TIDMBNR
RNS Number : 1514B
Blenheim Natural Resources PLC
05 October 2015
5 October 2015
BLENHEIM NATURAL RESOURCES PLC (AIM: BNR)
(FORMERLY KNOWN AS COBURG GROUP PLC)
("Blenheim" or "the Company")
FINAL RESULTS
Blenheim is pleased to announce its final results for the year
ended 30 April 2015.
Copies of the Company's annual report for the year ended 30
April 2015 will shortly be sent to shareholders.
In accordance with Rule 26 of the AIM Rules for Companies, this
information will be made available under the Reports and Documents
section of the Company's website:
http://www.blenheimnaturalresources.com
For further information please contact:
Blenheim Natural +44 (0) 1622
Chris Ells Resources Plc 844601
Colin Aaronson/Jamie Grant Thornton +44 (0) 20 7383
Barklem UK LLP 5100
+44 (0)1483
Nick Emerson SI Capital Ltd 413500
Lucy Williams / Duncan Peterhouse Corporate +44 (0) 20 7469
Vasey Finance Limited 0932
CHAIRMAN'S STATEMENT
These remain challenging times for the Natural Resources Sector
and Blenheim Natural Resources Plc ("Blenheim" or the "Company") is
no exception.
Results for Blenheim for the year ended 30 April 2015 show a
loss of GBP252,123 (2014 GBP78,786 as restated). A proportion of
this loss relates to the partial impairment of the Company's
investment in African Eagle Resources plc ("AFE") of GBP86,832.
Operating costs were GBP86,748, including maintenance of the
Company's AIM listing, while loss on disposal of financial assets
at fair value through profit or loss amounted to GBP49,243.
These results reflect the continued downturn in the Natural
Resources Sector and the significant rout in commodity prices,
aptly illustrated by the share price of Glencore, the world's
largest commodity trader and a FTSE 100 company, which has fallen
by more than 70% since the beginning of 2015.
The biggest effect of this climate on Blenheim's results has
been on the Company's investment in AFE. We have written this
investment down to GBP82,345 from its historic cost of GBP169,177,
which represents the Blenheim Board's conservative valuation of its
11.4% interest in AFE. AFE is no longer listed on AIM but remains
listed on the Johannesburg AltX market. AFE's last annual report
and financial statements indicated continuing viable interests in
mining projects in Tanzania and Zambia.
In arriving at our results, prior year adjustments have has been
recognised as a result of the following:
-- In the years ended 30 April 2013 and 30 April 2014, the
Convertible Loan Notes were not accounted for in accordance with
IFRS as a compound financial instrument and no equity element to
these loans was recognised within the financial statements;
-- In the prior year the gains on disposal of financial assets
at fair value through profit or loss were disclosed as an
exceptional item. As this forms part of the principal activity of
the Company these gains have been re-classified to other gains and
losses. In addition, dividend income previously recognised has also
been re-classified as revenue ; and
-- At the end of 2014 the Directors took the decision to
re-categorise certain investments from being valued as available
for sale to at fair value through the profit or loss. As a result
an adjustment has been made to reclassify the cumulative loss
previously recorded in other comprehensive income to profit or loss
in that year.
These adjustments had the impact of increasing the loss for the
year in 2014 by GBP32,093 and increasing total equity by
GBP63,684.
In spite of these results, the Blenheim Board remains quietly
confident that the slide in commodity prices may soon touch
bottom.
Our stated strategy of making investments in "good value"
companies and projects in the Natural Resources Sector by way of
cash and Blenheim stock remains our goal.
As an investment company, we are well positioned to take
advantage of opportunities offered by the current low valuations in
the sector and we continue actively to explore opportunities to
undertake a reverse-takeover of a Natural Resources company, or any
other deal attractive enough to benefit Blenheim.
We have received several interesting propositions and we are
confident that one or more transactions to benefit Blenheim
shareholders will eventuate in the near term.
To encourage liquidity in trading of our AIM listed shares, we
are proposing a 100 for 1 share split which is subject to approval
by the Company's shareholders at the forthcoming AGM. As announced
on 29 September 2015, we have changed the name of the Company to
Blenheim Natural Resources Plc to herald this new era.
I look forward to providing the Company's shareholders with
future updates.
