Company registration No 04095614 (England and Wales)
IRONVELD PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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 Financial Statement
1
2
3-4
5-7
8-9
10-11
12
13-16
17
18
19
20
21-22
23
24
25
26-48
YEAR ENDED
30 JUNE
2020
DIRECTORS
Giles Clarke – Chairman and Non-Executive Director
Giles Clarke is Chairman of Westleigh Investments Holdings Limited and Kazera Global plc, as well as Chairman
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, co-founded Safestore which was sold in 2003 for £44 million and was
Chairman of Amerisur Resources plc, sold for £242 million in 2019.
Martin Eales - Chief Executive Officer
Martin previously held the position of CEO at London listed Rainbow Rare Earths Limited from 2014 to 2019,
where he oversaw the development of that company into the only rare earths producer in Africa. Prior to that,
Martin enjoyed a 15 year career in the City of London rising to the role of Managing Director at RBC Capital
Markets with a strong track record advising natural resource companies on fundraisings and other corporate
transactions. He is a qualified Chartered Accountant.
Peter Cox - Technical Director
Peter Cox started his career in the mining industry over 30 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.
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 currently Chief Executive of
Westleigh Investments Holdings Limited and a non-executive director of Kazera Global plc.
IRONVELD PLC
1
ADVISORS
Company secretary
K J Pinnell
Company number
04095614 (England and Wales)
YEAR ENDED
30 JUNE
2020
Registered office
Nominated Adviser
Broker
Auditors
Bankers
Solicitors
Registrar
Financial PR
Unit D De Clare House Sir Alfred Owen Way
Pontygwindy Industrial Estate
Caerphilly Wales CF83 3HU
finnCap
60 New Broad Street
London EC2M 1JJ
finnCap
60 New Broad Street
London EC2M 1JJ
UHY Hacker Young Manchester LLP
St James Building
79 Oxford Street
Manchester M1 6HT
HSBC
97 Bute Street
Cardiff CF10 5NA
Kuit Steinart Levy LLP
3 St Mary's Parsonage
Manchester M3 2RD
Link Asset Services
34 Beckenham Road
Beckenham
Kent BR3 4TU
Blytheweigh
4-5 Castle Court
London EC3V 9DL
IRONVELD PLC
2
YEAR ENDED
30 JUNE
2020
CHAIRMAN'S STATEMENT - STRATEGIC REPORT
During the Period, we continued to undertake various activities focused on realising the value of the Company’s
assets.
In July 2019, we announced that finnCap had been engaged to lead a review of the strategic alternatives for
Ironveld’s mining assets (the “Strategic Review”). These assets include unfettered rights to 56.4 million tonnes of
magnetite ore, which the JORC compliant mineral resources demonstrates holds 1.4 billion pounds weight of
Vanadium – equivalent to four times annual global Vanadium demand; 27 million tons of High Purity Iron in situ;
and 8.3 million tonnes of titanium.
In December 2019 we announced the appointment of Martin Eales as the new Chief Executive Officer of the
Company, with Peter Cox moving to the position of Technical Director.
The Strategic Review led to a number of engagements with parties potentially interested in making an offer to
fund all or part of the development of Ironveld’s mining assets and ultimately led to the announcement in March
2020 that the Company and Inclusive Investment Group (“IIG”) had signed a conditional Option Agreement
envisaging an investment in the Company by IIG of US$3.2 million (approximately £2.7 million). The Option
Agreement was extended in June 2020 and September 2020, with IIG advancing a total of US$650,000 in bridge
funding to the Company, before ultimately lapsing post period end in November 2020.
During the period of the Option Agreement the Company and IIG worked hard to deliver a complete project funding
solution, including IIG obtaining a conditional offer of project finance from a South African funding institution, and
the parties remain in discussions about a possible future partnership.
Following the announcement of the agreed lapse of the IIG Option Agreement the Company announced a
conditional share placing at 0.30 pence per share to raise gross proceeds of £1,150,000, whilst at the same time
capitalising various loans and accrued salary/fees owed to IIG, Directors and other lenders. The net proceeds of
the placing have been used to strengthen the Company's financial position and cover its overheads whilst it seeks
to conclude an alternative development funding transaction.
We remain committed to operating responsibly, working closely with stakeholders and local communities at
grassroots level to improve standards of living. We continue to support our ‘Keep a Girl in School’ initiative working
alongside our local partners, The Imbumba Foundation and the Nelson Mandela Foundation, to provide hygiene
support to approximately 600 female students at school in the local area. Additionally we plan a new scheme in
2021 which will provide facilities and support to children with maths and science homework outside of school. We
were delighted to note that Ironveld’s first sponsored graduate mining engineer from the local community, Tebogo
Mahoai (2018), completed his mine officials training program and obtained his blasting licence during the period.
Financial
The Group recorded a loss before tax of £1.0m (2019: £0.6m) and had cash balances of £0.03m (2019: £0.6m)
at the end of the period. The Company does not plan to pay a dividend for the year ended 30 June 2020.
Going concern
Following approval of the share placing on 14 December 2020 and further rationalisation of the Company’s cost
base in both South Africa and the UK, the Group's present financial resources and existing facilities are
considered sufficient to enable it to operate until the first half of 2022, by which time, the board of directors
anticipates to have secured an alternative transaction focused on delivering value from the Group’s principal
assets..
IRONVELD PLC
3
YEAR ENDED
30 JUNE
2020
CHAIRMAN'S STATEMENT - STRATEGIC REPORT
Outlook
Ironveld’s Board remains committed to delivering value to our shareholders. Following the recent lapse of the
Option Agreement with IIG the Company has re-engaged in discussions with a number of parties which the Board
expects to lead to an alternative transaction.
We would like to thank all of our shareholders for their continuing support for both the Company and the project
and we look forward to providing further updates in the near future.
Giles Clarke
Chairman
IRONVELD PLC
4
YEAR ENDED
30 JUNE
2020
DIRECTORS' REPORT
The Directors present their annual report, together with the Group and Parent Company financial statements for
the year ended 30 June 2020. The Corporate Governance Statement set out on pages 8 and 9 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 Magnetite in South Africa. The principal activity of the Company for the period was
that of a holding Company.
