Group Directors and Strategic Report and
Consolidated Financial Statements for the Year Ended 31 December 2015
for
PATHFINDER MINERALS PLC
PATHFINDER MINERALS PLC
Contents of the Consolidated Financial Statements
for the Year Ended 31 December 2015
Company Information
Chairman’s Statement
Directors and Strategic Report
Report of the Independent Auditors
Consolidated Statement of Profit or Loss
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Statements of Cash Flows
Notes to the Consolidated Financial Statements
Page
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2
5
8
10
11
12
13
14
15
16
17
18
19
PATHFINDER MINERALS PLC
Company Information
for the Year Ended 31 December 2015
DIRECTORS:
SECRETARY:
REGISTERED OFFICE:
Sir H C Bellingham
N S Trew
R P Easby
R P Easby
Becket House
36 Old Jewry
London
EC2R 8DD
REGISTERED NUMBER:
02578942 (England and Wales)
SENIOR STATUTORY AUDITOR:
Keith Fulton
INDEPENDENT AUDITORS:
SOLICITORS:
NOMINATED ADVISOR:
REGISTRARS:
BANKERS:
Chapman Davis LLP
2 Chapel Court
London
SE1 1HH
Travers Smith LLP
10 Snow Hill
London
EC1A 2AL
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Capita Assets Services
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Royal Bank of Scotland
1 Dale Street
Liverpool
L2 2PP
Page 1
PATHFINDER MINERALS PLC
Chairman’s Statement
for the Year Ended 31 December 2015
INTRODUCTION
The process to regain control of Pathfinder's mining licences in Mozambique is ongoing. It is every bit as lengthy as the
board has in the past advised it might be. It is, however, no less likely to deliver a successful outcome. Some important
developments have occurred both within the year under review and since then.
STEPS TO RECOVER THE COMPANY'S ASSETS
There remain two principal strategies through which we are aiming to recover the mining concessions, which were
transferred away from the Company in late 2011, into the control of our former local partners.
The first is via the legal process which the Company is pursuing in Mozambique. Having successfully sought declarations
from the English High Court in 2012 that Pathfinder's ownership of its licence-holding subsidiary in Mozambique ("CMDN")
was valid; and that the agreements by which Pathfinder acquired its shares in that subsidiary were executed under English
Law, we were able to take to Mozambique an iron clad ruling.
Thereafter began the process to have the English court's ruling recognised in Mozambique via its Supreme Court. We
continue to await a decision from the Supreme Court and I am afraid neither the board nor its legal advisers has been
afforded any visibility on when we might expect such a decision. There was, however, an important development during
2015 which may favourably impact the outcome.
In late 2014, the Supreme Court refused the Company's first application for recognition of orders by the English court for a
small amount of costs to be paid by Jacinto Veloso, Diogo Cavaco and JV Consultores Internacionais Limitada (the
"Defendants"). In September 2015 the Supreme Court rejected Pathfinder's application for permission to appeal its earlier
decision. While on the surface that might seem to bode unfavourably for the more important pending application for
recognition of the English court's substantive ruling referred to above, the Supreme Court's admission of a key argument in
the appeal application may have positive implications in that respect.
This optimism arises from the second avenue of appeal pursued by the Company, which is called a 'harmonisation of laws'
appeal. It is an appeal based on the existence of a previous conflicting decision. In Pathfinder's case the Supreme Court
refused to recognise the judgments in question because it found that the customary clauses conferring jurisdiction on the
English Courts (which were contained in the underlying agreements through which the Company acquired CMDN) did not
satisfy the requirements of Mozambique law.
However, in a previous unrelated decision, the Supreme Court had agreed to recognise a foreign judgment where the
jurisdiction of the foreign court was derived from a clause similar to that in the Pathfinder agreements. The Supreme Court
therefore admitted Pathfinder's 'harmonisation of laws' appeal.
Unfortunately, as a matter of Mozambique law, a successful appeal on this point does not affect the underlying decision not
to recognise the relevant costs orders in this case. Its effect will be only to clarify the law going forward – which is a more
important outcome for Pathfinder than the application for recognition of the order for a relatively small amount of costs.
