TIDMSTGR
RNS Number : 8035D
Stratmin Global Resources PLC
02 May 2017
2 May 2017
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
StratMin Global Resources Plc
("StratMin" or the "Company")
Final Results for the Year to 31 December 2016
CHIEF EXECUTIVE OFFICER'S STATEMENT
YEAR TO 31 DECEMBER 2016
I am pleased to present the final results for StratMin Global
Resources plc for the 12 months to 31 December 2016 in what has
been a period of significant change for the Company, as we became
an AIM Rule 15 cash shell looking to complete a value accretive
reverse takeover ('RTO') within the precious metals sector.
During the period, the Board's strategy has been focused on
identifying suitable acquisition opportunities, which would satisfy
the requirements of Rule 15 of the AIM Rules for Companies (the
"AIM Rules") and indeed offer significant growth potential for the
Company. We resolved to pursue, as a priority, the acquisition of
projects in either gold exploration or mining. With this in mind,
we have found a compelling acquisition target in Signature Gold
Limited ("Signature"), a specialist Australian gold exploration
company focused on large-scale Intrusive Related Gold System
("IRGS") assets in Queensland, Australia. The Queensland projects
also hold the benefit of support from the Australian government,
providing a significant cash rebate to the Company of 43.5% of all
qualifying expenditure and giving Signature a substantial cost
advantage in development of the portfolio.
The acquisition of Signature also presents the opportunity to
attract significant project partners. Signature holds the option to
acquire the Kasperske Hory gold project in the Czech Republic, a
high grade IRGS deposit with an established initial 1.5M+ ozAu JORC
compliant resource with an average 7.29g/t Au grade. This project
is owned by Elbrus Resources Limited, a private company controlled
by majority shareholder Mr Gordon Toll. Mr Toll is a
highly-regarded resources industry executive most well known as the
founding Chairman of ASX listed Fortescue Metals Group Limited, the
world's fourth largest iron ore producer.
We are looking to acquire Signature as we believe it would be in
the best interests for the Company and wider stakeholders and
offers a value accretive opportunity to reward the patience of our
supportive shareholders. We are confident about the future
prospects with Signature, and we look forward to bringing a high
calibre and experienced global management team with a track record
of gold development, operations and shareholder returns to manage
this new venture.
Prior to entering into a binding heads of agreement ("HoA") with
Signature, executed and announced on 2 February 2017 for the
acquisition of the entire issued share capital of the company, we
divested our graphite assets, Graphmada Mauritius, to Bass Metals
Limited ("Bass"), announced on 7 July 2016.
As laid out in the Company's interim results for 2016 announced
on 30 September 2016, the Company successfully stabilised its
operations at its Graphmada graphite mine and processing plant in
Madagascar, bringing it to an operational level breakeven which
enabled us to secure an exit from that project. Further, the early
settlement and divestment of the Bass equity holding in cash, as
opposed to shares, has removed the need for the Company to raise
short term capital during a period of weak share price and provided
a stronger platform for negotiating an RTO.
In addition in line with its divestment strategy, the Company
agreed with its joint venture partner Tirupati Carbons and
Chemicals Pvt Ltd ("Tirupati"), to open the syndication of their
joint venture company, Tirupati Resources Mauritius Limited
("TRM"), to new investors. TRM is currently owned by Tirupati
(98.53%) and StratMin (1.47%). TRM is the 98% owner of Tirupati
Madagascar Ventures SARL ("TMV") which owns the Vatomaina licence,
Exploitation Permit (PE) No. 38321, for the Vatomaina large flake
graphite project in Madagascar. StratMin and Tirupati have agreed
that any new investment will be made at a minimum entry price equal
to StratMin's existing investment. Opening the joint venture to new
investment will enable Tirupati to accelerate development of the
Vatomaina project. A number of options are being discussed
currently, including the joint venture partners arranging a London
Stock Exchange flotation of TRM following commissioning of the
Vatomaina plant.
In addition to divesting our graphite assets and signing HoA
with Signature with the objective to complete the RTO in H1 2017,
we also re-structured the management team. In this regard, we
strengthened the Board through the appointment of Sam Quinn as
Executive Director in February 2017. Mr Quinn, a corporate lawyer
with significant experience in the mineral resources sector, will
bolster the Company's London-based management team as an executive
director in charge of corporate affairs.
Finally it remains for me to thank my fellow directors and
management as we continue to make progress on the RTO of Signature
and to all of our shareholders for their continued support over the
last year. The Board looks forward to the forthcoming year with
confidence and looks forward to reporting on developments in due
course.
Brett Boynton
Chief Executive Officer
28 April 2017
STRATEGIC REPORT
YEAR TO 31 DECEMBER 2016
The directors present their strategic report for the Company for
the year ended 31 December 2016.
REVIEW OF THE BUSINESS
The Company is an AIM Rule 15 cash shell company, following the
disposal of Graphmada Mauritius Limited ("GMM") to Bass Metals
Limited ("Bass") in July 2016, and is progressing a Reverse
Takeover ("RTO") transaction with Australian gold exploration
company Signature Gold Limited ("Signature"). In addition to a
portfolio of advanced exploration projects in Queensland,
Australia, Signature holds an option to acquire the 1.5M oz Au JORC
compliant resource with an average 7.29g/t Au grade gold deposit in
the Czech Republic known as the Kasperske Hory deposit. The
timetable for completion of this transaction is currently estimated
as mid-year 2017.
In addition the Company holds a small position in Tirupati
Resources Mauritius Limited (TVM), a graphite development holding
company with a mine development project in Madagascar. The holding
has an estimated fair value of GBP40,000 and constitutes less than
5% of the register of TVM.
Since the year end the Company has disposed of the shareholding
(GBP531,000) it received in Bass as part of the consideration for
the disposal of Graphmada.
For further details see the Chief Executive Officer's statement
on Page 2.
FINANCIAL HIGHLIGHTS
The operating loss from operations decreased from GBP847,000 in
2015 to GBP809,000. The net loss for the year was GBP7,405,000
compared to GBP23,205,000 in 2015, resulting in a loss per share of
4.5p (2015: 16.6p).
RESULTS AND DIVIDS
In 2016, the Company's overall loss after taxation was
approximately GBP7,405,000 (2015: GBP23,205,000 loss), this
includes a loss on disposal of Graphmada of GBP6,463,000. The
Directors do not recommend the payment of a dividend (2015:
GBPnil).
KEY PERFORMANCE INDICATORS
The key performance indicators are set out below.
STATISTICS 2016 2015 Change %
-------------------------- ------------ ------------ --------
Net asset value GBP1,869,000 GBP7,991,000 (76.37)
Net asset value per share 1.05p 5.29p (80,15)
Closing share price 1.38p 2.92p (52.74)
Market capitalisation GBP2,441,626 GBP4,393,000 (44.42)
-------------------------- ------------ ------------ --------
KEY RISKS AND UNCERTAINTIES
Currently the principal risk is a failure to complete the
proposed RTO of Signature, the failure of which may result in the
Company having its AIM listing cancelled. Details of other
financial risks and their management are given in Note 18 to the
financial statements.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Company's financial risk management objectives
and policies are set out in Note 18 to these financial
statements.
Brett Boynton
Director
28 April 2017
The Directors present their annual report and the audited
financial statements of Stratmin Global Resources plc ("Stratmin"
or the "Company") for the year ended 31 December 2016.