Dividends
The Directors do not recommend 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
V von Ketelhodt (resigned 30 November 2020)
R Fraser (resigned 19 September 2019)
D Harvey (resigned 24 September 2019)
M Eales (appointed 16 December 2019)
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
V von Ketelhodt
M Eales
R Fraser
D Harvey
30 June 2020
1p ordinary
shares
Number
21,211,050
17,210,310
259,161
262,500
-
-
-
30 June 2019
1p ordinary
shares
Number
21,211,050
14,460,310
259,161
262,500
-
-
-
G Clarke and N Harrison's interests in 10,062,470 (2019 - 10,062,470) shares above are through their
shareholding in Westleigh Investments Holdings Limited.
Subsequent to the announcement on 26 November 2020 and approval on 14 December 2020, the directors
converted loan facilities and deferred remuneration into additional Ordinary shares as follows:-
G Clarke
N Harrison
P Cox
8,538,231
5,204,898
28,526,239
In addition to the shares issued to directors, former director, V von Ketelhodt (who resigned 30 November 2020)
was issued with 13,838,534 shares in lieu of deferred remuneration to resignation.
Details of Directors' interests in share options are provided in the Directors' remuneration report on pages 10 and
11.
Political contributions
The Group made no political contributions during this or the preceding period.
IRONVELD PLC
5
YEAR ENDED
30 JUNE
2020
DIRECTORS' REPORT (continued)
Events arising after the reporting period
On 26 November the company announced a conditional placing and broker option of £1,000,000 and £150,000
respectively through the issue of up to 383,333,333 at 0.30 pence per share. The company also agreed to settle
the following:
a) all liabilities arising from the drawn down loan facilities announced in February 2020 (£235,000) by way
of the issue of 78,333,332 shares at the placing price of 0.30 pence per share and extinguishing the
26,000,000 associated share warrants.
b) Liabilities for deferred Directors fees of £780,900 by way of the issue of 52,774,570 shares. It was agreed
on 27 November 2020 that a weighted average share price over the period of accrual of the fees would
be used to calculate the number of shares and represented an issue of shares with a weighted average
price of 1.48 pence per share
c) Bridge funding liabilities from IIG of US$650,000 plus interest by the issue of 102,174,963 shares at the
previously agreed price of 0.42 pence per share along with a cash repayment of US$150,000.
Going concern
As announced on 12 November 2020, the Company and IIG agreed that the Option Agreement originally
announced on 30 March would be allowed to lapse on 30 November 2020. On 26 November 2020, alongside the
announcement of a share placing to raise up to £1,150,000, the Company agreed that the majority of the bridging
funds provided by IIG (US$650,000 plus interest) would be capitalised at a price of 0.42 pence per share alongside
a cash repayment of approximately £112,000)
Discussions with alternative financial and development funding institutions to secure the project funding required
continue.
Following shareholder approval of the of the share placing on 14 December 2020, the Group’s present financial
facilities are considered sufficient to enable the Company to operate at present levels until the first half of 2022,
by which time, the Board of Directors anticipates to have secured the further finance to develop the Project.
Whilst the impact of the global COVID-19 pandemic including the associated travel restrictions has hampered the
Company’s attempts to secure project development funding to some extent, as the Group is presently not currently
undertaking any operations at the project then no significant impact is anticipated over the next 12 months.
Therefore, whilst the existing resources are not sufficient to develop the mining asset, the Directors 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. The Group is
committed to developing its Project and is actively engaged with interested parties. For this reason, the Board
continues to adopt the going concern basis in the preparation of these financial statements.
IRONVELD PLC
6
DIRECTORS' REPORT (continued)
Substantial shareholdings
As at 30 November 2020 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
2020
Tracarta
Hargreaves Lansdown Stockbrokers
Michinoko
Africa Asia Capita
HSDL Stockbrokers
Mr Brendan Kerr
Interactive Investor
Barclays Smart Investor
Number of
Ordinary shares Percentage
80,380,235
62,862,547
60,306,937
39,746,892
36,604,353
35,000,000
32,229,934
28,891,171
12.27%
9.60%
9.21%
6.07%
5.59%
5.34%
4.92%
4.41%
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.
Employee relations
Ironveld complies fully with all South African employment legislation, including covering maternity and paternity
leave and equal pay. The Board feels that the building and maintaining good relationships with stakeholders where
it operates is not only an important part of Ironveld’s strategy and its commitment to be an ethical business, but
also ensures the Company is able to create value for all its stakeholders.
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 28 December 2020 and signed on its behalf by:
K J Pinnell
Company secretary
IRONVELD PLC
7
YEAR ENDED
30 JUNE
2020
CORPORATE GOVERNANCE STATEMENT
Corporate Governance Code
The Board seeks to follow best practice in corporate governance as appropriate for a company of our size, nature
and stage of development, As a public company listed on AIM we recognise the importance of an effectively
operating corporate governance framework. The Board has adopted the principles of the 2018 Quoted Companies
Alliance Corporate Governance Code (“the QCA Code”) to support Company’s governance framework. The
Directors acknowledge the importance of the ten principles set out in the QCA Code and a statement setting out
how the Company currently complies (along with any departures) with the QCA Code is provided on the website
at www.ironveld.com.
The Board of Directors
During the period, the Board comprised the Chairman, three Executive Directors (of whom one resigned post
period end) and three Non-Executive Directors (of whom two resigned during the period). Martin Eales was
appointed as Chief Executive Officer during the period. 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 function of the Chairman is to supervise the Board and
to ensure its effective control of the business, and that of the Chief Executive Officer 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 met 5 times throughout the year with Peter Cox and Vred
von Ketelhodt each missing 2 meetings.
The Board has established the following committees to fulfil specific functions:
The Audit Committee 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 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 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.
The Nomination Committee is tasked with ensuring directors are aware of the time commitment requirements
during the recruitment selection process and on an ongoing basis. They also help ensure during the year that
appointees do not have time commitment issues. All Directors receive detailed induction training upon joining the
Board, covering compliance issues, risk management considerations, Board processes and corporate
governance considerations. The Senior Independent Director provides a sounding board for the Chairman and
assists in building relationships between major shareholders and the Board. The Senior Independent Director is
available to shareholders if they have concerns which contact through the normal channels of Chairman, Chief
Executive Officer or other Executive Directors has failed to resolve or for which such contact is inappropriate. The
Board continue to conduct internal and external Board evaluations which consider the balance of skills,
experience, independence and knowledge of the Company. The evaluation process, the Board refreshment, use
of third-party search companies and succession planning elements are discussed. The Nomination Committee
recommends and reviews nominees for the appointments of new Directors to the Board and ensures there is due
process used in selecting candidates.
