLC
24
YEAR ENDED
30 JUNE
2017
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 15 (Clarification)
IFRS 9 (2014)
IFRS 10 &IAS 28 (amended)
IFRS 16
IAS 12 (amended)
IAS 7 (amended)
IFRS 15 (Clarification)
IFRS 2 (amended)
IFRS4 (amended)
IFRIC 22
IAS40 (amended)
Revenue from Contracts with Customers
IFRS 9 Financial Instruments (2014)
Sale or Contribution of Assets between investors and its Associates
Leases
Recognition of Deferred Tax Assets for Unrealised Losses
Disclosure Initiative
Revenue from Contracts with Customers
Classification and Measurement of Share-based Payment Transactions
Applying IFRS9 Insurance contracts
Foreign currency transactions and advance consideration
Transfer of Investment property
Annual Improvements to IFRSs 2014-2016 Cycle.
The adoption of these standards, amendments and interpretations is not expected to have a material impact on
the Group and 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
25
YEAR ENDED
30 JUNE
2017
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 acquiree’s 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 E&E
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
26
YEAR ENDED
30 JUNE
2017
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
27
YEAR ENDED
30 JUNE
2017
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
28
YEAR ENDED
30 JUNE
2017
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 borrowings.
Investments
Investments in subsidiaries 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
29
YEAR ENDED
30 JUNE
2017
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 foreseeable future being the period to 31 December 2018. The Directors are
presently fully engaged with finance providers to raise the further funds which will allow them to commit to the
next phase of the Project and the Directors are confident that sufficient funds can be raised for this additional
planned activity.
The Directors therefore have a reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future, being twelve months from the date of the approval of the
financial statements and are optimistic that the Group will be able to raise further funds when required for the
additional planned activities. The Company 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 used 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 Group. 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
30
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.
YEAR ENDED
30 JUNE
2017
4. Operating loss
Operating loss for the year is shown after charging:
Net foreign exchange gains/(losses)
Depreciation on tangible assets
Lease payments under operating leases
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
Year
Ended
2017
£000
Year
ended
2016
£000
3
6
34
28
8
3
8
(5)
8
25
24
8
3
9
Year
ended
2017
£000
Year
ended
2016
£000
635
17
81
733
341
132
519
17
155
691
309
118
The average monthly number of employees, including Directors, during
the period was as follows:
2017
Number
2016
Number
Administration and management
14
16
Further details of the Directors' remuneration are given in the Directors' Remuneration Report on pages 9 and
10.
IRONVELD PLC
31
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 19.75% (2016 - 20%)
Effects of :
Non-deductible expenses
Unused tax losses not recognised
Tax expense for the period
YEAR ENDED
30 JUNE
2017
Year
ended
2017
£000
Year
ended
2016
£000
1
-
Year
ended
2017
£000
Year
ended
2016
£000
185
91
Year
ended
2017
£000
Year
ended
2016
£000
-
-
-
-
-
-
(737)
(585)
(146)
(117)
16
130
-
34
83
-
c) Factors that may affect future tax charges - The Group has estimated unutilised tax losses amounting to
£3,100,000 (2016 - £2,460,000) the values of which are not recognised in the balance sheet. The losses
represent a potential deferred taxation asset of £630,000 (2016 - £490,000) 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 £6,150,000 (2016 - £4,400,000) which are
expected to be deductible against future trading profits of the Group.
IRONVELD PLC
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. (Loss)/earnings per share
Loss attributable to the owners of the Company
Loss per share – Basic and diluted
Continuing operations
YEAR ENDED
30 JUNE
2017
2017
£000
(737)
2016
£000
(584)
(0.20p)
(0.18p)
The calculation of basic earnings per share is based on 360,142,884 (2016 – 326,938,397) ordinary shares, being the
weighted average number of ordinary shares in issue during the year.
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 year were not considered to be diluting as the market price
throughout the period was below the exercise price of the warrants in issue. 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
£458,000 (2016 - £424,000).
