Group Directors and Strategic Report and
Consolidated Financial Statements for the Year Ended 31 December 2016
for
PATHFINDER MINERALS PLC
PATHFINDER MINERALS PLC
Contents of the Consolidated Financial Statements
for the Year Ended 31 December 2016
Company Information
Chairman’s Statement
Directors and Strategic Report
Report of the Independent Auditors
Consolidated Income Statement
Consolidated Statement of 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
1
2
4
7
9
10
11
12
13
14
15
16
17
18
PATHFINDER MINERALS PLC
Company Information
for the Year Ended 31 December 2016
DIRECTORS:
Sir H C Bellingham
R P Easby
N S Trew
SECRETARY:
R P Easby
REGISTERED OFFICE:
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 2016
INTRODUCTION
The primary activity of Pathfinder remains that of seeking to regain control of the valuable heavy mineral sands
licences in Mozambique which were transferred in 2011, without Pathfinder's knowledge or consent, to the
Company's former local partners. Another important activity during the year under review was the shoring up of the
Company's balance sheet to enable it to continue its strategy to recover the licences.
STEPS TO RECOVER THE COMPANY'S ASSETS
While the English High Court determined in 2012 that, contrary to the defendants' assertions, Pathfinder does validly
own the subsidiary company from which the licences were unlawfully removed, the Supreme Court in Mozambique is
yet to recognise that decision - a step which the Company believes will likely have the effect of bringing to a successful
conclusion the various proceedings in the commercial court in Maputo surrounding the same issue on which the
English court has already ruled; and ultimately compel the Mozambique Government to restore control to Pathfinder
of the licensed areas.
That application for recognition by the Supreme Court remains pending. The Board continues to believe the prospects
of the English court decision being recognised in Mozambique are high, based on a precedent in Mozambique relating
to the formulation of jurisdiction clauses. The timing, however, remains entirely out of the Company's control. Some
shareholders have expressed frustration over recent months with the length of time the Supreme Court is taking to
opine on this issue. I assure you the Board shares their sentiment. I am afraid neither Pathfinder nor its legal counsel
has any visibility over when the Supreme Court will deliver judgment on this matter. The Supreme Court there is not
answerable to such schedules as might be adhered to in other judicial systems. There is nothing the Company can do
to speed up the process.
The only material update to have been received during 2016 in respect of the legal proceedings ongoing in the
commercial court in Maputo was announced on 8 April 2016. This announcement recorded the Maputo court's refusal
to hear a challenge brought by Pathfinder's subsidiary, IM Minerals Limited, to the validity of a shareholder resolution
of CMDN, purportedly passed in May 2009. Pathfinder applied to the Maputo court on 13 April 2016 to appeal this
defective decision, which is inconsistent with previous judgments in each of the Supreme Court, the English court and
the Maputo court. Permission to appeal was granted on 13 June 2016 and a decision is awaited.
It is important to note that we are not simply waiting for the Supreme Court or Maputo court to deliver its judgments.
Pathfinder is actively pursuing parallel strategies to bring about a resolution which does not rely on the courts.
To this end, on 6 May 2016, Pathfinder announced the appointment of Eduardo C. Mondlane Jr as its regional
representative in Mozambique. Mr Mondlane Jr is a highly respected Mozambican who has been providing strategic
advisory services in Africa for thirty years across industries including aerospace, infrastructure, energy, power and
financial services. He has advised companies including Boeing Commercial Airplanes, United Technologies, Siemens
and GE Capital Aviation. He has also served on the boards of Absa Group and Bank (Barclays Africa) and other Barclays
African subsidiary banks.
Mr Mondlane Jr, Pathfinder’s board and members of Pathfinder's legal counsel in Mozambique are actively engaged in
discussions with relevant departments within the Mozambique Government including regarding the current status of
the licensed areas which, at present, reside under the control of Pathfinder's former local partners. Furthermore,
through Mr Mondlane Jr, Pathfinder is engaged in constructive discussions with Jacinto Veloso, the Company’s lead
former local partner, in an attempt to bring about a resolution without further reliance on the judicial processes. At
this point, there are no material developments and no certainty of a resolution outside of the courts; however, the
board continues to push for a breakthrough.