IRONVELD PLC
8
YEAR ENDED
30 JUNE
2020
CORPORATE GOVERNANCE STATEMENT (continued)
Status of Non-Executive directors
Neither 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
interests of shareholders.
Internal control
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 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. The effectiveness of the Group's system of internal financial controls, for the year
to 30 June 2020 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.
Relations with shareholders
As part of our commitment to shareholder engagement we have been seeking the views of shareholders through
outreach campaigns and roadshows. The Company maintains effective contact with its principal shareholders and
welcomes communications from its private investors. The Company’s Financial PR contact details are listed on
the website and a contact form is also included. The Board is kept updated on questions / issues raised by
stakeholders and incorporates information and feedback into future decision making. The directors meet with
institutional shareholders on a regular basis to understand their expectations and elicit feedback. The Company
holds an AGM which provides private shareholders with an opportunity to ask questions and engage with
Company management. The Company also communicates with shareholders through the Annual Report and
Accounts, full-year end and half-year results announcements. A range of corporate information (including all
Company announcements and presentations) is available to shareholders, investors and the public on the
Company’s corporate website. The Company also has a social media account (Twitter) through which the
Company can maintain a dialogue with shareholders and interested parties.
IRONVELD PLC
9
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
2020
Emoluments of the Directors
N Harrison*
R Fraser * (resigned 19 September 2019)
D Harvey (resigned 24 September 2019
G Clarke**
P Cox***
V von Ketelhodt (Resigned 30 November 2020)
M Eales
Salary
£000
45
11
-
45
-
-
101
202
Fees
£000
-
-
-
-
185
120
-
305
2020
Total
£000
45
11
-
45
185
120
101
507
2019
Total
£000
45
45
-
45
251
131
-
517
* Member of the Remuneration Committee during the period
** Member and Chairman of the Remuneration Committee during the period
*** Highest-paid Director during the period
In addition to the above remuneration disclosed above, share options were granted to M Eales with an
estimated value of £108,000 of which £80,000 was recognised as an expense in the year.
Other pensions
In addition to the above, pension contributions for M Eales amounting to £7,000 were made during the year (2019
- £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 2020, are as follows:
Director
P Cox
G Clarke
N Harrison
P Cox
G Clarke
P Cox
N Harrison
M Eales
Option
price
1p
1p
1p
1p
1p
1p
1p
1p
Date of
Grant
16/08/2012
16/08/2012
16/08/2012
13/11/2012
07/11/2013
07/11/2013
07/11/2013
10/01/2020
Expiry
date
1 July
2019
(Exercised)/
Granted
30 June
2020
16/08/2022
16/08/2022
16/08/2022
13/11/2022
07/11/2023
07/11/2023
07/11/2023
09/01/2030
1,427,894
1,427,894
1,427,894
6,663,505
600,000
600,000
600,000
-
-
-
-
-
-
-
-
27,400,000
1,427,894
1,427,894
1,427,894
6,663,505
600,000
600,000
600,000
27,400,000
IRONVELD PLC
10
YEAR ENDED
30 JUNE
2020
DIRECTORS' REMUNERATION REPORT (continued)
Directors' share options (continued)
With the exception of the share options granted in the year all of the share options are exercisable.
In respect of the share options granted in the year 13,700,000 are exercisable immediately and the remaining
13,700,000 following the first anniversary of the grant date.
The market price of the Company's shares at 30 June 2020 was 0.85p with a range of 0.4p to 1.125p during the
year.
There have been no movements in the Directors' share options since the year end.
G Clarke
Chairman of the Remuneration Committee
IRONVELD PLC
11
YEAR ENDED
30 JUNE
2020
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
M Eales
Director
28 December 2020
IRONVELD PLC
12
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC
YEAR ENDED
30 JUNE
2020
Our opinion is unmodified
We have audited the financial statements of Ironveld Plc for the year ended 30 June 2020 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 26. 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’s and the parent Company's affairs as at 30 June 2020 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.
Material uncertainty related to going concern
We draw attention to note 2.1 and 2.2 in the financial statements. As stated, the Company presently only has
sufficient funds to cover working capital sufficient to operate at present levels until the first half of 2022 and does
not presently have sufficient resources to develop its mining assets. These conditions, along with the other matters
as set out in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the Company’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter. The financial
statements do not include the adjustments that would result if the Group and Company were unable to continue
as a going concern.
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 has therefore not yet generated
significant revenue. The Company is reliant on short-term borrowings and 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
13
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
YEAR ENDED
30 JUNE
2020
Key audit matters (continued)
Our procedures included:-
- Review of the Group’s 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;
- Available and committed finance and repayments arrangements;
- 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;
- Review the development of the Project and the assessment of the nature of its activities;
- 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.
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures
and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a
whole
Materiality for the Group financial statements as a whole was set at £350,000 determined by reference to a
benchmark of total assets. This represents 1.5% of total assets and 1.9% 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 £350,000 representing 1.5% of net assets. We agreed to report
to the Audit Committee any corrected and uncorrected identified misstatements exceeding £17,500, 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. 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, which represented
39% (2019 - 36%) of the Group’s net assets, 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
14
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
YEAR ENDED
30 JUNE
2020
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 – strategic report and the Directors’ report for the
financial year for which the financial statements are prepared is consistent with the financial statements;
and
the Chairman’s statement – strategic report and the Directors’ report have been prepared in accordance
with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and Parent Company and its environment obtained
in the course of the audit, we have not identified material misstatements in the Chairman’s statement – strategic
report 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 12, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the Group or Parent
Company or to cease operations, or have no realistic alternative but to do so.
IRONVELD PLC
15
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRONVELD PLC (continued)
YEAR ENDED
30 JUNE
2020
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 Parent 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.