IRONVELD PLC
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. Intangible assets
Group
Cost:
At 1 July 2015
Additions
Contributions received
Exchange differences
At 30 June 2016
Additions
Exchange differences
At 30 June 2017
Amortisation:
At 1 July 2015, 30 June 2016 and at 30 June 2017
Net book value at 30 June 2017
Net book value at 30 June 2016
YEAR ENDED
30 JUNE
2017
Exploration
and
evaluation
assets
£000
21,743
927
(187)
(974)
21,509
1,120
4,121
26,750
-
26,750
21,509
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, as required by IFRS 6 and in the absence of such indicators no
impairment review was carried out.
IRONVELD PLC
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. Property, plant and equipment
Group
Cost:
At 1 July 2016
Additions
Exchange differences
At 30 June 2017
Depreciation:
At 1 July 2016
Charge for the period
Exchange differences
At 30 June 2017
Net book value at 30 June 2017
Net book value at 30 June 2016
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
All non-current assets in 2017 and 2016 were located in South Africa.
YEAR ENDED
30 JUNE
2017
Plant
and
machinery
£000
32
1
6
39
23
6
5
34
5
9
Plant and
machinery
£000
29
4
(1)
32
15
8
-
23
9
14
IRONVELD PLC
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED
30 JUNE
2017
13. Investments
Company
Subsidiary undertakings
Cost:
At 1 July 2015
Additions
At 30 June 2016
Additions
At 30 June 2017
Loans
£000
Shares
£000
Total
£000
-
-
-
17,776
1,178
17,776
1,178
18,954
18,954
861
1,398
2,259
861
20,352
21,213
Net book value at 30 June 2017
861
20,352
21,213
Net book value at 30 June 2016
-
18,954
18,954
Additions in the year of £1,398,000 (2016 - £1,178,000) represent further shares issued, and fully paid, by
Ironveld Mauritius Limited, the Company’s wholly owned subsidiary.
The loans in the period represent loans to Ironveld Holdings (Propriety) Limited which incur interest at a rate not
exceeding the base lending rate applicable in England and Wales and are repayable by 31 December 2019.
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 Middelburg (Proprietary) LimitedOrdinary
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%
100%
74%
68%
74%
74%
Holding Company
Holding Company
Mining and exploration
Ore processing and smelting
Ore processing and smelting
Prospecting and mining
Prospecting and mining
Prospecting and mining
* Held directly by Ironveld Plc all other holdings are indirect.
IRONVELD PLC
36
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.
Further details of non-wholly owned subsidiaries of the Group are provided in note 23.
YEAR ENDED
30 JUNE
2017
14. Trade and other receivables
Amounts owed from Group undertakings
Other debtors
Prepayments and accrued income
Credit risk
Group
2017
£000
-
751
29
780
2016
£000
-
209
25
234
Company
2017
£000
-
482
25
507
2016
£000
39
33
6
78
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 £249,000 (2016 - £171,000) is due from 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. Other debtors also includes £450,000 (2016 - £Nil)
in respect of placing proceeds not received by the year end.
15. Trade and other payables
Trade payables
Taxation and social security costs
Other payables
Accruals and deferred income
Due within 12 months
Due after more than 12 months
Group
2017
£000
61
25
113
132
331
(331)
-
2016
£000
14
25
5
142
186
(186)
-
Company
2017
£000
2016
£000
61
24
5
115
205
(205)
-
14
24
5
136
179
(179)
-
IRONVELD PLC
37
YEAR ENDED
30 JUNE
2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. Borrowings
Group
2017
£000
2016
£000
Company
2017
£000
Other loans
889
992
-
The borrowings are repayable as follows:
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.
Group
2017
£000
889
889
(889)
-
2016
£000
992
992
(992)
-
Company
2017
£000
-
-
-
-
2016
£000
-
2016
£000
-
-
-
-
17. Deferred tax
Balance at 1 July
Exchange differences
Balance at 30 June
The deferred tax liability is made up as follows:
Fair value adjustments
Group
2017
£000
4,699
881
5,580
2016
£000
4,930
(231)
4,699
Group
2016
£000
2017
£000
5,580
4,699
IRONVELD PLC
38
YEAR ENDED
30 JUNE
2017
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 2016.
