TIDMEDL
RNS Number : 4869D
Edenville Energy PLC
29 June 2021
29 June 2021
Edenville Energy Plc
("Edenville" or the "Company")
Annual Results for the year ended 31 December 2020
Edenville Energy Plc (AIM: EDL), the AIM quoted company
operating the Rukwa Coal Project in southwest Tanzania ("Rukwa"),
announces its audited results for the year ended 31 December
2020.
The Company's Annual Report for the year ended 31 December 2020
(the "Annual Report") will be available on the Company's website
at: https://edenville-energy.com/annual-reports/ later today,
pursuant to the Company's Articles of Association which allow
Edenville to use electronic communications for the posting of the
Annual Report.
Notice of the Company's Annual General Meeting will be announced
shortly, along with information regarding how shareholders can
request a hard copy of the Annual Report.
For further information please contact:
Edenville Energy Plc
Jeff Malaihollo - Chairman
Alistair Muir - CEO +44 (0) 20 3934 6630
Strand Hanson Limited
(Financial and Nominated Adviser)
James Harris
Rory Murphy
Georgia Langoulant +44 (0) 02 7409 3494
Brandon Hill Capital Ltd
(Broker)
Oliver Stansfield
Jonathan Evans +44 (0) 20 7936 5200
IFC Advisory Limited
(Financial PR and IR)
Tim Metcalfe
Florence Chandler +44 (0) 20 3934 6630
CHAIRMAN'S STATEMENT
The Covid-19 pandemic dominated 2020 across the globe and
unsurprisingly impacted the Company's expected operations at Rukwa.
Despite this strong headwind the Company was still able to make
progress, albeit not as fast as we would have liked.
During the year the Company took major steps in restructuring
the business by signing three related agreements with a strategic
partner, designed to address mining, sales and the Company's
capital position. We also renegotiated our debts and appointed Nick
von Schirnding as an Independent Non-Executive Director. Nick has
25 years of experience in coal mining and natural resources
including strategic development, M&A and driving operational
change.
Currently the business environment in Tanzania is improving and
we are seeing inquiries from former and new customers for our coal
again. We believe that as business conditions improve further the
Company is well placed to take a major step forward through the
adoption of this new operational structure that will ensure
Edenville draws revenue from every tonne of washed coal sold.
Post Period
During the first half of 2021, the Company reached an agreement
with Lind regarding its outstanding debt and in January and May
2021 we raised an aggregate GBP3.4 million which enabled us to pay
off the full amount outstanding to Lind and move the Company
forward in a stronger financial position.
Our existing major shareholders supported us throughout these
fund raises, and in addition we have gained new major shareholders
including RAB Capital and Mr. Anthony (Tony) Buckingham.
With a clear plan in place to deliver on operational success at
Rukwa and with an improved cash position, the Company has commenced
a review of additional asset acquisition opportunities, leveraging
the natural resources and capital markets expertise of its Board,
and significant shareholders.
I would like to thank all our stakeholders, including you the
shareholders, our partners, the local authorities and local
communities, my fellow directors, our employees and contractors who
have collectively supported the Company throughout this difficult
period.
We look forward to reporting on the Company's progress in the
coming months.
Yours sincerely
Dr Jeffrey Malaihollo
Chairman
CHIEF EXECUTIVE OFFICER'S REPORT
Period Review
The period has been characterised by:
- A restructuring of the operation of the Company's Rukwa
Project and closing of three agreements with a strategic
partner;
- The impact of the Covid-19 pandemic on Rukwa and Tanzania as a whole; and
- Adverse weather events that impacted production in the early part of the year.
In order to appropriately progress the Company's Rukwa Project
three contracts were put in place during the year. These agreements
were reached with two different companies, although both have the
same principal shareholder, a Dubai-based Tanzanian with extensive
experience in logistics in east Africa. The three contracts
comprise a coal mining agreement and a US$1million loan agreement
with Infrastructure and Logistics Tanzania Ltd ("ILTL"), and a
sales and marketing agreement with MarTek Ltd. The expected
handover of operations under these contracts has been delayed due
to the Covid-19 pandemic.
It has been difficult to quantify the overall impact of the
Covid-19 pandemic on Tanzania as the country has not implemented
widespread testing or reported details on cases in the country. The
Company understands that the virus peaked at the same time as
Europe with some lockdown and social distancing practices in place.
Although the Tanzanian President announced a return to "business as
usual" in mid-May 2020, logistically the movement of people in and
out of Tanzania remained very difficult throughout the year.
Rukwa and the complete Western Highlands region experienced an
extended weather event during the 2019-20 wet season with extensive
rains from December 2019 to April 2020. This again impacted
production in the first quarter of 2020, before the temporary
closure of the mine due to the Covid-19 pandemic. Some production
was taken from the southern pit during the first half of the year,
but access to the northern pit became problematic due to road
conditions. These were resolved post the Covid-19 lockdown as
advised in the Company's announcement of 20 August 2020.
With the assistance of two rounds of funding during 2020,
together with further funds raised post year end, the Company is in
a much improved financial position with its existing legacy debt
also settled post period end.. The equity funding rounds during
2020 were as follows:
- GBP700,000 was raised in January 2020 and was subscribed for
by existing major shareholders and one new major investor.
- GBP500,000 was raised in June 2020 all the funds coming from
the same existing major shareholders.
Lind Partners LLC
In November 2018, Edenville entered into a loan facility with
Lind Partners LLC ("Lind") for a principal of US$750,000. Repayment
of the loan commenced in September 2019 with cash payments of
approximately US$51,000 per month, though Edenville had the option
of payment through shares. Payments were made on a regular basis to
Lind between September 2019 to March 2020 inclusive, before a
payment holiday was agreed with Lind as a result of the disruption
related to the Covid-19 pandemic.
The Company announced on 6 October 2020 that Lind had initially
requested that Edenville repay the total outstanding balance of the
Funding Agreement by 30 November 2020. The Company subsequently
entered into discussions with Lind regarding the repayment terms of
the Funding Agreement and this matter was resolved in January
2021.
Post period end on 22 June 2021 the Company announced that i t
had now repaid in cash the full outstanding amount owing to Lind
under the Funding Agreement and the Company has no further
outstanding obligations to Lind.
Corporate Social Responsibility
The Company has continued to take its corporate and social
responsibility very seriously. We understand that Edenville must
meet the social requirements of an operator in Tanzania. The
construction of a mining operation at Rukwa has already provided
several opportunities to improve infrastructure for the local
community, the most visible being the construction of the road from
Kipandi, past Mkomolo village and beyond, to the mine. This has
opened-up a major artery in the area which services farmers and the
local population, as well as the mine itself.
At Rukwa, wherever possible, we have sought to employ local
people from the surrounding villages. Many of the operators and
management are local and are proving to be highly competent and
skilled employees. The positive social benefits also overflow into
the general community where enterprising individuals are providing
services such as food supply for workers.
Summary
2020, as with 2019, was a difficult year, primarily given
adverse weather events, liquidity constraints and the impact of the
Covid-19 pandemic.
However, following the closing of the three agreements with the
strategic partner over the 2020 summer, we believe the Company
ended the year much better placed with regard to its Rukwa project.
