Report of the Directors and
Audited Financial Statements for the Year Ended 31 December 2013
for
Pathfinder Minerals PLC
Contents of the Financial Statements
For the Year Ended 31 December 2013
Company Information
Chairman’s Statement
Report of the Directors
Report of the Independent Auditors
Statement of Consolidated Comprehensive Income
Statement of Consolidated Financial Position
Statement of Financial Position – Company
Statement of Changes in Equity
Statement of Cash Flows – Group and Company
Notes to the Financial Statements
Page
4
5
7
10
12
13
14
15
16
17
3
Company Information
For the Year Ended 31 December 2013
DIRECTORS:
SECRETARY
REGISTERED OFFICE:
Henry Bellingham
Nicholas Trew
James Normand
John McKeon
James Normand
60 Lombard Street
London
EC3V 9EA
REGISTERED NUMBER:
02578942 (England and Wales)
AUDITORS:
SOLICITORS:
NOMINATED ADVISER:
REGISTRARS:
BANKERS:
Chapman Davis LLP
2 Chapel Court
London
SE1 1HH
Travers Smith LLP
10 Snow Hill
London
EC1A 2AL
Daniel Stewart and Company
Becket House
36 Old Jewry
London
EC2R 8DD
Capita Registrars Limited
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Royal Bank of Scotland
1 Dale Street
Liverpool
L2 2PP
4
Chairman’s Statement
For the Year Ended 31 December 2013
Introduction
This is my first statement as chairman of Pathfinder, having been appointed in February 2014 – after the end
of the period under review. As a former Under Secretary of State at the Foreign and Commonwealth Office
with ministerial responsibility for Africa, I hope that I bring to the board a deep understanding of the African
continent and of its opportunities.
My first four months in the role have afforded me the opportunity to review in depth Pathfinder’s position.
I believe that our investment in the English legal proceedings – which resulted in the unequivocal ruling that
Pathfinder did validly acquire its Mozambique licence-holding subsidiary – has established a very strong
legal footing. This legal footing is the basis for Pathfinder’s application to have the English judgments
recognised (and ultimately enforced) in the Mozambique Supreme Court and/or to seek compensation for
the loss of value. It is not known, however, when such judgments from the Mozambique Supreme Court in
respect of the recognition proceedings will be delivered. Our legal advisers estimate anywhere from months
to one or two years. While we intend to continue to pursue the legal proceedings with all the vigour that the
Board has employed to date, I believe we must also consider ways to build value, even in the interim period
before final judgment on these issues. The Board is also determined to continue to explore every avenue to
bringing about an earlier resolution, if indeed one can be achieved, to restore value to the Company more
quickly than may be achieved by waiting for the courts in Mozambique to reach a verdict.
Legal proceedings in Mozambique
The Company often receives letters and e-mails from shareholders expressing both their resolute support of
the Company’s determination to recover its assets and, at times, their frustration with the slow progress of
proceedings in Mozambique. Their frustration is felt equally by the Board. The reality is, however, that we
are moving the proceedings along in Mozambique as efficiently and as expeditiously as the judicial
infrastructure there will allow. I am afraid to say that there is every likelihood of continued extended hiatuses
between reportable developments in the Mozambique proceedings.
Let me give an update on the status of legal proceedings in Mozambique. The principal proceedings
presently in train in the Mozambique Supreme Court are two claims for recognition of the London
judgments, referred to as the First and Second Claims for Recognition. The claims comprise a number of
orders for costs (totalling £1,106,000) by the English court; and certain declarations by the English court to
the effect that our subsidiary, IM Minerals Limited (“IMM”), did indeed validly acquire its 99.99 per cent.
stake in our Mozambique licence-holding subsidiary, Companhia Mineira de Naburi S.A.R.L (“CMDN”).