It is impossible to predict what the outcome will be from the Supreme Court and, whatever it is, the Company may still seek
to recover its assets or seek compensation for its loss through other judicial processes.
There remain several other legal proceedings ongoing in the commercial court in Maputo, each of which relates to the same
issue of the Company's ownership and control of CMDN, on which the English High Court has already ruled. It is not known
when judgment on those proceedings will be received and, whatever their outcome, it is likely that appeals will follow.
Page 2
PATHFINDER MINERALS PLC
Chairman’s Statement
for the Year Ended 31 December 2015
REVIEW OF BUSINESS
While the laborious legal process continues, it is of course not the only strategy through which the company is pursuing a
resolution. The second strategy relies on the Company's ongoing dialogue with the Mozambique Government regarding the
defective process by which Pathfinder's licences were transferred away from its control in 2011 and into the control of the
Defendants using a company named 'Pathfinder Moçambique, S.A.' but in no way associated with Pathfinder Minerals.
We have in recent months made a good deal of progress and, while any talks with the Mozambique Government are
sensitive in nature, I am heartened by the apparent understanding of the events which have occurred now being
demonstrated by senior members within the Government and I am optimistic that, while there can be no certainty of a
successful outcome, we are on the right track to a resolution.
To this end, we appointed last month Eduardo C. Mondlane Jr as our regional representative in Mozambique.
Eduardo has been providing strategic advisory services in Africa for 30 years across industries including aerospace,
infrastructure, energy, power and financial services. In the immediate term, Eduardo is assisting the Company in the
previously mentioned ongoing dialogue with the Mozambique Government. In the longer term, should Pathfinder be
successful in regaining control of the mining licences, we envisage Eduardo having an integral role with the Company,
assisting in the management of our local operating subsidiaries and with our relationships with regional and national
authorities and with local communities. In the event Pathfinder is successful in regaining control of its licences, the Company
has agreed to issue Eduardo shares equivalent to up to 25 per cent of the enlarged issued share capital of Pathfinder.
CORPORATE EVENTS
At the last Annual General Meeting, the Company's shareholders approved a share capital reorganisation which took effect
the following day. The consequence was that every 10 'old' shares were exchanged for 1 'new' share in a manner which did
not itself impact the market value of individual holdings.
The capital reorganisation later facilitated the raising, through two share issues, of much needed funds to continue the
process to recover the Company's assets. On 17 March 2016 the Company announced that it had raised £200,000 via a
subscription for new shares and, on 31 March 2016, investor demand through the PrimaryBid crowdfunding platform, led
to the announcement of a further £100,000 being raised, also via a subscription for new shares. One third of the total funds
raised in March were contributed by the Company's chief executive, Nick Trew. I should like to place on record my
admiration for his determination, in doing so, to see a positive outcome for all shareholders; there is no better
demonstration of the belief the board has that Pathfinder will ultimately be successful in restoring control of its assets.
A number of changes to the composition of the board occurred both during 2015 and after. In October 2015, John McKeon
stepped down as a non-executive director of the Company to devote more time to his other business interests. As an early
investor in Pathfinder, John was instrumental in creating the valuable opportunity of which the Company was subsequently
deprived. We continue to strive to deliver for him, and all shareholders, a positive outcome following the appalling actions
of the individuals who have taken the Company's assets unlawfully for personal gain.
Post year-end, on 10 March 2016, James Normand resigned from the board as Finance Director and, on 29 March 2016, we
welcomed Robert Easby as his replacement. Robert qualified as a Chartered Accountant in 2000 and spent his early career
in audit compliance and as a Company Law specialist within a large regional Chartered Certified Accountancy practice.
On 22 June 2016, Pathfinder announced that it had been successful in obtaining final charging orders from the English High
Court against the aggregate 19,824,000 shares held in Pathfinder by Jacinto Veloso’s company and Diogo Cavaco (the
“Defendants”). The English High Court has previously ordered the Defendants to pay £1.1 million worth of costs to
Pathfinder in respect of the 2012 English proceedings but the Defendants have not complied with any of the costs orders.