Page 2
PATHFINDER MINERALS PLC
Chairman’s Statement
for the Year Ended 31 December 2016
FINANCIAL RESULTS AND CURRENT FINANCIAL POSITION
Good progress was made during 2016 to shore up the Company's balance sheet to enable us to continue our strategy
to recover our assets. Gross proceeds of approximately £700,000 were raised through the issue of new shares to
investors (including the chief executive) both during 2016 and earlier this year; and net proceeds of approximately a
further £161,000 were raised through sale of all the shares previously owned by Pathfinder's former local partners
(the defendants in the English court legal proceedings) following the English court's granting, on 23 August 2016, of
orders for sale as part of the Company's enforcement in England of certain orders for payment of legal costs to the
Company by the defendants.
In parallel with bringing in additional funds, the Board continues to manage the central overheads of the Company
rigorously in order to preserve cash as much as possible. The Company has foregone a physical head office; the overall
cost of directors' fees has reduced and was approximately 17% less than the cost of directors' fees for 2015; and
payments of an aggregate 41% of those directors' fees incurred in the period under review, in addition to other
benefits such as pension contributions, have been deferred until the Company is in materially better financial health.
The financial statements of the Pathfinder Group for the year ended 31 December 2016 follow later in this report. The
Income Statement shows a reduced loss of £582,000 (2015 - £1,093,000) of which £138,000 relates to directors' fees
and pension contributions that are recorded as a liability in 'Trade and other payables' but actual payment of which
have been deferred as described above and in 'Note 20' to these accounts.
The Group's Statement of Financial Position shows net assets (excluding £183,000 of deferred fees and pension
contributions described in 'Note 20') at 31 December 2016 of £122,000 (31 December 2015 - £87,000). The assets are
held largely in the form of cash deposits (totalling £134,000 at the end of the period). These assets were boosted by
the raising of a further £200,000 after the year end, on 1 March 2017, through a placing of new shares with investors.
CORPORATE EVENTS
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.
OUTLOOK
The Company will continue to report through the regulatory news service any material developments, either in
respect of the Mozambique courts or the parallel discussions to bring about a faster resolution. The Board remains as
determined as ever - as evidenced by the chief executive's own subscription for £100,000 worth of shares during the
year under review - to bring about a successful resolution that recovers value for shareholders in the wake of these
unpalatable events. We will continue to monitor the Company's financial position to ensure the Company has
sufficient capital to bring our strategy to recover our assets to a successful conclusion. On behalf of the Board, I should
like to thank our investors once again for their support.
ON BEHALF OF THE BOARD:
Sir H C Bellingham - Director
27 June 2017
Page 3
PATHFINDER MINERALS PLC
Directors and Strategic Report
for the Year Ended 31 December 2016
The directors present their report with the financial statements of the company and the group for the year ended
31 December 2016.
DIVIDENDS
No dividends will be distributed for the year ended 31 December 2016.
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 2016 to the date of this
report.
Sir H C Bellingham
N S Trew
Other changes in directors holding office are as follows:
R P Easby - appointed 29 March 2016
J P Normand - resigned 10 March 2016
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.
MAJOR SHAREHOLDERS
As at 27 June 2017 the following shareholders had notified the company of an interest of 3% or more of the
Company's ordinary share capital:
Shareholder name
Nicholas Trew
JP Morgan Funds
Paul Ellison and Gareth Roberts as Joint
Administrators of Hill Street Investments plc
James Buchan
John Clarke
Roger Clarke
Number of 0.1p
ordinary shares
Shareholding
percentage
21,449,735
9,467,000
7,884,000
7,010,210
6,626,006
6,626,006
11.90%
5.25%
4.37%
3.89%
3.68%
3.68%
Page 4
PATHFINDER MINERALS PLC
Directors and Strategic Report
for the Year Ended 31 December 2016
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 20 days (2016: 17 days).