Chris Ells
Chairman
2 October 2015
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2015
As restated
30 April 2015 30 April 2014
Notes GBP GBP
CONTINUING OPERATIONS
REVENUE 4 2,361 3,226
Cost of Sales - -
GROSS PROFIT 2,361 3,226
Administrative expenses 5 (86,748) (65,148)
Impairment of available
for sale financial
assets 13 (86,832) -
Other (losses)/gains
- net 8 (49,243) 9,077
OPERATING LOSS (220,462) (52,845)
Finance income 9 36 -
Finance costs 9 (31,697) (25,941)
LOSS BEFORE INCOME
TAX (252,123) (78,786)
Income tax expense 10 - -
LOSS FOR THE YEAR (252,123) (78,786)
OTHER COMPREHENSIVE INCOME
Item that may be reclassified subsequently to profit or
loss:
Reclassification of
cumulative losses on
available for sale
financial assets - 14,447
OTHER COMPREHENSIVE
INCOME FOR THE YEAR,
NET OF INCOME TAX - 14,447
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR 18 (252,123) (64,339)
EARNINGS PER SHARE
(expressed in pence
per share)
Basic and diluted 12 (35.43) (19.08)
STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2015
As restated As restated
30 April 30 April 1 May 2013
2015 2014
Notes GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Available for
sale financial
assets 13 82,345 156,631 90,127
CURRENT ASSETS
Financial assets
at fair value
through profit
or loss 14 141,334 70,116 -
Cash and cash
equivalents 15 39,829 72,150 169,593
Prepayments 13,704 17,564 14,492
194,867 159,830 184,085
TOTAL ASSETS 277,212 316,461 274,212
EQUITY
Share capital 16 1,238,545 1,207,045 1,207,045
Share premium 16 801,614 633,164 633,164
Shares to be
issued 17 76,135 76,135 50,180
Share option
reserve 17 - - 9,000
Merger relief
reserve 17 417,284 417,284 417,284
Revaluation reserve 17 - - (14,447)
Retained earnings 18 (2,512,274) (2,260,151) (2,190,365)
TOTAL EQUITY 21,304 73,477 111,861
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings 19 226,513 211,316 135,581
CURRENT LIABILITIES
Trade and other
payables 20 29,395 31,668 26,770
TOTAL LIABILITIES 255,908 242,984 162,351
TOTAL EQUITY
AND LIABILITIES 277,212 316,461 274,212
The Financial Results were approved and authorised for issue by
the Board of Directors on 2 October 2015 and were signed on its
behalf by:
C J Ells - Director
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2015
Shares Share Merger
Share Share to option relief Revaluation Retained
capital premium be issued reserve reserve reserve earnings Total
GBP GBP GBP GBP GBP GBP GBP GBP
Balance at
1 May 2013 1,207,045 633,164 - 9,000 417,284 (14,447) (2,189,604) 62,442
Prior year
adjustment
(Note 11) - - 50,180 - - - (761) 49,419
---------- --------- ----------- --------- --------- ------------ ------------ ----------
Balance at
1 May 2013
(restated) 1,207,045 633,164 50,180 9,000 417,284 (14,447) (2,190,365) 111,861
Loss for the
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year - - - - - - (78,786) (78,786)
Other Comprehensive
income:
Reclassification
of cumulative
losses on
available
for sale financial
asset - - - - - 14,447 - 14,447
---------- --------- ----------- --------- --------- ------------ ------------ ----------
Total comprehensive
income for
the year - - - - - 14,447 (78,786) (64,339)
---------- --------- ----------- --------- --------- ------------ ------------ ----------
Cancellation
of share options - - - (9,000) - - 9,000 -
Issue of
convertible
loan stock - - 25,955 - - - - 25,955
---------- --------- ----------- --------- --------- ------------ ------------ ----------
Total transactions
with owners,
recognised
directly in
equity - - 25,955 (9,000) - - 9,000 25,955
---------- --------- ----------- --------- --------- ------------ ------------ ----------
Balance at
30 April 2014 1,207,045 633,164 76,135 - 417,284 - (2,260,151) 73,477
Balance at
1 May 2014 1,207,045 633,164 76,135 - 417,284 - (2,260,151) 73,477
Loss for the
year - - - - - - (252,123) (252,123)
Total comprehensive
income for
the year - - - - - - (252,123) (252,123)
---------- --------- ----------- --------- --------- ------------ ------------ ----------
Issue of share
capital 31,500 173,250 - - - - - 204,750
Issue costs - (4,800) - - - - - (4,800)
Total transactions
with owners,
recognised
directly in
equity 31,500 168,450 - - - - - 199,950
Balance at
30 April 2015 1,238,545 801,614 76,135 - 417,284 - (2,512,274) 21,304
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2015
As restated
30 April 2015 30 April 2014
GBP GBP
Cash flows from operating
activities
Loss before income tax (252,123) (78,786)
Finance costs 31,697 25,941
Finance income (36) -
Loss/(gain) on disposal
of financial assets
at fair value through
profit or loss 49,243 (9,077)
Impairment of available 86,832 -
for sale financial assets
Other income (2,361) (152)
Share based payments - (9,000)
Decrease/(increase) in
trade and other receivables 3,226 (3,072)
(Decrease)/increase in
trade and other payables (2,273) 4,898
Net cash used in operating
activities (85,795) (69,248)
Cash flows from investing
activities
Purchase of available (12,546) -
for sale financial assets
Purchase of financial
assets at fair value
through profit or loss (147,126) (192,311)
Proceeds from disposal
of financial assets at
fair value through profit
or loss 27,299 88,366
Dividends received 2,361 -
Net cash used in investing
activities (130,012) (103,945)
Cash flows from financing
activities
Proceeds from the issue 204,750 -
of share capital
Share issue expenses (4,800) -
paid
New loans taken out in
year - 90,000
Interest paid (16,500) (14,250)
Interest received 36 -
Net cash generated from