The effect of the charging orders is to charge their shares in the Company with payment of the amount of the costs orders
plus interest, currently totalling in excess of £1.4 million.
Page 3
PATHFINDER MINERALS PLC
Chairman’s Statement
for the Year Ended 31 December 2015
FINANCIAL RESULTS AND CURRENT FINANCIAL POSITION
The most important financial measurement continues to be whether Pathfinder has sufficient cash to see through its
strategy to recover its assets. The board has taken a number of definitive actions, both during the year under review and
since, to reduce the central overhead of the Company to enhance its ability to continue pursuing its recovery strategy.
During 2015 the board reduced from four members to three; the Company has foregone a physical head office; all salaries
have been materially reduced; and the Company continues to exercise prudence with expenditure.
As detailed in last year's Annual Report, in April 2015 the Company received a claim for the return of all the VAT recovered
by the Company since HMRC accepted the Company's VAT registration in October 2013. Professional advice on the claim
obtained by the board was that the claim had been based on incorrect assumptions about the Company's business plan and
consequently was flawed. The Company challenged the claim and, on 17 December 2015, Pathfinder announced the
welcome news that HMRC had rescinded its decision to cancel the Company's VAT registration and to demand the
repayment of refunded VAT and interest; and that HMRC would refund the Company's VAT repayment claims that had been
suspended since December 2014.
The financial statements of the Pathfinder Group for 2015 follow later in this report. The Income Statement shows a loss of
£1.1 million (2014 - £1.1 million). Since the Company has been prevented from conducting any activity relating to mining,
the large majority 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 2015 of £42,000 (31 December 2014 - £1.1
million). The assets are held largely in the form of cash deposits (totalling £80,000 at the end of the period).
The Company's cash resources were bolstered post year-end by the £295,500 of net proceeds received from the March
2016 subscriptions. The proceeds of the subscriptions have provided the Company with the ability to continue pursuing the
recovery of the licences, while seeking other sources of funding.
OUTLOOK
While there can be no certainty of a successful outcome, the board believes that its ongoing dialogue with the Mozambique
Government will ultimately deliver a positive resolution for shareholders. We are at the same time continuing to pursue our
legal strategy vigorously in the event that we should need to rely upon it to resolve the matters or provide compensation
for the Company's loss. I remain extremely grateful for the support that shareholders have shown in the wake of the deeply
unpalatable actions of the Defendants, and, while the process may yet be lengthy, I hope to be able to provide positive news
in due course.
..........................................................................
Sir Henry Bellingham - Chairman
Date: 27 June 2016
Page 4
PATHFINDER MINERALS PLC
Directors and Strategic Report
for the Year Ended 31 December 2015
The directors present their report with the financial statements of the company and the group for the year ended
31 December 2015.
RESULTS AND DIVIDENDS
No dividends will be distributed for the year ended 31 December 2015.
An overview of the group results is presented in the Chairman's Statement.
EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is given in the notes to the financial statements.
DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2015 to the date of this report.
Sir H C Bellingham
N S Trew
Other changes in directors holding office are as follows:
J P McKeon - resigned 7 October 2015
R P Easby was appointed as a director after 31 December 2015 but prior to the date of this report.
J P Normand ceased to be a director after 31 December 2015 but prior to the date of this report.
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 DONATIONS AND EXPENDITURE
No charitable or political contributions were made during the current or previous year.
Page 5
PATHFINDER MINERALS PLC
Directors and Strategic Report
for the Year Ended 31 December 2015
MAJOR SHAREHOLDERS
As at 27 June 2016 the following shareholders had notified the company of an interest of 3% or more of the Company's
ordinary share capital:
Shareholder name
Number of
0.1p
ordinary
shares
Shareholding
percentage
Nicholas Trew
J V Consultores Internacionais Limitada (a company controlled by Jacinto Veloso)*
JP Morgan Funds
Diogo Cavaco*
John McKeon
Paul Ellison and Gareth Roberts as Joint Administrators of Hill Street Investments
plc
John Clarke
Roger Clarke
YF Finance Limited
*subject to Court Order
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 17 days (2014: 20 days).