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.
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.
Page 5
PATHFINDER MINERALS PLC
Directors and Strategic Report
for the Year Ended 31 December 2016
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
27 June 2017
Page 6
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 2016, which
comprise the Consolidated Income Statement, Consolidated Statement of 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 and the related notes 1 to 22. 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 five, 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 Group Strategic Report and the Report of the
Directors 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 2016 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 Group Strategic Report and the Report of the Directors for the financial
year for which the financial statements are prepared is consistent with the financial statements.
Page 7
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
27 June 2017
Page 8
PATHFINDER MINERALS PLC
Consolidated Income Statement
for the Year Ended 31 December 2016
Notes
2016
£'000
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
Earnings per share expressed
in pence per share:
Basic
Diluted
4
5
7
8
9
11
-
161
(743)
(582)
-
(582)
-
(582)
(582)
-0.44
-0.44
2015
£'000
-
3
(1,104)
(1,101)
8
(1,093)
-
(1,093)
(1,093)
-1.05
-1.05
The notes form part of these financial statements
Page 9
PATHFINDER MINERALS PLC
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2016
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR
Total comprehensive income attributable to:
Owners of the parent
2016
£'000
(582)
-
(582)
(582)
2015
£'000
(1,093)
-
(1,093)
(1,093)
The notes form part of these financial statements
Page 10
PATHFINDER MINERALS PLC (REGISTERED NUMBER: 02578942)
Consolidated Statement of Financial Position
31 December 2016
Notes
2016
£'000
2015
£'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Investments
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
12
13
14
15
16
17
17
18
1
-
1
65
134
199
200
18,345
11,445
(29,851)
(61)
261
261
200
-
-
-
94
80
174
174
18,289
11,022
(29,269)
42
132
132
174
The financial statements were approved by the Board of Directors on 27 June 2017 and were signed on its behalf by:
R P Easby - Director
The notes form part of these financial statements
Page 11
PATHFINDER MINERALS PLC (REGISTERED NUMBER: 02578942)
Company Statement of Financial Position
31 December 2016
Notes
2016
£'000
2015
£'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Investments
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
12
13
14
15
16
17
17
18
1
-
1
65
134
199
200
18,345
11,445
(29,850)
(60)
260
260
200
-
-
-
94
80
174
174
18,289
11,022
(29,269)
42
132
132
174
The financial statements were approved by the Board of Directors on 27 June 2017 and were signed on its behalf by:
R P Easby - Director
The notes form part of these financial statements
Page 12
PATHFINDER MINERALS PLC
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2016
Called up
share
capital
£'000
Retained
earnings
£'000
Share
premium
£'000
Total
equity
£'000
Balance at 1 January 2015
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
Changes in equity
Issue of share capital
Total comprehensive income
56
-
-
(582)
423
-
Balance at 31 December 2016
18,345
(29,851)
11,445
479
(582)
(61)
The notes form part of these financial statements
Page 13
PATHFINDER MINERALS PLC
Company Statement of Changes in Equity
for the Year Ended 31 December 2016
Called up
share
capital
£'000
Retained
earnings
£'000
Share
premium
£'000
Total
equity
£'000
Balance at 1 January 2015
18,289
(28,307)
11,022
1,004
Changes in equity
Total comprehensive income
-
(962)
-
(962)
Balance at 31 December 2015
18,289
(29,269)
11,022
42
Changes in equity
Issue of share capital
Total comprehensive income
56
-
-
(581)
423
-
Balance at 31 December 2016
18,345
(29,850)
11,445
479
(581)
(60)
The notes form part of these financial statements
Page 14
PATHFINDER MINERALS PLC
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2016
Cash flows from operating activities
Cash generated from operations
Net cash from operating activities
Notes
1
Cash flows from investing activities
Purchase of tangible fixed assets
Interest received
Net cash from investing activities