The reason these declarations were essential to Pathfinder was that IMM needed to demonstrate beyond any
doubt that it was (and should now still be) the owner of CMDN. General Veloso and Diogo Cavaco have
continually argued that they were entitled to request the transfer of the mining licences to their ownership
because Pathfinder never validly owned the company from which they were taken. It has been established as
a matter of law that this is not the case. As well as seeking to have the English judgments recognised in the
Mozambique courts, Pathfinder has drawn them to the attention of the Government of Mozambique.
The First Claim for Recognition was filed with the Supreme Court in March 2013 and was supplemented by
final written arguments in late October 2013. The Second Claim for Recognition was filed in August 2013.
We are advised that the claims will be decided by the Supreme Court on the papers; and that there will be
no oral argument. The court’s chairman will prepare a draft judgment for the other judges to consider and,
following a meeting between them, a final judgment will be issued. It is not known when judgments might
be delivered. As I stated earlier, it may still be a considerable time.
There are a number of other proceedings ongoing in Mozambican courts, each of which raises the issue of
the jurisdiction of the English court and/or IMM’s status as a shareholder of CMDN. Judgments are awaited
from the Mozambique courts in respect of each of these proceedings and, again, it is not known when these
might be delivered. Whatever their outcome, however, it is likely that further appeals will follow.
5
Chairman’s Statement – continued
For the Year Ended 31 December 2013
Financial results and current financial position
The financial results of Pathfinder are, as for any pre-revenue company which does not currently have
operations, very straightforward. The most important financial measurement at this juncture is whether
Pathfinder has sufficient cash to see through its strategy to recover its assets. The Board is prudent with
expenditure and believes the Company does have sufficient reserves for the foreseeable future.
The financial statements of the Pathfinder Group for the year ended 31 December 2013 follow later in this
report. The Income Statement shows a loss of £1.5 million (2012 – £4.3 million). The conclusion of the legal
action in England brought about a material reduction in the rate of expenditure. Since the Company has been
prevented from conducting any activity relating to mining, the whole of this loss can be attributed to the
Company’s attempts to recover its expropriated licences.
The Group’s Statement of Financial Position shows net assets at 31 December 2013 of £2.2 million
(2012 – £3.7 million). The assets are held largely in the form of cash deposits (totalling £2.1 million at the
year-end and £1.7 million at 20 June 2014).
Pathfinder’s cash position was bolstered by the approval of the Company’s application for VAT registration
(backdated to February 2011) leading to the receipt, in December 2013, of a refund of VAT previously paid
amounting to £978,000.
Outlook
The length of time that the Mozambican legal proceedings are taking has unavoidably deprived shareholders
of any enhancement of value in the intervening period. The investments of time and resources in the English
legal proceedings were necessary and will be central to the ability to achieve a beneficial resolution, in or
out of court. We will continue to press for rulings in the proceedings in the Mozambique courts (including
those related to the recovery of costs from General Veloso and Diogo Cavaco) every bit as determinedly as
the Board has done so to date.
My overriding objective at Pathfinder is to help steer the company towards a resolution of its issues
concerning asset ownership; and thereafter to contribute to the ongoing development of those assets in an
efficient and responsible way which creates value for Pathfinder’s shareholders and benefits Mozambique.
At the same time, and in light of the considerable length of time it may take to achieve a legal resolution if
an appropriate solution cannot be achieved out of court, I believe we must also look for other ways to add
value to the Company while the legal proceedings run their course. With the Mozambican legal proceedings
well into their cycle, the Board is exploring such avenues.
Henry Bellingham
Chairman
27 June 2014
6
Report of the Directors
For the Year Ended 31 December 2013
The directors present their report with the consolidated financial statements of the company for the year
ended 31 December 2013.
PRINCIPAL ACTIVITY
The principal activity of the Group is mining.
REVIEW OF BUSINESS
The review of the business, its operations and finances is contained in the Chairman’s Statement.
DIVIDENDS
The Directors do not recommend the payment of a dividend.
EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is contained in the Chairman’s statement.
DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2013 to the date
of this report.
John McKeon
Nicholas Trew
James Normand
On 18 February 2014 Henry Bellingham was appointed to the Board as Chairman.