21,449,735
11,012,000
9,467,000
8,812,000
8,024,500
7,884,000
15.68%
8.05%
6.92%
6.44%
5.87%
5.76%
6,626,006
6,626,006
4,561,000
4.84%
4.84%
3.33%
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.
DISCLOSURE IN THE STRATEGIC REPORT
Strategic matters relating to the company throughout the reporting period are outlined in the Chairman's Statement.
Page 6
PATHFINDER MINERALS PLC
Directors and Strategic Report
for the Year Ended 31 December 2015
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 the group and of the profit or loss of
the group for that period. In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- state 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
and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and
the group 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 the group 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 group'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 group'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:
..........................................................................
N S Trew - Director
Date: 27 June 2016
Page 7
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 2015 on pages ten to
twenty nine. 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, and as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act 2006.
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 Statement of Directors' Responsibilities set out on page seven, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards
on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.
This includes an assessment of: whether the accounting policies are appropriate to the group's and the parent company's
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting
estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the
financial and non-financial information in the Directors and Strategic Report to identify material inconsistencies with the
audited financial statements and to identify any information that is apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent
material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements:
- give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2015 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;
-
the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
-
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors and Strategic Report for the financial year for which the financial
statements are prepared is consistent with the financial statements.
Page 8
Report of the Independent Auditors to the Members of
Pathfinder Minerals Plc
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 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.
Keith Fulton (Senior Statutory Auditor)
for and on behalf of Chapman Davis LLP
2 Chapel Court
London
SE1 1HH
Date: 27 June 2016
Page 9
PATHFINDER MINERALS PLC
Consolidated Statement of Profit or Loss
for the Year Ended 31 December 2015
CONTINUING OPERATIONS
Revenue
Other operating income
Administrative expenses
OPERATING LOSS
Finance income
LOSS BEFORE INCOME TAX
Income tax
LOSS FOR THE YEAR
Loss attributable to:
Owners of the parent
Loss per share expressed
in pence per share (restated for 2014):
Basic
Diluted
Notes
3
5
6
7
9
2015
£'000
-
3
(1,104)
(1,101)
8
(1,093)
-
(1,093)
(1,093)
(1.05)
(1.05)
2014
£'000
-
-
(1,070)
(1,070)
14
(1,056)
-
(1,056)
(1,056)
(1.02)
(1.02)
The notes form part of these financial statements
Page 10
PATHFINDER MINERALS PLC
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the Year Ended 31 December 2015
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR
2015
£'000
(1,093)
-
(1,093)
2014
£'000
(1,056)
-
(1,056)
Total comprehensive income attributable to:
Owners of the parent
(1,093)
(1,056)
The notes form part of these financial statements
Page 11
PATHFINDER MINERALS PLC (REGISTERED NUMBER: 02578942)
Consolidated Statement of Financial Position
31 December 2015
Notes
11
12
13
14
14
15
ASSETS
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital
Share premium
Retained earnings
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
2015
£'000
94
80
174
174
18,289
11,022
(29,269)
42
132
132
174
2014
£'000
61
1,172
1,233
1,233
18,289
11,022
(28,176)
1,135
98
98
1,233
The financial statements were approved by the Board of Directors on 27 June 2016 and were signed on its behalf by:
..........................................................................
R P Easby - Director
The notes form part of these financial statements
Page 12
PATHFINDER MINERALS PLC (REGISTERED NUMBER: 02578942)
Company Statement of Financial Position
31 December 2015
Notes
11
12
13
14
14
15
ASSETS
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital
Share premium
Retained earnings
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
2015
£'000
94
80
174
174
18,289
11,022
(29,269)
42
132
132
174
2014
£'000
61
1,172
1,233
1,233
18,289
11,022
(28,307)
1,004
229
229
1,233
The financial statements were approved by the Board of Directors on 27 June 2016 and were signed on its behalf by:
..........................................................................