However, their implementation has been hampered by the impact of
the Covid-19 pandemic. The Company has, to date, not attempted to
draw down on the loan arrangement with ILTL.
As business conditions improve we believe the Company is well
placed to take a major step forward through the adoption of this
new operational structure that is designed to ensure Edenville
draws revenue from every tonne of washed coal sold from Rukwa.
Post Period
Post period has seen a major positive change in prospects for
the Company.
On 15 January 2021, the Company announced that it had raised
GBP900,000 by way of a placing of 3,600,000 new ordinary shares of
1p each in the Company ("Ordinary Shares") at a placing price of
25p per ordinary share with new and existing shareholders (the
"January Placing").
Further, it announced that it had reached agreement with Lind
regarding its outstanding funding agreement in that the Company
were to pay Lind US$116,000 in cash by 31 January 2021 with the
remainder of US$464,000, to be repaid in monthly instalments of
US$50,000 starting from the end of April 2021.
On 5 May 2021, the Company conditionally raised GBP2,475,000
(before expenses) by way of a placing of 9,900,000 new Ordinary
Shares at a placing price of 25p per Ordinary Share (the "May
Placing"). Investors also received one warrant for every Placing
Share. If these warrants are exercised in full the Company will
receive a further GBP2,475,000 for the development of the Company's
business.
As part of the May Placing a new strategic investor, Anthony
(Tony) Buckingham, took an 18.5% stake in the Company through an
investment of GBP1million, with the majority of the balance coming
from the Company's substantial shareholders. Mr Buckingham is well
known in the natural resources market, particularly in Africa,
having been CEO and major shareholder of Heritage Oil Limited from
2006 until its acquisition by a wholly-owned subsidiary of Qatari
investment fund, Al Mirqab Capital SPC, in 2014 for a consideration
of US$1.6 billion. His wealth of experience and broad network of
relationships is expected to prove highly beneficial as Edenville
looks to add additional assets into the Company.
With an improved cash position, the Company will continue to
target additional asset acquisitions, leveraging the natural
resources and capital markets expertise of its Board, and
significant shareholders
On 22 June 2021, the Company announced that it had repaid in
cash the full outstanding amount of US$373,625 owed to Lind under
the Funding Agreement dated 6 November 2018.
Although the Company has faced a difficult environment over the
last two years, the business' outlook is looking more positive for
the remainder of 2021 and beyond, supported by the following recent
developments:
- As announced on 24 June 2021, the Company has commenced the
sale of coal fines and has 2 trial shipments in place which,
subject to the trial, could lead to significant contracts.
- As announced 24 June 2021, the Company has recommenced
discussions with the Tanzanian Government and recently been invited
to submit an unsolicited proposal for the supply of coal to an
on-site power station owned and operated by the Tanzanian
Government. The Tanzanian Government power planning program shows
the need for a base load plant by 2026.
- The overall business environment in Tanzania is increasingly
positive following the appointment of a new President and
subsequent demonstrated intent to support investment in the
country. As a further sign of improving conditions, in recent weeks
the Company has had several enquiries regarding coal supply to
neighbouring East African countries.
Alistair Muir
Chief Executive Officer
REPORT OF THE INDEPENT AUDITORS TO THE MEMBERS OF EDENVILLE
ENERGY PLC
FOR THE YEARED 31 DECEMBER 2020
Opinion
We have audited the financial statements of Edenville Energy Plc
(the 'parent Company') and its subsidiaries (the 'group') for the
year ended 31 December 2020 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Parent
Company Statement of Financial Position, the Consolidated and
Parent Company Statement of Changes in Equity, the Consolidated and
Parent Company Statement of Cash Flows and notes to the financial
statements, including significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and international accounting
standards in conformity with the requirements of the Companies Act
2006 and as regards the parent Company financial statements, as
applied in accordance with the provisions of the Companies Act
2006.
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's and of the parent Company's affairs as at 31
December 2020 and of the group's and parent Company's loss for the
year then ended;
-- the group financial statements have been properly prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006;
-- the parent Company financial statements have been properly
prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 as
applied in accordance with the provisions of the Companies Act
2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006
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 parent 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 as applied to listedentities,
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 opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the group's and parent
Company's ability to continue to adopt the going concern basis of
accounting included review of management's cashflow forecasts to
June 2022. The audit team have assessed the current cash balances
at the date of this report and challenged assumptions in the
forecasts provided to reasonably conclude that the group has
sufficient funds in order to meet its committed liabilities for the
foreseeable future. This is mainly as a result of significant funds
raised subsequent to the year end.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group's or parent Company's ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Emphasis of matter -recoverability of value added tax
We draw your attention to Note 4 of the nancial statements,
which describes the group's assessment over the VAT receivable
balance of GBP292,754 in Tanzania. The group have explained their
assessment over the recoverability within critical accounting
estimates and conclude this to be recoverable. The nancial
statements do not include the adjustments that would result if the
group was unable to fully recover this.
Our opinion is not modi ed in this respect.
Emphasis of matter - recoverability of inventory
We draw your attention to Note 4 of the financial statements,
which describes the group's assessment over the inventory balance
of GBP247,538 in Tanzania. The group have explained their
assessment over the recoverability within the critical accounting
estimates and conclude this to be recoverable. The financial
statements do not include the adjustment that would result if the
group was unable to fully recover this.
Our opinion is not modified in this respect.
Our application of materiality
The scope of our audit was in uenced by our application of
materiality. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature, timing
and extent of our audit procedures. The materiality applied to the
nancial statements as a whole was determined as follows:
2020 2019 Basis
for
materiality
Group GBP67,250 GBP77,000 1%
of
gross
assets
---------- ---------- -------------
In our professional judgement, we consider gross assets to be
the principal benchmark relevant to members of the mining group, in
assessing nancial position and performance. Our calculated
materiality levels were discussed and agreed with the audit
committee.
Whilst materiality for the group nancial statements as a whole
was GBP67,250, each signi cant component of the group was audited
to a level of materiality ranging between GBP37,100 - GBP63,800.
The materiality for the financial statements as a whole applied to
the parent Company financial statements was GBP37,100 (2019:
GBP47,500). The performance materiality for the group was GBP40,350
(2019: GBP46,200) or 60% which is consistent with the previous year
and falls within the firm's guidance for a medium risk listed audit
Our assessment as a medium risk is based on a combination of the
parent Company being listed (higher risk) and the operations of the
Group being in Tanzania having only one resource and not being too
complex. The performance materiality for the parent Company was
GBP22,260 (2019: GBP28,500).
We agreed with the audit committee that we would report all
individual audit differences identi ed during the course of our
audit in excess of GBP3,363 (2019: GBP3,850), in addition to other
audit misstatements below that threshold that we believe warrant
reporting on qualitative grounds.
Our approach to the audit
In designing our audit approach, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular we assessed the areas involving
significant accounting estimates and judgements by the directors in
respect of the carrying value of the mining assets and carrying
values of the Company's investments in and loans to subsidiaries
and considered future events that are inherently uncertain. We also
addressed the risk of management override of internal controls,
including evaluation whether there was evidence of bias by the
directors that represented a risk of material misstatement due to
fraud.
Of the four components of the group, a full scope audit was
performed on the complete financial information of the parent and
its Tanzanian subsidiary that owns the asset.,Thehe remaining
components were subject to analytical review only because they were
not significant to the group.
