TIDMHER
RNS Number : 9260J
Herencia Resources PLC
22 August 2019
Herencia Resources plc
("Herencia" or the "Company")
Annual Results for Twelve Months ended
31 December 2018
Chairman's Statement
Dear shareholders
It is my pleasure to present you with the Annual Report of
Herencia Resources plc (the "Company" or Herencia Resources) and
its subsidiary undertakings (together with the "Group") for the
year ended 31 December 2018.
Firstly, I would like to thank the small but professional team
at Herencia Resources for their ongoing hard work for our
shareholders. I would like to welcome Carl Dumbrell, who joined
Herencia Resources in May 2018 as CEO and Executive Director.
Our focus is to:
-- Use our available capital resources to fully explore the Group's copper projects in Chile;
-- Identify new exploration projects in South America;
-- Recapitalise the Company;
-- Review our current supplier and terms of business;
-- Turn around the Company's share price.
Financial and Statutory Information
The Group had an operating loss of GBP1.20 million for the year.
The Group received continued financial support from our major
shareholders throughout the year. The Group is committed to reduce
its debts and invest as much capital as possible into exploration
activities.
Outlook
The Group is focused on the development of its exploration
projects in Chile. Management has also been searching for new
exploration projects in South America in Copper and Gold.
We thank shareholders for their ongoing support.
On behalf of the Board of Directors.
Jeff Williams Chairman
22 August 2019
The Directors of Herencia expect to print and post the Annual
Report and Accounts for the year to 31 December 2018 (the
"Accounts") during the week commencing 26 August 2019 and a further
announcement will be made at that time.
For further information please contact:
Jeff Williams, Herencia Resources plc +61 418 594 324
Carl Dumbrell, Herencia Resources plc +61 402 277 282
David Little, Herencia Resources
plc +44 207 631 4141
Camilla Horsfall, Blytheweigh
(Financial PR) +44 207 138 3224
Andrew Raca, VSA Capital (Broker) +44 203 005 5004
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
The Directors present their Strategic Report for the year ended
31 December 2018.
Operating Review
The Group completed a drill program at its Pastizal copper
project in central Chile in 2018.
The initial Reverse Circulation (RC) drilling, reported copper
assays from the 25 holes drilled of up to 4.13% including other
high grade near surface copper (Cu) mineralisation.
In particular:
-- The initial RC drilling of 25 holes for 2,400 metres
demonstrated that the copper mineralised zones within the limestone
and chert were near surface when compared with the copper zones
identified at the adjacent Picachos lease.
-- The copper mineralisation intercepts suggest further
expansion of the zones are possible at depth and along strike.
Principal Activity and Business Review
The Company is registered in England and Wales, having been
incorporated on 27 January 2005 under the Companies Act with
registered number 05345029 as a public limited company.
The principal activity of the Group is mineral exploration and
development and it owns a portfolio of copper-silver properties in
Chile, South America. The Group operates through its parent and
subsidiary undertakings, details of which are set out in note 15 to
these accounts.
Review of the business and prospects
(i) The Group has acquired a 100% interest in the Pastizal
project and holds an option to acquire 100% of the currently
producing Picachos copper prospect in north-central Chile.
(ii) The Group owns 100% of the Guamanga copper-gold and the La Serena copper prospects.
(iii) The Group is also active in seeking new exploration and
development opportunities with a focus on Chilean projects, given
its significant expertise and resources in Chile.
Picachos and Pastizal prospects
The Picachos prospect is an advanced copper prospect located 50
kilometres east of the major coastal city of La Serena and only
eight kilometres west from the large Carmen de Andacollo copper
mine owned by the Canadian miner, Teck Resources Inc. This region
is a significant mining and resources location in Chile.
High grade copper ore grading approximately 2% copper is
currently mined by private miners at Picachos on a small
(artisanal) scale.
Other prospects
The Group proposes to undertake limited work programmes at the
La Guamanga and La Serena prospects during 2019/20 in order to
develop an appropriate strategy for extracting value.
The La Guamanga Project is targeting iron oxide copper-gold
style mineralisation whilst the La Serena Project is targeting
porphyry copper belt.
The package is highly prospective for leached cap, blanket style
chalcocite copper mineralisation and/or porphyry gold.
2019 goals
-- Use our available capital resources to fully explore the Group's copper projects in Chile;
-- Identify new exploration projects in South America;
-- Recapitalise the company;
-- Review our current supplier and terms of business;
-- Turn around the Company's share price.
The Group's primary business remains mineral exploration and
development which is subject to risks including discovery of
economic mineral resources, delays in work programme plans and
schedules, changes in market conditions affecting the resources
industry or commodity price levels, the outcome of commercial
negotiations and technical or operating factors, political,
environmental and regulatory controls and approvals, and
availability and retention of suitable employees and consultants.
Any one or more of these risk factors could have a material adverse
impact on the value of the Group.
Due to the early stage of the development of the Group and the
nature of its activities, it is not meaningful to consider a review
of the key financial performance indicators in respect of the
year.
Strategy
The Group's strategic plan is to advance the exploration
programs at its Chilean Picachos and Pastizal prospects and
continue to reduce creditors. With the strong Chilean management
team, the Group will leverage off the significant operating
experience in Chile.
Financial Review
During the year, the Group reported loss for the year of
GBP1,196,000 following a write back of GBP122,000 against to the
current trade and other payables. The Group received continued
financial support from our major shareholders throughout the year
where the Group received loan proceeds of GBP788,000 from the major
shareholder as working capital to financing the operating and
investing activities of the Group in Chile.
Included within current liabilities is an amount of GBP500,000
relates to historic liabilities that have previously been
recognised in Chile subsidiary undertakings. While the Group is
investigating the nature of these liabilities, it is appropriate
for the Group to continue to recognise these liabilities. The Group
is committed to reduce its debts and invest as much capital as
possible into exploration activities.
Corporate Governance
Herencia Resources plc is committed to achieve and maintain high
standards of governance. As such, the Board has chosen to adopt the
Quoted Companies Alliance Corporate Governance Code for Small and
Mid-Size Quoted Companies 2018 ("the QCA Code"). Further
information is available on page 10.
Principal risks and uncertainties
Currency risks
The Group operating in Chile are in US dollars, whilst our UK
costs are in GBP and therefore the Group's financial position and
performance will be affected by fluctuations in the US dollar,
sterling exchange rate. As a result, the Group recognised a foreign
exchange loss of GBP182,000.
Market risk
The demand for, and price of, copper is highly dependent on a
variety of factors beyond the Group's control.
Environment
Herencia Resources is committed to utilising industry best
practices and achieving the highest standards of environmental
management and safety. Our operations:
-- Continuously assess and monitor environmental impact
-- Promote internally and across our industry best practices for
environmental management and safety
-- Constant attention to maintaining our exemplary track record
of safe exploration activities
There were no reportable health and safety incident during the
year.
Community
Herencia Resources seeks and maintains positive relationships
with its local communities. As such, Herencia Resources is
dedicated to ensuring:
-- Open and honest dialogue
-- Engagement with stakeholders at all stages of development
-- Proactively address local concerns
-- Actively minimise impact on our neighbours
-- Adherence to a strict health and safety code of conduct
Events after the reporting period
Since 1 January 2019 the Group has received financial support
from its major shareholders as convertible loans for US$300,000.
The conversion price into ordinary fully paid shares will be at the
"Next Placement Price".
Outlook
The Group is focused on the development of its exploration
projects in Chile. Management has also been searching for new
exploration projects in South America in Copper and Gold.
I would like to thank our committed team of professionals at
Herencia Resources who continue to work hard on behalf of our
shareholders.
Approved by the Board of Directors and signed on behalf of the
Board.
Jeff Williams
Non-Executive Chairman
22 August 2019
Details of all our assets and operations can be found at our
website.
Directors' Report
The Directors present their report together with the audited
consolidated financial statements for the Herencia Group plc (the
"Company") and its subsidiary undertakings (together with the
"Group") for the year ended 31 December 2018.
Result
The Group incurred a loss of GBP1.05 million for the financial
year (2017: restated of GBP0.56 million). The Directors do not
recommend the payment of a dividend.
Business review and future developments
A summary of the Group's main business developments for the year
ended 31 December 2018 and potential future developments is
contained within the Chairman's Statement and Strategic Report.
Directors
The Directors who were in office during the year and up to the
date of signing the financial statements, unless stated, were:
Executive Director
Carl F. Dumbrell Appointed 30 May 2018
Non-Executive Director
Jeff Williams
PD Reeve Resigned 20 June 2018
The Directors of the Company at the date of this report, and
their biographical summaries, are given on page 20.
The Directors' remuneration is detailed in the Directors'
Remuneration Report on page 18 to 19. All Directors benefit from
the provision of Directors' and Officers' indemnity insurance
policies.
Share Capital
At the date of this report 10,908,517,793 ordinary shares are
issued and fully paid. Detail of movement in share capital during
the year is given in note 20 to the financial statements.
Substantial shareholders
As of the date of this report the Group had been notified of the
following interests of 3% or more in the Group's ordinary share
capital:
Percentage of shareholding
The Australian Special Opportunity
Fund (ASOF) 22.3%
Oriental Darius Co Ltd 20.9%
Shining Capital Management Ltd 3.7%
ASOF is acting in concert with John Hancock and Martin Rogers
and Abundance Partners LP. As at the date of this report the
Concert Parties held ordinary share capital:
Percentage of shareholding
Concert Parties 24.2%
Financial Instruments
The financial risk management objectives and policies of the
Group in relation to the use of financial instruments and the
exposure of the Company and its subsidiary undertakings to its main
risks, credit risk and liquidity risk, are set out in Note 25 to
the financial statement
Employees
The Group had 4 employees as at 31 December 2018 (2017: 4).
Going Concern
As disclosed in Note 3.2 to the financial statements, it refers
to the assumptions made by the Directors when concluding that it
remains appropriate to prepare the financial statements on the
going concern basis.
Events after the reporting period
Events after the reporting period have been disclosed in Note
29.
Disclosure of Information to the Auditor
In the case of each person who was a Director at the time this
report was approved:
-- so far as the Director was aware there was no relevant audit
information of which the company's auditor was unaware; and
-- the Director has taken all steps that the he ought to have
taken as a Director to make himself aware of any relevant audit
information and to establish that the Company's auditor was aware
of that information.
Auditors
During the year, UHY Hacker Young LLP resigned and Crowe U.K.
LLP were appointed in their place as auditor of the Company for the
purpose of the audit of the financial statements.
A resolution to reappoint the auditor, Crowe U.K. LLP, was
approved at the Annual General Meeting.
Approved by the Board of Directors and signed on behalf of the
Board.
Jeff Williams
Non-Executive Chairman
Date: 22 August 2019
Corporate Governance Statement
Herencia Resources plc is committed to achieve and maintain high
standards of governance. As such, the Board has chosen to adopt the
Quoted Companies Alliance Corporate Governance Code for Small and
Mid-Size Quoted Companies 2018 ("the QCA Code"). Detailed below is
how the Board applies the 10 principles of Corporate Governance,
which form part of the QCA code.
1. Establish a strategy and business model which promote
long-term value for shareholders
Business description
Herencia Resources plc ("Herencia") vision is to become a
significant exploration and development company in Chile, focus on
the resources of Copper and Gold.
Herencia has over a decade of experience in exploration in Chile
and a proven record of bring projects to market and the
identification of new exploration projects.
Herencia has a small but strong team, led by its Board of
Directors who work closely with the team in Chile, whom are
responsible for day to day operations of the Group exploration
projects.