R P Easby - Director
The notes form part of these financial statements
Page 13
PATHFINDER MINERALS PLC
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2015
Called up
share
capital
£'000
Retained
earnings
£'000
Share
premium
£'000
Total
equity
£'000
Balance at 1 January 2014
18,289
(27,120)
11,022
2,191
Changes in equity
Total comprehensive income
-
(1,056)
-
(1,056)
Balance at 31 December 2014
18,289
(28,176)
11,022
1,135
Changes in equity
Total comprehensive income
-
(1,093)
-
(1,093)
Balance at 31 December 2015
18,289
(29,269)
11,022
42
The notes form part of these financial statements
Page 14
PATHFINDER MINERALS PLC
Company Statement of Changes in Equity
for the Year Ended 31 December 2015
Called up
share
capital
£'000
Retained
earnings
£'000
Share
premium
£'000
Total
equity
£'000
Balance at 1 January 2014
18,289
(27,251)
11,022
2,060
Changes in equity
Total comprehensive income
-
(1,056)
-
(1,056)
Balance at 31 December 2014
18,289
(28,307)
11,022
1,004
Changes in equity
Total comprehensive income
-
(962)
-
Balance at 31 December 2015
18,289
(29,269)
11,022
(962)
42
The notes form part of these financial statements
Page 15
PATHFINDER MINERALS PLC
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2015
Cash flows from operating activities
Cash generated from operations
Net cash from operating activities
Notes
1
Cash flows from investing activities
Interest received
Net cash from investing activities
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of
year
2
Cash and cash equivalents at end of year
2
2015
£'000
(1,100)
(1,100)
8
8
(1,092)
1,172
80
2014
£'000
(976)
(976)
14
14
(962)
2,134
1,172
The notes form part of these financial statements
Page 16
PATHFINDER MINERALS PLC
Company Statement of Cash Flows
for the Year Ended 31 December 2015
Cash flows from operating activities
Cash generated from operations
Net cash from operating activities
Notes
1
Cash flows from investing activities
Interest received
Net cash from investing activities
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of
year
2
Cash and cash equivalents at end of year
2
2015
£'000
(1,100)
(1,100)
8
8
(1,092)
1,172
80
2014
£'000
(976)
(976)
14
14
(962)
2,134
1,172
The notes form part of these financial statements
Page 17
PATHFINDER MINERALS PLC
Notes to the Statements of Cash Flows
for the Year Ended 31 December 2015
1.
RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
Group
Loss before income tax
Finance income
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
2015
£'000
(1,093)
(8)
(1,101)
(33)
34
2014
£'000
(1,056)
(14)
(1,070)
124
(30)
Cash generated from operations
(1,100)
(976)
Company
Loss before income tax
Finance income
(Increase)/decrease in trade and other receivables
Decrease in trade and other payables
2015
£'000
(962)
(8)
(970)
(33)
(97)
2014
£'000
(1,056)
(14)
(1,070)
124
(30)
Cash generated from operations
(1,100)
(976)
2.
CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statements of Cash Flows in respect of cash and cash equivalents are in respect of
these Statement of Financial Position amounts:
Year ended 31 December 2015
Cash and cash equivalents
Year ended 31 December 2014
Cash and cash equivalents
Group
Company
31.12.15
£'000
80
31.12.14
£'000
1,172
1.1.15
£'000
1,172
1.1.14
£'000
2,134
31.12.15
£'000
80
31.12.14
£'000
1,172
1.1.15
£'000
1,172
1.1.14
£'000
2,134
The notes form part of these financial statements
Page 18
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2015
1.
GENERAL INFORMATION
Pathfinder Minerals Plc is a public limited company whose ordinary shares are listed on the Alternative Investment
Market of the London Stock Exchange; and is incorporated and domiciled in the UK. The address of its registered
office is Becket House, 36 Old Jewry, London EC2R 8DD.
The financial statements of Pathfinder Minerals PLC for the year ended 31 December 2015 were authorised for issue
by the Board on 27 June 2016 and the statement of consolidated financial position signed on the Board's behalf by
Robert Easby.