Of the two reporting components of the group, one is located in
Tanzania and audited by a component auditor operating under our
instructions, and the audit of the remaining components were
performed in London, conducted by PKF Littlejohn LLP using a team
with specific experience of auditing mining entities and publicly
listed entities. The Senior Statutory Auditor interacted regularly
with the component audit teams during all stages of the audit and
was responsible for the scope and direction of the audit process.
This, in conjunction with additional procedures performed, gave us
appropriate evidence for our opinion on the group and parent
Company financial statements.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including 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.
Key Audit Matters How our scope addressed these
matters
Carrying value mining assets
(Note 15)
==================================================================
The entity has capitalised mining Our work in this area included
assets of GBP5,058,177. Management but was not limited to:
is required to assess whether * Testing an appropriate sample of movements during the
there is any indication of impairment year to supporting documentation;
of these assets.
The significance of the intangible
non-current assets on the group's * Ensuring the reasonableness of the capitalization of
statement of financial position the new additions;
and the significant management
judgement involved in the determination
and the assessment of the carrying * Considering whether there were indicators of
values of these assets there impairment of the mining assets such as expiring
is increased risk of material concessions, licenses or rights, projections of
misstatement or that the values declining coal prices and/or declining demand and
will not be recovered. projections of increased future capital costs or
operating costs;
* Reviewing management's assessment of the impairment
of mining assets and challenging their key
assumptions and estimates used as a basis to value
the intangible assets. In addition, reviewing the
financial statements of the joint operator; and
In forming our opinion, which
is not modified, our work indicated
that the value of mining assets
are fairly stated in the financial
statements, but that the future
carrying value of these mining
assets are dependent on the ability
of the group to sign a significant
long term contract with a few
customers in the short to medium
term. We note that the group
are in advanced discussions with
a couple of prospective clients
and subject to the success of
the trial shipments may lead
to significant contracts being
signed. This will enable the
group to invest substantially
in production to increase its
revenue and generate profits
and or returns to cover its investment
in the asset. The financial statements
do not include the adjustments
that would result if the group
was unsuccessful in obtaining
a significant contracts.
==================================================================
Valuation of the parent Company's
investment in and loans to subsidiaries
(Note 14)
==================================================================
The parent Company owns a significant Our work in this area included:
investment in Edenville International * Reviewing the valuation methodology for the
(Tanzania) Limited of GBP16,561,617 investment held and ensuring that the carrying values
which includes loans to the were supported by sufficient and appropriate audit
subsidiary of GBP9,518,305. evidence.
The value of the investment
is linked to the value of the
assets held in Edenville International * Ensuring that all asset types were categorised
(Tanzania) Limited. There is according to the financial reporting framework,
a risk that the value in use including the associated disclosures.
is below the carrying value
of the investment and thus the
amounts reported are materially * Ensuring the parent Company has full title to the
misstated. investments held;
* Ensuring that appropriate disclosures surrounding the
estimates, including a review of how these estimates
were arrived at, are made in respect of any
valuations are included in the financial statements.
We note that the loan will soon
be converted into equity.
In forming our opinion, which
is not modified, our work indicated
that the value of its investment
and loans (soon to be converted
into equity) are fairly stated
in the financial statements,
but that the recoverability is
dependent on the ability of the
subsidiary to sign up significant
contracts with local customers
to substantially increase its
revenue and ultimately returns
over the medium term. The financial
statements do not include the
adjustments that would result
if the subsidiary was unsuccessful
in obtaining a significant contracts.
==================================================================
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
the group and parent Company 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. 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 course of 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 this gives rise to a material
misstatement in the financial statements themselves. 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.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the 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 the 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 Company
and its 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 parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent Company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
group and parent Company 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 group and parent Company financial statements,
the directors are responsible for assessing the group and the
parent Company'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 parent 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.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the group and parent Company
and the sector in which it operates to identify laws and
regulations that could reasonably be expected to have a direct
effect on the financial statements. We obtained our understanding
of the group and parent Company and sector in which they operate to
identify laws and regulations that would reasonably be expected to
have a direct effect on the financial statements. We obtained an
understanding in this regard through discussions with management
and the application of our cumulative audit knowledge and
experience of this sector.
-- We determined the principal laws and regulations relevant to
the group and parent Company in this regard to be those arising
from the Companies Act 2006, AIM rules and mining regulations
applicable to the subsidiaries.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the group and parent Company with those laws and regulations.
-- We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from
management override of controls, including the potential for
management bias identified in relation to the valuation of
investments and impairment of goodwill and we addressed this by
challenging the assumptions and judgements made by management when
auditing that significant accounting estimate.
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of
journals; enquiries of management, review of minutes and RNS
announcements, reviewing accounting estimates for evidence of bias;
and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of
business.
-- At a significant component level, we engaged with the
component auditors to ensure that they had conducted an extensive
review into whether the operating subsidiary was fully compliant
with laws and regulations at a local level, and reviewed their work
conducted into the posting of journal entries to ensure there were
no instances of fraud detected at a local level.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
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.
Zahir Khaki (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
28 June 2021
GROUP STATEMENT OF COMPREHENSIVE INCOME Note 2020 2019 (restated)
year ended 31 december 2020
GBP GBP
Revenue 5 33,852 233,414
Cost of sales (583,876) (1,005,480)
Gross loss (550,024) (772,066)
Administration expenses 6 (529,632) (887,555)
Share based payments 27 (50,398) (16,077)
Group operating loss (1,130,054) (1,675,698)
Finance income 10 112 113
Finance costs 11 (111,503) (170,537)
Loss on operations before taxation (1,241,445) (11,846,122)
Income tax 12 - -
Loss for the year (1,241,445) (1,846,122)
Attributable to:
Equity holders of the Company (1,239,553) (1,843,654)
Non-controlling interest (1,892) (2,468)
Other comprehensive loss
Item that will or may be reclassified to
the profit and loss:
(Loss/)gain on translation of overseas
subsidiary (209,935) (235,431)
Total comprehensive loss for the year (1,445,380) (2,081,553)
Attributable to:
Equity holders of the Company (1,443,488) (2,079,085)
Non-controlling interest (1,892) (2,468)
Earnings per Share (pence)
Basic and diluted loss per share 13 (0.02) (0.05)
All operating income and operating gains and losses relate to
continuing activities.
No separate statement of comprehensive income is provided as all
income and expenditure is disclosed above.