Paul Daly BEng FCA
Senior Statutory Auditor
for and on behalf of
UHY Hacker Young Manchester LLP
Statutory Auditor
Chartered Accountants
28 December 2020
St. James Building
79 Oxford Street
Manchester M1 6HT
IRONVELD PLC
16
CONSOLIDATED INCOME STATEMENT
Administrative expenses
Operating loss
Other gains and losses
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
9
Year
ended
2020
£000
(695)
(695)
(326)
4
(2)
(1,019)
-
(1,019)
(1,017)
(2)
(1,019)
YEAR ENDED
30 JUNE
2020
Year
ended
2019
£000
(629)
(629)
-
6
(2)
(625)
-
(625)
(624)
(1)
(625)
Loss per share- Basic and diluted
10
(0.16p)
(0.10p)
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
17
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Loss for the period
Exchange difference on translation of foreign operations
Total comprehensive income for the year
Attributable to:
Owners of the Company
Non-controlling interests
YEAR ENDED
30 JUNE
2020
Year
ended
2019
£000
(625)
211
(414)
(448)
34
(414)
Year
ended
2020
£000
(1,019)
(3,654)
(4,673)
(4,061)
(612)
(4,673)
IRONVELD PLC
18
CONSOLIDATED BALANCE SHEET
Note
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Other receivables
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 reserve
Retained earnings
Equity attributable to owners of the Company
Non-controlling interests
Total equity
12
13
14
15
15
16
17
18
20
21
21
21
24
YEAR ENDED
30 JUNE
2020
2019
£000
27,423
5
390
-
27,818
156
566
722
2020
£000
23,574
2
-
2
23,578
76
28
104
23,682
28,540
(805)
(210)
(1,015)
(610)
-
(610)
(4,384)
(5,243)
(5,399)
18,283
9,774
19,691
189
(14,480)
15,174
3,109
18,283
(5,853)
22,687
9,774
19,691
-
(10,499)
18,966
3,721
22,687
These financial statements were approved by the Board and authorised for issue on 28 December 2020
Signed on behalf of the Board
M Eales
Director
Company Registration No: 04095614
IRONVELD PLC
19
PARENT COMPANY BALANCE SHEET
Non-current assets
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
YEAR ENDED
30 JUNE
2020
Note
14
15
2020
£000
2019
£000
24,654
24,074
30
15
45
25
523
548
Total assets
24,699
24,622
Current liabilities
Trade and other payables
Borrowings
Total liabilities
Net assets
Equity
Share capital
Share premium
Other reserve
Retained earnings
Total equity
(Attributable to owners of the Company)
16
17
20
21
21
21
(219)
(210)
(429)
(70)
-
(70)
24,270
24,552
9,774
19,691
189
(5,384)
24,270
9,774
19,691
-
(4,913)
24,552
The loss for the financial year dealt with in the financial statements of the parent Company was £551,000 (2019
– loss £382,000).
These financial statements were approved by the Board and authorised for issue on 28 December 2020.
Signed on behalf of the Board
M Eales
Director
Company Registration No: 04095614
IRONVELD PLC
20
YEAR ENDED
30 JUNE
2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the Company:
Share
Capital
£000
Share
Premium
£000
Other
Reserve
£000
Retained
Earnings
£000
Total
£000
At 1 July 2018
8,903
19,161
Exchange difference on
translation of foreign operations
Issue of share capital
Credit for equity-settled
share based payments
Loss for the year
-
871
-
-
-
530
-
-
At 30 June 2019
9,774
19,691
Exchange difference on
translation of foreign operations
Issue of share option
Credit for equity-settled
share based payments
Loss for the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
189
-
-
(10,056)
18,008
176
-
5
176
1,401
5
(624)
(624)
(10,499)
18,966
(3,044)
(3,044)
-
80
189
80
(1,017)
(1,017)
At 30 June 2020
9,774
19,691
189
(14,480)
15,174
IRONVELD PLC
21
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Total equity:
YEAR ENDED
30 JUNE
2020
Owners of
the Company
£000
Interest
£000
Non-controlling
Total
Equity
£000
At 1 July 2018
Exchange difference on
translation of foreign operations
Issue of share capital
Credit for equity-settled share based payments
Loss for the year
At 30 June 2019
Exchange difference on
translation of foreign operations
Issue of share option
Credit for equity-settled share based payments
Loss for the year
At 30 June 2020
18,008
3,687
21,695
176
1,401
5
(624)
35
-
-
(1)
211
1,401
5
(625)
18,966
3,721
22,687
(3,044)
(610)
(3,654)
189
80
-
-
189
80
(1,017)
(2)
(1,019)
15,174
3,109
18,283
IRONVELD PLC
22
YEAR ENDED
30 JUNE
2020
COMPANY STATEMENT OF CHANGES IN EQUITY
Equity attributable to the equity holders of the Company:
Share
Capital
£000
Share
Premium
£000
Other
Reserve
£000
Retained
Earnings
£000
Total
Equity
£000
At 1 July 2018
8,903
19,161
Credit for equity-settled
share based payments
Issue of share capital
Loss for the year
-
871
-
-
530
-
At 30 June 2019
9,774
19,691
Credit for equity-settled
share based payments
Issue of share option
Loss for the year
At 30 June 2020
-
-
-
-
-
-
9,774
19,691
-
-
-
-
-
-
189
-
189
(4,536)
23,528
5
-
(382)
5
1,401
(382)
(4,913)
24,552
80
-
80
189
(551)
(551)
(5,384)
24,270
IRONVELD PLC
23
CONSOLIDATED CASH FLOW STATEMENT
Net cash used in operating activities
Note
22
Investing activities
Purchases of property, plant and equipment
Purchase of exploration and evaluation assets
Contributions to exploration and evaluation assets
Interest received
Net cash used in investing activities
Financing activities
Proceeds on issue of equity (net of costs)
Proceeds on issue of share options and warrants
Proceeds from new loans
Net cash generated by financing activities
Year
ended
2020
£000
(397)
-
(555)
-
4
(551)
-
189
210
399
Net (decrease)/increase in cash and cash equivalents
(549)
Cash and cash equivalents at beginning
of year
22
Effects of foreign exchange rates
Cash and cash equivalents at end of year
22
566
11
28
YEAR ENDED
30 JUNE
2020
Year
ended
2019
£000
(420)
(4)
(1,202)
268
6
(932)
1,401
-
-
1,401
49
517
-
566
IRONVELD PLC
24
COMPANY CASH FLOW STATEMENT
Note
Net cash from operating activities
22
Investing activities
Payments to acquire investments
Net cash used in investing activities
Financing activities
Proceeds on issue of equity (net of costs)
Proceeds on issue of share options and warrants
Proceeds from new loans
Net cash generated by financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at
beginning of year
Cash and cash equivalents at end of year
22
22
Year
ended
2020
£000
(350)
(557)
(557)
-
189
210
399
(508)
523
15
YEAR ENDED
30 JUNE
2020
Year
ended
2019
£000
(381)
(961)
(961)
1,401
-
-
1,401
59
464
523
IRONVELD PLC
25
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Ironveld Plc is a public company incorporated and domiciled 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 Directors report on page 5.