DIRECTORS
The Board comprised the following directors who served
throughout the year and up to the date of this report save where
disclosed otherwise:
Name Position
-------------- ----------------------- ------------------------
Executive Chairman
Brett Boynton and Managing Director
(appointed 20 February
Sam Quinn Executive Director 2017)
Shishir
Poddar Technical Director
(appointed 19 September
Zeg Choudhry Non-Executive Director 2016)
(resigned 16 February
Laurie Hunter Chairman 2016)
(resigned 16 February
Jeff Marvin Non-Executive Director 2016)
(resigned 19 September
David Premraj Non-Executive Director 2016)
-------------- ----------------------- ------------------------
DIRECTORS' INTERESTS
The above Directors' interests in the share capital of the
Company at 31 December 2016, held either directly or through
related parties, were as follows:
% of ordinary share capital and Voting
Name of director Number of ordinary shares Rights
-------------------------------------------- -------------------------- --------------------------------------------
David Premraj (resigned 19 September 2016) 1,705,556 0.96
Jeff Marvin (resigned 16 February 2016) 2,259,999 1.28
Brett Boynton 4,352,690 2.46
Shishir Poddar* 6,284,387 3.55
Zeg Choudhry - -
Sam Quinn (appointed 20 February 2017) 1,512,000 0.85
-------------------------- --------------------------------------------
14,142,245 8.68
-------------------------------------------- -------------------------- --------------------------------------------
* 1,972,387 shares are held by Tirupati Carbons & Chemicals
Pvt. Ltd, of which Mr Poddar is a 50 per cent. shareholder and
director.
Details of the options granted to or held by the Directors or
former Directors are as follows:
At 31
December At 31 December
Name of 2015 2016 or
director or date date of Average Earliest Average
or former of appointment Options Options cessation Exercise date Date
director if later granted lapsed if earlier price of exercise of expiry
------------------- --------------- -------- ------------ -------------- --------- ------------ ----------
Jeff Marvin 479,040 - (479,040) - 22.5p 2/03/2012 1/03/2022
Shishir
Poddar* 10,000,000 - (10,000,000) - 7.5p 16/06/2015 16/12/2016
Manoli Yannaghas 1,500,000 - (1,500,000) - 15.9p 30/09/2014 1/05/2017
Laurie Hunter 2,000,000 - (2,000,000) - 15.7p 12/03/2014 1/09/2017
------------------- --------------- -------- ------------ -------------- --------- ------------ ----------
*The options included under the name of Shishir Poddar are held
in the name of Tirupati Carbons and Chemicals Group (P) Limited
("Tirupati"), as part of the strategic agreement signed with them
on 18 June 2015. Mr Poddar is a major shareholder and Director of
Tirupati and as such the options have been reflected as above.
These options all expired during the year
The options for Messrs Marvin, Yannaghas and Hunter all expired
during the period following their resignation
The Company has made qualifying third party indemnity provisions
for the benefit of the Directors in the form of Directors' and
Officers' Liability insurance during the year which remain in force
at the date of this report.
DONATIONS
The Company did not make any political or charitable donations
during the year (2015: GBPnil).
EMPLOYEE CONSULTATION
The Company places considerable value on the involvement of its
employees and has continued to keep them informed on matters
affecting them as employees and on various factors affecting the
performance of the Company. This is achieved through formal and
informal meetings. Equal opportunity is given to all employees
regardless of their sex, age, religion or ethnic origin.
SIGNIFICANT SHAREHOLDINGS
On 30 March 2017 the following were interested in 3 per cent. or
more of the Company's share capital (including Directors, whose
interests are also shown above):
% of ordinary
Number share capital
Name of shareholder of ordinary and voting
shares rights
-------------------------------- ------------- ---------------
Consolidated Resources Pte Ltd 18,241,422 10.31
Viking Investments Limited 13,181,241 7.45
Mrs Kesava Padmavathi 8,775,699 4.96
Mrs Caryl Melissa Jane Pienaar 7,041,791 3.98
Ghanshyam Champakal 5,449,426 3.08
-------------------------------- ------------- ---------------
POST YEAR EVENTS
A list of post year end events have been included in note
22.
GOING CONCERN
The adoption of the going concern basis by the Directors is
following a review of the current position of the Company and the
forecasts for the next 18 months. To ensure the Company has
adequate resources to continue in operation or existence for the
foreseeable future, it is dependent on executing the impending
acquisition of Signature Gold as well as the concurrent placing
which will finance the group going forwards. If the deal does not
go ahead, the Company will most likely be cancelled from trading on
AIM which provides an additional source of funding. However, the
funds received and receivable, from Bass for Graphmada, together
with a cost-cutting exercise undertaken by the Board would ensure
it would continue for the foreseeable future. Thus, the directors
continue to adopt the going concern basis in preparing the
financial statements. Further details regarding the adoption of the
going concern basis and uncertainty surrounding it can be found in
note 4 of these financial statements.
DISCLOSURE OF INFORMATION TO THE AUDITORS
In the case of each of the persons who are directors of the
Company at the date when this report is approved:
-- So far as each director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and
-- Each of the directors has taken all steps that they ought to
have taken as a director to make themselves aware of any relevant
audit information and to establish that the auditors are aware of
the information.
This information is given and should be interpreted in
accordance with the provisions of Section 418 of the Companies Act
2006.
AUDITOR
Welbeck Associates have expressed their willingness to continue
in office as auditor and it is expected that a resolution to
reappoint them will be proposed at the next annual general
meeting.
The Board as a whole considers the appointment of external
auditors, including their independence, specifically including the
nature and scope of non-audit services provided.
CORPORATE GOVERNANCE
The requirements of the UK Corporate Governance Code are not
mandatory for companies traded on AIM. The Directors recognise the
value of the Quoted Companies Alliance Corporate Governance Code
for Small and Mid-sized Quoted Companies, to the extent that they
consider it appropriate and having regard to the size, current
stage of development and resources of the Company. While under the
AIM Rules full compliance is not required, the Directors believe
that the Company applies the recommendations in so far as it is
appropriate for a Company of its size.
BOARD OF DIRECTORS
The Company supports the concept of an effective Board leading
and controlling the Company. The Board of Directors is responsible
for approving Company policy and strategy. It meets regularly and
has a schedule of matters specifically reserved to it for decision.
All Directors have access to advice from independent professionals
at the Company's expense. Training is available for new and
existing Directors as necessary.
The Board consists of Chairman and Managing Director, Brett
Boynton, Executive Directors, Shishir Poddar and Sam Quinn and
Non-Executive director, Zeg Choudhry.
Matters which would normally be referred to appointed committees
other than those below, such as the AIM Compliance committee, are
dealt with by the full Board.
AUDIT COMMITTEE
The Audit Committee comprises Brett Boynton (Chairman), Zeg
Choudhry and Sam Quinn. The Committee meets at least twice a year
and is responsible for ensuring the financial performance of the
Company is properly reported on and monitored. It liaises with the
auditor and reviews the reports from the auditor relating to the
accounts.
REMUNERATION COMMITTEE
The Remuneration Committee comprises Sam Quinn (Chairman), Brett
Boynton and Zeg Choudhry. The Committee meets at least twice a year
and is responsible for reviewing the performance of Executive
Directors and sets the scale and structure of their remuneration on
the basis of their service agreements, with due regard to the
interests of the shareholders and the performance of the
Company.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority by
the management. In addition to the publication of an annual report
and an interim report, there is regular dialogue with shareholders
and analysts. The Annual General Meeting is viewed as a forum for
communicating with shareholders, particularly private investors.
Shareholders may question the Managing Director and other members
of the Board at the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Company's
system of internal control and for reviewing the effectiveness of
these systems. The risk management process and systems of internal
control are designed to manage rather than eliminate the risk of
the Company failing to achieve its strategic objectives. It should
be recognised that such systems can only provide reasonable and not
absolute assurance against material misstatement or loss. The
Company has well established procedures which are considered
adequate given the size of the business.
REMUNERATION
The remuneration of the directors has been fixed by the Board as
a whole. The Board seeks to provide appropriate reward for the
skill and time commitment required so as to retain the right
calibre of director at a cost to the Company which reflects current
market rates.
Details of directors' fees and of payments made to directors for
professional services rendered are set out in Note 8 to the
financial statements and details of the directors' share options
are set out in the Directors' Report.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Company's financial risk management objectives
and policies are set out in Note 18 to these financial
statements.