COMPANY’S POLICY ON PAYMENT OF CREDITORS
It is the company’s policy to pay suppliers in accordance with the payment terms negotiated with them. The
company’s average creditor days during the year were 43 days (2012: 20 days).
FINANCIAL INSTRUMENTS
The company’s financial instruments consist entirely of cash that arises directly from its operations. The
main purpose of these financial instruments is to fund the company’s operations as well as to manage
working capital, liquidity and invest surplus funds. It is, and has been throughout the period under review,
the company’s policy not to enter into derivative transactions and no trading in financial instruments has been
undertaken.
POLITICAL AND CHARITABLE CONTRIBUTIONS
No charitable or political contributions were made during the current or previous year.
7
Report of the Directors – continued
For the Year Ended 31 December 2013
SUBSTANTIAL SHAREHOLDINGS
As at 23 June 2014, the following shareholders had notified the company of an interest of 3% or more of the
Company’s ordinary share capital:
Number of 1p Shareholding
Shareholder name ordinary shares percentage
John McKeon 128,209,700 12.4%
J V Consultores Internacionais Limitada
(a company controlled by Jacinto Veloso) 110,120,680 10.6%
Timothy Baldwin 102,678,316 9.9%
JP Morgan Funds 99,685,000 9.6%
Nicholas Trew 94,375,753 9.1%
Diogo Cavaco 88,129,280 8.5%
Genesis Emerging Market Opportunities Fund 86,000,000 8.3%
YF Finance Limited 45,610,000 4.4%
RISK EXPOSURE
The Companies Act 2006 requires the Directors to set out in this report how the Group manages its exposure
to risk.
The directors consider that the Company has sufficient cash and cash equivalents to meet its foreseeable
operational requirements.
CORPORATE GOVERNANCE
The Board is responsible for establishing the strategic direction of the Company, monitoring the Group’s
trading performance and appraising and executing development and acquisition opportunities. The Company
holds regular Board meetings, at which financial and other reports, including working capital reports and
acquisition opportunities, are considered and, where appropriate, voted on.
The Directors support high standards of corporate governance and the Board complies with the QCA
Guidelines so far as reasonably practicable and appropriate taking into account the Company’s size. The
Company’s current situation does not allow for separate audit and remuneration committees and is not
conducive to the appointment of non-executive directors, all of which the Board is keen to do as soon as
circumstances allow.
The Board supports the principle of clear reporting of financial performance to shareholders. Each year,
shareholders receive a full annual report and interim report. The Board regards the Annual General Meeting
as an opportunity to communicate directly with private investors. Directors attend the Annual General
Meeting and are available to answer questions from shareholders present. The Board actively encourages
feedback and shareholder dialogue, whether oral or written.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Report of the Directors and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law
the directors have elected to prepare the financial statements in accordance with International Financial
Reporting Standards as adopted by the European Union. Under company law the directors must not approve
the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing these financial statements, the
directors are required to:
8
Report of the Directors – continued
For the Year Ended 31 December 2013
– select suitable accounting policies and then apply them consistently;
– make judgements and accounting estimates that are reasonable and prudent;
– state that the financial statements comply with IFRS;
– prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the company’s transactions and disclose with reasonable accuracy at any time the financial position of the
company and enable them to ensure that the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the
Companies Act 2006) of which the company’s auditors are unaware, and each director has taken all the steps
that he ought to have taken as a director in order to make himself aware of any relevant audit information
and to establish that the company’s auditors are aware of that information.
AUDITORS
The auditors, Chapman Davis LLP, will be proposed for re-appointment at the forthcoming Annual General
Meeting.