Adoption of new and revised Standards
In the current year, the Group has applied a number of new or amended standard for the first time which are
mandatory for accounting periods commencing on or after 1 January 2019. None of the standards adopted had a
material impact on the financial statements. The significant new and amended standards adopted were as
follows:-
IFRS 16 – Leases
Annual Improvements to IFRSs 2015-2017 Cycle
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 17 - Insurance contracts
Amendments to references to the conceptual Framework in IFRS Standards
Annual Improvements to IFRSs 2018-2020 Cycle.
The adoption of these standards, amendments and interpretations is not expected to have a material impact on
the Group and Company’s results 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 of the Group and Parent Company have been prepared in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union and the Companies Act 2006.
Under section 408 of the Companies Act 2006 the Parent Company is exempt from the requirement to present its
own profit and loss account.
The financial statements have been prepared on the historical cost basis. The financial statements are presented
in pounds sterling because that is considered to be the currency of the primary economic environment.
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
26
YEAR ENDED
30 JUNE
2020
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
27
YEAR ENDED
30 JUNE
2020
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.
Non-current assets held for sale
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount
and the fair value less costs to sell.
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered
through a sale transaction rather than through continuing use. This condition is regarded as met only when the
sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition.
Management must be committed to the sale which should be expected to qualify for recognition as a completed
sale within one year from the date of classification.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the asset and liabilities
of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether
the Group will retain a non-controlling interest in its former subsidiary after sale.
Revenue
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a
customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it
transfers control of a product or service to a customer. The Group reported no revenue for the year.
IRONVELD PLC
28
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
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.
Leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises
a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low
value assets (such as tablets and personal computers, small items of office furniture and telephones). For these
leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term
of the lease unless another systematic basis is more representative of the time pattern in which economic benefits
from the leased assets are consumed. All of the Groups leases has a lease term of 12 months or less.
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.
IRONVELD PLC
29
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
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. The Group recognises appropriate allowances for expected credit losses in the income statement
based on a historical credit loss experience, adjusted for factors that are specific to the debtors and general
economic conditions.
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.
Financial liability and equity
Interest bearing bank and other loans and bank 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 and
foreign exchange risk.
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.
IRONVELD PLC
30
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.1 Significant accounting policies (continued)
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 has 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. The financial statements therefore do not
include the adjustments that would result if the Group and Company were unable to continue as a going concern.
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
As announced on 12 November 2020, the Company and IIG agreed that the Option Agreement originally
announced on 30 March would be allowed to lapse on 30 November 2020. On 26 November 2020, alongside
the announcement of a share placing to raise up to £1,150,000, the Company agreed that the majority of the
bridging funds provided by IIG (US$650,000 plus interest) would be capitalised at a price of 0.42 pence per share
alongside a cash repayment of approximately £112,000)
Discussions with alternative financial and development funding institutions to secure the project funding required
continue.
Following shareholder approval of the of the share placing on 14 December 2020, the Group’s present financial
facilities are considered sufficient to enable the Company to operate at present levels until the first half of 2022,
by which time, the Board of Directors anticipates to have secured the further finance to develop the Project.
Whilst the impact of the global COVID-19 pandemic including the associated travel restrictions has hampered the
Company’s attempts to secure project development funding to some extent, as the Group is presently not currently
undertaking any operations at the project then no significant impact is anticipated over the next 12 months.
Therefore, whilst the existing resources are not sufficient to develop the mining asset, the Directors 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. The Group is
committed to developing its Project and is actively engaged with interested parties. For this reason, the Board
continues to adopt the going concern basis in the preparation of these financial statements.
IRONVELD PLC
31
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.2 Critical accounting estimates and judgements (continued)
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, in accordance with IFRS 6, no impairment review has
been carried out. The Directors remain committed to development of the asset.
Investment impairment indicators
The Company balance sheet includes an investment in subsidiary companies of £24,654,000 which is
underpinned and reflects the underlying subsidiary exploration and evaluation assets discussed above. As no
indicators of impairment have been identified in the exploration and evaluation asset then subsequently no
indicators or impairment in the investment in subsidiary have been identified and as is consistent with the
exploration and evaluation assets, no impairment review has been carried out in the period.
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.
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 year is shown after charging:
Depreciation on tangible assets
Short term lease payments under operating leases
Impairment of receivables
Share based payment charge
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
Other non-audit services
Year
ended
2020
£000
Year
ended
2019
£000
2
26
-
80
37
13
7
10
3
3
53
-
-
37
14
7
12
3
IRONVELD PLC
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. Staff costs
Group
Wages and salaries
Social security costs
Pension costs
Share based payments
Directors other fees
YEAR ENDED
30 JUNE
2020
Year
ended
2020
£000
Year
ended
2019
£000
350
28
8
80
305
771
438
15
-
5
382
840
The average monthly number of employees, including Directors, during
the period was as follows:
2020
Number
2019
Number
Administration and management
12
20
Directors remuneration and other fees
The aggregate remuneration and fees paid to the highest paid Director was
2020
£000
594
185
2019
£000
517
251
Further details of the Directors' remuneration are given in the Directors' Remuneration Report on pages 10 and
11.
Company
Wages and salaries - directors
Social security costs
Share based payments
Pension costs
Year
ended
2020
£000
Year
ended
2019
£000
202
26
80
7
315
135
12
-
-
147
The average monthly number of employees, including Directors, during
the period was as follows:
2020
Number
2019
Number
Directors
5
5
IRONVELD PLC
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. Other gains and losses
Impairment of other investments
7. Investment revenues
Interest on financial deposits
8. Finance costs
Loan interest and similar charges
9. Tax
a) Tax charge for the period
Corporation tax:
Current period
Deferred tax (note 18)
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 in the UK of 19% (2019 – 19%)
Effects of:
Unused tax losses not recognised
Tax expense for the period
YEAR ENDED
30 JUNE
2020
Year
ended
2020
£000
Year
ended
2019
£000
326
-
Year
ended
2020
£000
Year
ended
2019
£000
4
6
Year
ended
2020
£000
Year
ended
2019
£000
2
2
Year
ended
2020
£000
Year
ended
2019
£000
-
-
-
-
-
-
(1,019)
(625)
(194)
(119)
194
-
119
-
c) Factors that may affect future tax charges - The Group has estimated unutilised tax losses amounting to
£5,194,000 (2019 - £4,235,000) the values of which are not recognised in the balance sheet. The losses represent
a potential deferred taxation asset of £1,123,000 (2019 - £831,000) 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 £7,445,000 (2019 - £8,082,000) which are
expected to be deductible against future trading profits of the Group.