The Group is focused on delivering results and the creation of
long term value for shareholders. The new management team have
implemented a reporting framework which allows for the ongoing
reporting from our operations team in Chile. We also have conducted
review of our relationship with suppliers and made a number of
changes which we feel is in the interest of our shareholders.
Strategy
The board and management is focused on delivering results for
our shareholders whilst respecting the local partners and
landowners whom we work with in Chile. Our strategy is to be a low
cost exploration company, and discover high quality Copper and gold
projects in Chile.
We have recently appointed a specialist resource communication
firm in London, Blytheweigh, whose role is to assist with board in
the communication of our work program, ongoing results and ensure
the market is well informed on the goals and objectives of the
company.
The key challenges for the board are to:
1. Identify new exploration projects (Copper and Gold) in Chile;
2. Management of the company's existing projects and work programs
Further information can be obtained in the company's strategic
report on pages 5 to 7.
2. Seek to understand and meet shareholder needs and
expectations
The Board is committed to maintaining good communications and
having a constructive dialogue with both its institutional and
private shareholders. The Company endeavours to maintain a dialogue
and keep shareholders informed though its public announcements and
its website. The Company distributes all RNS releases to all
shareholders whom have registered their email address. We welcome
all shareholders to contact the company to provide their email
address and received ongoing alters both for both regulatory
announcements and non-regulatory news.
The Company encourages all shareholders to attend its Annual
General Meeting where they can meet and question the Directors and
express ideas or concerns. The Directors undertake presentations
and roadshows to institutional investors as appropriate and
periodically participate in recorded interviews that are available
to view on the corporate website.
Shareholders are welcome, to contact the CEO and Chairman via
email and telephone. In addition, shareholder communication is
answered, where possible or appropriate, by Directors or the
Company's Financial PR advisors, Blytheweigh or the Company's
brokers & VSA Capital.
3. Take into account wider stakeholder and social
responsibilities and their implications for long-term success
Stakeholder relations
The Board recognises that the Company's continued growth and
long-term success is largely reliant on its relations with its
stakeholders, both internal (employees and shareholders) and
external (customers, suppliers, agents, business partners and
advisors etc.).
Our employees are a key factor in delivering successful growth
and as such the Company fosters an open and friendly dialogue
throughout its workforce. The Company undertakes employee reviews
and assessments to identify and assist employees with training and
career progression. The Company endeavours to keep its workforce
informed on the Company's progress and holds regular meetings both
formal and informal via social events.
The company maintains regular dialogue with its external
stakeholders particularly its advisors in London and Chile. The
company works closely with its advisors to ensure it operates in
conformity of its listing regulations as well as the social, legal,
religious and cultural requirements of the countries in which it
operates.
The company has implemented changes following the considerations
of our stakeholders and will continue to engage with our
stakeholders in the future.
Social Responsibilities
As a Company, we take our corporate social responsibilities very
seriously, particularly as we operate in emerging market (Chile)
and in some cases in areas of poverty and deprivation. The company
aims to:
1. be accountable for our actions and activities;
2. be transparent about our activities and decisions that affect
society, the economy and the environment;
3. operate in an ethical manner in all our business operations;
4. be mindful of and respect our stakeholder interests, both
internal stakeholders (employees and shareholders) and external
(customers, suppliers, agents, business partners and advisors
etc.);
5. respect the rule of law wherever we operate;
6. respect international norms of behaviour wherever we operate;
7. respect human rights in whatever we do and wherever we operate.
We recognise that Social Responsibility is a process that will
develop and evolve with practice and time and one in which all our
employees have a role to play.
4. Embed effective risk management, considering both
opportunities and threats, throughout the organization
Risk Management
As an exploration business operating in Chile there is clearly
an elevated risk which is balanced by potentially greater rewards.
The Board is mindful of and monitors both its corporate risks and
individual project risks. Risks are categorised by both probability
and impact and appropriate measures identified to monitor and
mitigate any potential impact.
Project risks are dealt with on a case by case basis and
monitored through the life cycle of the project as risks change and
new risks appear. Project risks and mitigation will be part of
regular project management meetings. The project manager for any
given project will have responsibility for maintaining the project
risk register.
The Company's corporate risks, risk monitoring, and risk
management procedures are regularly reviewed by the Risk Committee
and the Company's risk register updated as necessary. The Company
Secretary will have responsibility for maintaining the corporate
risk register. The Risk Committee Chairman will be responsible for
ensuring the risk register is regularly reviewed and will report on
status and updates at Board meetings.
5. Maintain the board as a well-functioning, balanced team led
by the chair
The board members have a collective responsibility and legal
obligation to promote the interests of the company and are
collectively responsible for defining corporate governance
arrangements. Ultimate responsibility for the quality of, and
approach to, corporate governance lies with the chair of the board.
The board (and any committees) should be provided with high quality
information in a timely manner to facilitate proper assessment of
the matters requiring a decision or insight.
The board should have an appropriate balance between executive
and Non-Executive Directors and should have at least two
independent Non-Executive Directors. Independence is a board
judgement. The board should be supported by committees (e.g. audit,
remuneration, nomination) that have the necessary skills and
knowledge to discharge their duties and responsibilities
effectively. Directors must commit the time necessary to fulfil
their roles.
Compliance
The Board is comprised of a Chairman, an Non-Executive Director.
The roles of the Chairman and Chief Executive Officer are clearly
separated. The Chief Executive is responsible for the operational
management of the business of the Group and for the implementation
of strategy and policies as agreed by the Board.
The Chairman is responsible for the leadership and effective
working of the Board, for setting the Board agenda, and ensuring
that Directors receive accurate, timely and clear information. The
non-executive director (being Jeff Williams) is considered by the
Board to be independent of management and free to exercise
independence of judgement. The chairman is involved in daily
discussion and decisions of the ongoing activities and management
of the company.
A description of the roles of the Directors is included within
the Board of Directors page of this website. Profiles of the Board
of Directors and management are given on page 20.
The Directors recognise that it is expected that AIM companies
will have a minimum of two Non-Executive Directors and are
proactively seeking the appointment of a second non-executive
director.
Meetings of the Board
The board discussed matter daily via email the telephone. Board
meeting are held at least 6 times per year. The company has a small
team who work very closely together. Since the change in management
in May / June 2018 all Directors have attended all meetings of the
board.
6. Ensure that between them the Directors have the necessary
up-to-date experience, skills and capabilities
The Company operates in complex and challenging technological
and geographical areas and the Board is mindful that in order to
deal effectively with the challenges of the business and to
maximise its growth opportunities it has to incorporate a broad
range of skills and diversity.
The board has an appropriate balance of sector, financial and
public markets skills and experience, as well as an appropriate
balance of personal qualities and capabilities. The board should
understand and challenges its own diversity, including gender
balance, as part of its composition, and recognises the requirement
to appoint a second non-executive director.
The Directors have extensive international experience in finance
and natural resources. The company support ongoing education and
training of directors and its management. The Directors are members
of both UK and International professional organisations, and
through regular training courses ensure they keep their skills and
knowledge up to date.
The company secretary is a qualified solicitor in England and
partner of the firm Bishop & Sewell in London. The company
secretary is required as part of the professional standards of the
Law Society of England and Wales to attend ongoing training and
professional courses.
As noted above, the Company has put in place an Audit Committee
as well as Remuneration and Nomination Committees. The
responsibilities of each of these committees have been summarised
within this webpage.
7. Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement
Application
The board should regularly review the effectiveness of its
performance as a unit, as well as that of its committees and the
individual directors. The board performance review may be carried
out internally or, ideally, externally facilitated from time to
time.
The review should identify development or mentoring needs of
individual directors or the wider senior management team. It is
healthy for membership of the board to be periodically refreshed.
Succession planning is a vital task for boards. No member of the
board should become indispensable.
Compliance
The Company undertakes regular monitoring of personal and
corporate performance using agreed Key Performance Indicators and
detailed financial reports. Responsibility for assessing and
monitoring the performance of the Executive Directors lies with the
Chairman and the Non-Executive Directors. Following the recent
change in management the company, a review of the board and its
past performance was completed. The review identified areas in
which the board which the board needed to focus (in particular
finance and reporting its Annual and Half Year Reports on
time).
The board has taken immediate measured to improve the deficiency
in this area.
Ongoing evaluations will be completed as follows:
1. Board Evaluation
Review: Period:
Board composition in terms of skills, experience Annually or as required
and balance
Board cohesion Annually or as required
Board operational effectiveness and decision making Annually
Board meetings conduct and content and quality Annually or as required
of information
The Board's engagement with shareholders and other Annually
stakeholders
The corporate vision and business plan Annually
2. Committee Evaluation
Review: Period:
Board Committees' composition in terms of skills, Annually or as required
experience and balance
Board Committees' Terms of Reference Annually
Board Committees' effectiveness Annually
3. Individual Director Evaluation
Review: Period:
Executive Director performance in executive role Annually
Executive Director performance and contribution Annually
to the Board
Non-Executive Director performance and contribution Annually
to the Board
Non-Executive Director's independence and time Annually
served
All Directors' attendance at Board and Committee Annually
meetings
The board discusses succession planning at board meetings. As
part of these discussions the board considers the skills &
diversity of the existing board members. The board will consider
the appointment of persons whose skills and diversity would
complement the current board members and brings new skills and
knowledge to the company.
8. Promote a corporate culture that is based on ethical values
and behaviours
Application
The board should embody and promote a corporate culture that is
based on sound ethical values and behaviours and use it as an asset
and a source of competitive advantage.
The policy set by the board should be visible in the actions and
decisions of the chief executive and the rest of the management
team. Corporate values should guide the objectives and strategy of
the company.
The culture should be visible in every aspect of the business,
including recruitment, nominations, training and engagement. The
performance and reward system should endorse the desired ethical
behaviours across all levels of the company. The corporate culture
should be recognisable throughout the disclosures in the annual
report, website and any other statements issued by the company.
Compliance
Herencia Resources plc has a strong ethical culture, which is
promoted by the actions of the board and executive team. The Group
has an anti-bribery policy and has implemented adequate procedures
described by the Bribery Act 2010. The Group reports on its
compliance to the board on an annual basis. The Group has
undertaken a review of its requirements under the General Data
Protection Regulation, implementing appropriate policies,
procedures and training to ensure it is compliant.
The board also encourages all employees adopt such values
through an appraisal process linked to performance.
9. Maintain governance structures and processes that are fit for
purpose and support good decision-making by the board
Application
The company should maintain governance structures and processes
in line with its corporate culture and appropriate to its:
-- size and complexity; and
-- capacity, appetite and tolerance for risk.
The governance structures should evolve over time in parallel
with its objectives, strategy and business model to reflect the
development of the company.
Compliance
Details of the Company's corporate governance arrangements are
provided within this Corporate Governance section of the
website.
10. Communicate how the company is governed and is performing by
maintaining a dialogue with shareholders and other relevant
stakeholders
Stakeholder Communication
The Board is committed to maintaining good communication and
having constructive dialogue with all of its stakeholders,
including shareholders, providing them with access to information
to enable them to come to informed decisions about the Company. The
Company's website provides all required regulatory information as
well as additional information shareholders may find helpful
including: Share Services, information on Board Members, Advisors
and Significant Shareholdings, a historical list of the Company's
Announcements, its Financial Calendar, Corporate Governance
information, the Company's publications including historic Annual
Reports and Notices of Annual General Meetings, together with Share
Price information and interactive Charting facilities to assist
shareholders analyse performance.