ON BEHALF OF THE BOARD:
James Normand
Director and Company Secretary
27 June 2014
9
Report of the Independent Auditors to the Members of
Pathfinder Minerals PLC
We have audited the financial statements of Pathfinder Minerals PLC for the year ended 31 December 2013
which comprises the Statement of Consolidated Comprehensive Income, the consolidated and parent
company statements of financial position, the consolidated and parent company statements of changes in
equity, the consolidated and parent company statements of cash flow and the related notes. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in a Report of the Auditors and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors’ Report, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit
and express an opinion on the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices
Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the Company’s members as a body
in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in
giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where expressly agreed by our prior consent in
writing.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to
the company’s circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the directors; and the overall presentation of
the financial statements. In addition, we read all the financial and non-financial information in the Report of
the Directors to identify material inconsistencies with the audited financial statements. If we become aware
of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements:
– give a true and fair view of the state of the Group’s and of the parent company’s affairs as at
31 December 2013 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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Report of the Directors for the financial year for which the
financial statements are prepared is consistent with the financial statements.
10
Report of the Independent Auditors to the Members of
Pathfinder Minerals PLC – continued
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
– adequate accounting records have not been kept, or returns adequate for our audit have not been
received from branches not visited by us; or
– the 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.
Rowan J Palmer (Senior Statutory Auditor),
for and on behalf of Chapman Davis LLP, Statutory Auditor
Chartered Accountants
2 Chapel Court
London
SE1 1HH
27 June 2014
11
Statement of Consolidated Comprehensive Income
For the Year Ended 31 December 2013
2013 2012
Notes £’000 £’000
CONTINUING OPERATIONS
Revenue – –
Administrative expenses (1,480) (4,424)
––––––––– –––––––––
OPERATING LOSS 5 (1,480) (4,424)
Finance income 6 21 106
––––––––– –––––––––
LOSS BEFORE INCOME TAX (1,459) (4,318)
Income tax 7 – –
––––––––– –––––––––
LOSS FOR THE YEAR (1,459) (4,318)
OTHER COMPREHENSIVE INCOME – –
––––––––– –––––––––
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (1,459) (4,318)
––––––––– –––––––––
Loss per share (expressed in pence per share) 8
Basic (0.1) (0.4)
Diluted (0.1) (0.4)
––––––––– –––––––––
The notes form part of these financial statements
12
Statement of Consolidated Financial Position
31 December 2013
2013 2012
Notes £’000 £’000
ASSETS
CURRENT ASSETS
Trade and other receivables 10 185 163
Cash and cash equivalents 11 2,134 3,767
––––––––– –––––––––
2,319 3,930
––––––––– –––––––––
TOTAL ASSETS 2,319 3,930
––––––––– –––––––––
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital 12 18,289 18,289
Share premium 11,022 11,022
Retained earnings (27,120) (25,661)
––––––––– –––––––––
TOTAL EQUITY 2,191 3,650
––––––––– –––––––––
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 13 128 280
––––––––– –––––––––
TOTAL LIABILITIES 128 280
––––––––– –––––––––
TOTAL EQUITY AND LIABILITIES 2,319 3,930
––––––––– –––––––––
The financial statements were approved by the Board of Directors on 27 June 2014 and were signed on its
behalf by:
James Normand
Finance Director
The notes form part of these financial statements
13
Statement of the Company’s Financial Position
31 December 2013
2013 2012
Notes £’000 £’000
ASSETS
NON-CURRENT ASSETS
Investments 9 – –
––––––––– –––––––––
– –
––––––––– –––––––––
CURRENT ASSETS
Trade and other receivables 10 185 163
Cash and cash equivalents 11 2,134 3,767
––––––––– –––––––––
2,319 3,930
––––––––– –––––––––
TOTAL ASSETS 2,319 3,930
––––––––– –––––––––
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital 12 18,289 18,289
Share premium 11,022 11,022
Retained earnings (deficit) (27,251) (25,792)
––––––––– –––––––––
TOTAL EQUITY 2,060 3,519