GROUP AND COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 december 2020
Company Registered Number Note Group Company
05292528 31 December 31 December 31 December 31 December
2020 2019(restated) 2020 2019
GBP GBP GBP GBP
Non-current assets
Investment in subsidiaries 14 - - 16,561,617 16,160,713
Property, plant and equipment 15 5,644,577 6,085,403 1,334 1,778
Intangible assets 16 311,032 321,368 - -
5,955,609 6,406,771 16,562,951 16,162,491
Current assets
Inventories 17 251,736 247,538 - -
Trade and other receivables 18 301,251 365,541 8,499 48,412
Cash and cash equivalents 19 25,690 41,110 25,628 40,845
578,677 654,189 34,127 89,257
Current liabilities
Trade and other payables 20 (685,809) (897,122) (213,559) (479,244)
Borrowings 21 (440,831) (504,444) (416,142) (481,581)
(1,126,640) (1,401,566) (629,701) (960,825)
Current assets less current
liabilities (547,963) (747,377) (595,574) (871,568)
Total assets less current
liabilities 5,407,646 5,659,394 15,967,377 15,290,923
Non-current liabilities
Borrowings 21 (39,873) (185,599) (16,084) (141,463)
Environmental rehabilitation
liability 22 (21,912)
5,345,861 5,473,795 15,951,293 15,149,460
Equity
Called-up share capital 23 4,041,601 3,414,935 4,041,601 3,414,935
Share premium account 19,390,849 18,811,157 19,390,849 18,811,157
Share option reserve 301,174 281,502 301,174 281,502
Foreign currency translation
reserve 494,130 698,065 - -
Retained earnings (18,866,991) (17,718,347) (7,782,331) (7,358,134)
Attributable to the equity shareholders
of the Company 5,360,763 5,487,312 15,951,293 15,149,460
Non- controlling interests (14,902) (13,517)
Total equity 5,345,861 5,473,795 15,951,293 15,149,460
The financial statements were approved by the board of directors
and authorised for issue on 28 June 2021 and signed on its behalf
by:
Alistair Muir, Director
GROUP STATEMENT OF CHANGES IN EQUITY
year ended 31 december 2020
group
--------------------------------------------------Equity
Interests---------------------------------------
Share Capital Share Premium Retained Share Option Foreign Total Non-controlling Total
Earnings Reserve Currency interest
Account Translation
Reserve
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January 2019 2,722,036 18,566,642 (15,884,731) 275,463 933,496 6,612,906 (11,508) 6,601,398
Issue of share
capital 692,899 244,515 - - - 937,414 - 937,414
Share
options/warrants
charge - - - 16,077 - 16,077 - 16,077
Cancellation of
share options - - 10,038 (10,038) - - - -
Foreign currency
translation - - - - (235,431) (235,431) - (235,431)
Loss for the year - - (1,843,654) - - (1,843,654) (2,468) (1,846,122)
Non- controlling
interest share
of
goodwill - - - - - - 459 459
_
At 31 December
2019 3,414,935 18,811,157 (17,718,347) 281,502 698,065 5,487,312 (13,517) 5,473,795
Issue of share
capital 626,666 648,334 - - - 1,275,000 - 1,275,000
Share issue costs - (68,642) - - - (68,642) - (68,642)
Share
option/warrants
charge - - - 110,581 - 110,581 - 110,581
Cancellation of
share options - - 90,909 (90,909) - - - -
Foreign currency
translation - - - - (203,935) (203,935) - (203,935)
Loss for the year - - (1,239,553) - - (1,239,553) (1,892) (1,241,445)
Non- controlling
interest share
of
goodwill - - - - - - 507 507
_ __ ____ __ __ __
At 31 December
2020 4,041,601 19,390,849 (18,866,991) 301,174 494,130 5,360,763 (14,902) 5,345,861
COMPANY
Retained Share
Share Capital Share Premium Earnings Option Reserve
Account Total
GBP GBP GBP GBP GBP
At 1 January 2019 2,722,036 18,566,642 (6,508,311) 275,463 15,055,830
Issue of share capital 692,899 244,515 - - 937,414
Share option/warrants
charge - - - 16,077 16,077
Cancellation of share
options - - 10,038 (10,038) -
Total comprehensive loss
for the year - - (859,861) - (859,861)
At 31 December 2019 3,414,935 18,811,157 (7,358,134) 281,502 15,149,460
Issue of share capital 626,666 648,334 - - 1,275,000
Share issue costs - (68,642) - - (68,642)
Share option/warrants
charge - - - 110,581 110,581
Cancellation of share
options - - 90,909 (90,909) -
Total comprehensive loss
for the year - - (515,106) - (515,106)
At 31 December 2020 4,041,601 19,390,849 (7,782,331) 301,174 15,941,559
GROUP AND COMPANY CASH FLOW STATEMENTS
year ended 31 december 2020
Group Company
Year ended Year ended Year ended Year ended
31 December 31 December 31 December 31 December
2020 2019 (restated) 2020 2019
GBP
GBP GBP GBP
Cash flows from operating
activities
Operating loss (1,130,054) (1,675,698) (515,218) (859,974)
Depreciation 277,921 261,638 445 593
Interest paid (351) (23,000) 100,090 144,824
Expected credit losses - 26,804 - -
Share based payments 50,398 16,077 50,398 16,077
(Increase)/decrease in inventories (4,198) 8,544 - -
Increase in trade and other
receivables 54,984 26,741 39,912 (29,858)
(Decrease)/Increase in trade
and other payables (116,836) 476,883 (189,149) 351,132
Foreign exchange differences (34,521) (32,194) (10,482) (13,331)
Net cash outflow from operating
activities (902,657) (914,205) (524,004) (390,537)
Cash flows from investing
activities
Capital introduced to subsidiaries - - (400,904) (547,984)
Purchase of property, plant - (33,559) - -
and equipment
Finance income 112 113 112 113
Net cash used in investing
activities 112 (33,446) (400,792) (547,871)
Cash flows from financing
activities
Borrowings 180,000 100,000 180,000 100,000
Repayment of convertible
loan notes (160,421) (198,644) (160,421) (198,644)
Repayment of lease liabilities (17,404) (7,328) - -
Lease interest (5,059) (2,711) - -
Proceeds from issue of ordinary
shares 950,000 937,414 950,000 937,414
Share issue costs (60,000) - (60,000) -
Net cash inflow from financing
activities 887,116 828,731 909,579 838,770
Net decrease in cash and
cash equivalents (15,429) (118,920) (15,217) (99,638)
Cash and cash equivalents
at beginning of year 41,110 160,042 40,845 140,483
Effect of foreign exchange
rate changes on cash and
cash equivalents 9 (12) - -
Cash and cash equivalents
at end of year 19 25,690 41,110 25,628 40,845
NOTES TO THE COMPANY'S FINANCIAL STATEMENTS
year ended 31 december 2020
1. General Information
Edenville Energy Plc is a public limited Company incorporated in
England and Wales. The address of the registered office is Aston
House, Cornwall Avenue, London, N3 1LF. The Company's shares are
listed on AIM, a market operated by the London Stock Exchange.
The principal activity of the Group is the exploration,
development and mining of energy commodities predominantly coal in
Africa.
2. Group Accounting Policies
Basis of preparation and statement of compliance
The Group's and Company's financial statements have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union, IFRIC
Interpretations and the parts of the Companies Act 2006 applicable
to companies reporting under IFRS. The Group's financial statements
have also been prepared under the historical cost convention,
except for the measurement to fair value of assets and financial
instruments as described in the accounting policies set out
below.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Group's financial
statements are disclosed in Note 4 of the 2020 Annual Report.
The Company has elected to take the exemption under section 408
of the Companies Act 2006 from presenting the Parent Company Income
Statement. The loss after tax for the Parent Company for the year
was GBP515,106 (2019: GBP859,861
Going concern
At 31 December 2020 the Group had cash balances totalling
GBP25,690.