Results of shareholder meetings and details of votes cast will
be publicly announced through the regulatory system and displayed
on the Company's website with suitable explanations of any actions
undertaken as a result of any significant votes against
resolutions.
Information on the work of the various Board Committees and
other relevant information are included in the Company's Annual
Report.
Meetings of Directors
The number of meetings of the company's Board of Directors held
during the year, and the number of meetings attended by each
director were:
Attended Held
Carl Dumbrell (appointed 30 May 2018) 6 6
Jeff Williams 10 10
Peter Reeves (resigned 20 June 2018) 4 4
The Group has established an audit committee, a remuneration
committee, a nomination committee and an AIM Rules compliance
committee with formally delegated duties and responsibilities.
Audit & risk committee
The audit committee comprised of Jeff Williams and Carl Dumbrell
with Carl Dumbrell as Chairman.
The audit committee helps the Board discharge its
responsibilities regarding financial reporting, external and
internal audits and controls as well as reviewing the Group's
annual and half-year financial statements, other financial
information and internal Group reporting.
It oversees and reviews the Company's financial reporting and
internal control processes, its relationship with external auditors
and the conduct of the audit process together with its process for
ensuring compliance with laws, regulations and corporate
governance. The Company's external auditors will be invited to
attend meetings of the Committee on a regular basis.
There is currently no internal audit function in view of the
size of the Group, although this is kept under annual review.
The Auditor Committee Report is presented on page 17.
Remuneration committee
The remuneration committee comprised of Carl Dumbrell and Jeff
Williams with Jeff Williams as Chairman.
The remuneration committee is responsible for establishing a
formal and transparent procedure for developing policy on executive
remuneration and to set the remuneration packages of individual
directors. This includes agreeing with the Board the framework for
remuneration of the Chief Executive, all Directors, the Company
Secretary and such other members of the of the Company as it is
designated to consider. It is furthermore responsible for
determining the total individual remuneration packages of each
Director including, where appropriate, bonuses, incentive payments
and share options.
The remuneration committee will determine the scale and
structure of the Executive Directors' and senior employees'
remuneration and the terms of their respective service or
employment contracts, including share option schemes and other
bonus arrangements. The remuneration and terms and conditions of
the Non-Executive Directors of the Group will be set by the
Chairman and executive members of the board.
The Committee's policy is to provide a remuneration package
which will attract and retain Directors and management with the
ability and experience required to manage the Group and to provide
superior long-term performance. It is the aim of the Committee to
reward Directors competitively and on the broad principle that
their remuneration should be in line with the remuneration paid to
senior management of comparable companies. There are four main
elements of the remuneration package for Executive Directors: base
salary, share options, benefits and annual bonus
The Directors' Remuneration Report is presented on page 18 to
19.
Nomination committee
The nomination committee comprised of Jeff Williams and Carl
Dumbrell with Jeff Williams as Chairman.
The nominations committee leads the process for Board
appointments and is responsible for review of the board size,
structure and composition (both executive and non-executive)
including any potential new applicants to ensure the board contains
the right balance of skills, knowledge and experience to manage and
grow the business. The nominations committee will make
recommendations to the Chairman of the Board on any proposed or
suggested changes to the Board with a view on the leadership needs
of the business including succession planning.
Where new Board appointments are considered the search for
candidates is conducted, and appointments are made, on merit,
against objective criteria and with due regard for the benefits of
diversity on the Board, including gender.
The Board carries out an evaluation of its performance annually,
considering the Financial Reporting Council's Guidance on Board
Effectiveness.
The Chairman is responsible for monitoring of compliance with
the terms of reference of the committees. The Chairman is
responsible for the overall governance and compliance of the
company of the Companies Act, AIM rules and policies and procedures
adopted by the company.
The CEO is responsible for implementation of the straggly and
governance policies adopted by the company.
The Nominations Committee did not meet during the period under
review.
The Board believes that the Group has a strong governance
culture and this has been reinforced by the adoption of the QCA
Code and recognition of the key principles of corporate governance
set out in the QCA Code, which the Board continually considers in a
manner appropriate for a company of its size.
The board reviews the compliance of the policies of the company
at its board meetings. The board also evaluates the company's
governance framework work at board meetings, considering any
changes to AIM rules and other regulatory frameworks.
Jeff Williams
Chairman
22 August 2019
Audit Committee Report
The Audit Committee helps the Board discharge its
responsibilities regarding financial reporting, external and
internal audits and controls as well as reviewing the Group's
annual and half-year financial statements, other financial
information and internal Group reporting.
This will include:
-- considering whether the Company has followed appropriate
accounting standards and, where necessary, made appropriate
estimates and judgments considering the views of the external
auditors;
-- reviewing the clarity of disclosures in the financial
statements and considering whether the disclosures made are set
properly in context;
-- where the audit committee is not satisfied with any aspect of
the proposed financial reporting of the Company, reporting its view
to the Board of Directors;
-- reviewing material information presented with the financial
statements and corporate governance statements relating to the
audit and to risk management; and
-- reviewing the adequacy and effectiveness of the Company's
internal financial controls and, unless expressly addressed by a
separate board risk committee composed of independent directors, or
by the board itself, review the Company's internal control and risk
management systems and, except where dealt with by the board or
risk management committee, review and approve the statements
included in the annual report in relation to internal control and
the management of risk.
The Audit Committee assists by reviewing and monitoring the
extent of non-audit work undertaken by external auditors, advising
on the appointment of external auditors and reviewing the
effectiveness of the Group's internal audit activities, internal
controls and risk management systems. The ultimate responsibility
for reviewing and approving the Annual Report and financial
statements and the half-yearly reports remains with the Board.
During the year, there were no non-audit services rendered to
the Group and the Company. The audit committee considered the
nature, scope of engagement and remuneration paid were such that
the independence and objectivity of the auditors were not impaired.
Fees paid for audit and non-audit services are provided in Note
5.
During the financial year, the Audit Committee met with the
auditor, Crowe U.K. LLP, to review audit planning and findings with
regard to the Annual Report.
Significant reporting issues considered during the year included
the following:
1. Going concern
The Committee also considered the Going Concern basis on which
the accounts have been prepared and can refer shareholders to the
Group's accounting policy set out in Note 3.2.
The Directors are satisfied that the going concern basis is
appropriate for the preparation of the financial statements.
Carl Dumbrell
Chairman - Audit Committee
Directors' Remuneration Report
This report sets out the remuneration policy operated by the
Company in respect of the Executive and Non-Executive Directors.
The remuneration policy is the responsibility of the Remuneration
Committee, a sub-committee of the Board. No Director is involved in
discussions relating to their own remuneration.
Remuneration policy
The objective of the proposed remuneration policy is to attract,
retain and motivate high calibre executives to deliver outstanding
shareholder returns and at the same time maintain an appropriate
compensation balance with the other employees of the Group.
Directors' remuneration
The normal remuneration arrangements for Executive Directors
consists of base salary, performance bonuses and other benefits as
determined by the Board. Each of the Executive Directors has a
service agreement that can be terminated at any time by either
party giving to the other six months' written notice. Compensation
for loss of office is restricted to base salary and benefits
only.
The remuneration packages for the Executive Directors are
detailed below:
-- Base Salary
Annual review of the base salaries of the Executive Directors
are concluded after considering the Executive Directors' role,
responsibilities and contribution to the Group performance.
-- Performance Bonus
Bonus arrangements are discretionary and are payable depending
on the performance of the Executive Directors in meeting their key
performance indicators and in the wider context with the
performance of the Group.
-- Benefits
Benefits include payments for provident funds that are mandatory
and statutory pension payments as required by laws of the resident
countries of the Executive Directors.
Non-Executive Directors are remunerated solely in the form of
Director Fees determined by the Board and are not entitled to
pensions, annual bonuses or employee benefits.
Performance evaluation
All Directors undergo a performance evaluation before being
proposed for re- election to ensure that their performance is and
continues to be effective, that where appropriate they maintain
their independence and that they are demonstrating continued
commitment to the role.
Appraisals are carried out each year with all Executive
Directors. All continuing Directors stand for re-election every 2
years. Succession planning at the current time is limited due to
the current size of the Board.
The tables below set out the respective Directors' remuneration
and fees:
Salary Share based Total
2018 payment
GBP'000 GBP'000 GBP'000
Carl Dumbrell 20 - 20
Jeffrey William 20 - 20
Peter Reeves - (15) (15)
------- ----------- -------
40 (15) 25
------- ----------- -------
Salary Share based Total
2017 payment
GBP'000 GBP'000 GBP'000
Jeffrey William - 15 15
Peter Reeves - 15 15
------- ----------- -------
- 30 30
------- ----------- -------
The Remuneration Committee met once during the year to review
the scale and structure of the Executive Directors' and senior
employees' remuneration.
Jeff Williams
Chairman - Remuneration Committee
Board of Directors
Jeffrey Williams - Non-Executive Chairman
Jeffrey Williams has over 40 years' industry experience with 16
years' experience as a professional mining engineer in Australia
and seven years in the stockbroking industry, and is a Fellow of
the Australasian Institute of Mining and Metallurgy. His mining
experience ranges from mine planning, underground management and
feasibility studies through to mine development.
Jeffrey was the Managing Director of Mineral Deposits Ltd for 15
years and departed in late 2011. He secured the Sabodala gold and
Grande Cote zircon projects in Senegal in West Africa, and
commenced gold production in March 2009. The market capitalisation
of Mineral Deposits Limited increased from AUD$6 million in 2003 to
over AUD$1000 million in 2011. Jeffrey has since been involved in
other smaller mining companies on the ASX to develop exploration
plans mostly in Australia.
Jeffrey is currently a Director of Horizons Minerals Limited
(ASX: HRZ).
Carl Dumbrell - Chief Executive Officer & Executive
Director
Carl Dumbrell is a partner in a Sydney accounting firm with 20
years' experience in taxation and assurance services in Australia
and England, and with an on-going involvement in the raising of
finance and the divestment of assets for listed companies.
Carl has Bachelor of Commerce and Master of Taxation Law
degrees, and is a Chartered Accountant in both Australia and in
England & Wales, as well as being a Chartered Tax Advisor,
Registered Company Auditor, Registered Self-Managed Superannuation
Fund Auditor, and Member of the Australia Institute of Company
Directors.
Carl is Director & Company secretary of Emperor Energy
Limited (ASX: EMP).
Statement of Director's Responsibilities
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare Group and Company
financial statements for each financial year. The Directors are
required by the AIM Rules of the London Stock Exchange to prepare
Group and the Company financial statements in accordance with
International Financial Reporting Standards ('IFRS') as adopted by
the European Union ('EU') and applicable law.
The financial statements are required by law and applicable
accounting standards to present fairly the financial position of
the Group and the Company and the financial performance of the
Group. The Companies Act 2006 provides in relation to such
financial statements that references in the relevant part of that
Act to financial statements giving a true and fair view are
references to their achieving a fair presentation.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and the Company and of
the profit or loss of the Group for that period.
In preparing the Group and Company financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
-- prepare the Strategic Report and Directors' report which
comply with the requirements of the Companies Act 2006;
-- prepare financial statements on the going concern basis
unless it is inappropriate to presume that the Group and the
Company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and the
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and 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 Group and the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are also responsible for ensuring that the
Strategic Report, Directors' report and other information included
the Annual Report and financial statements is prepared in
accordance with applicable law in the United Kingdom. The Directors
are responsible for the maintenance and integrity of the corporate
and financial information included on the Herencia Resources plc
website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statement may differ from legislation in
other jurisdictions.