––––––––– –––––––––
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 13 259 411
––––––––– –––––––––
TOTAL LIABILITIES 259 411
––––––––– –––––––––
TOTAL EQUITY AND LIABILITIES 2,319 3,930
––––––––– –––––––––
The financial statements were approved by the Board of Directors on 27 June 2014 and were signed on its
behalf by:
James Normand
Finance Director
The notes form part of these financial statements
14
Statement of Changes in Equity
For the Year Ended 31 December 2013
Called up Profit
share and loss Share Total
capital account premium equity
£’000 £’000 £’000 £’000
Group
Balance at 1 January 2012 18,289 (21,343) 11,022 7,968
Changes in equity
Total comprehensive loss – (4,318) – (4,318)
———— ———— ———— ————
Balance at 31 December 2012 18,289 (25,661) 11,022 3,650
Changes in equity
Total comprehensive loss – (1,459) – (1,459)
———— ———— ———— ————
Balance at 31 December 2013 18,289 (27,120) 11,022 2,191
———— ———— ———— ————
Company
Balance at 1 January 2012 18,289 (21,474) 11,022 7,837
Changes in equity
Total comprehensive loss – (4,318) – (4,318)
———— ———— ———— ————
Balance at 31 December 2012 18,289 (25,792) 11,022 3,519
Changes in equity
Total comprehensive loss – (1,459) – (1,459)
———— ———— ———— ————
Balance at 31 December 2013 18,289 (27,251) 11,022 2,060
———— ———— ———— ————
The notes form part of these financial statements
15
Statement of Cash Flows – Group and Company
For the Year Ended 31 December 2013
2013 2012
£’000 £’000
Cash flows from operating activities
Loss before income tax (1,459) (4,318)
Finance income (21) (106)
––––––––– –––––––––
(1,480) (4,424)
Increase in trade and other receivables (22) (129)
Decrease in trade and other payables (152) (257)
––––––––– –––––––––
Net cash from operating activities (1,654) (4,810)
––––––––– –––––––––
Cash flows from investing activities
Interest received 21 106
––––––––– –––––––––
Net cash from investing activities 21 106
––––––––– –––––––––
Decrease in cash and cash equivalents (1,633) (4,704)
Cash and cash equivalents at beginning of the year 3,767 8,471
––––––––– –––––––––
Cash and cash equivalents at end of the year 2,134 3,767
––––––––– –––––––––
The notes form part of these financial statements
16
Notes to the Financial Statements
For the Year Ended 31 December 2013
1. GENERAL INFORMATION
The company is a public limited company listed on the AIM market of the London Stock Exchange and is
incorporated and domiciled in the UK. The address of its registered office is 60 Lombard Street, London
EC3V 9EA.
The financial statements of Pathfinder Minerals Plc for the year ended 31 December 2013 were authorised
for issue by the Board on 27 June 2014 and the statement of consolidated financial position signed on the
Board’s behalf by James Normand.
2. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting
Standards and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. The financial statements have been prepared under the historical cost
convention and are presented in the functional currency in £’000.
Although the Company’s direct subsidiary, IM Minerals Limited, itself holds the whole of the issued share
capital of Companhia Mineira de Naburi SARL, which in turn holds the whole of the issued share capital of
Sociedade Geral de Mineracao de Moçambique SARL, events in 2011 indicated that the Company does not
control either of these sub-subsidiaries. Neither has it been possible to obtain audited accounts for them.
Accordingly these financial statements consolidate the financial statements of IM Minerals Limited only.
IM Minerals Limited is a dormant intermediate holding company.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and other short term highly liquid deposits with
original maturities of three months or less.
Share capital
Ordinary shares of the company are classified as equity.
New standards and interpretations not yet adopted
The adoption of new standards, where relevant, has had no impact on the reported results nor on the financial
position of the company.
Critical accounting estimates and judgements
The preparation of financial information in accordance with generally accepted accounting practice, in the
case of the Group using International Financial Reporting Standards as adopted by the European Union,
requires the directors to make estimates and judgements that affect the reported amount of assets, liabilities,
income and expenditure and the disclosures made in the financial statements. Such estimates and judgements
must be continually evaluated based on historical experience and other factors, including expectations of
future events.