By order of the Board on 28 April 2017
Sam Quinn
Director
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 Company financial
statements for each financial year. The Directors are required by
the AIM Rules of the London Stock Exchange to prepare financial
statements in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the European Union ("EU"). 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 and profit or loss of the company for that
period. In preparing these financial statements, the directors are
required to:
-- select suitable accounting policies and then apply them consistently
-- make judgments and accounting estimates that are reasonable and prudent
-- state whether applicable IFRSs have been followed, subject to
any material departures disclosed and explained in the financial
statements
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
By order of the Board on 28 April 2017
Sam Quinn
Director
INDEPENT AUDITORS' REPORT TO THE MEMBERS OF STRATMIN GLOBAL
RESOURCES PLC
We have audited the financial statements of StratMin Global
Resources plc for the year ended 31 December 2016 which comprise
the Statement of Income, the Statement of comprehensive income, the
Statement of changes in equity, the Statement of financial
position, the Statement of cash flows, and the related notes. The
financial reporting framework that has been applied in the
preparation of the financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the 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 9, 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 (APB'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 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 annual
report to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for
our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion:
-- the financial statements give a true and fair view of the
state of the Company's affairs as at 31 December 2016 and of the
loss for the year then ended;
-- the Company financial statements have been properly prepared
in accordance with IFRS as adopted by the European Union; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
EMPHASIS OF MATTER - GOING CONCERN
In forming our opinion on the financial statements, which is not
modified, we draw your attention to the disclosures made in note 4
to the financial statements concerning the Company's ability to
continue as a going concern.
These conditions, along with other matters explained in note 4
to the financial statements, indicate the existence of uncertainty
which may cast doubt about the ability of the Group and Company to
continue as a going concern. However, the directors have plans to
manage the cash flows of the Company to enable it to continue as a
going concern. The financial statements do not include the
adjustments that would result if the Group and Company was unable
to continue as a going concern.
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the information given in the 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.
INDEPENT AUDITORS' REPORT TO THE MEMBERS OF STRATMIN GLOBAL
RESOURCES PLC (continued)
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Jonathan Bradley Hoare (Senior statutory auditor)
for and on behalf of Welbeck Associates
Chartered Accountants and Statutory Auditor
London, United Kingdom
28 April 2017
STATEMENT OF INCOME
YEAR TO 31 DECEMBER 2016
2016 2015
Notes GBP'000 GBP'000
-------------------------------- ----- -------- --------
Administrative expenses (809) (847)
Operating loss 6 (809) (847)
Finance costs 9 - (9)
Impairment of investments - (21,651)
Impairment of receivables - (698)
Loss on disposal of subsidiary
undertakings 11 (6,596) -
Loss before tax (7,405) (23,205)
Tax 10 - -
Loss for the year (7,405) (23,205)
Earnings per share attributable
to owners of the company
Basic and diluted (pence per
share)
From continuing operations 12 (4,5) (16.6)
The accounting policies and notes are an integral part of these
financial statements.
2016 2015
Notes GBP'000 GBP'000
--------------------------------------- ----- -------- --------
Loss for the year (7,405) (23,205)
Other comprehensive income:
Items that may be subsequently
reclassified to profit and loss:
Market value adjustment to investments - (1)
Reclassification of the investment
reserve to the income statement
following the disposal of investments 11 700 -
Other comprehensive income/(expense)
for the period 700 (1)
Total comprehensive loss for the
year attributable to equity holders
of the parent (6,705) (23,206)
The accounting policies and notes are an integral part of these
financial statements.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
2016 2015
Notes GBP'000 GBP'000
---------------------------------- ----- -------- --------
Non-Current assets
Property, plant and equipment - 2
Investment in subsidiaries - 4,318
Available for sale investments 13 40 1
Loans to group undertakings - 3,274
40 7,595
---------------------------------- ----- -------- --------
Current assets
Deferred consideration receivable 11 292 -
Available for sale investments 13 572 -
Trade and other receivables 14 1,007 947
Cash and cash equivalents 15 493 154
2,364 1,101
--------
Current liabilities
Trade and other payables 16 447 698
Short term borrowings 17 88 87
535 785
---------------------------------- ----- -------- --------
Net assets 1,869 7,911
---------------------------------- ----- -------- --------
Equity
Share capital 20 6,049 6,046
Share premium account 20 55,900 31,818
Merger reserve - 23,460
Investment reserve - (700)
Other reserves 455 417
Retained earnings (60,535) (53,130)
---------------------------------- ----- -------- --------
Equity attributable to owners
of the Company 1,869 7,911
These financial statements were approved by the Board of
Directors on 28 April 2017.
Signed on behalf of the Board by:
Brett Boynton
Director
The accounting policies and notes are an integral part of these
financial statements.
STATEMENT OF CASH FLOWS
YEAR TO 31 DECEMBER 2016
Share Share Merger Investment Other Retained
capital Premium Reserve reserve reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- -------- --------- ----------- ---------- --------- --------
Balance at 1
January 2015 4,505 31,771 23,460 (699) 350 (29,925) 29,462
Total comprehensive
expense for
the year - - - (1) - (23,205) (23,206)
Net proceeds
of share issues 1,541 173 - - - - 1,714
Share issue
costs - (126) - - - - (126)
Share based
payment costs - - - - 67 - 67
Balance at 31
December 2015 6,046 31,818 23,460 (700) 417 (53,130) 7,911
Total comprehensive
expense for
the year - - - 700 - (7,405) (6,705)
Issue of shares
and warrants 3 622 - - 5 - 630
Share based
payment costs - - - - 33 - 33
Reclassification
of reserves
following disposal
of subsidiary
undertakings - 23,460 (23,460) - - - -
Balance at 31
December 2016 6,049 55,900 - - 455 (60,535) 1,869
Movement in other reserve relates to a share based payment
charge for the year of GBP38,000 (2015: GBP67,000).
The accounting policies and notes are an integral part of these
financial statements.
2016 2015
GBP'000 GBP'000
---------------------------------------- -------- ---------
OPERATING ACTIVITIES
Loss for the year before taxation (7,405) (23,205)
Adjusted for:
Finance expense - 9
Depreciation 2 2
Share based payment charge 33 67
Shares issued in settlement of fees - 189
Loss on disposal of investments 6,463 1,151
Impairment of receivables 133 -
Impairment of investment - 20,500
Operating cash flows before movements
in working capital (774) (1,287)
(Increase)/Decrease in trade and
other receivables (33) (73)
Increase/(Decrease) in trade and
other payables (677) 344
Net cash used in operations (1,484) (1,016)
Tax paid - -
Net cash used in operating activities (1,484) (1,016)
---------------------------------------- -------- ---------
INVESTING ACTIVITIES
Acquisition of investments (40) -
Advances to group companies - (664)
Disposal of investments 1,232 504
Net cash from/(used in) investing
activities 1,192 (160)
---------------------------------------- -------- ---------
FINANCING ACTIVITIES
Net proceeds from share issues 630 1,399
Repayment of short term borrowings 1 (139)
Interest paid - (9)
Net cash from/(used in) financing
activities 631 1,251
Net (decrease)/increase in cash and
cash equivalents 339 75
Cash and cash equivalents at beginning
of year 154 79
Cash and cash equivalents at end
of year 493 154
---------------------------------------- -------- ---------
The accounting policies and notes are an integral part of these
financial statements.
1 GENERAL INFORMATION
StratMin Global Resources Plc is a company incorporated
in the United Kingdom under the Companies Act
2006. The nature of the Company's operations
and its principal activities are set out in
the Strategic Report and the Directors' Report
on pages 4 and 5.