financing activities 183,486 75,750
Decrease in cash and
cash equivalents (32,321) (97,443)
Cash and cash equivalents
at the beginning of the
year 72,150 169,593
Cash and cash equivalents
at the end of the year 39,829 72,150
NOTES TO THE FINANCIAL RESULTS
FOR THE YEAR ENDED 30 APRIL 2015
1. ACCOUNTING POLICIES
General information
Blenheim Natural Resources Plc is a public limited company
incorporated in England and Wales under the Companies Act
(registered number 02956279). The Company is domiciled in the
United Kingdom and its registered address is Unit 3, Harrington
Way, Warspite Road, Woolwich, London, SE18 5NU. The Company's
shares are traded on the AIM market of the London Stock
Exchange.
Summary of significant accounting policies
The principal Accounting Policies applied in the preparation of
these results are set out below. These Policies have been
consistently applied to all the periods presented, unless otherwise
stated.
Basis of preparation
These Financial Results have been prepared in accordance with
International Financial Reporting Standards (IFRS) and IFRS
Interpretations Committee (IFRS IC) interpretations as adopted by
the European Union and the Companies Act 2006 applicable to
companies reporting under IFRS. The Financial Results have been
prepared under the historical cost convention, as modified by the
revaluation of available-for-sale financial assets and financial
assets at fair value through profit or loss.
The Financial Results set out in this announcement do not
constitute audited financial statements for the year ended 30 April
2015. The financial information for the year ended 30 April 2014 is
derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies and re-stated for the prior
year adjustments mentioned below. The Group's previous auditors
reported on those accounts and their report was unqualified.
The Financial Results for the year ended 30 April 2015 are
derived from the financial statements but do not constitute
financial statements. The Company's auditors have reported on the
statutory financial statements for the year ended 30 April 2015 and
their report is unqualified.
The preparation of Financial Results in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Company's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Financial Results
are disclosed in Note 3.
Going concern
The Financial Results have been prepared on the basis that the
Company will continue as a going concern. Under the going concern
basis, an entity is ordinarily viewed as continuing in business for
the foreseeable future with neither the intention nor the necessity
of liquidation, ceasing trading or seeking protection from
creditors pursuant to laws or regulations. The assessment has been
made based on the Company's economic prospects.
In assessing whether the going concern basis is appropriate,
Management has taken into account all available information for the
foreseeable future, in particular for the twelve months from the
date of approval of the Financial Statements. Should the Company be
unable to continue trading, adjustments would have to be made to
reduce the value of the assets to their recoverable amounts, to
provide for further liabilities which might arise, and to classify
fixed assets as current.
The Directors are in discussions with various parties in
relation to a number of potential acquisitions that have been
identified and which are expected to contribute positively to cash
flow in the short to medium term. The Company's activities,
together with the factors likely to affect its future development,
performance and position, are set out in the Strategic Report. The
Company finances it working capital through equity and shareholder
loans and currently has no debt with external providers of finance.
The Directors are considering the possibility of raising further
funds on the open market to take advantage of the opportunities
that are considered to be available.
On this basis, the Directors have formed a judgement, at the
time of approving the Financial Results, that there is a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. For this reason
the Directors have adopted the going concern basis in preparing the
Financial Statements.
Changes in accounting policy and disclosures
(a) New standards, amendments and interpretations adopted by the
Company
The following standards have been adopted by the Company for the
first time for the financial year beginning on or after 1 May 2014
and have a material impact on the Company:
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Amendments to IAS 36, 'Impairment of Assets', require additional
information about the fair value measurement when the recoverable
amount of impaired assets is based on fair value less costs of
disposal. The amendments also incorporate the requirement to
disclose the discount rate used in determining impairment (or
reversals) where the recoverable amount (based on fair value less
costs of disposal) is determined using a present value
technique.
All other new standards and amendments to standards and
interpretations effective for the financial year beginning on or
after 1 May 2014 are not material to the Company and therefore not
applied.
(b) New standards, amendments and interpretations not yet
adopted by the Company
The standards and interpretations that are issued, but not yet
effective, up to the date of issuance are disclosed below. The
Company intends to adopt these standards, if applicable, when they
become effective.