IRONVELD PLC
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. (Loss)/earnings per share
Loss attributable to the owners of the Company
Loss per share – Basic and diluted
Continuing operations
YEAR ENDED
30 JUNE
2020
2020
£000
(1,019)
2019
£000
(625)
(0.16p)
(0.10p)
The calculation of basic earnings per share is based on 654,990,841 (2019 – 602,782,339) 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 20.
11. 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 £551,000
(2019 - £382,000).
12. Intangible assets
Group
Cost:
At 1 July 2018
Additions
Contributions received
Exchange differences
At 30 June 2019
Additions
Exchange differences
At 30 June 2020
Amortisation:
At 1 July 2018, 30 June 2019 and at 30 June 2020
Net book value at 30 June 2020
Net book value at 30 June 2019
Exploration
and
evaluation
assets
£000
26,218
1,225
(268)
248
27,423
645
(4,494)
23,574
-
23,574
27,423
IRONVELD PLC
35
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. Intangible assets (continued)
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. During the period contributions of £Nil (2019 - £268,000) were received from the project
partner in respect of the mineral ore testing.
13. Property, plant and equipment
Group
Cost:
At 1 July 2019
Exchange differences
At 30 June 2020
Depreciation:
At 1 July 2019
Charge for the period
Exchange differences
At 30 June 2020
Net book value at 30 June 2020
Net book value at 30 June 2019
Cost:
At 1 July 2018
Additions
At 30 June 2019
Depreciation:
At 1 July 2018
Charge for the period
At 30 June 2019
Net book value at 30 June 2019
Net book value at 30 June 2018
All non-current assets in 2020 and 2019 were located in South Africa.
Plant and
machinery
£000
41
(7)
34
36
2
(6)
32
2
5
Plant and
machinery
£000
37
4
41
33
3
36
5
4
IRONVELD PLC
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Investments
Group – Loans to other entities
Cost:
At 1 July
Exchange differences
At 30 June
Impairment:
At 1 July
Recognised in the year
At 30 June
Book value at 30 June
YEAR ENDED
30 JUNE
2020
2020
£000
390
(64)
326
-
326
326
-
2019
£000
386
4
390
-
-
-
390
The investment represented the Rand 7million refundable deposit to Siyanda Smelting and Refining Proprietary
Limited which the Group paid in exchange for a period of exclusivity to conclude a potential acquisition of the
company. The deposit is interest free and becomes refundable should the acquisition not proceed. The investment
was considered to be fully impaired as at 30 June 2020 whilst the directors pursued other alternatives and
£326,000 was charged to the income statement.
Company - Subsidiary undertakings
Cost:
At 1 July 2018
Additions
At 30 June 2019
Additions
At 30 June 2020
Loans
£000
Equity
£000
Total
£000
2,762
978
20,329
5
23,091
983
3,740
20,334 24,074
580
-
580
4,320
20,334
24,654
Net book value at 30 June 2020
4,320
20,334
24,654
Net book value at 30 June 2019
3,740
20,334
24,074
The loans represent loans to Ironveld Holdings (Propriety) Limited of £4,215,000 which incur interest at a rate not
exceeding the base lending rate applicable in England and Wales. Under the initial terms of the loan, £2,500,000
is repayable 31 December 2019 with the remainder due 31 December 2020 however further agreement in the
year has extended the loan period when project finance is agreed. Also included in loans are working capital loans
to Ironveld Mauritius Limited of £105,000 which are interest free.
IRONVELD PLC
37
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Investments (continued)
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
Ordinary
Ironveld Mauritius Limited
Ordinary
Ironveld Holdings (Proprietary) Limited
Ironveld Mining (Proprietary) Limited
Ordinary
Ironveld Middelburg (Proprietary) Limited Ordinary
Ordinary
Ironveld Smelting (Proprietary) Limited
Ordinary
HW Iron (Proprietary) Limited
Lapon Mining (Proprietary) Limited
Ordinary
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.
All subsidiary undertakings are incorporated and domiciled in South Africa, other than Ironveld Mauritius Limited,
which is incorporated and domiciled in Mauritius.
Further details of non-wholly owned subsidiaries of the Group are provided in note 24.
15. Trade and other receivables
Group
Other receivables
Amounts owed by related parties
Prepayments and accrued income
Due within 12 months
Due after more than 12 months
2020
£000
58
2
18
78
(76)
2
2019
£000
138
-
18
156
(156)
-
Company
2020
£000
2019
£000
16
-
14
30
(30)
-
11
-
14
25
(25)
-
Amounts owed by related parties represent expenses paid on behalf of the non-controlling interest shareholders
by the company and are expected to be recovered in more than 12 months. The amounts are unsecured and
interest free.
Credit risk
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 £27,000 (2019 - £109,000) is due from a third
party financial institution and further information is provided in note 19. The remaining receivable relates to
recoverable VAT. The amounts presented in the balance sheet are net of allowances for doubtful receivables.
IRONVELD PLC
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. Trade and other payables
Group
YEAR ENDED
30 JUNE
2020
Company
2020
£000
2019
£000
48
13
5
153
219
(219)
8
14
5
43
70
(70)
-
-
2020
£000
48
13
6
738
805
(805)
-
2019
£000
8
18
10
574
610
(610)
-
Group
2020
£000
2019
£000
210
(210)
-
-
-
-
Company
2020
£000
210
(210)
-
2019
£000
-
-
-
Group
2020
£000
5,243
(859)
4,384
2019
£000
5,194
(49)
5,243
Trade payables
Taxation and social security costs
Other payables
Accruals and deferred income
Due within 12 months
Due after more than 12 months
17. Borrowings
Other loans
Due within 12 months
Due after more than 12 months
Further details on loans is provided in note 19.
18. Deferred tax
Balance at 1 July
Exchange differences
Balance at 30 June
The Group has unrelieved tax losses carried forward which represent a deferred tax asset of £1,122,000 (2019 -
£831,000). This asset is not recognised in these financial statements.