During the countrywide lockdown during the second quarter the
Company was forced to suspend mine operations, leaving just a
skeleton security force at the site. The pandemic also caused a
delay in finalizing and implementing all agreements with our
strategic partnership. The third quarter saw a recommencement of
mining, processing and sales of coal from Rukwa all be it at a
reduced level and also the signing of the intended three related
agreements with the strategic partner, designed to address mining,
sales and the Company's capital position.
This reduced demand has continued to the middle of 2021 and only
recently May/June 2021 has there been a return of consumers to the
market. This has been significantly aided not only by the receding
of the pandemic but by a change of sentiment in the county brought
about by the appointment of the new President. Because of this
ongoing situation the contracts with the strategic partner have not
yet been implemented with EITL aiming to establish production of
3000 tonnes per month before it re-engages with the strategic
partner.
On 15 January 2021 the Company raised GBP900,000 before expenses
by way of placing 3,600,000 ordinary shares of 1p each.
The Company also agreed repayment terms with Lind Partners LLC
whereby it agreed to repay 20% of the outstanding debt by 31
January 2021 with the balance to be paid in monthly instalments
from the end of April 2021. Lind Partners LLC also agreed that no
further interest is to be charged on the outstanding balance.
On 5 May 2021 the Company raised GBP2,475,000 before expenses by
way of placing 9,900,000 new ordinary shares of 1p each in the
Company at a placing price of 25p per ordinary share.
The Group meets its day to day working capital requirements
through the sale of its coal resource, and monies raised in
follow-on offerings. The Group's forecasts and projections indicate
that the Group has sufficient cash reserves to operate within the
level of its current facilities. These forecasts are based upon
expected saleable levels of production.
Expenditure on excavation is related to the level of orders and
both head office costs and Tanzanian administration costs can be
reduced if it is found that order levels together with available
cash resources are insufficient to meet the Group's working capital
needs.
Whilst it is the Group's intention to rely on the available cash
reserves, future income generated and if required reductions in its
cost base, a negative variance in the forecasts and projections
would make the Group's ability to continue as a going concern
dependent on an additional fund raise. If the Group's forecasts are
not achieved, the Directors would seek to raise the additional
funds through equity issues which would be dependent upon investor
appetite. After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. This is mainly as
a result of the significant funds raised after the year end which
is sufficient to cover their working capital needs over the next 12
months from the date these financial statements have been
approved.
Adoption of new and revised standards and changes in accounting
policies
There were no new standards or interpretations impacting the
Group that will be adopted in the annual financial statements for
the year ended 31 December 2020, and which have given rise to
changes in the Group's accounting policies.
Standards and interpretations in issue but not yet effective or
not yet relevant
At the date of authorisation of these financial statements the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
Effect annual periods
beginning before
or after
IFRS amendments updating a reference to the Conceptual 1(st) January 2022
3 Framework
--------------------------------------------------- ----------------------
IFRS amendments regarding replacement issues in 1(st) January 2021
4, 7,9,16 the context of the IBOR reform
IAS
39
--------------------------------------------------- ----------------------
IFRS Amendments resulting from the annual improvements 1(st) January 2022
9 to IDRS Standards 2018-2020 (fees in the
'10 per cent' test for derecognition of financial
liabilities)
--------------------------------------------------- ----------------------
IFRS Amendments to address concerns and implementation 1(st) January 2023
17 challenges that were identified after IFRS
17 was published
--------------------------------------------------- ----------------------
IAS Amendments to defer the effective date of 1(st) January 2023
1 January 2020 amendments
Amendments regarding the disclosure of accounting
policies
--------------------------------------------------- ----------------------
IAS amendments regarding the definition of accounting 1(st) January 2023
8 estimates
--------------------------------------------------- ----------------------
IAS Amendments prohibiting a Company from deducting 1(st) January 2022
16 from the cost of property, plant and equipment
amounts received from selling items while
the Company is preparing the asset for its
intended use
--------------------------------------------------- ----------------------
IAS Amendments regarding the costs to include 1(st) January 2022
37 when assessing whether a contract is onerous
--------------------------------------------------- ----------------------
The Directors anticipate that the adoption of these Standards
and Interpretations in future periods will have no material impact
on the Group's financial statements.
Share based payments
The Group operates a number of equity-settled, share-based
compensation plans, under which the entity receives services from
employees as consideration for equity instruments (options) of the
Group. The fair value of the employee services received in exchange
for the grant of options is recognised as an expense. The total
amount to be expensed is determined by reference to the fair value
of the options granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability, sales
growth targets and remaining an employee of the entity over a
specified time period); and
-- excluding the impact of any non-vesting conditions (for
example, the requirement of employees to save).
Assumptions about the number of options that are expected to
vest include consideration of non-market vesting conditions. The
total expense is recognised over the vesting period, which is the
period over which all of the specified vesting conditions are to be
satisfied. At the end of each reporting period, the entity revises
its estimates of the number of options that are expected to vest
based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
When the options are exercised, the Group issues new shares. The
proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium when the options are exercised.
Basis of consolidation
The Group's financial statements consolidate the financial
statements of Edenville Energy Plc and all its subsidiary
undertakings (Edenville International (Seychelles) Limited,
Edenville International (Tanzania) Limited and Edenville Power (TZ)
Limited) made up to 31 December 2020. Profits and losses on
intra-group transactions are eliminated on consolidation.
Subsidiaries are all entities over which the group has control.
The group controls an entity when the group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the group. They are deconsolidated
from the date that control ceases.
Business combinations
The Group adopts the acquisition method in accounting for the
acquisition of subsidiaries. On acquisition the cost is measured at
the fair value of the assets given, plus equity instruments issued
and liabilities incurred or assumed at the date of exchange. The
assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured at their fair value at the
date of acquisition. Any excess of the fair value of the
consideration over the fair value of the identifiable net assets
acquired is recorded as goodwill.
Any deficiency of the fair value of the consideration below the
fair value of identifiable net assets acquired is credited to the
income statement in the period of the acquisition.
The results of subsidiary undertakings acquired or disposed of
during the year are included in the group statement of
comprehensive income statement from the effective date of
acquisition or up to the effective date of disposal.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the group. Inter-company transactions
and balances between group companies are eliminated.
Revenue recognition
consideration received or receivable, and represent amounts
receivable for goods supplied, stated net of discounts, returns and
value added taxes. Under IFRS 15 there is a five-step approach to
revenue recognition which is adopted across all revenue streams.
The process is:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the
contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance
obligations in the contract; and
Step 5: Recognise revenue as and when the entity satisfies the
performance obligation.
The Group has one revenue stream being the sale of coal and
other aggregate bi-products produced by the Group. Sales are
predominantly made at the Group's premises as customers collect
their quantities from the mine. Such revenue is recognised at the
point of contact at a pre-agreed fixed price on a per tonnage
basis. For deliveries made to customer premises, revenue is
recognised at the point of which the products leave the Group's
premises
Presentational and functional currency
This financial information is presented in pounds sterling,
which is the Group's functional currency.
In preparing the financial statements of individual entities,
transaction in currencies other than the entity's functional
currency (foreign currencies) are recorded at the rates of exchange
prevailing on the dates of the transactions. At each balance sheet
date, monetary items denominated in foreign currencies are
retranslated at the rates prevailing at the balance sheet date.