Cash flows from financing activities
Share issue
Share issue expenses
Net cash from financing activities
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of
year
2
Cash and cash equivalents at end of year
2
2016
£'000
(423)
(423)
(2)
-
(2)
495
(16)
479
54
80
134
2015
£'000
(1,100)
(1,100)
-
8
8
-
-
-
(1,092)
1,172
80
The notes form part of these financial statements
Page 15
PATHFINDER MINERALS PLC
Company Statement of Cash Flows
for the Year Ended 31 December 2016
Cash flows from operating activities
Cash generated from operations
Net cash from operating activities
Notes
1
Cash flows from investing activities
Purchase of tangible fixed assets
Interest received
Net cash from investing activities
Cash flows from financing activities
Share issue
Share issue expenses
Net cash from financing activities
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of
year
2
Cash and cash equivalents at end of year
2
2016
£'000
(423)
(423)
(2)
-
(2)
495
(16)
479
54
80
134
2015
£'000
(1,100)
(1,100)
-
8
8
-
-
-
(1,092)
1,172
80
The notes form part of these financial statements
Page 16
PATHFINDER MINERALS PLC
Notes to the Statements of Cash Flows
for the Year Ended 31 December 2016
1.
RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
Group
Loss before income tax
Depreciation charges
Finance income
Decrease/(increase) in trade and other receivables
Increase in trade and other payables
2016
£'000
(582)
1
-
(581)
29
129
2015
£'000
(1,093)
-
(8)
(1,101)
(33)
34
Cash generated from operations
(423)
(1,100)
Company
Loss before income tax
Depreciation charges
Finance income
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
2016
2015
£'000
(581)
1
-
(580)
29
128
£'000
(962)
-
(8)
(970)
(33)
(97)
Cash generated from operations
(423)
(1,100)
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 2016
Cash and cash equivalents
Year ended 31 December 2015
Cash and cash equivalents
Group
Company
31.12.16
£'000
134
31.12.15
£'000
80
1.1.16
£'000
80
1.1.15
£'000
1,172
31.12.16
£'000
134
31.12.15
£'000
80
1.1.16
£'000
80
1.1.15
£'000
1,172
The notes form part of these financial statements
Page 17
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2016
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 2016 were authorised for
issue by the Board on 27 June 2017 and the statement of consolidated financial position signed on the Board's
behalf by Robert Easby.
2.
STATUTORY INFORMATION
Pathfinder Minerals Plc is a private company, limited by shares, registered in England and Wales. The
company's registered number and registered office address can be found on the General Information page.
3.
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.
Property, plant and equipment
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful
life.
Plant and machinery
- 33% on cost
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.
Page 18
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2016
3.
ACCOUNTING POLICIES - continued
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.
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.
4.
SEGMENTAL REPORTING
The Group has one activity only. Of the Group's administrative expenses, £53,000 (2015: £188,000) 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 2016 and 2015 was attributable to UK assets and liabilities.
5.
OTHER OPERATING INCOME
Sundry receipts
2016
£'000
161
2015
£'000
3
On 23 August 2016, the English High Court made orders for the sale of the aggregate 19,824,000 shares held
by JV Consultores Internacionais Limitada and Diogo Cavaco in the Company. In the current year, other
operating income represents receipts from the sale of these shares.
The comparative figure for 2015 represents the sale of the fractional entitlement following the capital
consolidation as set out in note 16.
Page 19
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2016
6.
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 2016
and 2015.
Year ended 31 December 2016:
Henry
Bellingham
Nicholas Trew
James Normand
Robert Easby
Benefits
in kind
£000
-
Total
emoluments
£000
48
Contributions to
pension
schemes
£000
-
Total
remuneration
2016
£000
48
5
4
-
9
155
54
45
302
15
5
-
20
170
59
45
322
Salary
£000
48
150
50
45
293
In addition to the above amounts, James Normand received £14,665 as part of a settlement agreement
following his resignation as director.