The deferred tax liability is made up as follows:
Fair value adjustments
Group
2019
£000
2020
£000
4,384
5,243
IRONVELD PLC
39
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. 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 2019.
The capital structure of the Group consist of 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 for working capital at fixed and
variable rates. The Group exposure to interest rates on financial assets and 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 assessing required 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 bank 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 £28,000 (2019 -
£566,000). The cash deposits attract variable rates of interest. At the year end the effective rate was 0.8% (2019
– 0.7%). 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
2020
£000
10
4
1
13
28
2019
£000
518
2
5
41
566
IRONVELD PLC
40
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Financial instruments (continued)
Financial liabilities
Other loans
Other loans represents the Group’s interest bearing financial liabilities. The others loans are due to a consortium
of high net worth investors and existing shareholders with whom facilities of £260,000 were agreed on 3 February
2020. The loans mature 6 months after draw down and attract a fixed interest rate of 8% per annum. The Company
issued 26,000,000 share warrants with a subscription price of 1p per share to the lenders, pro rata to the amount
of each loan. These warrants have a two year life and the lenders may use the outstanding balances under the
loan facilities to exercise the warrants.
At 30 June 2020, £210,000 had been drawn against this facility and therefore £50,000 remained undrawn.
On 11 June 2020, the Company arranged a bridging loan facility with Inclusive Investment Group Propriety Limited
(“IIG”) of ZAR 3,700,000 (approximately £170,000). At 30 June 2020 no amount had been drawn under this facility.
On 3 September 2020, a further extension of these facilities of ZAR 3,300,000 (approximately £154,000) was
agreed.
On 30 March 2020, the Company arranged a potential US$1 million facility with IIG which could be drawn down
if IIG completed its share subscription under the outstanding option agreement and therefore no amounts were
available to draw on this facility at the year-end and the facility lapsed on 30 November 2020.
Currency exposures
The Group undertakes transactions denominated in foreign currencies and is consequently exposed to
fluctuations in exchange rates. The carrying amounts of the Group's foreign currency denominated monetary
assets and monetary liabilities were as follows:-
As at 30 June 2020
British Pound Sterling (£)
USD ($)
South African Rand (R)
As at 30 June 2019
British Pound Sterling (£)
USD ($)
South African Rand (R)
Assets
£000
Liabilities
£000
31
1
56
88
417
21
564
1,002
Assets
£000
Liabilities
£000
528
2
564
1,094
70
13
527
610
Financial commitments and guarantee
Rehabilitation guarantees of £1,340,000 (R 24,278,412) have been issued to the Department of Mineral
Resources for three subsidiaries, HW Iron Proprietary Limited, Lapon Mining 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, 2002 (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 2020 £27,000 (R 577,000) (2019 - £109,000 (R 1,962,000)) had been deposited in respect of this agreement
and is included in other receivables. As no significant activity had taken place on the Group’s mineral resources
then R 1,500,000 was withdrawn from the bond in the year. This receivable represents a concentration of credit
risk and the Group is exposed to currency risk on these amounts. As the project has not yet commenced then no
liability is considered to have arisen under this guarantee at the reporting date.
IRONVELD PLC
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. Share capital
Group and Company
Allotted, called up and fully paid
654,990,841 (2019 – 654,990,841) ordinary shares of 1p each
322,447,158 (2019 - 322,447,158) deferred shares of 1p each
YEAR ENDED
30 JUNE
2020
2020
£000
6,550
3,224
9,774
2019
£000
6,550
3,224
9,774
As announced on 26 November 2020 and subsequently approved on 14 December 2020, the Company agreed
to carry out a subdivision of the existing ordinary shares whereby each existing ordinary share of 1 pence each
will be subdivided into one New Ordinary share of 0.1 pence each and nine deferred shares of 0.1 pence each
to enable the placing at 0.30 pence per share to become unconditional. The New Ordinary shares continue to
carry the same rights as attached to the existing ordinary shares, save for the reduction in nominal value.
On 15 December 2020, a further 643,949,531 shares were issued and admitted to trading to settle existing
liabilities and riase working capital of £1,150,000 for the Group.
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 interests 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. For this reason the deferred shares are excluded
from any Earnings per share calculations.
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 year 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
10 January 2020
1p
0.42p
30 March 2020
As at
1 July
2019
No.
1,600,000
5,949,558
6,663,505
1,033,334
2,086,667
200,000
2,500,000
445,545
-
-
Granted
in year
No.
Exercised
in year
No.
-
-
-
-
-
-
-
-
27,400,000
440,176,070
-
-
-
-
-
-
-
-
-
-
The exercise period of the options is as follows:
Date
granted
Expiry date
Exercise period
As at
30 June
2020
No.
Lapsed/
Cancelled
No.
(1,600,000)
-
-
-
-
-
-
-
-
5,949,558
6,663,505
1,033,334
2,086,667
200,000
2,500,000
445,545
- 27,400,000
- 440,176,070
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
10 January 2020
9 January 2030 ½ on grant and the remaining ½ one year after the grant date.
IRONVELD PLC
42
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. Share capital (continued)
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 £80,000 (2019 - £5,000) in the year. No options were
exercised in the year.
The aggregate of the estimated fair value of the employee related share options granted in the period amounted
to £108,000 (2019 - £Nil). The inputs to the Black Scholes Model were as follows:-
Weighted average share price (pence)
Weighted average share price (pence)
Expected volatility
Weighted average period to exercise
Risk free rate
0.75
1.00
82%
5 years
0.7%
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the three
years prior to the grant date. The expected period to exercise is based on management’s best estimate.
Share options (continued)
On 30 March 2020, the Company announced that it had entered in a share Option Agreement with IIG pursuant
to which IIG could subscribe for 440,176,070 new Ordinary shares in the capital of the company at a price of 0.42
pence per share. The option agreement was issued in exchange for US$250,000.
The Option agreement had an initial expiry date of 17 June 2020 but in order to bring the timetable for the potential
Option exercise in line with the proposed project financing application, the Company entered into an extension of
the Agreement to 30 September 2020. In consideration of this extension IIG agreed to provide the Company with
a bridging funding facility of up to ZAR3.7 million (approximately £170,000) which was intended to provide the
Company with the requisite funds to continue in operations until such time as the funding application is reviewed.