Standard Effective Date
IAS 1 (Amendments) Presentation of Financial *1 January
Statements: Disclosure Initiative 2016
IAS 19 (Amendments) Defined Benefit Plans: Employee 1 February
Contributions 2015
IAS 27 (Amendments) Separate Financial Statements *1 January
2016
IAS 28 (Amendments) Investment Entities: Applying *1 January
the Consolidation Exception 2016
IAS 38 (Amendments) Clarification of Acceptable *1 January
Methods of Amortisation 2016
IFRS 9 (Amendments) Financial Instruments *1 January
2018
IFRS 10 (Amendments) Consolidated Financial Statements *1 January
2016
IFRS 10 (Amendments) Investment Entities: Applying *1 January
the Consolidation Exception 2016
IFRS 12 (Amendments) Investment Entities: Applying *1 January
the Consolidation Exception 2016
IFRS 14 Regulatory Deferral Accounts *1 January
2016
IFRS 15 Revenue from Contracts with *1 January
Customers 2018
Annual Improvements 2010 - 2012 Cycle 1 February
2015
Annual Improvements 2011 - 2013 Cycle 1 January 2015
Annual Improvements 2012 - 2014 Cycle *1 July 2016
*Subject to EU endorsement
Financial assets
(a) Classification
The Company classifies its financial assets in the following
categories: at fair value through profit or loss, loans and
receivables, and available for sale. The classification depends on
the purpose for which the financial assets were acquired.
Management determines the classification of its financial assets at
initial recognition.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are
financial assets held for trading and include investments the Board
of Directors expect to trade within the next 12 months.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities
greater than 12 months after the end of the reporting period. These
are classified as non-current assets. The Company's loans and
receivables comprise 'prepayments' and 'cash and cash equivalents'
in the Statement of Financial Position.
Available for sale financial assets
Available for sale financial assets include non-derivative
financial assets that are either designated as such or do not
qualify for inclusion in any of the other categories of financial
assets. They are included in non-current assets unless the
investment matures or management intends to dispose of it within 12
months of the end of the reporting period.
(b) Recognition and measurement
Regular purchases and sales of financial assets are recognised
on the trade-date - the date on which the Company commits to
purchase or sell the asset. Investments are initially recognised at
fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss.
Financial assets carried at fair value through profit or loss
are initially recognised at fair value, and transaction costs are
expensed in the Income Statement. Financial assets are derecognised
when the rights to receive cash flows from the investments have
expired or have been transferred and the group has transferred
substantially all risks and rewards of ownership. Available for
sale financial assets and financial assets at fair value through
profit or loss are subsequently carried at fair value. Loans and
receivables are subsequently carried at amortised cost using the
effective interest method.
Gains or losses arising from changes in the fair value of the
'financial assets at fair value through profit or loss' category
are presented in the Income Statement within 'Other (losses)/gains
- net' in the year in which they arise. Dividend income from
financial assets at fair value through profit or loss is recognised
in the Income Statement.
Changes in the fair value of monetary and non-monetary
securities classified as available for sale are recognised in other
comprehensive income.
When securities classified as available for sale are sold or
impaired, the accumulated fair value adjustments recognised in
equity are included in the Income Statement as 'Gains and losses
from investment securities'. Dividends on available-for-sale equity
instruments are recognised in the Income Statement as part of other
income when the Company's right to receive payments is
established.
(c) Impairment of financial assets
The Company assesses at the end of each reporting period whether
there is objective evidence that a financial asset or a group of
financial assets is impaired.
A significant or prolonged decline in the fair value of equity
investments and securities below its cost is also evidence that the
assets are impaired. If any such evidence exists the cumulative
loss - measured as the difference between the acquisition cost and
the current fair value, less any impairment loss on that financial
asset previously recognised in profit or loss - is removed from
equity and recognised in profit or loss. Impairment losses
recognised in the Income Statement on equity instruments are not
reversed through the Income Statement.
Trade and other receivables
Trade and other receivables are initially recognised at fair
value. Fair value is considered to be the original invoice amount,
discounted where material, for short-term receivables and
payables.
Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash
equivalents comprise of cash in hand and bank balances.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
ordinary shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
Trade payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less (or in the normal
operating cycle of the business if longer). If not, they are
presented as non-current liabilities.
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
Compound financial instruments
Compound financial instruments issued by the Company comprise
convertible notes that can be converted to share capital at the
option of the holder, and the number of shares to be issued does
not vary with changes in their fair value.
The liability component of a compound financial instrument is
recognised initially at the fair value of a similar liability that
does not have an equity conversion option. The equity component is
recognised initially as the difference between the fair value of
the compound financial instrument and the fair value of the
liability component. Any directly attributable transaction cost is
allocated to the liability and equity components in proportion to
their initial carrying amounts.