2 STATEMENT OF COMPLIANCE
The financial statements comply with International
Financial Reporting Standards as adopted by
the European Union. At the date of these financial
statements, the following Standards and Interpretations
affecting the Company, which have not been applied
in these financial statements, were in issue,
but not yet effective (and in some cases had
not been adopted by the EU):
Effective
for periods
beginning
on or after
---------------------------------------------------------
IFRS 2 (amendments) Classification 1 January
and Measurement of Share-based Payment 2018
Transactions
IFRS 9 Financial Instruments 1 January
2018
IFRS 15 Revenue from Contracts with 1 January
Customers 2018
IFRS 16 Leases 1 January
2019*
IAS 7(amendments) Disclosure of changes 1 January
in liabilities arising from financing 2017*
activities
IAS 12 (amendments) Recognition of 1 January
Deferred Tax Assets for Unrealised 2017*
Losses
IAS 40 Transfers of Investment Property 1 January
2018*
IFRIC 22 Foreign Currency Transactions 1 January
and Advance Consideration 2018*
Annual Improvements to IFRSs: 2014-2016 1 January
cycle 2017*
The Directors anticipate that the adoption of the above
Standards and Interpretations in future periods will have little or
no impact on the financial statements of the Company when the
relevant Standards come into effect for future reporting
periods.
3 Accounting Policies
The principal accounting policies adopted and
applied in the preparation of the Company Financial
statements are set out below.
These have been consistently applied to all
the years presented unless otherwise stated:
BASIS OF ACCOUNTING
The financial statements of StratMin Global
Resources plc (the "Company") have been prepared
in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the European
Union ("EU") applied in accordance with the
provisions of the Companies Act 2006.
IFRS is subject to amendment and interpretation
by the International Accounting Standards Board
("IASB") and the International Financial Standards
Interpretations Committee ("IFRS IC") and there
is an ongoing process of review and endorsement
by the European Commission. The accounts have
been prepared on the basis of the recognition
and measurement principles of IFRS that were
applicable at 31 December 2016.
These financial statements reflect the results
of the Company only. As such the comparative
figures include the company only position and
results as if the acquisition of the subsidiary
operations had never occurred. During the year
the company ceased to be a parent (note 11)
therefore group accounts are not prepared.
3 Accounting Policies (continued)
GOING CONCERN
Any consideration of the foreseeable future
involves making a judgement, at a particular
point in time, about future events which are
inherently uncertain. The ability of the Company
to carry out its planned business objectives
is dependent on its continuing ability to raise
adequate financing from equity investors and/or
the achievement of profitable operations.
Nevertheless, at the time of approving these
Financial Statements and after making due enquiries,
the Directors have a reasonable expectation
that the Company has adequate resources to continue
operating for the foreseeable future. For this
reason they continue to adopt the going concern
basis in preparing the Financial Statements.
AVAILABLE FOR SALE INVESTMENTS
Investments are initially measured at fair value
plus directly attributable incidental acquisition
costs. Subsequently, they are measured at fair
value in accordance with IAS 39. This is either
the bid price or the last traded price, depending
on the convention of the exchange on which the
investment is quoted.
Investments are recognised as available-for-sale
financial assets. Gains and losses on measurement
are recognised in other comprehensive income
except for impairment losses and foreign exchange
gains and losses on monetary items denominated
in a foreign currency, until the assets are
derecognised, at which time the cumulative gains
and losses previously recognised in other comprehensive
income are recognised in the income statement.
The Company assesses at each year end date whether
there is any objective evidence that a financial
asset or group of financial assets classified
as available-for-sale has been impaired. An
impairment loss is recognised if there is objective
evidence that an event or events since initial
recognition of the asset have adversely affected
the amount or timing of future cash flows from
the asset. A significant or prolonged decline
in the fair value of a security below its cost
shall be considered in determining whether the
asset is impaired.
When a decline in the fair value of a financial
asset classified as available-for-sale has been
previously recognised in other comprehensive
income and there is objective evidence that
the asset is impaired, the cumulative loss is
removed from other comprehensive income and
recognised in the income statement. The loss
is measured as the difference between the cost
of the financial asset and its current fair
value less any previous impairment.
foreign currencies
The Company financial statements are presented
in the currency of the primary economic environment
in which it operates (its functional currency).
For the purpose of these financial statements,
the results and financial position are expressed
in Pounds Sterling, which is both the functional
and presentation currency of the Company.
Exchange differences arising on the settlement
of monetary items, and on the retranslation
of monetary items, are included in the income
statement. Exchange differences arising on the
retranslation of non-monetary items carried
at fair value are included in profit or loss
for the period, except for differences arising
on the retranslation of non-monetary items in
respect of which gains and losses are recognised
directly in equity. For such non-monetary items,
any exchange component of that gain or loss
is also recognised directly in equity.
For the purpose of presenting Company financial
statements, the assets and liabilities of any
of the Company's operations that are overseas
are translated at exchange rates prevailing
on the year end date. Income and expense items
are translated at the average exchange rates
for the period.
3 Accounting Policies (continued)
taxation
The tax expense represents the sum of the tax
currently payable and deferred tax.
The tax currently payable is based on taxable
profit for the year. Taxable profit differs
from net profit as reported in the income statement
because it excludes items of income or expense
that are taxable or deductible in other years
and it further excludes items that are never
taxable or deductible. The Company's liability
for current tax is calculated using tax rates
that have been enacted or substantively enacted
by the year end date.
Deferred tax is the tax expected to be payable
or recoverable on temporary differences between
the carrying amounts of assets and liabilities
in the financial statements and the corresponding
tax bases used in the computation of taxable
profit, and is accounted for using the balance
sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary
differences and deferred tax assets are recognised
to the extent that it is probable that taxable
profits will be available against which deductible
temporary differences can be utilised. Such
assets and liabilities are not recognised if
the temporary difference arises from the initial
recognition of goodwill or from the initial
recognition (other than in a business combination)
of other assets and liabilities in a transaction
that affects neither the tax profit nor the
accounting profit.
Deferred tax liabilities are recognised for
taxable temporary differences arising on investments
in subsidiaries and associates, and interests
in joint ventures, except where the Company
is able to control the reversal of the temporary
difference and it is probable that the temporary
difference will not reverse in the foreseeable
future.
The carrying amount of deferred tax assets is
reviewed at each year end date and reduced to
the extent that it is no longer probable that
sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates
that are expected to apply in the period when
the liability is settled or the asset is realised.
Deferred tax is charged or credited in the income
statement, except when it relates to items charged
or credited directly to equity, in which case
the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
set off current tax assets against current tax
liabilities and where they relate to income
taxes levied by the same taxation authority
and the Company intends to settle its current
tax assets and liabilities on a net basis.
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND
INTANGIBLE ASSETS EXCLUDING GOODWILL
At each financial year end date, the Company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there
is any indication that those assets have suffered
an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated
in order to determine the extent of the impairment
loss, if any. Where the asset does not generate
cash flows that are independent from other assets,
the Company estimates the recoverable amount
of the cash-generating unit to which the asset
belongs. An intangible asset with an indefinite
useful life is tested for impairment annually
and whenever there is an indication that the
asset may be impaired.
If the recoverable amount of an asset or cash-generating
unit is estimated to be less than its carrying
amount, the carrying amount of the asset or
cash-generating unit is reduced to its recoverable
amount and the impairment loss is recognised
as an expense immediately.
When an impairment loss subsequently reverses,
the carrying amount of the asset or cash-generating
unit is increased to the revised estimate of
its recoverable amount, but so that the increased
carrying amount does not exceed the carrying
amount that would have been determined had no
impairment loss been recognised for the asset
or cash-generating unit in prior years. A reversal
of an impairment loss is recognised as income
immediately, unless the relevant asset is carried
at a revalued amount, in which case the reversal
of the impairment loss is treated as a revaluation
increase.
3 Accounting Policies (continued)
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and equipment are recorded at
cost, less depreciation, less any amount adjustments
for impairment, if any.
Significant improvements are capitalised, provided
they qualify for recognition as assets. The
costs of maintenance, repairs and minor improvements
are expensed when incurred.
Tangible assets retired or withdrawn from service
are removed from the balance sheet together
with the related accumulated depreciation. Any
profit or loss resulting from such an operation
is included in the income statement.