Further to the above, on 3 September 2020, the exercise period Option Agreement was once again extended to
30 November 2020 in exchange for further bridging funding of ZAR 3.3 million (approximately £150,000). The
option lapsed on 30 November 2020.
Share warrants
Pursuant to the loan facilities agreement, dated 3 February 2020 for £260,000 and referred to in note 19, the
Company issued share warrants to the lenders over 26,000,000 shares at 1 pence per share. The warrants had
a 2 years life and the lender was able to use the outstanding balances under the loan facilities to exercise the
warrants. Following the approval of the conditional placing on 14 December 2020 and the repayment of the
associated loans, these share warrants lapsed.
IRONVELD PLC
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. Reserves
Group
Share
premium
account
£000
Other
reserve
£000
At 1 July 2019
Loss for the year
Exchange difference on translation of foreign operations
Issue of share options and warrants
Credit for equity settled share based payments
At 30 June 2020
-
-
-
189
-
189
19,691
-
-
-
19,691
(14,480)
YEAR ENDED
30 JUNE
2020
Retained
earnings
£000
(10,499)
(1,017)
(3,044)
-
80
Other reserves represent the equity component of share options and share warrants issued in the year.
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.
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.
Company
Other
reserve
£000
Share
premium
Retained
account earnings
£000
£000
At 1 July 2019
Loss for the period
Issue of share options and warrants
Credit for equity settled share based payments
At 30 June 2020
-
-
189
-
189
19,691
-
-
-
(4,913)
(551)
-
80
19,691
(5,384)
Other reserves represent the equity component of share options and share warrants issued in the year.
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.
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
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. Cash generated from operations
Group
Operating loss
Depreciation on property, plant and equipment
Share based payment charge
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
Company
Operating loss
Share based payment charge
Operating cash flows before movements in working capital
Movement in receivables
Movement in payables
Net cash used in operations
Cash and cash equivalents
2020
£000
(695)
2
80
(613)
61
155
(397)
-
(397)
2020
£000
28
2020
£000
(571)
80
(491)
(6)
147
(350)
2020
£000
Cash and bank balances
15
YEAR ENDED
30 JUNE
2020
2019
£000
(629)
3
-
(626)
22
185
(419)
(1)
(420)
2019
£000
566
2019
£000
(404)
-
(404)
13
10
(381)
2019
£000
523
IRONVELD PLC
45
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. Related party transactions
Group
During the year the Group incurred £185,000 (2019 - £251,000) for consultancy services to Goldline Global
Consulting (Pty) Limited, a company in which P Cox is materially interested. At 30 June 2020, £392,000 (2019 -
£365,000) remained unpaid in accruals. Following the year end the accrued fees were settled by the issue of
shares in the Company.
During the year the Group incurred £120,000 (2019 - £131,000) for consultancy services to Novem Consulting, a
private company in which V von Ketelhodt is materially interested. At 30 June 2020, £171,000 (2019 - £145,000)
remained unpaid in accruals. Following the year end the accrued fees were settled by the issue of shares in the
Company.
Group and Company
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 (2019 - £48,000) for accounting services to Westleigh Investments
Limited, a company in which G Clarke and N Harrison are materially interested. During the year the Company
paid £Nil (2019 - £20,000) for consultancy services to Merlin Partnership LLP, a company in which G Clarke is
materially interested.
Included in other loans is a short term loan due to G Clarke of £10,000 (2019- £Nil). The loan attracts interest at
8% per annum and was repaid after the year-end by the issue of 3,333,333 shares and the interest waived.
Further directors’ remuneration of £96,805 (2019 - £Nil) was unpaid at the year-end and is included in accruals.
Following the year end £60,000 of the accrued fees were settled by the issue of shares in the Company.
24. Non-controlling interest
At 1 July
Exchange adjustments
Share of loss for the period
At 30 June
2020
£000
3,721
(610)
(2)
2019
£000
3,687
35
(1)
3,109
3,721
The table below shows details of non-wholly owned subsidiaries of the Group that have material non-controlling
interests:
Proportion of
voting rights
and shares held
2020
(2019)
HW Iron (Proprietary) Limited
32%
Lapon Mining (Proprietary) Limited 26%
Other non-controlling interests
(32%)
(26%)
Profit/ (loss)
allocated to
non-controlling
interests
Accumulated
non-controlling
interests
2020
£000
2019
£000
2020
£000
-
-
(2)
(2)
-
-
(1)
(1)
989
2,124
(4)
3,109
2019
£000
1,184
2,540
(3)
3,721
IRONVELD PLC
46
YEAR ENDED
30 JUNE
2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. Non-controlling interest (continued)
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 2020 of 21.4676 (2019 – 17.9497).
HW Iron (Proprietary) Limited
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Equity attributable to owners of the Company
Non-controlling interest
Revenue
Expenses
Loss for the year
Attributable to the owners of the Company
Attributable to the non-controlling interests
Net cash outflow from operating activities
Net cash outflow from investing activities
Net cash inflow from financing activities
Net cash inflow
Net cash flow - Attributable to the non-controlling interests
2020
£000
6,261
3
(1,970)
(1,205)
2019
£000
7,261
-
(2,122)
(1,441)
3,090
3,698
2,101
989
2,514
1,184
-
(1)
(1)
(1)
-
-
(157)
157
-
-
-
-
-
-
-
-
(188)
188
-
-
IRONVELD PLC
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. Non-controlling interest (continued)
Lapon Mining (Proprietary) Limited
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Equity attributable to owners of the Company
Non-controlling interest
Revenue
Expenses
Loss for the year
Attributable to the owners of the Company
Attributable to the non-controlling interests
Net cash outflow from operating activities
Net cash outflow from investing activities
Net cash inflow from financing activities
Net cash flow
Net cash flow - Attributable to the non-controlling interests
YEAR ENDED
30 JUNE
2020
2020
£000
2019
£000
12,992
2
(1,647)
(3,179)
15,300
-
(1,728)
(3,802)
8,168
9,770
6,044
2,124
7,230
2,540
-
(1)
(1)
(1)
-
(1)
(153)
153
(1)
-
-
(1)
(1)
(1)
-
(1)
(183)
184
-
-
25. Financial commitments
At the year end the Group had no financial commitments under operating leases (2019 - £Nil).
26. Control
The Directors consider that there is no overall controlling party.
IRONVELD PLC
48