Subsequent to initial recognition, the liability component of a
compound financial instrument is measured at amortised cost using
the effective interest method. The equity component of a compound
financial instrument is not re-measured subsequent to initial
recognition except on conversion or expiry.
Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement of the
liability for at least 12 months after the end of the reporting
period.
Income tax
Income tax is recognised in the Income Statement, except to the
extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity,
respectively.
The current income tax charge is calculated on the results shown
in the Financial Results and are calculated according to local tax
rules, using tax rates enacted or substantially enacted by the
Statement of Financial Position date.
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Tax losses available to be carried forward as well as other
income tax credits to the Company are assessed for recognition as
deferred tax assets. Deferred tax assets are only recognised to the
extent that it is probable that future taxable profits will be
available against which the asset can be recognised and are reduced
to the extent that it is no longer probable that the related tax
benefit will be realised.
Share based payments
The Company operates equity-settled, share-based compensation
plans, under which the Company receives services from directors and
employees as consideration for equity instruments (options) of the
Company. The fair value of the services received in exchange for
the grant of the options is recognised as an expense. The total
amount to be expensed is determined by reference to the fair value
of the options granted:
-- including any market performance conditions (for example, an entity's share price);
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability, sales
growth targets and remaining an employee of the entity over a
specified time period); and
-- including the impact of any non-vesting conditions (for
example, the requirement for employees to save or holding shares
for a specific period of time).
At the end of each reporting period, the Company revises its
estimates of the number of options that are expected to vest based
on the non-market vesting conditions and service conditions. It
recognises the impact of the revision to original estimates, if
any, in the Income Statement, with a corresponding adjustment to
equity.
When the options are exercised, the Company issues new shares.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium.
Foreign currency translation
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.
Segmental reporting
An operating segment is a component of the Company that engages
in business from which it may earn revenues and incur expenses. The
Company has only one operating segment, being the investment in
companies or assets in the natural resource sector. The Company's'
results are reviewed regularly by the Board of Directors, to make
decisions about resources and strategy. Therefore the financial
information of the single segment is the same as that set out in
the statement of comprehensive income, the statement of financial
position, the statement of changes in equity and the statement of
cash flows.
Revenue
Revenue comprise of dividends and are recognised when the
Company's right to receive payment is established.
Interest income
Interest income is recognised as it is received from finance
institutions.
(a) Financial Risk Factors
The Company's principal financial instruments comprise both
listed and unlisted investments, other receivables, other payables,
cash and convertible loan notes, which arise directly from its
operations. The main purpose of these financial instruments is to
raise finance for the Company's operations.
The Company's activities expose it to a variety of financial
risks. The Company's Board monitors and manages the financial risks
relating to the operations of the Company. The Board provides
written policies for overall risk management, as well as written
policies covering specific areas including: market risks (including
foreign exchange risk and price risk) and to a very limited amount,
interest rate risk and liquidity risk.
Market risk
Foreign currency risk
This is minimised given the level of activity the Company has,
and plans to undertake, while the Directors seek investment
opportunities.
Price risk
The Company is exposed to equity securities price risk because
of investments held by the Company, classified as
available-for-sale or at fair value through profit or loss. The
Company is not directly exposed to commodity price risk. To manage
its price risk arising from investments in equity securities, the
Company diversifies its portfolio.
Diversification of the portfolio is done in accordance with the
limits set by the Board.
The Company's investments in equity of other entities are
publicly traded on one of or dual listed on the following: the
London Stock Exchange (LSE); Australian Stock Exchange (ASX);
Johannesburg AltX (JSE).
Post-tax profit for the year would increase or decrease by
GBP6,883 as a result of a 5% gain or loss on equity securities
classified as at fair value through profit or loss. Other
components of equity would not change as a result of gains or
losses on equity securities classified as available for sale.
Interest risk
The Company is not exposed to interest rate risk on financial
liabilities. As at the reporting date, the Company's interest rate
profile solely consisted of fixed rate convertible loans valued at
GBP275,000 and carrying an interest rate of 6% per annum.
The Company has no other borrowing facilities available to
it.
Liquidity risk
The Company manages liquidity risk by maintaining adequate
reserves and by continuously monitoring forecast and actual cash
flows and matching the maturity profiles of financial assets and
liabilities. The Company seeks to manage financial risk, to ensure
sufficient liquidity is available to meet foreseeable needs and to
invest cash assets safely and profitably.
(b) 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. The Company's capital structure primarily consists of
equity attributable to the owners, comprising issued capital,
reserves and retained losses.