Mining properties (included within Plant & Equipment,
Fixtures & Fittings, Buildings and Motor Vehicles)
are depreciated using the unit of production
method under IAS 16 based on their total useful
economic life either by number of tonnes produced
or hours available in use. In the units of production
method, depreciation is charged according to
the actual usage of the asset. Therefore a higher
depreciation is charged at times of increased
activity and lower depreciation when the plant
is either yet to reach full production or idle
for the entire period. The Directors have applied
this method as they believe it to be a much
more accurate technique is estimated the current
fair value of their mining assets.
Other tangible and intangible assets are depreciated
on straight-line method based on the estimated
useful lives from the time they are put into
operations, so that the cost diminished over
the lifetime of consideration to estimated residual
value as follows:
Other Fixtures & Fittings - Over 5 years
Other Buildings - Between 5 and 10 years
Other Motor Vehicles - Over 5 years
TRADE RECEIVABLES, loans and other receivables
Trade receivables, loans and other receivables
that have fixed or determinable payments that
are not quoted in an active market are classified
under 'loans and receivables'. Loans and receivables
are measured at amortised cost using the effective
interest method, less any impairment. Interest
income is recognised by applying the effective
interest rate, except for short term receivables
when the recognition of interest would be immaterial.
Other receivables, that do not carry any interest,
are measured at their nominal value as reduced
by any appropriate allowances for irrecoverable
amounts.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand
and demand deposits and other short-term highly
liquid investments that are readily convertible
to a known amount of cash and are subject to
an insignificant risk of changes in value.
FINANCIAL LIABILITIES
Financial liabilities and equity instruments
are classified according to the substance of
the contractual arrangements entered into. Financial
liabilities are classified as either financial
liabilities 'at FVTPL' or 'other financial liabilities'.
There were no financial liabilities 'at FVTPL'
during the current, or preceding, period.
An equity instrument is any contract that evidences
a residual interest in the assets of the Company
after deducting all of its liabilities.
OTHER FINANCIAL LIABILTIES, BANK AND SHORT TERM
BORROWINGS
Interest-bearing bank loans and overdrafts are
recorded at the proceeds received, net of direct
issue costs. Finance charges are accounted for
on an accruals basis in profit or loss using
the effective interest rate method and are added
to the carrying amount of the instrument to
the extent that they are not settled in the
period in which they arise. Other short term
borrowings being intercompany loans and unsecured
convertible loan notes issued in the year are
recognised at amortised cost net of any financing
or arrangement fees.
3 Accounting Policies (continued)
TRADE PAYABLES
Trade payables are initially measured at fair
value and subsequently measured at amortised
cost using the effective interest method, less
provision for impairment.
EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL
Equity instruments issued by the Company are
recorded at the proceeds received, net of incremental
costs attributable to the issue of new shares.
An equity instrument is any contract that evidences
a residual interest in the assets of a company
after deducting all of its liabilities. Equity
instruments issued by the Company are recorded
at the proceeds received net of direct issue
costs.
Share capital represents the amount subscribed
for shares at nominal value.
The share premium account represents premiums
received on the initial issuing of the share
capital. Any transaction costs associated with
the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Any bonus issues are also deducted from share
premium.
The merger reserve represents the premium on
the shares issued less the nominal value of
the shares, being the difference between the
fair value of the consideration and the nominal
value of the shares. It arose from the acquisition
of Graphmada Equity Pte. Limited by the Company.
Following the disposal the merger reserve was
transferred to the Share Premium account.
The investment reserve represents the difference
between the purchase costs of the available
for sale investments less any impairment charge
and the market or fair value of those investments
at the accounting date.
The warrant reserve represents the fair value,
calculated at the date of grant, of warrants
unexercised at the balance sheet date.
Retained earnings include all current and prior
period results as disclosed in the statement
of comprehensive income.
SHARE-BASED PAYMENTS
The Company has applied the requirements of
IFRS 2 Share-based payments.
The Company operates a number of equity-settled
share-based payment schemes under which share
options are issued to certain employees. Equity-settled
share-based payments are measured at fair value
(excluding the effect of non market-based vesting
conditions) at the date of grant. The fair value
determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line
basis over the vesting period, based on the
Company's estimate of shares that will eventually
vest and adjusted for the effect of non market-based
vesting conditions.
Fair value is measured by use of the Black Scholes
model. The expected life used in the model has
been adjusted, based on management's best estimate,
for the effects of non-transferability, exercise
restrictions, and behavioural considerations.
4 CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
In the application of the Company's accounting
policies, which are described in note 3, the
Directors are required to make judgements, estimates
and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent
from other sources. The estimates and associated
assumptions are based on historical experience
and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are
reviewed on an on-going basis. Revisions to accounting
estimates are recognised in the period. Judgements
and estimates that may affect future periods
are as follows:
GOING CONCERN
The adoption of the going concern basis by the
Directors is following a review of the current
position of the Company and the forecasts for
the next 18 months. To ensure the Company has
adequate resources to continue in operation or
existence for the foreseeable future, it is dependent
on executing the impending acquisition of Signature
Gold as well as the concurrent placing which
will finance the Enlarged Group going forwards.
If the deal does not go ahead, the Company will
most likely be cancelled from trading on AIM,
which provides an additional source of funding.
The Company's continuing activities did not generate
any revenue in 2016 (2015: GBP445,000 prior to
the agreed disposal) and incurred a loss of GBP809,000
during the year (2015: GBP2,185,000 loss). In
addition as at 31 December 2016 there was a cash
balance of GBP493,000 as at 31 December 2016.
However, the funds received and receivable, from
Bass for their acquisition of Graphmada, together
with a cost-cutting exercise undertaken by the
Board should ensure that it could continue for
the foreseeable future if the RTO of Signature
Gold and concurrent placing do not transpire.
So, after making enquiries, the Directors have
formed a judgement that there is a reasonable
expectation that the Company can secure further
adequate resources when needed, to continue in
operational existence for the foreseeable future
and that adequate arrangements will be in place
to enable the settlement of their financial commitments.
For this reason, the Directors continue to adopt
the going concern basis in preparing the financial
statements. Whilst there are inherent uncertainties
in relation to future events, and therefore no
certainty over the outcome of the matters described,
the Directors consider that, based upon financial
projections and dependent on the success of their
efforts to complete these activities, the Company
will be a going concern for the next twelve months.
If it is not possible for the Directors to realise
their plans, over which there is significant
uncertainty, the carrying value of the assets
of the Company is likely to be impaired.
SHARE BASED PAYMENTS
The calculation of the fair value of equity-settled
share based awards and the resulting charge to
the statement of comprehensive income requires
assumptions to be made regarding future events
and market conditions. These assumptions include
the future volatility of the Company's share
price. These assumptions are then applied to
a recognised valuation model in order to calculate
the fair value of the awards. Details of these
assumptions are set out in note 21.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company holds investments that have been
designated as available for sale on initial
recognition. Where practicable the Company determines
the fair value of these financial instruments
that are not quoted (Level 3), using the most
recent bid price at which a transaction has
been carried out. These techniques are significantly
affected by certain key assumptions, such as
market liquidity. Other valuation methodologies
such as discounted cash flow analysis assess
estimates of future cash flows and it is important
to recognise that in that regard, the derived
fair value estimates cannot always be substantiated
by comparison with independent markets and,
in many cases, may not be capable of being realised
immediately.
5 SEGMENTAL INFORMATION
A segment is a distinguishable component of
the Company's activities from which it may earn
revenues and incur expenses, whose operating
results are regularly reviewed by the Company's
chief operating decision maker, the Board of
Directors, to make decisions about the allocation
of resources and assessment of performance and
about which discrete financial information is
available.
As the chief operating decision maker reviews
financial information for and makes decisions
about the Company's activities as a whole, the
directors have identified a single operating
segment, that of holding investments. The directors
consider that it would not be appropriate to
disclose any geographical analysis of the Company's
activities at this point in time, given the
level of current activity. Although the directors
can confirm that all revenue and expenses relate
to the investment activity.