Independent Auditors' Report
Opinion
We have audited the financial statements of Herencia Resources
Plc (the "Company") and its subsidiaries (the "Group") for the year
ended 31 December 2018, which comprise:
-- the Group statement of comprehensive income for the year ended 31 December 2018;
-- the Group and Company statements of financial position as at 31 December 2018;
-- the Group statement of cash flows for the year then ended;
-- the Group and Company statements of changes in equity for the year then ended; and
-- the notes to the financial statements, including a summary of
significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the Group and the Company financial statements is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Company's affairs as at 31 December
2018 and of the Group's loss for the year then ended;
-- the Group and the Company financial statements have been
properly prepared in accordance with International Financial
Reporting Standards as adopted by the European Union; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Group
and Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our qualified
opinion.
Material uncertainty relating to going concern
We draw attention to note 3.2 to the financial statements, which
indicates that the Group will require additional funds and/or
funding facilities in order to fully develop its business plan. The
financial statements have been prepared on the going concern basis,
which depends on a continuation of existing shareholders' support.
These conditions, along with the other matters explained in note
3.2 to the financial statements, indicate the existence of a
material uncertainty which may cast significant doubt about the
Group and Company's ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall
materiality for the Group financial statements as a whole to be
GBP60,000, based on approximately 5% of the Group's normalised loss
before taxation.
We use a different level of materiality ('performance
materiality') to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment.
Where considered appropriate performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors' remuneration.
We agreed with the Audit Committee to report to it all
identified errors in excess of GBP1,500. Errors below that
threshold would also be reported to it if, in our opinion as
auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
We performed a full scope audit on the Company and its wholly
owned subsidiary undertakings are accounted for from one central
operating location, the Group's registered office. Our audit was
conducted from the main operating location and all group companies
were within the scope of our audit testing.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current year and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
In addition to the matter described in the "Materiality
uncertainty related to going concern", we have determined the
following key audit matters. This is not a complete list of all
risks identified by our audit.
Key audit matter How the scope of our audit addressed
the key audit matter
Carrying value of intangible
assets
We have agreed the costs capitalised
The group's primary focus to underlying supporting documentation
is on exploration activities considering whether it meets the
in Chile. Exploration expenditure criteria of IFRS 6.
in the year totalled GBP0.2
million and relates to licence We have reviewed management's assessment
renewal fees and drilling which concluded that there are no
costs incurred at Pastizal facts or circumstances that suggest
project. the carrying amount of the asset
exceeds the recoverable amount.
We have considered the risk
that exploration assets are In considering this assessment we
incorrectly capitalised or considered the following sources
impaired. of evidence:
* Board minutes and budgets setting out the group's
plans for the continued commercial appraisal of the
exploration assets.
* Discussing plans and intentions with management.
-------------------------------------------------------------
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
our audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and
the Company and their environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the Company financial statements are not in agreement with
the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement set out on page 21, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do
so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Use of our report
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.
Matthew Stallabrass (Senior Statutory Auditor)
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
Date: 22 August 2019
Consolidated Statement of Comprehensive Income
(Restated)
Year ended Year ended
31 December 31 December
2018 2017
Notes GBP'000 GBP'000
Continuing Operations
Revenue - -
Cost of sales - -
------------- ------------
Gross profit - -
Other operating income 6 7 184
Administration expenses (855) (685)
Write back of trade and other payables 122 -
Share based payment charge (42) (29)
Foreign exchange losses (182) 48
------------- ------------
Operating loss 5 (950) (482)
Finance costs (246) (73)
------------- ------------
Loss before tax (1,196) (555)
Income tax expenses 8 - -
------------- ------------
Loss for the year from continuing operations (1,196) (555)
Items that may be reclassified subsequently
to profit or loss:
Other comprehensive income
Exchange differences on translating
foreign operation (117) (15)
------------- ------------
Total comprehensive loss for the year (1,313) (570)
Loss for the year attributable to:
Equity holders of the Company (1,196) (555)
============= ============
Total comprehensive loss for the year
attributable to:
Equity holders of the Company (1,313) (570)
============= ============
Loss per share
Loss per ordinary share - basic and
diluted 28 (0.011) (0.008)
============= ============
The notes on page 31 to 50 form part of these of financial
statements
Consolidated Statement of Financial Position
(Restated) (Restated)
At 31 December At 31 December At 1 January
2018 2017 2017
Note GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Receivables - - 4
Exploration and evaluation 9 5,818 5,368 4,162
Property, plant and equipment 10 21 17 23
5,839 5,385 4,189
---------------- --------------- -------------
Current assets
Cash and cash equivalents 13 45 233 17
Trade and other receivables 14 62 150 130
Prepayments - 1 22
---------------- --------------- -------------
107 384 169
---------------- --------------- -------------
Total assets 5,946 5,769 4,358
---------------- --------------- -------------
LIABILITIES
Non-current liabilities
Loans and borrowings 17 1,572 619 768
Vendor obligations 19 1,025 875 -
---------------- --------------- -------------
2,597 1,494 768
---------------- --------------- -------------
Current liabilities
Trade and other payable 15 1,121 986 1,173
Provisions 16 111 54 93
Loans and borrowings 17 63 255 35
---------------- --------------- -------------
1,295 1,295 1,301
---------------- --------------- -------------
Total liabilities 3,892 2,789 2,069
---------------- --------------- -------------
Net Assets 2,054 2,980 2,289
================ =============== =============
EQUITY
Share capital 20 4,931 4,801 4,305
Share premium 20 24,486 24,271 23,412
Share based payments reserve 22 71 29 761
Translation reserve 21 (486) (369) (354)
Accumulated losses 21 (26,948) (25,752) (25,958)
---------------- --------------- -------------
2,054 2,980 2,166
Non-controlling interest - - 123
Total Equity 2,054 2,980 2,289
================ =============== =============
The financial statements were approved by the Board of Directors
and authorised for issue on 22 August 2019 and were signed on its
behalf by:
Jeff Williams -Non-Executive Chairman
Company number 05345029
The notes on page 31 to 50 form part of these of financial
statements
Company Statement of Financial Position
(Restated) (Restated)
At 31 December At 31 December At 1 January
2018 2017 2017
Note GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Exploration and evaluation 9 911 911 -
Receivables 11 2,912 5,458 4,082
Investments in subsidiaries 12 123 123 -
---------------- --------------- -------------
3,946 6,492 4,082
---------------- --------------- -------------
Current assets
Cash and cash equivalents 13 38 230 9
Trade and other receivables 14 - 38 -
Prepayments - - 21
---------------- --------------- -------------
38 268 30
---------------- --------------- -------------
Total assets 4,384 6,760 4,112
---------------- --------------- -------------
LIABILITIES
Non-current liabilities
Loans and borrowings 17 2,072 1,119 769
Vendor obligations 19 1,025 875 -
---------------- --------------- -------------
3,097 1,994 769
---------------- --------------- -------------
Current liabilities
Trade and other payable 15 172 273 270
Provisions 16 - - 45
Loans and borrowings 17 63 255 35
---------------- --------------- -------------
235 528 350
---------------- --------------- -------------
Total liabilities 3,332 2,522 1,119
---------------- --------------- -------------
Net Assets 652 4,238 2,993
================ =============== =============
EQUITY
Share capital 20 4,931 4,801 4,305
Share premium 20 24,486 24,271 23,412
Share based payments reserve 71 29 761
Accumulated losses (28,836) (24,863) (25,485)
---------------- --------------- -------------
Total Equity 652 4,238 2,993
================ =============== =============
The loss for the Company for the year ended 31 December 2018 was
GBP973,000 (2017: restated GBP139,000).
The financial statements were approved by the Board of Directors
and authorised for issue on 22 August 2019 and were signed on its
behalf by:
Jeff Williams -Non-Executive Chairman
Company number 05345029
The notes on page 31 to 50 form part of these of financial
statements
Consolidated and Company Statement of Cash Flows
(Restated) (Restated)
Group Group Company Company
Year ended Year ended Year ended Year ended
31 December 31 December 31 December 31 December
2018 2017 2018 2017
Note GBP'000 GBP'000 GBP'000 GBP'000
Operating loss (1,196) (555) (973) (139)
Adjustments for non-cash items:
Depreciation 5 6 - -
Exchange difference 182 (48) 182 (48)
De-recognition of loans (43) (184) (43) (184)
Write back of trade and other
payable (122) - (115) -
ECL allowance on intercompany
loans receivables 11 - - 300 -
Finance costs 246 73 246 73
Share based payment charge 42 29 42 29
------------- ------------ ------------- ------------
Cash used in operating activities
before changes in working capital (886) (679) (361) (269)
increase/(decrease) in trade
and other receivables 89 7 38 (16)
(increase)/decrease in trade
and other payables 280 (252) 97 (68)
Cash flow from operating activities (517) (924) (226) (353)
------------- ------------ ------------- ------------
Cash flow from investing activities
Cash calls made to controlled
entities - - (754) (876)
Purchase of property, plant
and equipment 10 (9) - - -
Net funds used for investing
in exploration 9 (450) (310) - -
------------- ------------ ------------- ------------
Cash flow from investing activities (459) (310) (754) (876)
------------- ------------ ------------- ------------
Cash flow from financing activities
Proceeds from issue of shares 20 - 955 - 955
Proceeds from loans 18 788 495 788 495
Cash flow from financing activities 788 1,450 788 1,450
------------- ------------ ------------- ------------
Net increase/(decrease) in
cash and cash equivalents (188) 216 (192) 221
Cash and cash equivalents at
the beginning
of the year 233 17 230 9
Effect of changes in exchange -* -* - -
rate
Cash and cash equivalents at
the end
of the year 45 233 38 230
------------- ------------ ------------- ------------
*less than GBP1,000
The notes on page 31 to 50 form part of these of financial
statements
Consolidated Statement of Changes in Equity
Share Non-
Share Share Translation based Other Retained controlling Total
capital premium reserve payments reserve losses interests equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2017 4,305 23,412 (354) 761 46 (25,952) 123 2,341
Correction of
error (note
27) - - - - (46) (6) - (52)
---------- ---------- ----------------- ---------- ---------- ---------- ----------- --------
Restated total
equity at
the beginning
of the
financial year 4,305 23,412 (354) 761 - (25,958) 123 2,289
Exchange
difference on
translating
foreign
operation - - (15) - - - - (15)
Loss for the
year - - - - - (555) - (555)
---------- ---------- ----------------- ---------- ---------- ---------- ----------- --------
Total
comprehensive
income/(loss)
for the year - - (15) - - (555) - (570)
---------- ---------- ----------------- ---------- ---------- ---------- ----------- --------
Transaction with
owners
Issue of shares 496 859 - - - - - 1,355
Performance
rights awarded - - - 29 - - - 29
Options expired - - - (761) - 761 - -
Acquisition of
non-controlling
interest - - - - - - (123) (123)
Balance at 31
December 2017 4,801 24,271 (369) 29 - (25,752) - 2,980
========== ========== ================= ========== ========== ========== =========== ========
Exchange
difference on
translating
foreign
operation - - (117) - - - - (117)
Loss for the
year - - - - - (1,196) - (1,196)
---------- ---------- ----------------- ---------- ---------- ---------- ----------- --------
Total
comprehensive
income/(loss)
for the year - - (117) - - (1,196) - (1,313)
---------- ---------- ----------------- ---------- ---------- ---------- ----------- --------
Transaction with
owners
Issue of shares 130 215 - - - - - 345
Performance
rights
awarded/lapsed - - - 42 - - - 42
Balance at 31
December 2018 4,931 24,486 (486) 71 - (26,948) - 2,054
========== ========== ================= ========== ========== ========== =========== ========
The notes on page 31 to 50 form part of these of financial
statements.