(c) Fair Value Estimation
The table below analyses financial instruments carried at fair
value, by valuation method. The different levels have been defined
as follows:
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
-- Inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (Level
2).
-- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level
3).
The fair values for the Company's assets and liabilities are not
materially different from their carrying values.
The following table presents the Company's financial assets that
are measured at fair value:
30 April 2015: Level 1 Level 2 Level 3 Total
Financial assets
at fair value through
profit or loss
Trading securities 137,654 - 3,680 141,334
Available for sale
financial assets
Equity securities - - 82,345 82,345
30 April 2014: Level 1 Level 2 Level 3 Total
Financial assets
at fair value through
profit or loss
Trading securities 66,436 - 3,680 70,116
Available for sale
financial assets
Equity securities 156,631 - - 156,631
The Company does not have any liabilities measured at fair
value.
(i) Financial instruments in Level 1
The fair value of financial instruments traded in active markets
is based on quoted market prices at the year end date. A market is
regarded as active if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing
service, or regulatory agency, and those prices represent actual
and regularly occurring market transactions on an arm's length
basis. The quoted market price used for financial assets held by
the Company is the current bid price. These instruments are
included in Level 1. Instruments included in Level 1 comprise
primarily LSE, ASX and JSE equity investments classified as trading
securities or available for sale.
(ii) Financial instruments in Level 2
The fair value of financial instruments that are not traded in
an active market is determined by using valuation techniques. These
valuation techniques maximise the use of observable market data
where it is available and rely as little as possible on entity
specific estimates. If all significant inputs required to fair
value an instrument are observable, the instrument is included in
Level 2.
If one or more of the significant inputs is not based on
observable market data, the instrument is included in Level 3.
(iii) Financial instruments in Level 3
The following table presents the changes in Level 3 instruments
for the year ended 30 April:
2015 2014
GBP GBP
Opening balance 3,680 -
Transfers into Level 3 169,177 3,680
Losses recognised in profit (86,832) -
or loss
Closing balance 86,025 3,680
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
(a) Critical accounting estimates and assumptions
The Company makes estimates and assumptions concerning the
future. The resulting estimates will by definition, seldom equal
the actual results.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are addressed below.
Fair value of financial assets
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The Company reviews the fair value of its quoted and unquoted
equity instruments at each Statement of Financial Position date.
This requires management to make an estimate of the value of the
unquoted securities in the absence of an active market.
Share based payment transactions
The Company has made awards of share option over its unissued
share capital to certain directors and employees as part of their
remuneration package.
The valuation of these options involves making a number of
critical estimates relating to price volatility, future dividend
yields, expected life of the options and forfeiture rates. These
assumptions have been described in more detail in Note 22.
Compound financial instruments
In order to calculate the split for convertible loans between
the financial liability and equity components, management is
required to discount the contractual stream of future cash flows
under the convertible loan note instrument at an estimated rate of
interest applicable to instruments which do not have any associated
conversion option.
The values of the liability and equity conversion component were
determined at the date the loan notes were issued. The fair value
of the liability component was calculated using a market interest
rate of 15% for an equivalent non-convertible loan. The residual
amount, representing the value of the equity conversion option was
GBP76,135 (2014: GBP76,135) and therefore included in equity.
(b) Critical judgements in applying the entity's accounting policies
Many of the amounts included in the Financial Results involve
the use of judgement and/or estimation. These judgements and
estimates are based on management's knowledge of the relevant facts
and circumstances, having regard to prior experience, but actual
results may differ from the amounts included in the Financial
Results. The most critical judgements as applied are as
follows:
Available for sale of financial assets
Available for sale financial assets have a carrying value of
GBP82,345 at 30 April 2015 following an impairment charge of
GBP86,832 in the year.
The Company follows the guidance of IAS 39 to determine when an
available-for-sale equity investment is impaired. This
determination requires significant judgement. In making this
judgement, the Company evaluates, among other factors, the duration
and extent to which the fair value of an investment is less than
its cost; and the financial health of the short-term business
outlook for the investee, including factors such as industry and
sector performance and operational and financing cash flow.
Management has concluded that there is a requirement to impair
the carrying value of available for sale financial assets based it
its valuation of the equity instruments held.