6 OPERATING LOSS
2016 2015
GBP'000 GBP'000
-------------------------- -------- --------
Operating loss is stated
after charging:
Staff costs as per Note
8 below 223 448
Depreciation of property,
plant and equipment 1 2
Net foreign exchange
gain (124) (195)
------------------------------ -------- --------
7 auditors' remuneration
The analysis of auditors' remuneration is as
follows:
2016 2015
GBP'000 GBP'000
------------------------------------------- --------- ---------
Fees payable to the Company's auditors
for the audit of the Company's annual
accounts 30 39
Total audit fees 30 39
Fees payable to the Company auditor
and their associates for other services
to the Company:
- Tax services 2 2
32 41
----------------------------------------------- --------- ---------
8 staff costs
The average monthly number of employees (including
executive directors) for the continuing operations
was:
2016 2015
No. No.
Company total staff 4 6
2016 2015
GBP'000 GBP'000
--------------------------------------------------------------------- -------------- --------------
Wages and salaries 190 380
Social security costs - 6
Share based payment expense 33 62
223 448
--------------------------------------------------------------------------------- -------------- --------------
Directors' emoluments were as follows:
2016 2016 2016 2015
Directors Consultancy Total Total
fees payments
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------------------ -------------------- -------------- --------------
L Laurie Hunter 18 - 18 80
Manoli Yannaghas - - - 120
Jeff Marvin 4 - 4 30
David Premraj 25 - 25 30
Marius Pienaar - - - 14
Shishir Poddar 68 - 68 96
Zeg Choudhry 6 - 6 -
Brett Boynton 65 - 65 48
--------------------------- ---------- ------------------ -------------------- -------------- --------------
186 - 186 418
-------------------------------------- ------------------ -------------------- -------------- --------------
9 finance costs
2016 2015
GBP'000 GBP'000
--------------------------------------- ----------- ---------
Short term loan finance costs - 9
10 taxation
There is no UK tax charge/credit in 2016 or
2015.
Reconciliation of tax charge:
2016 2015
GBP'000 GBP'000
----------------------------------------- --------- ---------
Loss on continuing operations before
tax (7,405) (23,205)
---------------------------------------------- --------- ---------
Tax at the UK corporation tax rate
of 20% (2015: 20%) 1,481 4,641
Effects of:
Tax effect of expenses that are
not deductible in determining taxable
profit: - -
Unutilised tax losses carried forward (1,481) (4,641)
Tax charge for period - -
---------------------------------------------- --------- ---------
No deferred tax asset has been recognised in
respect of the losses. See Note 19 for further
details
Where it is anticipated that future taxable
profits will be available against which these
losses will be utilised a deferred tax asset
is recognised.
The total taxation charge in future periods
will be affected by any changes to the corporation
tax rates in force in the countries in which
the Company operates.
11 DISPOSAL OF SUBSIDIARY
In December 2015 Bass Metals Limited ("Bass") acquired 6.25% of
Graphmada Mauritius, the holding company for the Group's graphite
operations in Madagascar, and in May 2016 it was announced that
Bass would proceed with an offer to acquire the remaining 93.75% of
Graphmada Mauritius that it did not already own.
On 14 September 2016, the Company completed the disposal of its
remaining 93.75% shareholding in Graphmada Mauritius Limited.
By 15 December, following the completion OF the disposal, the
Board concluded negotiations with Bass regarding settling the
outstanding payments due in shares in Bass for cash as well as the
warranties provided as part of the Sale and Purchase Agreement
("SPA"). This resulted in a total aggregate consideration of
A$4,050,000 (GBP3,090,000). This includes deferred consideration
being the net smelter royalty of 2.5%, which has been valued at
A$500,000 (GBP292,000).
2016 2015
GBP'000 GBP'000
----------------------------------------------- --------- ---------
Consideration received or receivable:
Cash 2,215 -
Shares in Bass Metals Limited 624 -
----------------------------------------------- --------- ---------
Initial consideration 2,839 -
Deferred consideration - smelter
royalty 292
----------------------------------------------- --------- ---------
Total consideration 3,131
Less the carrying amount of net
assets sold (8,894) -
----------------------------------------------- --------- ---------
Loss on sale before tax and reclassification
of foreign currency translation
reserve (5,763) -
Reclassification of deficit on investment
reserve (700) -
Impairment of intercompany balance (133) -
----------------------------------------------- --------- ---------
Loss on sale after tax (6,596) -
----------------------------------------------- --------- ---------
12 EARNINGS PER SHARE
The basic earnings per share is based on the
profit/(loss) for the year divided by the weighted
average number of shares in issue during the
year. The weighted average number of ordinary
shares for the year ended 31 December 2016 assumes
that all shares have been included in the computation
based on the weighted average number of days
since issue.
2016 2015
GBP'000 GBP'000
Loss for the year attributable to
owners of the Company (7,405) (23,205)
Weighted average number of ordinary
shares in issue for basic and fully
diluted earnings* 164,514,863 139,754,569
LOSS PER SHARE (PENCE PER SHARE)
BASIC AND FULLY DILUTED*: (4.5p) (16.6p)
------------------------------------------ ----------- -----------
*Since the Company has incurred losses in both 2015 and 2016 the
basic loss and the diluted loss per share are the same as the
effect of exercise of options and warrants is not dilutive.
13 AVAILABLE-FOR-SALE INVESTMENTS
2016 2015
GBP'000 GBP'000
Investments at fair value at 1 January 1 6
Disposals (53) (5)
Acquisition 40 -
Investments acquired as part consideration
for the sale of subsidiary 624 -
612 1
Market value adjustments to investment - -
------------------------------------------- -------- --------
Market value of investments at 31
December 612 1
------------------------------------------------ -------- --------
Long term investments 40 1
Short term investments 572 -
------------------------------------------------ -------- --------
Market value of investments at 31
December 612 1
------------------------------------------------ -------- --------
Categorised as:
Level 2 Investments 572 1
Level 3 Investments 40 -
The table above sets out the fair value measurements using the
IFRS 7 fair value hierarchy. Categorisation within the hierarchy
has been determined on the basis of the lowest level of input that
is significant to the fair value measurement of the relevant asset
as follows:
Level 1 - valued using quoted prices in active markets for
identical assets.
Level 2 - valued by reference to valuation techniques using
observable inputs other than quoted prices included within Level
1.
Level 3 - valued by reference to valuation techniques using
inputs that are not based on observable market data.
13 AVAILABLE-FOR-SALE INVESTMENTS (continued)
There were no transfers between Level 1, Level 2 and Level 3 in
either 2016 or 2015.
The changes in level 3 investments for the year include:
2016 2015
GBP'000 GBP'000
Investments at fair value at 1 January - -
Acquisition 40 -
Value of investments at 31 December 40 -
--------------------------------------- -------- --------
The above acquisition relates to the investment in Tirupati
Resources Mauritius Limited ("TRM"), the joint venture holding
company of the joint venture agreement between StratMin and
Tirupati Carbons and Chemicals Pvt. Ltd ("Tirupati"). US$50,000 was
invested by way of a subscription for 1.48% of the enlarged issued
share capital of TRM. TRM is the 98% owner of Tirupati Madagascar
Ventures SARL ("TMV"), the owner of the Vatomaina licence,
Exploitation Permit (PE) No. 38321.
Measurement of fair value of financial instruments
The management team of StratMin Global Resources
plc perform valuations of financial items for
financial reporting purposes, including Level
3 fair values. Valuation techniques are selected
based on the characteristics of each instrument,
with the overall objective of maximising the use
of market-based information.
14 TRADE AND OTHER RECEIVABLES
2016 2015
GBP'000 GBP'000
------------------------------------- ------- -------
Prepayments and accrued income 13 20
Trade receivable - 103
VAT receivable 11 1
24 124
Short term loans to Graphmada - 823
Due from Bass under early settlement
agreement 983 -
1,007 947
------------------------------------------ ------- -------
No receivables were past due or provided for at the year-end or
at the previous year end. The Directors consider the carrying
amount of trade and other receivables approximates to their fair
value.