For the purposes of presenting consolidated financial
statements, the assets and liabilities of the Group's foreign
operations (including comparatives) are expressed in pounds
sterling using exchange rates prevailing at the balance sheet date.
Income and expense items are translated at the average exchange
rate for the period. Exchange differences arising, if any, are
classified as equity and transferred to the Group's foreign
currency translation reserve. Such translation differences are
recognised in the income statement in the period in which the
foreign operation is disposed.
Financial instruments
Financial assets
Financial assets comprise investments, cash and cash equivalents
and receivables. Unless otherwise indicated, the carrying amounts
of the Group's financial assets are a reasonable approximation of
their fair values.
Classification and measurement
The Group classifies its financial assets into the following
categories: those to be measured subsequently at fair value (either
through other comprehensive income (FVOCI) or through the income
statement (FVPL) and those to be held at amortised cost.
Classification depends on the business model for managing the
financial assets and the contractual terms of the cash flows.
Management determines the classification of financial assets at
initial recognition. The Group's policy with regard to financial
risk management is set out in note 3. Generally, the group does not
acquire financial assets for the purpose of selling in the short
term.
The group's business model is primarily that of "hold to
collect" (where assets are held in order to collect contractual
cash flows). When the group enters into derivative contracts, these
transactions are designed to reduce exposures relating to assets
and liabilities, firm commitments or anticipated transactions.
Financial Assets
The Group recognises an allowance for expected credit losses
(ECLs) for all debt instruments not held at fair value through
profit or loss.
ECLs are based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows
that the Group expects to receive, discounted at an approximation
of the original EIR. The expected cash flows will include cash
flows from the sale of collateral held or other credit enhancements
that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for
which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that
result from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk since initial
recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective of
the timing of the default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and
other receivables due in less than 12 months, the Group applies the
simplified approach in calculating ECLs, as permitted by IFRS 9.
Therefore, the Group does not track changes in credit risk, but
instead, recognises a loss allowance based on the financial asset's
lifetime ECL at each reporting date.
The Group considers a financial asset in default when
contractual payments are 90 days past due. However, in certain
cases, the Group may also consider a financial asset to be in
default when internal or external information indicates that the
Group is unlikely to receive the outstanding contractual amounts in
full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows and usually
occurs when past due for more than one year and not subject to
enforcement activity.
At each reporting date, the Group assesses whether financial
assets carried at amortised cost are credit impaired. A financial
asset is credit-impaired when one or more events that have a
detrimental impact on the estimated future cash flows of the
financial asset have occurred.
Financial Assets held at fair value through other comprehensive
income (FVOCI)
The classification applies to the following financial
assets:
- Debt instruments that are held under a business model where
they are held for the collection of contractual cash flows and also
for sale ("collect and sale") and which have cash flows that meet
the SPPI criteria. An example would be where trade receivable
invoices for certain customers were factored from time to time. All
movements in the fair value of these financial assets are taken
through comprehensive income, except for the recognition of
impairment gains and losses, interest revenue (including
transaction costs by applying the effective interest method), gains
or losses arising on derecognition and foreign exchange gains and
losses which are recognised in the income statement. When the
financial asset is derecognised, the cumulative fair value gain or
loss previously recognised in other comprehensive income is
reclassified to the income statement.
- Equity investments where the group has irrevocably elected to
present fair value gains and losses on revaluation of such equity
investments, including any foreign exchange component, are
recognised in other comprehensive income.
- When equity investment is derecognised, there is no
reclassification of fair value gains or losses previously
recognised in other comprehensive income to the income statement.
Dividends are recognised in the income statement when the right to
receive payment is established.
Financial Assets held at fair value through profit or loss
(FVPL)
The classification applies to the following financial assets. In
all cases, transaction costs are immediately expensed to the income
statement.
- Debt instruments that do not meet the criteria of amortised
costs or fair value through other comprehensive income.
- Equity investments which are held for trading or where the
FVOCI election has not been applied. All fair value gains or losses
and related dividend income are recognised in the income
statement.
- Derivatives which are not designated as a hedging instrument.
All subsequent fair value gains or losses are recognised in the
income statement.
Derecognition
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks
and rewards of ownership of the asset to another entity.
On derecognition of a financial asset measured at amortised
cost, the difference between the asset's carrying amount and the
sum of the consideration received and receivable is recognised in
profit or loss.
Financial Liabilities
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. All financial
liabilities are recognised initially at fair value and, in the case
of loans and borrowings and payables, net of directly attributable
transaction costs. The Group's financial liabilities include trade
and other payables and loans.
Subsequent measurement
The measurement of financial liabilities depends on their
classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value
through profit or loss. Financial liabilities are classified as
held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Group that are
not designated as hedging instruments in hedge relationships as
defined by IFRS 9. Separated embedded derivatives are also
classified as held for trading unless they are designated as
effective hedging instruments. Gains or losses on liabilities held
for trading are recognised in the statement of profit or loss and
other comprehensive income.
Trade and other payables
After initial recognition, trade and other payables are
subsequently measured at amortised cost using the EIR method. Gains
and losses are recognised in the statement of profit or loss and
other comprehensive income when the liabilities are derecognised,
as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included as finance costs
in the statement of profit or loss and other comprehensive
income.
Derecognition
A financial liability is derecognised when the associated
obligation is discharged or cancelled or expires.
When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange
or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in
the respective carrying amounts is recognised in profit or loss and
other comprehensive income.
Liabilities within the scope of IFRS 9 are classified as
financial liabilities at fair value through profit and loss or
other liabilities, as appropriate.
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires.
Financial liabilities included in trade and other payables are
recognised initially at fair value and subsequently at amortised
cost.
Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost is determined using the average costing method.
Components of inventories consist of coal, parts and supplies, net
of allowance for obsolescence. Coal inventories represent coal
contained in stockpiles, coal that has been mined and hauled to the
wash plant (raw coal) for processing and coal that has been
processed (crushed, washed and sized) and stockpiled for shipment
to customers.
The cost of raw and prepared coal comprises extraction costs,
direct labour, other direct costs and related production overheads
(based on normal operating capacity). It excludes borrowing costs.
Net realisable value is the estimated selling price in the ordinary
course of business, less applicable variable selling expenses.
The Company performs inventory obsolescence at each reporting
date. In determining whether inventories are obsolete, the Company
assesses the age at which inventories held in the store in order to
make an assessment of the inventory write down to net realisable
value.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand,
demand deposits and other short term highly liquid investments that
are readily convertible to a known amount of cash and are subject
to insignificant risk of changes in value.
Convertible loan notes
The convertible loan notes issued by the Company are classified
separately as financial liabilities in accordance with the
substance of contractual arrangements. The convertible loan note
("CLN") is a compound financial instrument that cannot be converted
to share capital at the option of the holder. As the CLN, and the
accrued interest, can only be repaid as a loan, it has been
recognised within liabilities. Interest is accounted for on an
accruals basis and charged to the Consolidated Income Statement and
added to the carrying amount of the liability component of the
CLN.
Property, plant and equipment
Property, plant and equipment are stated at cost on acquisition
less accumulated depreciation and accumulated impairment
losses.