Year ended 31 December 2015:
Henry
Bellingham
John McKeon
Nicholas Trew
James Normand
Fees
£000
-
37
-
-
37
Salary
£000
48
-
150
120
318
Benefits
in kind
£000
-
Total
emoluments
£000
48
Contributions to
pension
schemes
£000
-
Total
remuneration
2015
£000
48
-
4
4
8
37
154
124
363
-
15
12
27
37
169
136
390
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.
7.
NET FINANCE INCOME
Finance income:
Deposit account interest
2016
£'000
2015
£'000
-
8
Page 20
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2016
8.
LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging:
Depreciation - owned assets
Auditors' remuneration
Foreign exchange differences
9.
INCOME TAX
2016
£'000
1
11
8
2015
£'000
-
14
-
Analysis of tax expense
No liability to UK corporation tax arose for the year ended 31 December 2016 nor for the year ended
31 December 2015.
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 before income tax
2016
£'000
(582)
2015
£'000
(1,093)
Loss multiplied by the standard rate of corporation tax in the UK of 20%
(2015 - 20%)
(116)
(219)
Effects of:
Unrelieved tax losses carried forward
Income not chargeable to tax
Tax expense
10.
LOSS OF PARENT COMPANY
148
(32)
-
219
-
-
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
£(581,282) (2015 - £(962,202)).
Page 21
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2016
11.
LOSS PER SHARE
Basic loss per share is calculated, as set out in the tables below, by dividing the loss 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
Earnings attributable to ordinary shareholders
Effect of dilutive securities
Diluted
Adjusted earnings
Basic
Earnings attributable to ordinary shareholders
Effect of dilutive securities
Diluted
Adjusted earnings
2016
Weighted
average
number
of
shares
Per-share
amount
pence
Loss
£'000
(582)
-
131,985,901
-
-0.44
-
(582)
131,985,901
-0.44
2015
Weighted
average
number
of
shares
Per-share
amount
pence
Loss
£'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 2016
12.
PROPERTY, PLANT AND EQUIPMENT
Group
COST
Additions
At 31 December 2016
DEPRECIATION
Charge for year
At 31 December 2016
NET BOOK VALUE
At 31 December 2016
Company
COST
Additions
At 31 December 2016
DEPRECIATION
Charge for year
At 31 December 2016
NET BOOK VALUE
At 31 December 2016
Plant and
machinery
£'000
2
2
1
1
1
Plant and
machinery
£'000
2
2
1
1
1
Page 23
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2016
13.
INVESTMENTS
Company
COST
At 1 January 2016
and 31 December 2016
PROVISIONS
At 1 January 2016
and 31 December 2016
NET BOOK VALUE
At 31 December 2016
At 31 December 2015
Shares in
group
undertakings
£'000
34,806
34,806
-
-
The group or the company's investments at the Statement of Financial Position date in the share capital of
companies include the following:
Subsidiaries
I M Minerals Limited
Registered office: United Kingdom
Nature of business: Holding company
Class of shares:
Ordinary
Companhia Mineira de Naburi SARL
Registered office: Mozambique
Nature of business: Mining
Class of shares:
Ordinary
%
holding
100.00
%
holding
100.00
Page 24
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2016
13.
INVESTMENTS - continued
Company
Sociedade Geral de Mineracao de Moçambique SARL
Registered office: Mozambique
Nature of business: Dormant
Class of shares:
Ordinary
%
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.
14.
TRADE AND OTHER RECEIVABLES
Current:
Other debtors
VAT
Prepayments and accrued income
15.
CASH AND CASH EQUIVALENTS
Bank accounts
16.