Company Statement of Changes In Equity
Share-based Accumulated
Share capital Share premium payments Other losses Total
reserve reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2017 4,305 23,412 761 46 (25,479) 3,045
Correction of
error (note
27) - - - (46) (6) (52)
----------------------- ---------------------------- ----------- --------- ----------- ----------
Restated total
equity at the
beginning
of the
financial
year 4,305 23,412 761 - (25,485) 2,993
Total
comprehensive
loss for the
year - - - - (139) (139)
Transaction
with owners
Issue of
shares 496 859 - - - 1,355
Performance
rights
awarded
during
the year - - 29 - - 29
Transfers from
reserves - - (761) - 761 -
Balance at
31 December
2017 4,801 24,271 29 - (24,863) 4,238
Adjustment on
initial
application
of IFRS 9
(note 11) - - - - (3,000) (3,000)
----------------------- ---------------------------- ----------- --------- ----------- ----------
Restated
balance at 1
January
2018 4,801 24,271 29 - (27,863) 1,238
Total
comprehensive
loss for the
year - - - - (973) (973)
Transaction
with owners
Issue of
shares 130 215 - - - 345
Performance
rights
awarded
during
the year - - 42 - - 42
Balance at
31 December
2018 4,931 24,486 71 - (28,836) 652
======================= ============================ =========== ========= =========== ==========
The notes on page 31 to 50 form part of these of financial
statements.
Notes to the Financial Statements
1. General information
Herencia Resources Plc (the "Company") is incorporated and
domiciled in the United Kingdom. The address of the registered
office is 59-60 Russell Square, London WC1B 4HP.
The principal activity of the Company is that of exploration of
copper in Chile.
2. Presentation of financial statements
The financial statements have been presented in Pounds Sterling
(GBP) as this is the currency of the primary economic environment
that the group operates in. The amount is rounded to the nearest
thousand (GBP'000), unless otherwise stated.
3. Accounting policies
The principal accounting policies applied in the preparation of
these financial statements are set out below.
3.1 Basis of preparation
These financial statements have been prepared in accordance with
International financial Reporting standards (IFRSs) as adopted by
the European Union and the Companies Act 2006. The financial
statements have been prepared on the historical cost basis except
for certain assets which are stated at their fair value.
The Company has taken advantage of section 408 of the Companies
Act 2006 and, consequently, a profit and loss account for the
Company alone has not been presented.
3.2 Going concern
The financial statements are required to be prepared on the
going concern basis.
The Group made a loss for the year of GBP1.20 million (2017:
loss of GBP0.56 million) and there was a net cash outflow from
operating activities of GBP0.52 million (2017: GBP0.92 million). At
the reporting date the Group held cash and cash equivalents of
GBP0.04 million (2017: GBP0.23 million) and had total liabilities
of GBP3.89 million (2017: GBP2.79 million).
The requirement for additional funds constitutes a material
uncertainty that may cast significant doubt on the ability of the
Company and the Group to continue as a going concern.
As described in note 17, the two major shareholders of the
Company have provided working capital loans to the Group to finance
its daily operational. Loans of an aggregate value of GBP1.57
million are either repayable within 12 months of the date of
approval of these financial statements or will be converted into
equity upon on its maturity. Subsequent to the year end, the Group
received a further US$300,000 (in GBP GBP240,000) from the issue of
convertible notes. The providers of the loans have informed the
Directors that repayment will not be sought for at least 12 months
of the date of approval of these financial statements unless the
Group has sufficient available working capital to support the
making of repayments. The Directors have considered and assessed
the support provided by shareholders and are satisfied that they
will and can, if required, continue to provide the support for the
development of the Group's growth over at least the next twelve
months from the date of approval of these financial statements and
are therefore satisfied that the going concern basis of preparation
is appropriate. In considering the appropriateness of this basis of
preparation.
Based on their assessment, the Directors have a reasonable
expectation that the Group has adequate resources, supplemented by
the additional funds to be raised, to continue as a going concern
for the foreseeable future and that the carrying values of
intangible assets are therefore not impaired. Thus, they continue
to adopt the going concern basis of accounting in preparing these
financial statements.
If the Group was unable to secure sufficient funding to enable
it to continue on a going concern basis then adjustments would be
necessary to write down assets to their recoverable amounts,
reclassify non-current assets and long-term liabilities as current
and provide for additional liabilities.
3.3 New standards, amendments to and interpretations to published standards not yet effect
A number of new standards and amendments to standards and
interpretations have been issued but are not yet effective and, in
some cases, have not yet been adopted by the EU.
At the date of authorisation of these financial statements, the
Directors have reviewed the standards in issue by the International
Accounting Standards Board ("IASB") and IFRIC, which are effective
for annual accounting periods ending on or after the stated
effective date. In their view, none of these standards would have a
material impact on the financial statements of the Group for being
non-trading group. Except for IFRS 16 is likely to require the
recognition of most operating lease commitments on the Group's
balance sheet as assets and the recognition of a corresponding
liability. At 31 December 2018, the Group does not have any lease
which is material and long term, Directors do not therefore
anticipate the adoption of IFRS16 will have any impact on the
Group's consolidated financial statements.
The Group has yet to record any revenues and therefore impact of
IFRS 15 have been minimal. However, the adoption of IFRS 9 has
impacted the Company as a result of the existing incurred loss
approach under IAS 39 being replaced by the forward-looking
expected credit loss model approach of IFRS 9. The expected credit
loss model is required to be applied to the intercompany loan
receivables, as described in note 11.
3.4 Basis of consolidation
The consolidated financial statements comprise the financial
information of the Company and its subsidiaries (the "Group") made
up to the end of the reporting period. Control is achieved when the
Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those
returns through its power over the investee.
The consolidated financial statements present the results of the
Company and its subsidiaries and joint arrangements as if they
formed a single entity. Inter-company transactions and balances
between group companies are therefore eliminated in full. The
financial information of subsidiaries is included in the Group's
financial statements from the date that control commences until the
date that control ceases.
Profit or loss and each component of other comprehensive income
(OCI) are attributed to the equity holders of the parent of the
Group and to the non-controlling interests (NCI). When necessary,
adjustments are made to the financial information of subsidiaries
to bring their accounting policies into line with the Group's
accounting policies. All intragroup assets and liabilities, equity,
income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
3.5 Property, plant & equipment
All fixed assets are initially recorded at cost.
Depreciation is calculated so as to write off the cost of an
asset, less its estimated residual value, over the useful economic
life of that asset as follows:
Fixtures and fittings 25% straight line
Plant and machinery 25% straight line
Motor vehicles 25% straight line
3.6 Exploration and evaluation costs
All costs associated with mineral exploration and investments
are capitalised on a project by project basis, pending
determination of the feasibility of the project. Costs incurred
include appropriate technical and administrative expenses but not
general corporate overheads. If an exploration project is
successful, the related expenditures will be transferred to mining
assets and amortised over the estimated life of the commercial ore
reserves on a unit of production basis. Where a licence is
relinquished or project abandoned, the related costs are written
off. Where the Group maintains an interest in a project, but the
value of the project is considered to be impaired, a provision is
made against the relevant capitalised costs.
The recoverability of all exploration and evaluation costs is
dependent upon the discovery of economically recoverable reserves,
the ability of the Group to obtain necessary financing to complete
the development of the reserves and future profitable production or
proceeds from the disposition thereof.
Amounts recorded for these assets represent costs and are not
intended to reflect present or future values.
3.7 Impairment of exploration and evaluation costs
The carrying value of exploration and evaluation is assessed on
at least an annual basis or when there has been an indication that
impairment in value may have occurred. The impairment of
exploration and evaluation is assessed based on the Directors'
intention with regard to future exploration and development of
individual significant areas and the ability to obtain funds to
finance such exploration and future development.
3.8 Investment
Investments in subsidiaries are stated at cost less provision
for impairment.
3.9 Financial instruments
Financial assets and financial liabilities are recognised in the
Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Trade and other receivables
Loan and receivables comprise cash and cash equivalents and
other receivables are measured at initial recognition at fair value
and are subsequently measured at amortised cost less any provision
for impairment.
Trade receivables are recognised initially at the transaction
price and subsequently measured at amortised costs, less any
impairment losses.
Trade and other payables
Trade and other payables are initially measured at fair value,
net of transaction costs, and are subsequently measured at
amortised cost, where applicable, using the effective interest
method, with interest expense recognised on an effective yield
basis.
3.10 Impairment of assets
(a) Financial assets
The Group recognises a loss allowance for expected credit loss
("ECL") on financial assets which are subject to impairment under
IFRS 9 including trade receivables, contract assets, other
receivables, loan receivable, amounts due from an intermediate
holding company, immediate holding company, associates and fellow
subsidiaries, pledged bank deposits and bank balances. The amount
of ECL is updated at each reporting date to reflect changes in
credit risk since initial recognition.
Lifetime ECL represents the ECL that will result from all
possible default events over the expected life of the relevant
instrument. In contrast, 12-month ECL ("12m ECL") represents the
portion of lifetime ECL that is expected to result from default
events that are possible within 12 months after the reporting date.
Assessment are done based on the Group's historical credit loss
experience, adjusted for factors that are specific to the debtors,
general economic conditions and an assessment of both the current
conditions at the reporting date as well as the forecast of future
conditions. The Group always recognises lifetime ECL for trade
receivables. The ECL on these assets are assessed individually for
debtors with significant balances and collectively using a
provision matrix with appropriate groupings. For all other
instruments, the Group measures the loss allowance equal to 12m
ECL, unless when there has been a significant increase in credit
risk since initial recognition, the Group recognises lifetime ECL.
The assessment of whether lifetime ECL should be recognised is
based on significant increases in the likelihood or risk of a
default occurring since initial recognition.
(b) Non-financial assets
The carrying amounts of the Group's non-financial assets, other
than deferred tax assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any
such indication exists, then the asset's recoverable amount is
estimated. For assets that have indefinite lives, the recoverable
amount is estimated at each reporting date.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and risk specific to the asset. For the purpose of impairment
testing, assets are grouped together into the smallest group of
assets that generates cash inflows from continuing use that are
largely independent of the cash inflows of other assets or groups
of assets (the "cash generating unit").
An impairment loss is recognised if the carrying amount of an
asset or its cash generating unit exceeds its estimated recoverable
amount. Impairment losses are recognised in the profit or loss.
3.11 Employee benefits
A liability is recognised for benefits accruing to employees in
respect of wages and salaries, annual leave and long service leave
when it is probable that settlement will be required and they are
capable of being measured reliably.
Liabilities recognised in respect of employees benefits to be
settled within twelve months are measured at their nominal values
using the remuneration rates expected to apply at the time of
settlement.
3.12 Income tax
Income 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 profit as reported comprehensive
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 not taxable or tax deductible. The Group's
liability for current tax is calculated using tax rates (and tax
laws) that have been enacted or substantively enacted in countries
where the Group and its subsidiaries operate by the end of the
financial period.
Deferred income taxes are calculated using the balance sheet
method. Deferred tax is generally provided on the temporary
difference between the carrying amounts of assets and liabilities
and their tax bases. However, deferred tax is not provided on the
initial recognition of goodwill, nor on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries and
joint ventures is not provided if reversal of these temporary
differences can be controlled by the Group and it is probable that
reversal will not occur in the foreseeable future. In addition, tax
losses available to be carried forward as well as other income tax
credits to the Group are assessed for recognition as deferred tax
assets.