Depreciation is provided on all property, plant and equipment
categories at rates calculated to write off the cost, less
estimated residual value on a reducing balance basis over their
expected useful economic life. The depreciation rates are as
follows:
Basis of depreciation
Fixtures, fittings and 25% reducing balance
equipment
Plant and machinery 5 years straight line or 25% reducing
balance
Office equipment 25% reducing balance
Motor vehicles 25% reducing balance
Costs capitalised include the purchase price of an asset and any
costs directly attributable to bringing it into working condition
for its intended use.
Production assets
Coal land, mine development costs, which include directly
attributable construction overheads, land and coal rights are
recorded at cost. Coal land and mine development are depleted and
amortised, respectively, using the units of production method,
based on estimated recoverable tonnage. The depletion of coal
rights and depreciation of restoration costs are expensed by
reference to the estimated amount of coal to be recovered over the
expected life of the operation.
Coal Mine Reclamation Costs
Future cost requirements for land reclamation are estimated
where surface operations have been conducted, based on the Group's
interpretation of the technical standards of regulations enacted by
the Government of Tanzania. These costs relate to reclaiming the
pit and support acreage at surface mines and sealing portals at
deep mines. Other costs include reclaiming refuse and slurry ponds
as well as related termination/exit costs.
The Group records asset retirement obligations that result from
the acquisition, construction or operation of long-lived assets at
fair value when the liability is incurred. Upon the initial
recognition of a liability, that cost is capitalised as part of the
related long-lived asset and expensed over the useful life of the
asset. The asset retirement costs are recorded in Land, Coal Rights
and Restoration Costs.
The Group expenses reclamation costs prior to the mine closure.
The establishment of the end of mine reclamation and closure
liability is based upon permit requirements and requires
significant estimates and assumptions, principally associated with
regulatory requirements, costs and recoverable coal lands.
Annually, the end of mine reclamation and closure liability is
reviewed and necessary adjustments are made, including adjustments
due to mine plan and permit changes and revisions of cost and
production levels to optimize mining and reclamation efficiency.
The amount of such adjustments is reflected in the year end
reclamation provision calculation.
Stripping (waste removal) costs
As part of its mining operations, the Group incurs stripping
(waste removal) costs both during the production phase of its
operations. Stripping activities undertaken during the production
phase of a surface mine (production stripping) are accounted for as
set out below.
After the commencement of production, further development of the
mine may require a phase of unusually high stripping that is
similar in nature to development phase stripping. The cost of such
stripping is accounted for in the same way as development stripping
(as outlined above). Production stripping is generally considered
to create two benefits, being either the production of inventory or
improved access to the ore to be mined in the future. Where the
benefits are realised in the form of inventory produced in the
period, the production stripping costs are accounted for as part of
the cost of producing those inventories.
Where the benefits are realised in the form of improved access
to ore to be mined in the future, the costs are recognised as a
non-current asset, referred to as a 'stripping activity asset', if
the following criteria are met:
a) Future economic benefits (being improved access to the ore
body) are probable;
b) The component of the ore body for which access will be
improved can be accurately identified; and
c) The costs associated with the improved access can be reliably
measured
If any of the criteria are not met, the production stripping
costs are charged to profit or loss as operating costs as they are
incurred.
In identifying components of the ore body, the Group works
closely with the mining operations personnel for each mining
operation to analyse each of the mine plans. Generally, a component
will be a subset of the total ore body, and a mine may have several
components. The mine plans, and therefore the identification of
components, can vary between mines for a number of reasons. These
include, but are not limited to: the type of commodity, the
geological characteristics of the ore body, the geographical
location, and/or financial considerations.
The stripping activity asset is initially measured at cost,
which is the accumulation of costs directly incurred to perform the
stripping activity that improves access to the identified component
of ore, plus an allocation of directly attributable overhead costs.
If incidental operations are occurring at the same time as the
production stripping activity, but are not necessary for the
production stripping activity to continue as planned, these costs
are not included in the cost of the stripping activity asset.
If the costs of the inventory produced and the stripping
activity asset are not separately identifiable, a relevant
production measure is used to allocate the production stripping
costs between the inventory produced and the stripping activity
asset. This production measure is calculated for the identified
component of the ore body and is used as a benchmark to identify
the extent to which the additional activity of creating a future
benefit has taken place. The Group uses the expected volume of
waste extracted compared with the actual volume for a given volume
of ore production of each component.
The stripping activity asset is accounted for as an addition to,
or an enhancement of, an existing asset, being the mine asset, and
is presented as part of 'Intangible assets' in the statement of
financial position. This forms part of the total investment
Finance costs
Finance costs of debt, including premiums payable on settlement
and direct issue costs are charged to the income statement on an
accruals basis over the term of the instrument, using the effective
interest method.
Income taxation
The taxation charge represents the sum of current tax and
deferred tax.
The tax currently payable is based on the taxable profit for the
period using the tax rates that have been enacted or substantially
enacted by the balance sheet date. Taxable profit differs from the
net profit as reported in the income statement because it excludes
items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or
deductible.
Deferred taxation
Deferred tax is recognised, using the liability method, in
respect of temporary differences between the carrying amount of the
Group's assets and liabilities and their tax base. Deferred tax
liabilities are offset against deferred tax assets within the same
taxable entity or qualifying local tax group. Any remaining
deferred tax asset is recognised only when, on the basis of all
available evidence, it can be regarded as probable that there will
be suitable taxable profits, within the same jurisdiction, in the
foreseeable future against which the deductible temporary
difference can be utilised. Deferred tax is determined using tax
rates that are expected to apply in the periods in which the asset
is realised or liability settled, based on tax rates and laws that
have been enacted or substantially enacted by the balance sheet
date. Deferred tax is recognised in the income statement, except
when the tax relates to items charged or credited directly in
equity, in which case the tax is also recognised in equity.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as deduction, net of tax, from the proceeds.
Intangible assets
Intangible assets arose as a result of the valuation placed on
the original six Tanzanian licences acquired on the acquisition of
Edenville (Tanzania) Limited. The allocation price was based on the
price paid to acquire these the Group's licences. The licences are
amortised over the life of the production asset using rates of
depletion.
Operating segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief executive officer.
The Board considers that the Group's project activity
constitutes one operating and reporting segment, as defined under
IFRS 8.
The total profit measures are operating profit and profit for
the year, both disclosed on the face of the combined income
statement.
Share Capital
The Group's ordinary shares are classified as equity instruments
.
Prior year restatement
Following the adoption of IFRS 16 in the prior year, Mining
licences were incorrectly capitalised as these fall outside the
scope of the standard. Due to the material nature of these entries,
a prior year adjustment has been made to correct the error, and the
previous year's figures have been restated as a result. For details
see Note 32
3. Financial risk management
Fair value estimation
The carrying value less impairment provision of trade
receivables and payables is assumed to approximate their fair
values, due to their short-term nature. The fair value of financial
liabilities for disclosure purposes is estimated by discounting the
future contractual cash flows at the current market interest rate
that is available to the group for similar financial
instruments.
4. Critical accounting estimates and areas of judgement
The Group makes estimates and assumptions concerning the future,
which by definition will seldom result in actual results that match
the accounting estimate. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amount of assets and liabilities within the next financial year are
those in relation to:
-- the impairment of coal production assets and intangible assets;
-- share based payments
-- Valuation of provision for restoration costs
-- Recoverability of VAT balance
Impairment - coal production assets and intangible assets (notes
15 and 16)
The Group is required to perform an impairment review, on coal
production assets, for each CGU to which the asset relates.