CALLED UP SHARE CAPITAL
Allotted, issued and fully paid:
Number:
Class:
160,255,079
183,688,116
Ordinary
Deferred
Group
2016
£'000
2015
£'000
Company
2016
£'000
2015
£'000
37
17
11
65
13
69
12
94
37
17
11
65
13
69
12
94
Group
Company
2016
£'000
134
2015
£'000
80
2016
£'000
134
2015
£'000
80
Nominal
value:
0.1p
9.9p
2016
£'000
160
18,185
2015
£'000
104
18,185
18,345
18,289
Page 25
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2016
16.
CALLED UP SHARE CAPITAL - continued
56,538,356 Ordinary shares of 0.1p each were allotted as fully paid for cash at a premium of 0.776p per share
during the year.
During 2015, 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.
17.
RESERVES
Group
At 1 January 2016
Deficit for the year
Cash share issue
Share issue expenses
At 31 December 2016
Retained
earnings
£'000
(29,269)
(582)
-
-
Share
premium
£'000
11,022
439
(16)
Totals
£'000
(18,247)
(582)
439
(16)
(29,851)
11,445
(18,406)
Page 26
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2016
17.
RESERVES - continued
At 1 January 2015
Deficit for the year
At 31 December 2015
Company
At 1 January 2016
Deficit for the year
Cash share issue
Share issue expenses
At 31 December 2016
At 1 January 2015
Deficit for the year
At 31 December 2015
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
(29,269)
(581)
-
-
Share
premium
£'000
11,022
439
(16)
Totals
£'000
(18,247)
(581)
439
(16)
(29,850)
11,445
(18,405)
Retained
earnings
£'000
(28,307)
(962)
Share
premium
£'000
11,022
Totals
£'000
(17,285)
(962)
(29,269)
11,022
(18,247)
18.
TRADE AND OTHER PAYABLES
Current:
Trade creditors
Social security and other taxes
Other creditors
Accruals and deferred income
Group
2016
£'000
2015
£'000
Company
2016
£'000
2015
£'000
18
11
220
12
261
35
11
65
21
132
17
11
220
12
260
35
11
65
21
132
During 2015, IM Minerals Limited, a subsidiary of the company, waived a loan payable by the company
totalling £131,000.
Page 27
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2016
19.
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.
In the event that Pathfinder is successful in regaining control of the disputed Licences, the Company has
agreed to issue ordinary shares to its' regional representative, Eduardo C. 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.
20.
RELATED PARTY DISCLOSURES
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:
Salary/ fees
deferred at 1
January
2016
N S Trew
J P
Normand
H C
Bellingham
R P Easby
J P McKeon
Total
£000
19
15
6
-
1
41
Pension
contributions
deferred at 1
January 2016
£000
Salary/fees
deferred
during the
year
£000
Pension
contributions
deferred during
the year
Salary/fees
deferred at 31
December
2016
Pension
contributions
deferred at 31
December 2016
£000
£000
15
4
-
-
-
87
27
28
17
1
£000
19
4
-
-
-
23
119
19
160
68
12
22
17
-
4
-
-
-
-
4
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 6 above.
Page 28
continued...
PATHFINDER MINERALS PLC
Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2016
21.
EVENTS AFTER THE REPORTING PERIOD
Following the end of the year the company has raised £200,000 via a subscription for new shares.
22.
SHARE OPTIONS AND WARRANTS
The company granted the following share options to directors on 15 November 2016:
Director
H C Bellingham
N S Trew
R P Easby
Number of
shares the
subject of
options or
warrants
2,750,000
2,750,000
1,375,000
6,875,000
Exercise price
per share
Latest exercise date
3p
3p
3p
15 November 2021
15 November 2021
15 November 2021
In addition to those listed above, J P Normand holds options over 1,600,000 shares with an exercise price of
47.5p.
The fair value of the options granted on 15 November 2016 was determined using the Black-Scholes pricing
model. The resulting value was deemed immaterial by the directors and no charge has been made to the
income statement.
As detailed in note 19, 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