15 CASH AND CASH EQUIVALENTS
2016 2015
GBP'000 GBP'000
-------------------------- ------- -------
Cash and cash equivalents 493 154
493 154
------------------------------- ------- -------
The Directors consider the carrying amount of cash and cash
equivalents approximates to their fair value.
TRADE AND OTHER PAYABLES
16
2016 2015
GBP'000 GBP'000
----------------- ------- -------
Trade payables 360 261
Other payables 11 132
Accrued expenses 76 305
------------------------ ------- -------
447 698
------------------------ ------- -------
The Directors consider the carrying amount of trade payables
approximates to their fair value.
SHORT TERM BORROWINGS
The following amounts relate to short term borrowings:
17
2016 2015
GBP'000 GBP'000
--------------------------------------- --------- ---------
Other short term borrowings* 88 87
---------------------------------------------- --------- ---------
Included in short term loans is a loan of GBP88,000 (2015:
GBP30,000) from current Managing Director Brett Boynton. The loan
does not accrue interest and is repayable on demand. It was repaid
in full in February 2017.
The Directors consider the carrying amount of short term
borrowings approximates to their fair value.
1.1 FINANCIAL INSTRUMENTS
18
FINANCIAL ASSETS BY CATEGORY
The IAS 39 categories of financial assets included
in the Statement of financial position and the
headings in which they are included are as follows:
2016 2015
GBP'000 GBP'000
------------------------------------- --------- ---------
Financial assets:
Cash and cash equivalents 493 156
Available for sale investments 612 1
Deferred consideration 292 -
Loans and receivables 994 124
-------------------------------------- ---- --------- ---------
2,391 281
------------------------------------------- --------- ---------
FINANCIAL LIABILITIES BY CATEGORY
The IAS 39 categories of financial liability
included in the Statement of financial position
and the headings in which they are included
are as follows:
2016 2015
GBP'000 GBP'000
------------------------------------ -------- --------
Financial liabilities at amortised
cost:
Trade and other payables 371 311
Short term borrowings 88 87
------------------------------------- -------- --------
459 398
------------------------------------ -------- --------
1.2 FINANCIAL INSTRUMENTS (continued)
18
CAPITAL RISK MANAGEMENT
The Company manages its capital to ensure that
it will be able to continue as a going concern
while maximising the return to stakeholders
through the optimisation of the debt and equity
balance. The capital structure of the Group
consists of debt, (previously includes the borrowings)
cash and cash equivalents and equity attributable
to equity holders of the Company, comprising
issued capital, reserves and retained earnings,
all as disclosed in the Statement of Financial
Position.
FINANCIAL RISK MANAGEMENT OBJECTIVES
The Company is exposed to a variety of financial
risks which result from both its operating and
investing activities. The Company's risk management
is coordinated by the board of directors, and
focuses on actively securing the Company's short
to medium term cash flows by minimising the
exposure to financial markets.
The main risks the Company is exposed to through
its financial instruments are credit risk, liquidity
risk and market price risk.
FOREIGN CURRENCY RISK MANAGEMENT
The Company undertakes transactions denominated
in foreign currencies. Hence, exposures to exchange
rate fluctuations arise. Since the disposal
of Graphmada Equity Pte. Ltd, the Company's
major activity is now investment in Mauritius
and Madagascar, bringing exposure to the exchange
rate fluctuations of GBP/GBP Sterling with both
USD/$ Dollars, Mauritian Rupee and Madagascan
Ariary. The risk is reduced however, given the
investments were in USD, Company cash liquidity
is in GBP and the Company has primarily incurred
expenditure during the year denominated in GBP.
Exchange rate exposures are managed within approved
policy parameters. The Company does not enter
into forward exchange contracts to mitigate
the exposure to foreign currency risk as amounts
paid and received in specific currencies are
expected to largely offset one another and the
currencies most widely traded are relatively
stable.
The Directors consider the balances most susceptible
to foreign currency movements to be the Investment
Available for Sale (2015: Investments in Subsidiaries).
These assets are denominated in the following
currencies:
AUD USD
GBP'000 GBP'000
---------------------------- ---------- ---------
Company 31 December 2016
Investment Available for
Sale 572 -
Deferred consideration 292 -
864 -
---------------------------- ---------- ---------
Company 31 December 2015
Investment in Subsidiaries - 6,396
----------------------------- --------- ---------
18 Financial instruments (continued)
The following table illustrates the sensitivity
of the value of the foreign currency denominated
assets in regards to the change in AUD and USD
exchange rates.
It assumes a +/- 15% change in the AUD/GBP exchange
rate for the year ended 31 December 2016 and
a +/- 7.104% change in the USD/GBP exchange
rate for the year ended 31 December 2015. These
percentages have been based on the average market
volatility in exchange rates in the previous
twelve months for those periods.
Impact of exchange rate fluctuations:
USD
AUD impact impact
2016 2015
GBP'000 GBP'000
-------------------------------------- ------------- ----------
Average movement in exchange
rate 15% 7.104%
Change in equity
increase in GBP value (85) (306)
decrease in GBP value 85 306
Result for the period
increase in GBP value (44) -
decrease in GBP value 44 -
Exposure to foreign exchange rates varies during
the year depending on the volume and nature
of foreign transactions. Nonetheless, the analysis
above is considered to be representative of
the Group's exposure to currency risk.
interest rate risk managEment
The Company's exposure to interest rates on
financial assets and financial liabilities is
detailed in the liquidity risk management section
of this note.
There are no long term loans or short term loans
that carry any interest and thus sensitivity
analyses have not been provided on the exposure
to interest rates for both derivatives and non-derivative
instruments during the year.
There would have been no effect on amounts recognised
directly in equity.
Credit risk management
The Company's financial instruments, which are
subject to credit risk, are considered to be
cash and cash equivalents and trade and other
receivables, and its exposure to credit risk
is not material. The credit risk for cash and
cash equivalents is considered negligible since
the counterparties are reputable banks.
The Company's maximum exposure to credit risk
is GBP1,779,000 (2015: GBP280,000) comprising
other receivables and cash.
Liquidity risk management
Ultimate responsibility for liquidity risk management
rests with the Board of Directors, which monitors
the Company's short, medium and long-term funding
and liquidity management requirements on an
appropriate basis. The Company manages liquidity
risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities.
The Company's liquidity risk arises in supporting
the trading operations in the subsidiaries,
which hopefully will start to generate profits
and positive cash-flows in the short term. However,
as referred to in Note 4 the Company is currently
exposed to significant liquidity risk and needs
to obtain external funding to support the Company
going forwards.
19 dEferred tax
At the year-end date, the Company had unused
tax losses of GBP36.1m (2015: GBP32.1m) available
for offset against future gains and trading
profits. No deferred tax asset has been recognised
in respect of these losses (2015: GBPnil) due
to the unpredictability of future profit streams.
Called up share capital
20
Number of Nominal value
shares
Ordinary Deferred Share
Ordinary Deferred shares shares premium
shares shares GBP'000 GBP'000 GBP'000
ISSUED AND FULLY
PAID:
At 31 December
2014 112,634,237 - 4,505 - 31,771
Ordinary shares
of 4p each 38,515,154 - 1,541 - 173
Expenses of share
issues - - - (126)
------------------------------ ------------ ------------- --------- --------- ---------
At 31 December
2015 151,149,391 - 6,046 - 31,818
------------------------------ ------------ ------------- --------- --------- ---------
Share reorganisation
(see note below)
Ordinary shares
of 0.01p each 151,149,391 151,149,391 15 6,031 31,818
Share issues 25,780,022 - 3 - 637
Expenses of share
issues - - - - (15)
Reclassification
of merger reserve
following disposal
of subsidiaries - - - - 23,460
------------------------------ ------------ ------------- --------- --------- ---------
At 31 December
2016 176,929,413 151,149,391 18 6,031 55,900
------------------------------ ------------ ------------- --------- --------- ---------
Note: During the year the Company undertook
a share capital reorganisation subdividing each
existing ordinary share of 4p into one ordinary
share of 0.01p and one deferred share of 3.99p.