Deferred tax liabilities are provided in full, with no
discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the balance sheet date.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the Consolidated Statement of
Comprehensive Income, except where they relate to items that are
charged or credited directly to equity in which case the related
deferred tax is also charged or credited directly to equity.
3.13 Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from
past events and whose existence will only be confirmed by the
occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Group. It can also be a
present obligation arising from past events that is not recognised
because it is not probable that outflow of economic resources will
be required or the amount of obligation cannot be measured
reliably.
A contingent liability is not recognised but is disclosed in the
notes to the accounts. When a change in the probability of an
outflow occurs so that the outflow is probable, it will then be
recognised as a provision. A contingent asset is a possible asset
that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain
events not wholly within the control of the Group. Contingent
assets are not recognised but are disclosed in the notes to the
accounts when an inflow of economic benefits is probable. When
inflow is virtually certain, an asset is recognised.
3.14 Operating lease agreements
Rentals applicable to operating leases where substantially all
of the benefits and risks of ownership remain with the lessor are
charged against profits on a straight line basis over the period of
the lease.
3.15 Foreign currencies
Assets and liabilities in foreign currencies are translated into
sterling at the rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are translated into sterling at
the rate of exchange ruling at the date of the transaction.
Exchange differences are taken into account in arriving at the
operating profit or loss.
3.16 Share based payments
The Company has applied IFRS 2 Share-based Payment for all
grants of equity instruments. Fair value is measured using 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. The inputs to the model include: the share price at
the date of grant, exercise price expected volatility, risk free
rate of interest.
4. Critical accounting estimates and sources of estimation uncertainty
In applying the accounting policies, the Directors may at times
require to make critical accounting judgements and estimates about
the carrying amount of assets and liabilities. These estimates and
assumptions, when made, are based on historical experience and
other factors that the Directors consider are relevant.
The key estimates and assumptions concerning the future and
other key sources of estimation uncertainty at the end of the
financial year, that have significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are reviewed are as stated below.
Key accounting judgements
(a) Impairment of non-current asset
The Group's non-current assets represent its most significant
assets, comprising exploration assets in Chile. Management is
required to assess exploration and evaluation (E&E) assets for
indicators of impairment and has considered the economic value of
individual E&E assets. The carrying amount of the E&E asset
are subject to a separate review for indicators of impairment, by
reference to the impairment indicators set out in IFRS 6, which is
inherently judgmental.
In performing impairment reviews, the Group assesses the
recoverable amount of its operating assets principally with
reference to the Group's independent competent person's report,
estimates of future copper prices, operating costs and capital
expenditure necessary to extract those estimated reserves for the
purpose of deriving a recoverable value.
The Directors have considered all the facts and circumstances,
as described in note 9, in making their assessment as whether the
carrying value of an E&E assets may exceed the recoverable
amount.
(b) Going concern
As disclosed in note 3.2, these financial statements have been
prepared on a going concern basis.
(c) Current liabilities
Included within current liabilities is an amount of GBP500,000
which relates to historic liabilities that have previously been
recognised. Given the past recognition Management consider it
appropriate to continue to recognise these liabilities on balance
sheet however, they are currently investigating the nature of these
liabilities, how they arose and whether they are still payable.
This investigation may result in a material write back of these
amounts. If any adjustment arose it could impact prior periods and,
if material, would be corrected via an adjustment to opening
reserve and a prior period adjustment.
5. Operating loss
Group Group
2018 2017
GBP'000 GBP'000
Auditors' remuneration
Fee payable to company's auditor in respect
to the audit of the Parent Company and consolidated
financial statements 25 33
Depreciation 5 6
Corporate and advisory fees 198 253
Employee benefits expense 534 493
------- -------
6. Other income
Group Group
2018 2017
GBP'000 GBP'000
De-recognition of loan (note 18) - 184
Other income 7 -
------- -------
7 184
------- -------
7. Employee benefit expense
Group Group
2018 2017
GBP'000 GBP'000
Wages and salaries 504 459
Payroll tax contribution 5 4
Director fees 25 30
------- -------
534 493
------- -------
Details of each Director's emoluments are in the Directors'
Remuneration Report. Key managements are considered to be the
directors.
8. Taxation on ordinary activities
No liability to corporation tax arose for the years ended 31
December 2017 and 2018, as a result of underlying losses brought
forward.
Reconciliation of effective tax rate
Group Group
2018 2017
GBP'000 GBP'000
Loss from ordinary activities (1,195) (555)
------- -------
Tax at the UK corporation tax rate of 19%
(2017: 19.5%) (227) (108)
Unrealised exchange difference 35 (3)
Finance revenue (75) (31)
Finance costs 47 3
Share based payments 7 5
Tax losses 213 134
- -
------- -------
At 31 December 2018, the Group has unused tax losses available
for offset against suitable future profits. The Group had
accumulated tax losses of GBP11,772,000 (2017: GBP10,651,000) at
the reporting date. No deferred tax asset was recognised in respect
to these accumulated tax losses as there is insufficient evidence
that the amount will be recovered in future years.
9. Intangible assets - exploration and evaluation (E&E) assets
Group Group Company Company
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
At costs
At 1 January 5,914 4,709 911 -
Additions 214 187 - -
Fair value of Pastizal Project
acquired - 1,034 - 911
Exchange fluctuation 237 (16) - -
At 31 December 6,365 5,915 911 911
------- ------- ------- -------
Impairment
At 1 January and 31 December (547) (547) - -
------- ------- ------- -------
Carrying value 5,818 5,368 911 911
======= ======= ======= =======
The impairment review conducted by the Directors for the
financial year ended 31 December 2018. In performing their
assessment, the Directors have:
-- reviewed the time period that the Group has the right to
explore the area and noted no instances of expiration, or licences
that are expected to expire in the near future;
-- determined that further E&E expenditure is either budgeted or planned for all licences;
-- not decided to discontinue exploration activity due to there
being a lack of quantifiable mineral resource; and
-- not identified any instances where sufficient data exists to
indicate that there are licences where the E&E spend is
unlikely to be recovered from successful development or sale.
On the basis of the above assessment, the Directors are not
aware of any facts or circumstances that would suggest the carrying
amount of the E&E asset may exceed its recoverable amount.
Accordingly, no impairment were made during the year.
10. Property, plant and equipment
Group Group Company Company
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
At costs 69 60 - -
Less: accumulated depreciation (48) (43) - -
Carrying value 21 17 - -
------- ------- ------- -------
Movements in carrying value
Balance at the beginning
of the year 17 23 - -
Additions 9 - - -
Depreciation charge for
the year (5) (6) - -
Exchange fluctuation -* -* - -
------- ------- ------- -------
Balance at the end of the
year 21 17 - -
======= ======= ======= =======
*less than GBP1,000
11. Receivable - non current
Company Company
2018 2017
GBP'000 GBP'000
Advances to controlled
entities 2,912 5,458
------- -------
The adoption of IFRS 9 has impacted the Company as a result of
the existing incurred loss approach under IAS 39 being replaced by
the forward-looking expected credit loss ("ECL") model approach of
IFRS 9. The expected credit loss model is required to be applied to
the intercompany loan receivables and investment in subsidiaries.
To a large extent the mineral exploration segment has been funded
by loans from the Company is represented by the value of the
mineral exploration cash generating units. Recoverability of these
loans is therefore dependent upon the mineral exploration segments
producing sufficient cash surplus such that the segment achieves a
positive net asset position.
As described in note 26, the mineral exploration segment has a
positive net assets position at 31 December 2018. Accordingly, an
ECL allowance of GBP3 million was recognised in the accumulated
losses on 1 January 2018 and a further ECL allowance of GBP0.3
million was recognised for the year making a total ECL allowance to
be GBP3.3 million at the reporting date.
12. Investments in subsidiaries
The Company's investments in subsidiary undertakings at 31
December 2018 were as follows:
Company Company
2018 2017
GBP'000 GBP'000
At costs
At 1 January 1,623 1,500
Acquisition of minority interest in Herencia
Resources Chile SA - 123
------- -------
At 31 December 1,623 1,623
------- -------
Provision for impairment at 1 January and
31 December (1,500) (1,500)
------- -------
Net book value at 31 December 123 123
======= =======
The Company's subsidiary undertakings at 31 December 2018 were
as follows:
Company name Country of Class Shares
registration or incorporation held %
Direct
Tarapaca Resources (Bermuda)
Limited Bermuda Ordinary 100
Indirect
Tarapaca Holdings (BVI)
Limited British Virgin Islands Ordinary 100
Iquique Resources (Chile)
SA Chile Ordinary 100
Paguanta Mining Services
Limited Chile Ordinary 100
Herencia Resources (Chile)
SA Chile Ordinary 100
Herencia Services SA Chile Ordinary 100
The principal activity of Iquique Resources Chile SA and
Herencia Resources Chile SA is mineral exploration, Paguanta Mining
Services Limited and Herencia Services SA are employment and
services entities whilst Tarapaca Resources (Bermuda) Limited and
Tarapaca Holdings (BVI) Limited are holding entities.
12. Investments in subsidiaries (continued)
The registered office address of the respective entity as
follow:
Company name Registered address
Direct
Tarapaca Resources (Bermuda) Canon's Court, 22 Victoria Street,
Limited Bermuda
Indirect
Tarapaca Holdings (BVI) C/- Offshore Incoporations limited
Limited P.O. Box 957 Offshore Incorporations
Centre, Road Town, Tortola,
British Virgin Islands.
Iquique Resources (Chile) Office 401, Av Apoqundo 6410, Santiago,
SA Chile
Paguanta Mining Services Office 401, Av Apoqundo 6410, Santiago,
Limited Chile
Herencia Resources (Chile) Office 401, Av Apoqundo 6410, Santiago,
SA Chile
Herencia Services SA Office 401, Av Apoqundo 6410, Santiago,
Chile
13. Cash and cash equivalents
Group Group Company Company
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Cash at bank and in hand 45 233 38 230
------- ------- ------- -------
14. Trade and other receivable
Group Group Company Company
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Other receivable 62 150 - 38
------- ------- ------- -------
15. Trade and other payable
Group Group Company Company
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Other payables and accruals 1,121 986 172 273
------- ------- ------- -------
16. Provisions for liabilities
Group Group Company Company
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Employee benefits
Balance at the beginning
of the year 54 93 - 45
Arising during the year 57 6 - -
Company paid to creditors - (45) - (45)
------- ------- ------- -------
Balance at the end of the
year 111 54 - -
------- ------- ------- -------
The provision for employee benefits relates to annual leave
entitlements.
17. Loans and borrowings
Group Group Company Company
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Current
Loan from third parties 63 255 63 255
Non-current
Loan from third parties 305 43 305 43
Amount owed to ASOF 634 362 634 362
Amount owed to Oriental 633 214 633 214
Amount owed to group undertakings - - 500 500
------- ------- ------- -------
1,572 619 2,072 1,119
------- ------- ------- -------
Loan from third parties 368 298 368 298
Amount owed to group undertakings - - 500 500
Amounts owed to ASOF and
Oriental 1,267 576 1,267 576
1,635 874 2,135 1,374
------- ------- ------- -------
The effective interest rates on the loan and borrowings for the
year at approximately 10.7% (2017: 12.2%) per annum. Loan and
borrowings are denominated in United State Dollars, Australia
Dollars and Pound Sterling.