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.
Financial assets
The Group has no financial assets, other than short-term receivables and cash deposits of £788,000 (2016 -
£113,000). The cash deposits attract variable rates of interest. At the year end the effective rate was 0.3%
(2016 – 0.04%). 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
2017
£000
251
3
6
528
787
2016
£000
23
47
3
40
113
IRONVELD PLC
39
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
2017
Weighted
average
effective
interest rate
(%)
Within 1
year
£000
30 June 2017
Variable interest rates - SA
14.50
889
30 June 2016
Variable interest rates - SA
5.14
992
Other loans relate to a loan agreed on the acquisition of the Ironveld Group. The loan of £889,000 (2016 -
£992,000) bears interest at 14.5%, was repayable by 30 June 2017 and was repaid shortly after the year end.
The loan was secured against the assets of the Group and by share warrants as noted in note 19.
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 2017
British Pound Sterling (£)
USD ($)
South African Rand (R)
As at 30 June 2016
British Pound Sterling (£)
USD ($)
South African Rand (R)
Assets
£000
Liabilities
£000
740
3
786
1,529
204
-
1,016
1,220
Assets
£000
Liabilities
£000
56
47
218
321
178
-
1,000
1,178
IRONVELD PLC
40
YEAR ENDED
30 JUNE
2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. Financial instruments (continued)
Financial commitments and guarantee
A rehabilitation guarantee of £711,000 (R 11,993,000) (2016 – £599,000 (R 11,993,000)) has been issued to
the Department of Mineral Resources in South Africa 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 2017 £249,000 (R 4,206,000) (2016 – £171,000 (R 3,426,000)) 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
444,641,279 (2016 - 327,544,176) ordinary shares of 1p each
322,447,158 (2016 - 322,447,158) deferred shares of 1p each
2017
£000
4,447
3,224
7,671
2016
£000
3,276
3,224
6,500
In August 2016, the Company issued 743,513 ordinary shares at 5.75p in lieu of consultant and contractor
expenses.
In October 2016, the Company completed a placing of 40,000,003 ordinary shares at a price of 4.5p. The costs
in respect of this placing were settled by an additional issue of 2,266,667 ordinary shares.
In January 2017, the Company issued 3,801,341 ordinary shares at 4.75p in lieu of consultant and contractor
expenses.
In February 2017, the Company issued 285,579 ordinary shares of 1pence each on the exercise of employee
share options.
The Company completed a second placing in June 2017 placing 70,000,000 ordinary shares at 2p each
Since the year end, in November 2017, the Company completed a further placing of 88,250,000 ordinary shares
of 1p each raising £1,765,000 before expenses.
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.
IRONVELD PLC
41
YEAR ENDED
30 JUNE
2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Share capital (continued)
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
16 August 2012
1p
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
2016
No.
1,600,000
6,235,137
6,663,505
1,033,334
2,086,667
200,000
2,500,000
445,545
Granted
in year
No.
Exercised
in year
No.
Lapsed/
Cancelled
No.
-
-
-
-
-
-
-
-
(285,579)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
As at
30 June
2017
No.
1,600,000
5,949,558
6,663,505
1,033,334
2,086,667
200,000
2,500,000
445,545
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 third 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 proposed 15 MW smelter.
The Group recognised a share based payment expense of £81,000 (2016 - £171,000) in the period. No options
were granted in the year
Share warrants
As at 1 July 2016 there were 8,399,966 warrants in issue issued at a price of 0.25p each. These warrants
expired on 24 September 2016.
On the 1 November 2016 40,000,003 new share warrants were issued pursuant to a share warrant instrument
dated 26 October 2016. One warrant was issued to each placee in respect of each placing share issued at that
date and each warrant allowed the holder to subscribe for one ordinary share in Ironveld Plc and were
exercisable at 6.75 pence at any time during the 12 months from the date of issue of the warrants. 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. No placing proceeds were allocated to the issue of the
warrants
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
42
YEAR ENDED
30 JUNE
2017
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 were 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 January 2017 and
ending on the earlier of repayment in full of the loan facility monies or the fifth anniversary of admission.