Details of accounting estimates and judgements that have the most significant effect on the amounts
recognised in the financial statements have been disclosed under the relevant note or accounting policy for
each area where disclosure is required.
3. SEGMENTAL REPORTING
The Group has one activity only. Of the Group’s administrative expenses, £409,000 (2012 – £395,000) was
spent in Mozambique. The whole of the value of the Group’s and the Company’s net assets in their respective
financial statements at 31 December 2013 and 2012 was attributable to UK assets and liabilities.
17
Notes to the Financial Statements – continued
For the Year Ended 31 December 2013
4. EMPLOYEES AND DIRECTORS
There were no employees, other than the directors.
The following table sets out and analyses the remuneration of directors for the years ended 31 December
2013 and 2012 in £s:
Contributions
Benefits Total to pension Total emoluments
Fees Salaries in kind emoluments schemes 2013 2012
£ £ £ £ £ £ £
John McKeon 48,000 – – 48,000 – 48,000 48,000
Nicholas Trew – 150,000 5,880 155,880 15,000 170,880 170,863
James Normand – 120,000 4,626 124,626 12,000 136,626 136,497
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
48,000 270,000 10,506 328,506 27,000 355,506 355,360
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
5. OPERATING LOSS
2013 2012
£’000 £’000
The loss before income tax is stated after charging:
Auditors’ remuneration 10 12
Directors’ remuneration 355 355
Litigation costs 1,304 3,203
and after crediting:
Recovery of VAT relating to earlier years 762 –
––––––– –––––––
Any recovery of litigation expenditure resulting from the Court costs awards
in the Company’s favour will be recognised in the accounts when received.
6. NET FINANCE INCOME
Interest on bank deposits 21 106
––––––– –––––––
7. INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose on ordinary activities for the year
ended 31 December 2013 nor for the year ended 31 December 2012.
Factors affecting the tax expense
The tax assessed for the year is higher than the standard rate of corporation
tax in the UK. The difference is explained below:
Loss on ordinary activities before income tax (1,459) (4,318)
––––––– –––––––
Loss on ordinary activities multiplied by the standard rate of corporation tax
in the UK of 23.25% (2012 – 24.5%) (339) (1,058)
Effects of:
Unrelieved tax losses carried forward 339 1,058
––––––– –––––––
Tax expense – –
––––––– –––––––
18
Notes to the Financial Statements – continued
For the Year Ended 31 December 2013
8. LOSS PER SHARE
Basic loss per share is calculated, as set out in the tables below, by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
A diluted loss per share has not been calculated as the effect of the exercise of outstanding warrants and
options would be anti-dilutive.
Weighted
average Per share
Earnings number amount
£’000 of shares – pence
2013
Basic earnings per share
Earnings attributable to ordinary shareholders (1,459) 1,037,167,230 (0.1)
———— ——–––—— ————
2012
Basic earnings per share
Earnings attributable to ordinary shareholders (4,318) 1,037,167,230 (0.4)
———— ——–––—— ————
9. SUBSIDIARIES
Shares in
group
undertakings
£’000
COST
At 1 January 2013 and 31 December 2013 34,806
––––––––
PROVISIONS
At 1 January 2013 and 31 December 2013 34,806
––––––––
NET BOOK VALUE
At 1 January 2013 and 31 December 2013 –
––––––––
The Company’s subsidiaries, each of which is wholly-owned, are: Incorporated in:
IM Minerals Limited England and Wales
Companhia Mineira de Naburi SARL Mozambique
Sociedade Geral de Mineracao de Moçambique SARL Mozambique
IM Minerals Limited held the shares in Companhia Mineira de Naburi SARL which held titanium dioxide
mining concessions in the Republic of Mozambique. In November 2011 the original vendors of IM
Minerals’ subsidiary, Companhia Mineira de Naburi SARL (“CMdN”), advised the Company that they had
procured the cancellation of IM Minerals’ shares in CMdN and the transfer of its assets (the mining licences)
to another company controlled by them. Whilst the Company is taking legal and other action in order to
recover the shares and the licences, the Company, in the interest of accounting prudence, made full provision
in the 2011 financial statements against the cost of its investment in IM Minerals.