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.
As a result of the funding activities undertaken since the year end, the Company has improved its short-term liquidity
position. The Board have reviewed the Company's cash requirements for the next 12 months and,
after taking account of reasonably possible changes in both expenditure and equity investment, have concluded that
the Company should be able to operate within its current level of financing.
After making enquiries, the directors have a reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future. The Company therefore continues to adopt the going
concern basis in preparing its financial statements.
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.
Taxation
Current taxes are based on the results shown in the financial statements and are calculated according to local tax
rules, using tax rates enacted or substantially enacted by the statement of financial position date.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement
of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange
ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.
Employee benefit costs
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme
are charged to the income statement in the period to which they relate.
Page 19
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2015
2.
ACCOUNTING POLICIES - continued
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.
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, £188,000 (2014: £128,000) 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 2015 and 2014 was attributable to UK assets and liabilities.
4.
EMPLOYEES AND DIRECTORS
There were no employees, other than the directors.
The following tables set out and analyse the remuneration of directors for the years ended 31 December 2015 and
2014.
Year ended 31 December 2015:
Fees
£'000
-
37
-
-
Salary
£'000
48
-
150
120
Benefits
in kind
£'000
-
-
4
4
Total
emoluments
£'000
48
37
154
124
Contributions to
pension
schemes
£'000
-
-
15
12
Total
remuneration
2015
£'000
48
37
169
136
Henry Bellingham
John McKeon
Nicholas Trew
James Normand
37
318
8
363
27
390
Page 20
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2015
4.
EMPLOYEES AND DIRECTORS - continued
Year ended 31 December 2014:
Fees
£'000
-
48
-
-
Salary
£'000
44
-
150
120
Benefits
in kind
£'000
-
-
5
4
Total
emoluments
£'000
44
48
155
124
Contributions to
pension
schemes
£'000
-
-
15
12
Total
remuneration
2014
£'000
44
48
170
136
Henry Bellingham
John McKeon
Nicholas Trew
James Normand
48
314
9
371
27
398
No share options were exercised by the directors, and no shares were received or receivable by any director in
respect of qualifying services under a long term incentive scheme.
5.
NET FINANCE INCOME
Finance income:
Deposit account interest
6.
LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging:
Auditors' remuneration
7.
INCOME TAX
2015
£'000
2014
£'000
8
14
2015
£'000
14
2014
£'000
10
Analysis of tax expense
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2015 nor for the year
ended 31 December 2014.
Page 21
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2015
7.
INCOME TAX - continued
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
2015
£'000
(1,093)
2014
£'000
(1,056)
Loss on ordinary activities multiplied by the standard rate of corporation tax
in the UK of 20% (2014 - 21.500%)
(219)
(227)
Effects of:
Unrelieved tax losses carried forward
Tax expense
8.
LOSS OF PARENT COMPANY
219
-
227
-
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not
presented as part of these financial statements. The parent company's loss for the financial year was £(962,202)
(2014 - £(1,056,185)).
9.
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.
Basic EPS
Earnings attributable to ordinary shareholders
Effect of dilutive securities
Diluted EPS
Adjusted earnings
2015
Weighted
average
number
of
shares
Per-share
amount
pence
Earnings
£'000
(1,093)
-
103,716,156
-
(1.05)
-
(1,093)
103,716,156
(1.05)
Page 22
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2015
9.
LOSS PER SHARE - continued
Basic EPS
Earnings attributable to ordinary shareholders
Effect of dilutive securities
Diluted EPS
Adjusted earnings
2014
Weighted
average
number
of
shares
Per-share
amount
pence
Earnings
£'000
(1,056)
-
103,716,000
-
(1.02)
-
(1,056)
103,716,000
(1.02)
The tables above present the number of shares in issue in 2015, and re-states the number of shares in issue in 2014,
following the capital re-organisation detailed in note 13.
10.