Such warrants were only exercisable to the extent that any amount is then outstanding under the loan facility.
The proceeds derived from the exercise of the warrants would be used only to repay the associated loan. The
loan of 15,000,000 South African Rand was repaid after the year-end and no warrants were exercised.
20. Reserves
Group
At 1 July 2016
Loss for the period
Exchange difference on translation of foreign operations
Issue of share capital
Expiry of warrants
Credit for equity settled share based payments
Warrant
reserve
£000
21
-
-
-
(21)
-
Share
premium
account
£000
16,136
-
-
2,054
21
-
Retained
earnings
£000
(10,006)
(737)
2,380
-
-
81
At 30 June 2017
-
18,211
(8,282)
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.
IRONVELD PLC
43
YEAR ENDED
30 JUNE
2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. Reserves (continued)
Company
Warrant
reserve
£000
Share
premium
Retained
account earnings
£000
£000
At 1 July 2016
Loss for the period
Issue of share capital
Expiry of warrants
Credit for equity settled share based payments
At 30 June 2017
21
-
-
(21)
-
16,136
-
2,054
21
-
(3,730)
(458)
-
-
81
-
18,211
(4,107)
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 in prior periods which expired
in the year.
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
2017
£000
(553)
6
21
(526)
20
51
(455)
(186)
(641)
2017
£000
788
2016
£000
(494)
8
171
(315)
(109)
(46)
(470)
-
(470)
2016
£000
113
Included in cash and bank at the year end was South African Rand 8,800,000 (£522,000) which was held in a
solicitors client account and which was paid out shortly after the year-end in respect of the potential acquisition
of the Middelburg Smelting facility.
IRONVELD PLC
44
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
2017
2017
£000
(458)
21
(437)
21
26
2016
£000
(424)
76
(348)
8
109
(390)
(231)
2017
£000
260
2016
£000
74
The key management personnel of the Group are the directors. Directors’ remuneration is disclosed in Note 5.
During the year the Company paid £48,000 (2016 - £55,200) for accounting services to Westleigh Investments
Holdings Limited, a company in which G Clarke and N Harrison are materially interested.
Other receivable include £Nil (2016 - £2,800) 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
Exchange adjustments
Adjustment arising from change in non-controlling interest
Share of loss for the period
At 30 June
2017
£000
3,337
586
-
-
2016
£000
3,328
(156)
166
(1)
3,923
3,337
IRONVELD PLC
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. Non-controlling interest (continued)
The table below shows details of non-wholly owned subsidiaries of the Group that have material non-controlling
interests:
YEAR ENDED
30 JUNE
2017
Proportion of
voting rights
and shares held
2017
(2016)
Profit/ (loss)
allocated to
non-controlling
interests
2017
£000
2016
£000
HW Iron (Proprietary) Limited
32%
Lapon Mining (Proprietary) Limited 26%
Other non-controlling interests
(32%)
(26%)
-
-
-
-
-
-
(1)
(1)
Accumulated
non-controlling
interests
2017
£000
1,221
2,704
(2)
3,923
2016
£000
1,061
2,277
(1)
3,337
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 (R) using the R : GBP exchange rate prevailing at 30 June 2017 of 16.8652
(2016 - 20.0272).
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
2017
£000
248
7,125
2016
£000
171
5,817
(2,021)
(1,534)
(1,480)
(1,291)
2,597
1,221
2,156
1,061
-
-
-
-
-
-
(45)
(213)
258
-
-
1
(1)
(1)
-
-
(252)
7
245
-
IRONVELD PLC
46
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
2017
2017
£000
-
15,831
(1,384)
(4,046)
7,697
2,704
-
-
-
-
-
-
-
(13)
13
-
2016
£000
-
13,222
(1,056)
(3,407)
6,482
2,277
-
1
(1)
(1)
-
-
(1)
(26 )
27
-
IRONVELD PLC
47