4. REVENUE
30 April 2015 30 April 2014
GBP GBP
Dividend income on financial assets
at fair value through profit or loss 2,361 3,226
5. EXPENSES BY NATURE
Loss from continuing operations is stated after charging:
30 April 2015 30 April 2014
GBP GBP
Directors' fees (Note 6) 20,778 11,042
Legal and professional fees 32,743 46,037
Auditor's remuneration (Note
7) 9,000 2,000
LSE fees 10,322 9,300
Insurance 1,590 1,544
Provision for share options - (9,000)
Travelling, motor and entertaining 4,043 424
Other costs 8,272 3,801
Total administration expenses 86,748 65,148
6. EMPLOYEES AND DIRECTORS
30 April 30 April
2015 2014
GBP GBP
Directors' fees 20,778 11,042
The average monthly number of employees, being the Directors
during the year were as follows:
30 April 30 April
2015 2014
Directors 5 5
Information regarding the highest paid director for the year is
as follows:
30 April 30 April
2015 2014
GBP GBP
Director's remuneration 5,890 3,500
7. AUDITOR'S REMUNERATION
During the year the Company obtained the following services from
the auditor:
30 April 30 April
2015 2014
GBP GBP
Fees payable to the Company's
auditor in regards to the audit
of the Company: 9,000 2,000
8. OTHER (LOSSES)/GAINS - NET
As restated
30 April 30 April
2015 2014
GBP GBP
Fair value (losses)/gains on financial
assets at fair value through profit
or loss (49,243) 9,077
9. NET FINANCE COSTS
As restated
30 April 30 April
2015 2014
GBP GBP
Finance income:
Deposit account interest 36 -
Finance costs:
Loan interest 31,697 25,941
10. INCOME TAX
Tax charge for the year
No liability to UK corporation tax arose on ordinary activities
for the year ended 30 April 2015 nor for the year ended 30 April
2014.
Factors affecting the tax charge for the year
As restated
30 April 30 April
2015 2014
GBP GBP
Loss on ordinary activities
before income tax (252,123) (78,786)
Loss on ordinary activities
before tax multiplied by the
small rate of corporation tax
in the UK of 20% (2014: 20%) (50,425) (15,757)
Effect of:
Unrelieved tax losses 32,637 15,757
Expenses not deductible 17,788 -
Tax charge for the year - -
As at the end of the reporting period the Company has
GBP4,139,693 (2014: GBP4,139,693) in respect of capital losses and
approximately GBP419,000 (2014: GBP246,000) in relation to
operating losses, both of which are available to be offset against
future gains and profits.
11. PRIOR YEAR ADJUSTMENT
In the years ended 30 April 2013 and 30 April 2014, the equity
element of the convertible loans was not recognised. A prior year
adjustment has therefore been made to correctly account for the
convertible loans including the discounting to present value, the
recognition of the equity element and the unwinding of the interest
and loan over the life of the loan notes. The effect of this
adjustment in 2014 is a decrease in profit of GBP11,691, a decrease
in the long term loan liability of GBP63,684 and an increase in
other reserves of GBP76,135 (Note 19).
In the prior year, the gain on disposal of financial assets at
fair value through the profit or loss were disclosed as an
exceptional item. An amount of GBP29,479 was reclassified to other
gains as the Company's principal activity, being the buying and
selling of short term and long term investments. In addition,
dividend income received from such investments amounting to
GBP3,226 was also reclassified from operating income to
revenue.
At the end of the 2014 reporting period, the Board of Directors
took the decision to re-categorise certain financial asset
investments from being valued as available for sale to at fair
value through profit or loss. In doing so an adjustment for the
year ended 30 April 2014 has been made to recognise the cumulative
loss previously recognised in other comprehensive income in
accordance with IAS 39. Additional fair value loss on financial
assets at fair value through profit or loss was recognised in the
prior year's results of GBP20,402 and equity increased by
GBP11,403.
12. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated using the weighted
average number of shares adjusted to assume the conversion of all
dilutive potential ordinary shares.
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Reconciliations are set out below.
30 April
2015
Earnings Weighted Per-share
GBP average amount
number pence
of shares
Basic EPS
Earnings attributable to
ordinary shareholders (252,123) 711,512 (35.43)
Effect of dilutive securities - - -
Diluted EPS
Adjusted earnings (252,123) 711,512 (35.43)
30 April
2014
Earnings Weighted Per-share
GBP average amount
number pence
of shares
Basic EPS
Earnings attributable to
ordinary shareholders (78,786) 412,909 (19.08)
Effect of dilutive securities - - -
Diluted EPS
Adjusted earnings (78,786) 412,909 (19.08)
13. AVAILABLE FOR SALE FINANCIAL ASSETS
2015 2014
GBP GBP
At 1 May 156,631 90,127
Additions 12,546 183,368
Disposals - (26,737)
Impairment (86,832) -
Reclassification - (90,127)
At 30 April 2015 82,345 156,631
The above represents the Company's strategic holding in African
Eagle Resources Plc referred to in the Chairman's Statement. These
equity securities are listed on Johannesburg AltX Stock Exchange
(JSE).
Impairment review
An impairment review of the investments is carried out on an
annual basis in order to ensure that they are valued at the lower
of cost and recoverable amount.
An impairment charge is made where the recoverable amount is
below the carrying value of investments. In 2015, this resulted in
an impairment charge of GBP86,832 (2014: GBPNil).