INVESTMENTS
Company
COST
At 1 January 2015
and 31 December 2015
PROVISIONS
At 1 January 2015
and 31 December 2015
NET BOOK VALUE
At 31 December 2015
At 31 December 2014
Shares in
group
undertakings
£'000
34,806
34,806
-
-
Page 23
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2015
10.
INVESTMENTS - continued
Company
The group or the company's investments at the Statement of Financial Position date in the share capital of
companies include the following:
Subsidiaries
IM Minerals Limited
Nature of business: Holding company
Class of shares:
Ordinary
Companhia Mineira de Naburi SARL
Country of incorporation: Mozambique
Nature of business: Mining
Class of shares:
Ordinary
Sociedade Geral de Mineracao de Moçambique SARL
Country of incorporation: Mozambique
Nature of business: Dormant
Class of shares:
Ordinary
%
holding
100.00
%
holding
100.00
%
holding
100.00
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.
11.
TRADE AND OTHER RECEIVABLES
Current:
Other debtors
VAT
Prepayments and accrued income
Group
2015
£'000
2014
£'000
Company
2015
£'000
2014
£'000
13
69
12
94
32
21
8
61
13
69
12
94
32
21
8
61
Page 24
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2015
12.
CASH AND CASH EQUIVALENTS
Bank accounts
13.
CALLED UP SHARE CAPITAL
Allotted, issued and fully paid:
Number:
Class:
103,716,723
183,688,116
Ordinary
Deferred
Group
Company
2015
£'000
80
2014
£'000
1,172
2015
£'000
80
2014
£'000
1,172
Nominal
value:
0.1p
9.9p
2015
£'000
104
18,185
2014
£'000
10,372
7,917
18,289
18,289
723 Ordinary shares of 0.1p each were allotted and fully paid for cash at par during the year.
The number of allotted, issued and fully paid 1p shares in 2014 was 1,037,167,230.
During the year, the company reorganised its share capital as follows:
Each existing ordinary share was sub-divided into one divided ordinary share of 0.01p and one deferred share of
0.99p. The divided ordinary shares were consolidated, on a 10,000 for 1 basis, into consolidated ordinary shares of
£1.00 each. Shareholders with a holding in excess of 10,000 existing ordinary shares, but which is not exactly divisible
by 10,000, had their holding of consolidated ordinary shares rounded down to the nearest whole number of
consolidated ordinary shares. The consolidated ordinary shares were then divided, on a 1 for 1,000 basis, into new
ordinary shares of 0.1p each. The rights attaching to the new ordinary shares are the same as those attaching to the
existing ordinary shares including, without limitation, the same voting and dividend rights.
Every 10 resulting deferred shares of 0.99p held by a Shareholder was then consolidated into 1 deferred share of
9.9p. This consolidation brought the nominal value of the deferred shares back into line with that of the deferred
shares already in issue.
The Directors determined that any divided ordinary shares held by shareholders as a result of the above sub-division
that were not a multiple of 10,000 be aggregated and sold in the market, free of commission. The proceeds of such
sales were paid to each shareholder in proportion to the fractional entitlements to which such shareholder would
otherwise have been entitled. However, where the proceeds of the fractional entitlement was less than £10, the
proceeds were retained for the benefit of the Company, in accordance with Article 73.3 of the Company’s Articles.
The value of this benefit was £2,506.
Furthermore, the Directors determined that any deferred shares of 0.99p each held by shareholders as a result of
the above sub-division that were not a multiple of 10 would (in accordance with article 73 of the Company’s Articles)
be aggregated and transferred to the Company’s registrars and held by them until such time as the Company buys
in the deferred shares, as the costs of selling such shares, producing cheques and posting the same to shareholders
would exceed the actual value to shareholders of any resulting fractions.
Page 25
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2015
14.