19
Notes to the Financial Statements – continued
For the Year Ended 31 December 2013
10. TRADE AND OTHER RECEIVABLES
2013
2012
Group Company Group Company
£’000 £’000 £’000 £’000
VAT recoverable 27 27 – –
Other debtors and prepaid expenses 158 158 163 163
––––––––– ––––––––– ––––––––– –––––––––
185 185 163 163
––––––––– ––––––––– ––––––––– –––––––––
11. CASH AND CASH EQUIVALENTS
Group Company Group Company
£’000 £’000 £’000 £’000
Bank balances 2,134 2,134 3,767 3,767
––––––––– ––––––––– ––––––––– –––––––––
2013
2012
12. CALLED UP SHARE CAPITAL
Allotted, issued and fully paid: 2013 2012
Number Class £’000 £’000
1,037,167,230 Ordinary shares of 1 penny each 10,372 10,372
79,971,393 Deferred shares of 9.9 pence each 7,917 7,917
––––––––– –––––––––
18,289 18,289
––––––––– –––––––––
13. TRADE AND OTHER PAYABLES
2013
2012
Group Company Group Company
£’000 £’000 £’000 £’000
Trade creditors 2 2 233 233
Amount owing to subsidiary – 131 – 131
Other creditors 33 33 19 19
Accrued expenditure 93 93 28 28
——–—— ——–—— ——–—— ——–——
128 259 280 411
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Notes to the Financial Statements – continued
For the Year Ended 31 December 2013
14. SHARE OPTIONS AND WARRANTS
No share options or warrants have been awarded or exercised, nor have any expired, during the year.
Unexercised share options and warrants at the beginning and end of the year, all of which are currently
capable of being exercised, were held as follows:
Share options and warrants
Number of shares
the subject of Exercise price
options and warrants per share exercise price
Directors
John McKeon 36,000,000 10p 26 July 2016
Nicholas Trew 36,000,000 10p 26 July 2016
Latest
James Normand
Former directors and others
–––––––––
–––––––––
Total 122,000,000
16,000,000 4.75p 9 February 2021
{ 3,600,000 10p 26 July 2016
{ 6,000,000 4.75p 8 February 2016
24,400,000 10p 26 July 2016
At 23 June 2014 (the latest date before publication of these financial statements), the mid-market price of
the Company’s shares was 0.4 pence. The value of the options granted to directors and others, in connection
with the reverse takeover and the ongoing development of the company, has been considered in the context
of the requirements of IFRS 2; and in the opinion of the directors there is no material charge to be made to
the income statement. There have been no changes to the numbers of unexercised warrants and share options
since 31 December 2013.
15. RELATED PARTY DISCLOSURES
Directors were reimbursed sums totalling £nil (2012 – £4,342) for personal expenditure incurred on
Company business.
Details of directors’ remuneration are given in note 4 above.
16. CONTINGENT LIABILITIES
As part of the agreement for the purchase of the shares in its subsidiary, Companhia Mineira de Naburi
SARL (“CMdN”), the Company’s subsidiary, IM Minerals Limited, agreed to pay the vendors a further sum
of $9,900,000 if, following further exploration and appraisal, an agreement is reached for the construction
of a facility for the processing of ore extracted from the Naburi mineral sands deposit. This sum has since
been reduced by advances of £90,083, made by IM Minerals Limited, and £75,933, made by the Company,
to one of the vendors, Mr Diogo Cavaco.
Similarly, as part of its agreement for the purchase of the whole of the issued share capital of Sociedade
Geral de Mineracao de Moçambique SARL, CMdN has agreed to pay the vendors, BHP Billiton, a further
sum of $9,500,000 if, following further exploration and appraisal, an agreement is reached for the
construction of a facility for the processing of ore extracted from the Moebase mineral sands deposit. This
obligation is guaranteed by IM Minerals Limited.
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sterling 163786