As the activities of African Eagle Resources Plc are minimal,
the Directors deem it prudent to impair the asset to a carrying
value of GBP82,345, which is below its quoted value. Should
circumstances change and as a result, measurement made with a
greater degree of reliability, the value of the investment will, in
future, be increased in line with its open market value.
14. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
2015 2014
GBP GBP
Equity securities - held for
trading 141,334 70,116
Financial assets at fair value through profit or loss are
presented within 'operating activities' as part of changes in
working capital in the Statement of Cash Flows.
Changes in fair values of financial assets at fair value through
profit or loss are recorded in 'Other (losses)/gains - net' in the
Income Statement (Note 8).
The fair value of all equity securities is based on their
current bid prices in an active market.
15. CASH AND CASH EQUIVALENTS
2015 2014
GBP GBP
Bank accounts 38,578 72,150
Cash held in investment portfolio 1,251 -
39,829 72,150
16. SHARE CAPITAL
Number Ordinary Deferred Total Share
of shares shares shares shares premium
No. GBP GBP GBP GBP
At 1 May 2013 412,909 41,335 1,165,710 1,207,045 633,164
At 30 April
2014 412,909 41,335 1,165,710 1,207,045 633,164
Issue of shares 315,000 31,500 - 31,500 173,250
Issue costs - - - - (4,800)
At 30 April
2015 727,909 72,835 1,165,710 1,238,545 801,614
On 16 May 2014, 315,000 Ordinary shares of GBP0.10 each were
allotted as fully paid at a premium of GBP0.55 per share during the
year.
17. OTHER RESERVES
Shares Share Merger Revaluation Total
to be option relief reserve
issued reserve reserve
At 1 May 2013 - 9,000 417,284 (14,447) 411,837
Prior year
adjustment
(Note 11) 50,180 - - - 50,180
At 1 May 2013
(Restated) 50,180 9,000 417,284 (14,447) 462,017
Reclassification
of cumulative
losses on
available
for sale financial
assets - - - 14,447 14,447
Cancellation
of share options - (9,000) - - (9,000)
Issue of convertible
loans 25,955 - - - 25,955
At 30 April
2014 (Restated)
(Note 18) 76,135 - 417,284 493,419
At 1 May 2014 76,135 - 417,284 493,419
At 30 April
2015 76,135 - 417,284 493,419
Merger relief reserve of GBP417,284 arose in the period ended 31
December 1995, and relates to shares that were issued on a share
for share basis in relation to the Langdon (Coffee & Tea)
Limited transaction.
18. RETAINED EARNINGS
Total
At 1 May 2013 (Restated) (2,190,365)
Loss for the year (78,786)
Cancellation of share options 9,000
At 30 April 2014 (Restated) (2,260,151)
Total
At 1 May 2014 (Restated) (2,260,151)
Loss for the year (252,123)
At 30 April 2015 (2,512,274)
19. BORROWINGS
As restated
30 April 30 April
2015 2014
Non-current: GBP GBP
Convertible loan notes 226,513 211,316
Terms and debt repayment schedule: GBP GBP
1-2 years 226,513 211,316
Borrowings represent convertible loan notes redeemable on or
before 15 October 2016 and attract an interest charge of 6% per
annum. At the option of the loan note holder, if converted, the
loan notes can be exchanged for 1 ordinary share for every 65p of
loan notes held.
The carrying amount and the fair value of the non-current
borrowings are as follows:
2015 2014 2015 2014
GBP GBP GBP GBP
Convertible loan notes 226,513 211,316 275,000 275,000
The carrying amounts of the Company's borrowings are denominated
in the UK Sterling.
The convertible bond recognised in the balance sheet is
calculated as follows:
As restated
2015 2014
GBP GBP
Face value of convertible loan
notes issued 275,000 275,000
Equity component (Note 17) (76,135) (76,135)
Liability component on initial
recognition 198,865 198,865
Interest expense (Note 9) 59,315 27,618
Interest paid (31,667) (15,167)
226,513 211,316
The fair value has been calculated using discounted cash flows
at a rate of 15% per annum.
20. TRADE AND OTHER PAYABLES
2015 2014
GBP GBP
Trade payables 13,963 14,568
Other payables 125 -
Accruals 15,307 17,100
29,395 31,668
21. RELATED PARTY DISCLOSURES
The following transactions were undertaken with the following
related parties:
2015 2014
Transactions GBP GBP
Entity under Office
Coburg Coffee common Directorship: running
Company Ltd K P Legg costs 1,199 -
Entity under Office
The Main Group common Directorship: running
Ltd C J Ells costs 4,080 -
Costs
Entity under in relation
The Main Group common Directorship: to share
Ltd C J Ells issue 4,800 -
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