Amount owed to Australian Special Opportunity Fund ("ASOF") and
Oriental Darius Co Ltd ("Oriental") are secured against the assets
of the Group.
The table below analyses the movement in loan amount denominated
in US Dollars during the reporting period:
ASOF Oriental Total Total
US$'000 US$'000 US$'000 GBPGBP'000
At 1 January 2017 185 235 420 330
Loan advance during the
year 400 200 600 456
Conversion of loan into
equity (120) (170) (290) (226)
Accreted interest 24 24 48 40
Forex effect - - - (24)
------- -------- ------- ----------
At 31 December 2017 489 289 778 576
Loan advance during the
year 393 593 986 731
Conversion of loan into
equity (150) (150) (300) (262)
Accreted interest 73 71 144 112
Forex effect - - - 110
------- -------- ------- ----------
At 31 December 2018 805 803 1,608 1,267
------- -------- ------- ----------
18. Net debt reconciliation
Group Group
2018 2017
GBP'000 GBP'000
Cash and cash equivalent 45 233
Loan from third parties (368) (298)
Amounts owed to ASOF and
Oriental (1,267) (576)
------- -------
Net debt (1,590) (641)
------- -------
Loan Amounts owed
Cash and from third to ASOF and
Group cash equivalent parties Oriental Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2017 (restated) 17 (473) (330) (786)
Cash flow (739) - - (739)
Share placements 955 - - 955
New loan drawn down - - (456) (456)
Non-cash finance costs - (33) (40) (73)
Conversion of loan notes
into equity - - 226 226
Forex exchange movement - 24 24 48
Adjustment to fair value* - 184 - 184
At 31 December 2017 233 (298) (576) (641)
Cash flow (188) - - (188)
New loan drawn down - (57) (731) (788)
Non-cash finance costs - (40) (112) (152)
Conversion of loan notes
into equity - - 262 262
Forex exchange movement - (16) (110) (126)
Debt forgiven - 43 - 43
---------------- ----------- ------------ -------
At 31 December 2018 45 (368) (1,267) (1,590)
---------------- ----------- ------------ -------
*Adjustment to fair value
The loans provided by former Directors (Messrs JC Moore, JB
Russell and GJ Sloan) have been adjusted to reflect the present
value based on consideration of an appropriate discount at a rate
of 20% and financial position that the Company would need to
achieve in order to pay the former Directors' loans.
Based on the time value of money, the loan has been recorded at
GBP43,000 as at balance date 31 December 2017. The adoption of the
amortised cost basis of accounting for the former Directors loan
resulted in the Group recorded a gain of GBP184,000 for the
financial year with a finance cost of GBP7,000.
Funding arrangement with ASOF and Oriental
In 2016, the Group entered into funding arrangements with two of
its major shareholders, the Australian Special Opportunity Fund
("ASOF" or "Lind Partners") and Oriental Darius Co. Ltd
("Oriental"). The funding will be provided to the Group by the
Shareholders by way of Secured Convertible Facilities with a Face
Value, the agreed amount to be repaid by the Group over the term of
the agreement. These facilities will be secured against the Group's
assets.
Furthermore, the Shareholders will be given the option to
convert any outstanding Face Value amounts into ordinary shares in
the Company at a price per Share equal to the lower of GBP 0.0001
or, in the event that the nominal value per Share is reduced in the
future, 90% of the average of three daily VWAPs, chosen by the
Investor, during the 20 trading days before the conversion
("Conversion Price").
19. Vendor obligation
Group Group Company Company
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Balance at the beginning
of the year 875 - 1,025 -
Recognition of vendor
obligation - 860 - 860
Accrued interest 94 14 94 14
Foreign exchange effect 56 1 56 1
------- ------- ------- -------
Balance at the end of
the year 1,025 875 1,025 875
======= ======= ======= =======
On 24 October 2017, the Company executed an agreement with
Consultoria y Services Mineros SA for the acquisition of the
Pastizal project.
Under the terms and conditions of the acquisition the Company
agreed to pay the following consideration:
-- 580,000,000 fully paid ordinary shares at 0.03 pence per
fully paid ordinary share and a further 670,000,000 fully paid
ordinary shares upon the Herencia share price averaging at least
0.12 pence per share for a minimum of 90 days;
-- Cash consideration of US$150,000 payable in 30 months from
the date of execution of the acquisition agreement and a further
US$200,000 payable in 42 months from the date of execution;
-- Debt assumption of US$1,200,000 payable between 18 months and
54 months from the date of execution of the acquisition agreement;
and
-- Milestone payments of up to US$2,000,000 based the Mineral
Resources at both Picachos and Pastizal where the Mineral Resources
exceed 10 million tonnes grading an average copper grade of 1% but
being less than 20 million tonnes grading an average copper grade
of 1% US$1,000,000 payable in two instalments between 18 months and
36 months from date of execution of the acquisition agreement and
where the Mineral Resources exceed 20 million tonnes grading an
average copper grade of 1% the maximum amount of US$2,000,000.
The Company has pledged its interest in the Guamanga project and
La Serena project as security for the cash obligations and debt
settlement obligations.
20. Share capital and premium
Number of Number of
Ordinary Shares Deferred Share Share Premium
Shares Capital
GBP'000 GBP'000
As at 1 January 2017 4,627,271,915 4,266,609,563 4,305 23,412
8 May 2017 - Share placements 1,781,158,152 - 178 624
15 May 2017 - Conversion of
convertible notes by Oriental
Darius Co Ltd 388,018,004 - 39 -
10 July 2017 - Conversion of
convertible notes by
ASOF 931,178,173 - 93 -
10 July 2017 - Conversion of
convertible notes by
Oriental Darius Co Ltd 943,396,226 - 94 -
15 July 2017 - Share placements 339,978,890 - 34 119
Issue of share for acquisition
of Pastizal project 580,000,000 - 58 116
---------------- ------------- --------- ---------------
As at 31 December 2017 9,611,001,360 4,266,609,563 4,801 24,271
3 January 2018 - Conversion
of convertible notes by
Oriental Darius Co Ltd and ASOF 1,047,516,433 - 105 157
28 August 2018 - Issuance of
shares 150,000,000 - 15 30
11 October 2018 - Issuance of
shares 100,000,000 - 10 28
As at 31 December 2018 10,908,517,793 4,266,609,563 4,931 24,486
---------------- ------------- --------- ---------------
During the year, the Company issued 250 million shares to third
party creditors in lieu of their services to the Company, amounted
to GBP83,000.
21. Reserve
Share premium
Share premium is the aggregate of amounts received for the issue
of share capital less the nominal value of the shares issued and
less any costs permitted to be deducted under applicable law.
Translation reserve
The translation reserve represents cumulative foreign exchange
differences arising from the translation of the financial
statements of foreign subsidiaries and is not distributable by way
of dividends.
Accumulated losses
Accumulated losses represent the cumulative balance of losses
recognised.
22. Performance rights and share-based payments
(a) Movements in share performance rights during the year
The following reconciles the outstanding share performance
rights granted as share-based payments at the beginning and end of
the financial year:
Number of Weighted Number of Weighted
options average exercise options average exercise
price price
2018 2018 2017 2017
Balance at the beginning of
the year 1,700,000,000 - - -
Awarded during the year - - 1,700,000,000 -
Expired during the year (850,000,000) - - -
------------- ----------------- ------------- -----------------
Balance at the end of the
year 850,000,000 - 1,700,000,000 -
============= ================= ============= =================
(b) Fair value of share performance rights granted
No share performance rights were awarded during the financial
year (2017: 1,700,000,000) for zero consideration and vesting over
a three-year period from the date of award. Mr. P. Reeves per
Performance Rights performance rights lapsed upon retirement from
the company.
(c) Options held by Directors
No options were held or granted to Directors during the
year.
The Company uses a Black Scholes model to estimate the cost of
share options. The following information is relevant in the
determination of the fair value of options granted. The assumptions
inherent in the use of this model are as follows:
The fair value was calculated using the Black Scholes warrant
pricing model. The inputs into the model were as follows:
Share performance
rights
Stock price 0.025
Exercise price -
Interest rate 0.75%
Volatility 500%
Time to maturity 23 October
2022
The expense recognised during the period was GBP42,000 (2017:
GBP29,000). The weighted average remaining life of the options
outstanding at the end of the period was 3.81 years. No options
were exercised during the period.
23. Related party transactions
Company secretary
Ben Harber was the secretary of the Company until 13 September
2018 and was also a partner of Shakespeare Martineau LLP, a firm of
which provides company secretarial and legal services. During the
year this partnership was paid a sum of GBP16,913 (2017: GBP32,229)
in respect of company secretarial and legal services to the
Company. This related party transaction is based on independent
third-party commercial rates.
David Little became the secretary of the Company on 13 September
2018 and was also a partner of Bishop Sewell LLP, a firm of which
provides company secretarial and legal services. During the year
this partnership was paid a sum of GBP5,040 (2017: nil) in respect
of company secretarial and legal services to the Company. This
related party transaction is based on independent third-party
commercial rates.
Chartered Accountants
Carl Dumbrell became a director of the Company on 28 May 2018
and is also a partner of CDTL Chartered Accountants, a firm of
which provides accounting services. During the year this
partnership was paid a sum of GBP6,670 (2017: nil) in respect of
accounting services to the Company. This related party transaction
is based on independent third-party commercial rates.
Loan
CDTL International Ltd a company of which Carl Dumbrell is a
director and shareholder provided Herencia Resources Plc with a
loan of GBP6,700 in October 2018. This loan accrues and interest
yield of 10% and will be converted into equity when the company
relists.
ZLD Holdings Pty Ltd is a company of which Carl Dumbrell is a
director provided Herencia Resources Plc with a loan of GBP6,966 in
October 2018. This loan accrues and interest yield of 10% and will
be converted into equity when the company relists.
24. Contingent liabilities and capital commitments
Pastizal project
Under the terms and conditions of the acquisition of the
Pastizal project the Company agreed to pay the following
consideration which are subject to achievement of specific
milestones and therefore contingent liabilities:
(a) 670,000,000 fully paid ordinary shares upon the Herencia
share price averaging at least 0.12 pence per share for a minimum
of 90 days; and
(b) Milestone payments of up to US$2,000,000 based the Mineral
Resources at both Picachos and Pastizal where the Mineral Resources
exceed 10 million tonnes grading an average copper grade of 1% but
being less than 20 million tonnes grading an average copper grade
of 1% US$1,000,000 payable in two instalments between 18 months and
36 months from date of execution of the acquisition agreement and
where the Mineral Resources exceed 20 million tonnes grading an
average copper grade of 1% the maximum amount of US$2,000,000.
Picachos Project
On 7 August 2013, the Company announced that its subsidiary
Herencia Resources (Chile) SA entered into an Option Agreement to
acquire the advanced Picachos Copper Project in central Chile.
Under the original terms of the Option Agreement, for Herencia
Resources Chile SA to earn 100% of the project, US$200,000 was paid
upfront on signing with further payments of US$8,300,000 over 4
years.
In 2016, the Company renegotiated the Option Agreement to
acquire the Picachos project. Under the terms and conditions of the
Revised Option Agreement for Herencia Resources Chile SA to earn
100% of the Picachos project it is required to pay total option
payments of US$5,000,000 of which US$885,000 has been paid as at 31
December 2017.