RESERVES
Group
At 1 January 2015
Deficit for the year
At 31 December 2015
At 1 January 2014
Deficit for the year
At 31 December 2014
Company
At 1 January 2015
Deficit for the year
At 31 December 2015
At 1 January 2014
Deficit for the year
At 31 December 2014
Retained
earnings
£'000
(28,176)
(1,093)
Share
premium
£'000
11,022
Totals
£'000
(17,154)
(1,093)
(29,269)
11,022
(18,247)
Retained
earnings
£'000
(27,120)
(1,056)
Share
premium
£'000
11,022
Totals
£'000
(16,098)
(1,056)
(28,176)
11,022
(17,154)
Retained
earnings
£'000
(28,307)
(962)
Share
premium
£'000
11,022
Totals
£'000
(17,285)
(962)
(29,269)
11,022
(18,247)
Retained
earnings
£'000
(27,251)
(1,056)
Share
premium
£'000
11,022
Totals
£'000
(16,229)
(1,056)
(28,307)
11,022
(17,285)
Page 26
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2015
15.
TRADE AND OTHER PAYABLES
Current:
Trade creditors
Amounts owed to group undertakings
Social security and other taxes
Other creditors
Accruals and deferred income
Group
2015
£'000
2014
£'000
Company
2015
£'000
2014
£'000
35
-
11
65
21
132
13
-
13
14
58
98
35
-
11
65
21
132
13
131
13
14
58
229
During the year, IM Minerals Limited, a subsidiary of the company, waived a loan payable by the company totalling
£131,000.
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.
Page 27
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2015
17.
RELATED PARTY DISCLOSURES
During the year, N S Trew was reimbursed sums totalling £4,249 (2014: £15,695) for expenditure personally made
on company business.
At the balance sheet date J P McKeon, a former director, owed the company £8,924.
In order to ease the pressure on the company's cash resources, the following directors deferred payment of their
contracted salaries or fees and, where applicable, pension contributions. The amounts deferred, and included in
other creditors, were as follows:
Director
N S Trew
J P Normand
H C Bellingham
J P McKeon
Salary/fees
deferred
Pension
contributions
deferred
18,750
15,000
6,000
1,500
3,750
-
-
-
These amounts will be made good when it is safe and reasonable for the company to do so, but no fixed date for
repayment has been set.
Details of directors' remuneration are given in note 4 above.
18.
EVENTS AFTER THE REPORTING PERIOD
As explained in the Chairman's Statement, the company appointed Eduardo C. Mondlane Jr as its' regional
representative in Mozambique. In the immediate term Mr Mondlane Jr will assist the Company in its ongoing
dialogue with the Mozambique Government to restore control of the areas previously licensed to the Company
under mining concessions 760C and 4623C (the "Licences") following their appropriation in 2011 by Jacinto Veloso
and Diogo Cavaco.
In the event that Pathfinder is successful in regaining control of the Licences, the Company has agreed to issue
ordinary shares to Mr Mondlane Jr equivalent to up to 25 per cent of the enlarged issued share capital of Pathfinder.
In such circumstances, it is envisaged that the Mr Mondlane Jr will assist with the ongoing administration of
Pathfinder's local operating subsidiaries and with the Company's relationships with regional and national authorities
and with local communities.
Following the end of the year the company has raised £300,000 via a subscription for new shares.
Page 28
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2015
19.
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:
Directors
J P McKeon
N S Trew
J P Normand
J P Normand
Former directors and others
Former directors and others
Number of shares the
subject of options or
warrants (adjusted
following share
reorganisation)
3,600,000
3,600,000
1,600,000
360,000
2,440,000
600,000
12,200,000
Exercise price
per share
Latest exercise date
100p
100p
47.5p
100p
100p
47.5p
26 July 2016
26 July 2016
9 February 2021
26 July 2016
26 July 2016
8 February 2016
At 27 June 2016 (the latest date before publication of these financial statements), the mid-market price of the
Company's shares was 0.78 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. The 600,000 shares subject to the latest exercise date of 8 February 2016 remained unexercised at that
date and have therefore been cancelled. There have been no other changes to the numbers of unexercised warrants
and share options since 31 December 2015.
As detailed in note 18, the company is contractually obliged to issue Eduardo Mondlane Jr ordinary shares equivalent
to 25 per cent of the enlarged issued share capital of the company if certain conditions are met.
Page 29