On 4 March 2016, the Company issued 12,000,000
new ordinary shares of 0.01p each at a price
of 2.5p each, raising in aggregate gross proceeds
of approximately GBP299,000.
On 30 September 2016, the Company issued 13,780,022
new ordinary shares of 0.01p each at a price
of 2.5p each to its directors.
On 4 March 2016 the Company issued warrants
to subscribe for 600,000 ordinary shares at
0.025p per share, exercisable on or before 4
March 2018 to Optiva Securities Limited. The
warrants issued were part of placing of the
same date and so the charge was taken against
Share premium as part of the placing fees.
21 Share-based payments
WARRANTS
Details of the warrants outstanding during the
year are as follows:
2016 2015
Number Weighted Number Weighted
of Warrants average of Warrants average
exercise exercise
price price
000's GBP 000's GBP
Outstanding at the
beginning of the
year 16,136 0.0578 11,970 0.1389
Granted during the
year 600 0.025 9,880 0.0784
Exercised during - - -
the year*
Lapsed during the
year (14,030) 0.0925 (5,714) 0.1389
Outstanding at the
end of the year 2,706 0.0672 16,136 0.0578
-------------------------- ------------- ---------- ------------- ----------
Exercisable at the
end of the year 2,706 0.0672 16,136 0.0578
The warrants outstanding at 31 December 2016
had a weighted average remaining contractual
life of 1.2 years (2015: 1.9 years).
21 Share-based payments (continued)
The estimated fair value of the warrants granted was calculated
by applying the Black-Scholes option pricing model. The assumptions
used in the calculation were as follows:
4 March 9 November 12 July 28 March
2016 2015 2015 2014
Share price 2.65 pence 4.25 pence 4.02 pence 8.63 pence
at date of grant 2.5 pence 6.00 pence 4.00 pence 9.00 pence
Exercise price 40% 40% 40% 40%
Expected volatility Nil Nil Nil Nil
Expected dividend Exercisable Exercisable Exercisable Exercisable
Vesting criteria on date on date on date on date
of grant of grant of grant of grant
Contractual 1.5 years 5 years 3 year 3-5 years
life 1.5% 1.5% 1.5% 2.5%
Risk free rate 0.7929 1.4753 1.9894 2.9835
Estimated fair pence pence pence -3.8608
value of each pence
warrant
The total share-based payment expense recognised in the option
and warrant reserve for the year ended 31 December 2016 in respect
of the warrants issued was GBPnil (2015: GBPnil) given the warrants
issued were part of fundraising. Thus the charge has been taken
against Share premium as part of the placing fees.
Equity-settled share option schemes
The Company has granted a variety of options
to certain employees and consultants. Options
are exercisable at a price equal to the average
quoted market price of the Company's shares
on the date of grant. Exercise period is between
3 and 10 years from the date of grant, the options
are forfeited if the employee leaves the Company
before the options vest.
The estimated fair value of the options granted
was calculated by applying the Black-Scholes
option pricing model. The assumptions used in
the calculation were as follows:
6p Options 9p Options 14p Options
Share price 5.25 pence 5.25 pence 9.00 pence
at date of 6.00 pence 9.00 pence 14.00 pence
grant 50% 50% 50%
Exercise price Nil Nil Nil
Expected volatility Exercisable Exercisable Exercisable
Expected dividend on date of on date of on date of
Vesting criteria grant grant grant
1.5 years 1.5 years 3 years
Contractual 1.5% 1.5% 2.5%
life
Risk free rate 1.05 pence 0.4502 pence 2.2054 pence
Estimated fair
value of each
Option
The total share-based payment expense recognised in the option
and warrant reserve for the year ended 31 December 2016 in respect
of the options granted was GBPNil (2015: GBP66,714).
21 Share-based payments (continued)
Details of the options outstanding during the
year are as follows:
2016 2015
Number Weighted Number Weighted
of options average of options average
exercise exercise
price price
000's GBP 000's GBP
--------------------- ------------ ---------- ------------ ----------
Outstanding at the
beginning of the
year 17,379 0.1107 7,479 0.1610
Granted during the
year - - 10,650 0.0740
Cancelled during
the year - - (750) 0.0900
Lapsed during the
year (14,879) 0.0764 - -
Outstanding at the
end of the year 2,500 0.0861 17,379 0.1107
Exercisable at the
end of the year 2,500 0.0913 16,379 0.1129
The options outstanding at 31 December 2016
had a weighted average remaining contractual
life of 0.7 years (2015: 2.4 years).
The charge in the income statement in respect
of options was GBPNil for 2016 (2015: GBP66,714).
22 EVENTS AFTER THE REPORTING PERIOD
There were no material events after the reporting
period.
23 Related party tranSactions
The remuneration of the Directors, who are the
key management personnel of the Group, is set
out in note 8.
Loans receivable from the related parties are
disclosed in note 14.
During the year the Directors lent the Company
GBP58,000 (2015: GBP152,000) by way of short
term Director Loans free of interest. This has
been included within Short Term Borrowings.
The amount outstanding at year end was GBP87,832
(2015: GBP87,170) (see note 17).
At the beginning of the year there was a loan
owing to former Director David Premraj of GBP46,797.
The loan was unsecured, repayable on demand
and zero coupon. Further amounts totalling GBP48,947
were lent to the Company on the same basis through
Consolidated Minerals (Pty) Limited ("Consolidated
Minerals"). Consolidated Minerals is connected
to the Company as D Premraj is also a Director
and significant shareholder through connected
parties of Consolidated Minerals and the Company.
Both of the loans were repaid in full during
the year.
During the year Consolidated Chrome charged
the Company GBP154,000 for professional fees
in relation to the investment in Tirupati Resources
Mauritius Limited. Ghanshyam Champaklal, director
and significant shareholder of Consolidated
Chrome is also a significant shareholder of
the Company. Consolidated Chrome is also connected
through previous director D Premraj. The balance
at the year-end in respect of this fee is GBP127,301
(2015: GBPNil).
During the year the Company was charged GBP28,800
for consultancy fees by Srirekam Kesava Purushotham,
a significant shareholder of the Company through
connected parties, and a Director of Graphmada
Equity (Pte) Limited ("GME"). GME was the former
intermediate holding company of Graph Mada Sarl
before it transferred its holding to Graphmada
Mauritius Limited in 2014. GME was removed from
the Company register in Singapore on 19 February
2016. The balance owing at year end in respect
of these fees was GBP23,800.
During the year the following transactions took place with
Tirupati and subsidiary entities of the Tirupati Group. Director
and Shareholder Shishir Poddar is a major shareholder and Director
of Tirupati:
2016 2015
GBP'000 GBP'000
------------------------------------------------------ ------- -------
Tirupati Carbon and Chemicals Group Limited
Goods and services provided to the Group 25 96
Goods and services provided from the Group 157 34
Technical consultancy services paid for in shares - 100
Included in the accounts receivable / (payable) at 31
December - (31)
Tirupati Mauritius Limited
Investments in Tirupati Resources Mauritius Limited 40 -
Goods and services provided from the Group 204 86
Trade debt and assignment fee written off in the year 200 -
Included in the accounts receivable / (payable) at 31
December - (28)
24 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
The Company had no capital commitments or contingent
liabilities as at 31 December 2016 (2015: GBPnil).
25 ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be one
single ultimate controlling party.
For further information please visit www.stratminglobal.com or
contact:
StratMin Global Resources Plc +44 (0) 20
Brett Boynton, CEO 3691 6160
Allenby Capital (Nominated Adviser
& Broker)
John Depasquale/ Nick Harriss/Richard +44 (0) 020
A Short 3328 5656
Optiva Securities (Broker) +44 (0) 20
Christian Dennis 3137 1903
VSA Capital Limited (Financial
Adviser) +44 (0) 20
Andrew Raca 3005 5000
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKDDBDBKBQPK
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May 02, 2017 02:01 ET (06:01 GMT)
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