The Company is in arrears with the renegotiated option payments
schedule as at the date of this annual report. Under the Revised
Option Agreement options payments for 2016-2018 remain outstanding
and total US$1,913,250. Option payments due in 2019 US$800,000;
2020 US$900,000 and 2021 US$500,000.
The Company has also agreed to make royalty payments during
production with a base royalty of 2 US cents per pound rising to
2.5 US cents per pound when the copper price exceeds US$3 per pound
and 3.0 US cents per pound when the copper price exceeds US$4 per
pound.
24. Contingent liabilities and capital commitments (continued)
Capital commitments
The Group's future minimum exploration commitments are as
follows:
Group Group
2018 2017
GBP'000 GBP'000
Within 12 months 50 36
Between 12 months and 5 years 100 145
Greater than 5 years - -
------- -------
Total 150 181
------- -------
25. Financial instruments
The Group's principal financial instruments comprise cash and
cash equivalents, trade and other receivables and trade and other
payable. The Group's accounting policies and method adopted,
including the criteria for recognition, the basis on which income
and expenses are recognised in respect of each class of financial
assets, financial liability and equity instrument are set out in
Note 3. The Group do not use financial instruments for speculative
purposes.
The principal financial instruments used by the Group, from
which financial instrument risk arises, are as follows:
Group Group Company Company
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Financial assets measured at
amortised cost
Cash and cash equivalents 45 233 38 230
Trade and other receivables 62 150 - 38
------- ------- ------- -------
Total financial assets 107 383 38 268
------- ------- ------- -------
Financial liabilities measured
at amortised costs
Trade and other payables 1,120 986 172 273
Loans and borrowings (current) 63 255 63 755
Loans and borrowings (non-current) 1,572 619 1,572 619
Vendor obligation 1,025 875 1,025 875
------- ------- ------- -------
Total financial liabilities 3,780 2,735 2,832 2,522
------- ------- ------- -------
Capital management
The Group manages its capital to ensure that it will be able to
continue as a going concern while attempting to maximise the return
to stakeholders through the optimisation of the debt and equity
balance. The capital structure of the group consists of issued
capital and external loans.
Credit risk
Credit risk is the risk that a counter-party will cause a
financial loss to the Group by failing to discharge its obligations
to the Group. The Group manages its exposure to this risk by
applying limits to the amount of credit exposure to any one
counterparty and employs strict minimum credit worthiness criteria
as to the choice of counterparty. The maximum exposure to credit
risk for receivables and other financial assets is represented by
their carrying amount. The Group's exposure to credit risk on cash
and cash equivalents is considered low as the bank accounts are
with banks with high credit ratings.
25. Financial instrument (continued)
Fair values
Management assessed that the fair values of cash and short-term
deposits, trade receivables, trade payables and other current
liabilities approximate their carrying amounts largely due to the
short-term maturities of these instruments.
Interest rate risk
The Group and company's policy is to fund its operations through
the use of retained earnings and equity. The Group exposure to
changes in interest rates relates primarily to cash at bank. Cash
is held either on current or short term deposits at a floating rate
of interest determined by the relevant bank's prevailing base
rate.
The Group's exposure to interest rate risk is minimal as all its
loans and borrowings are fixed rate instruments.
Foreign currency exchange risks
Foreign currency risk is the risk that the fair value or future
cash flows of an exposure will fluctuate because of the changes in
foreign exchange rates. The Group's exposure to the risk of changes
in foreign exchange rates relates primarily to the Group's
operating activities (when revenue or expense is denominated in a
foreign currency and the Group's net investments in foreign
subsidiaries).
The carrying amounts of the financial instruments are
denominated in the following currencies at each reporting year:
GBP AUD USD Total
GBP'000 GBP'000 GBP'000 GBP'000
2018
Financial assets 38 - 69 107
Financial liabilities (179) (56) (3,545) (3,780)
Net financial liabilities (141) (56) (3,476) (3,673)
------- ------- ------- -------
2017
Financial assets 268 - 115 383
Financial liabilities (273) - (2,462) (2,735)
Net financial liabilities (5) - (2,347) (2,352)
------- ------- ------- -------
The sensitivity analyses in the table below details the impact
of changes in foreign exchange rates on the Group's post-tax profit
for each reporting year. It is assumed that the named currency is
strengthening or weakening against all other currencies, while all
the other currencies remain constant.
If the USD strengthened or weakened by 5% against the other
currencies, with all other variables in each case remaining
constant, then the impact on the group's post-tax profit would be
gains or losses as:
Strengthen Weaken
2018 GBP'000 GBP'000
USD (183) 183
AUD (3) 3
---------- -------
2017
USD (123) 123
---------- -------
Liquidity risks
The principal risk to the Group is liquidity, which arises from
the Group's management of working capital. It is a risk that the
Group will encounter difficulty in meeting its financial
obligations as they fall due. This aspect is kept under review by
the Directors and in this respect management carries out rolling 12
month cash flow projections on a monthly basis as well as
information regarding cash balances. It is the Group's policy as
regards liquidity to ensure sufficient cash resources are
maintained to meet short-term liabilities.
25. Financial instrument (continued)
The maturity profile of the Group's financial liabilities at the
reporting dates based on contractual undiscounted payments are
summarised below:
2018 2017
GBP'000 GBP'000
Within 1 year
Trade and other payables 1,120 986
Loans and borrowings (current) 63 255
Between 1 to 5 years
Loans and borrowings (non-current) 1,740 722
Vendor obligation 1,025 875
------- -------
Total financial liabilities 3,948 2,838
------- -------
26. Segmental reporting
For the purposes of presenting segment information, the
activities of the Group are divided into operating segments in
accordance with IFRS 8 'Operating Segments'. Operating segments are
identified on the same basis that is used internally to manage and
report on performance and takes account of the organisational
structure of the Group based on the activities of the reportable
segments.
The activities of the Group are broken down into the operating
segments of Mineral Exploration and Central Costs. Segment
information by operating segment as follows:
Mineral Central
Exploration Costs Total
2018 2018 2018
GBP'000 GBP'000 GBP'000
Other income 7 - 7
Administrative expenses (450) (320) (770)
Depreciation charge (5) - (5)
Finance costs (152) - (152)
Foreign exchange (loss)/gain - (126) (126)
------------ ------- -------
Loss for the year (600) (446) (1,046)
------------ ------- -------
Segment assets 5,908 38 5,946
Segment liabilities (3,657) (235) (3,892)
------------ ------- -------
Net assets/(liabilities) 2,251 (197) 2,054
============ ======= =======
Mineral Central
Exploration Costs Total
2017 2017 2017
GBP'000 GBP'000 GBP'000
Finance revenue - 184 184
Administrative expenses (397) (311) (708)
Depreciation charge (6) - (6)
Finance costs (73) - (73)
Foreign exchange (loss)/gain 35 13 48
------------ ------- -------
Loss for the year (441) (114) (555)
------------ ------- -------
Segment assets 5,501 268 5,769
Segment liabilities (2,261) (528) (2,789)
------------ ------- -------
Net assets 3,240 (260) 2,980
============ ======= =======
26. Segmental reporting (continued)
Segment information by geographical segment as follows:
Non-Current Assets
2018 2017
GBP'000 GBP'000
Australia - -
Chile 5,839 5,385
Total non-current assets 5,839 5,385
--------- ---------
The Group had not commenced commercial production from its
exploration sites and therefore had no turnover in the reporting
year.
27. Prior year adjustment
The Group made a prior year adjustment in relation to the
accounting for the convertible loan notes as described in note 17.
Previously these convertible loan notes were accounted as equity
instruments. Having considered the guidance in IAS 32, the
Directors consider the convertible loan notes to be embedded
derivative contracts giving rise to a financial liability with the
embedded derivative liabilities to be measured at fair value.
Accordingly, the restatement of the comparative financial
information for the correction of this error.
The error has been corrected by restating each of the affected
financial statement line items for the prior periods as
follows:
(Restated)
At 31 December Increase/ At 31 December
Group 2017 (decrease) 2017
GBP'000 GBP'000 GBP'000
Consolidated Statement of
financial position (extract)
Non-current liabilities
Loans and borrowings 530 89 619
Current liabilities
Loans and borrowings 295 (40) 255
Total liabilities 2,738 49 2,787
---------------- ------------ ---------------
Net Assets 3,029 (49) 2,980
================ ============ ===============
Other reserve 117 (117) -
Accumulated losses (25,820) 68 (25,752)
---------------- ------------ ---------------
Total Equity 3,029 (49) 2,980
---------------- ------------ ---------------
Consolidated Statement of
comprehensive income (extract)
Foreign exchange losses (85) 39 (45)
Finance costs (107) 34 (73)
Loss for the year (628) 73 (555)
================ ============ ===============
27. Prior year adjustment (continued)
(Restated)
At 1 January Increase/ At 1 January
Group 2017 (decrease) 2017
GBP'000 GBP'000 GBP'000
Consolidated Statement of
financial position (extract)
Non-current liabilities
Loans and borrowings 716 52 768
Total liabilities 2,016 52 2,068
-------------- ------------ -------------
Net Assets 2,341 (52) 2,289
============== ============ =============
Other reserve 46 (46) -
Accumulated losses (25,952) (6) (25,958)
-------------- ------------ -------------
Total Equity 2,341 (52) 2,289
-------------- ------------ -------------
(Restated)
At 31 December Increase/ At 31 December
Company 2017 (decrease) 2017
GBP'000 GBP'000 GBP'000
Company Statement of financial
position (extract)
Non-current liabilities
Loans and borrowings 530 89 619
Current liabilities
Loans and borrowings 795 (40) 755
Total liabilities 2,473 49 2,522
---------------- ------------ ---------------
Net Assets 4,287 (49) 4,238
================ ============ ===============
Other reserve 117 (117) -
Accumulated losses (24,931) 68 (24,863)
---------------- ------------ ---------------
Total Equity 4,287 (49) 4,238
---------------- ------------ ---------------
(Restated)
At 1 January Increase/ At 1 January
Company 2017 (decrease) 2017
GBP'000 GBP'000 GBP'000
Company Statement of financial
position (extract)
Non-current liabilities
Loans and borrowings 717 52 769
Current liabilities
Loans and borrowings 35 - 35
Total liabilities 1,067 52 1,119
-------------- ------------ -------------
Net Assets 3,045 (52) 2,993
============== ============ =============
Other reserve 46 (46) -
Accumulated losses (25,479) (6) (25,985)
-------------- ------------ -------------
Total Equity 3,045 (52) 2,993
-------------- ------------ -------------
28. Earnings per share
Basic EPS amounts are calculated by dividing the profit or loss
for the year attributable to equity holders of the Group by the
weighted average number of ordinary shares outstanding during the
period.
Diluted EPS amounts are calculated by dividing the profit or
loss for the year attributable to equity holders of the Group by
the weighted average number of ordinary shares outstanding during
the period plus the weighted average number of ordinary shares that
would be issued on conversion of all the dilutive potential
ordinary shares into ordinary shares.
Group Group
2018 2017
GBP'000 GBP'000
Net loss attributable to equity holders
of the parent company 1,196 555
Weighted average number of basic ordinary
shares 10,723,469,713 7,120,014,383
Basic and diluted EPS (in pence) (0.011) (0.008)
-------------- -------------
The diluted loss per share was not applicable as there were no
dilutive potential ordinary shares outstanding at the end of the
reporting period.
29. Subsequent event review
On 1 August 2019 the company has received financial support from
its major shareholders as convertible loans for US$300,000. The
conversion price into ordinary fully paid shares will be at the
"Next Placement Price".
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR PGUAPRUPBUBP
(END) Dow Jones Newswires
August 22, 2019 05:46 ET (09:46 GMT)
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