Impairment review is also required to be performed on other
intangible assets when facts and circumstances suggest that the
carrying amount of the asset may exceed its recoverable amount. The
recoverable amount is based upon the Directors' judgements and are
dependent upon the ability of the Company to obtain necessary
financing to complete the development and future profitable
production or proceeds from the disposal, at which point the value
is estimated based upon the present value of the discounted future
cash flows.
In assessing whether an impairment is required for the carrying
value of an asset, its carrying value is compared with its
recoverable amount. The recoverable amount is the higher of the
asset's fair value less costs to sell and value in use. Given the
nature of the Group's activities, information on the fair value of
an asset is usually difficult to obtain unless negotiations
with
potential purchasers or similar transactions are taking place.
Consequently, unless indicated otherwise, the recoverable amount
used in assessing the impairment charges described below is value
in use.
The calculation of value in use is most sensitive to the
following assumptions:
-- Production volumes
-- Sales volumes
-- Discount rates
-- Coal prices
-- Operating overheads
-- Inventory
Estimated production volumes are based on the production
capability of the plant and estimated customer demand.
The Group generally estimates value in use using a discounted
cash flow model. The future cash flows are adjusted for risks
specific to the asset and discounted using a pre-tax discount rate
of 10%. The Directors believe this rate to be appropriate as this
is in line with the borrowing rates the Group are expected to
receive if they were to obtain significant long term finance based
on discussions between the Directors and prospective parties. The
Directors acknowledge that the Group does have small short term
finance arrangements which attract a higher rate but have chosen
not to use these rates as they would not be financing the
production asset using short term borrowing facilities. These short
term loans were needed mostly for working capital needs and most
have been paid off in 2021.
The directors have assessed the value of exploration and
evaluation expenditure and development assets and intangible
assets. In their opinion there has been no impairment loss to these
intangible assets in the period, other than the amounts charged to
the income statement.
Share based payments (note 28)
The estimate of share based payments costs requires management
to select an appropriate valuation model and make decisions about
various inputs into the model including the volatility of its own
share price, the probable life of the options, the vesting date of
options where non-market performance conditions have been set and
the risk free interest rate.
Valuation of provision for restoration costs (note 15)
The Company makes full provision for the future cost of
rehabilitating mine sites and related production facilities on a
discounted basis at the time of developing the mines and installing
and using those facilities. The rehabilitation provision represents
the present value of rehabilitation costs relating to mine sites,
which are expected to be incurred in the future, which is when the
producing mine properties are expected to cease operations. These
provisions have been created based on the Company's internal
estimates and a third party estimate from an independent
consultant. Assumptions based on the current economic environment
have been made, which management believes are a reasonable basis
upon which to estimate the future liability. These estimates are
reviewed regularly to take into account any material changes to the
assumptions. However, actual rehabilitation costs will ultimately
depend upon future market prices for the necessary rehabilitation
works required that will reflect market conditions at the relevant
time. Furthermore, the timing of rehabilitation is likely to depend
on when the mines cease to produce at economically viable rates.
This, in turn, will depend upon future coal prices, which are
inherently uncertain.
Management increases reclamation costs estimates at an annual
inflation rate to the anticipated future mine closure date. This
inflation rate is based on the historical rate for the industry for
a comparable.
Due to limited mining activity to date, management have assessed
the liability to be $29,907 which has not been adjusted for as it
is immaterial.
Recoverability of VAT receivable (note 18)
The group considers the recoverability of the VAT balance in
Tanzania to be a key area of judgement, as the VAT can only be
claimed backed when the Company turns profitable. The directors
believe that the debtor is recoverable based on their knowledge of
the market in Tanzania.
Recoverability of Inventory (Note 18)
The group considers the recoverability of the inventory to be a
key area of judgement, and this is held at its realisable value.
The directors believe the inventory to be in good condition and the
main reason why the stock has remained high in the last two years
is mainly because of the Covid-19 impact which necessitated the
closure of the mine. The mine has now fully reopened in May 2021
and the directors are taking making concerted efforts to sell this
excess stock. They have recently identified key customers and have
sold 1,000 tonnes in June 2021 with an expected commitment to
purchase at a rate of 1,200 tonnes per month thereafter. They are
optimistic that the remainder of the stock will be sold over the
next 1-3 years on the presumption that one of the key customers
will sign a long term contract. As a result of this, they have
concluded no impairment is required at this stage, based on the
directors' judgement of the local market and estimates regarding
the timeframe in which the goods can be sold.
5. Segmental information
The Board considers the business to have one reportable segment
being Coal production assets.
Other represents unallocated expenses and assets held by the
head office. Unallocated assets primarily consist of cash and cash
equivalents.
Coal Production
Assets
2020 Coal Other Total
Consolidated Income Statement GBP GBP GBP
Revenue - Tanzania 33,030 - 33,030
Revenue - other 822 - 822
Cost of sales (excluding
depreciation and amortisation) (349,121) - (349,121)
Depreciation (209,208) - (209,208)
Depletion of development
assets (25,547) - (25,547)
Gross profit (550,024) - (550,024)
Administrative expenses (122,780) (363,685) (486,465)
Share based payment - (50,398) (50,398)
Depreciation (42,722) (445) (43,167)
Group operating loss (715,526) (414,528) (1,130,054)
Finance income - 112 112
Finance cost (10,812) (100,691) (111,503)
Loss on operations before
taxation (726,338) (515,107) (1,241,445)
Income tax - -
Loss for the year (726,338) (515,107) (1,241,445)
Coal Production
Assets
2019 Coal Other Total
Consolidated Income Statement GBP GBP GBP
Revenue - Tanzania 218,953 - 218,953
Revenue - other 14,461 14,461
Cost of sales (excluding
depreciation and amortisation) (805,059) - (805,059)
Depreciation (173,073) - (173,073)
Depletion of development
assets (27,348) - (27,348)
Gross profit (772,066) - (772,066)
Administrative expenses (150,859) (675,480) (826,339)
Share based payment - (16,077) (16,077)
Depreciation (60,624) (593) (61,217)
Group operating loss (983,549) (692,150) (1,675,699)
Finance income - 113 113
Finance cost (2,711) (167,825) (170,536)
Loss on operations before
taxation (986,260) (859,862) (1,846,122)
Income tax - - -
Loss for the year (986,260) (859,862) (1,846,122)
By Business Segment Carrying value of Additions to non-current Total liabilities
segment assets assets and intangibles
2020 2019 2020 2019 2020 2019
GBP GBP GBP GBP GBP GBP
Coal 6,498,828 6,969,925 17,788 106,509 548,980 491,219
Other 35,458 91,035 - - 639,445 1,095,946
6,534,286 7,060,960 17,788 106,509 1,188,425 1,587,165
By Geographical
Area
GBP GBP GBP GBP GBP GBP
Africa (Tanzania) 6,498,828 6,969,925 17,788 106,509 548,980 491,219
Europe 35,458 91,035 - - 639,445 1,095,946
6,534,286 7,060,960 17,788 106,509 1,188,425 1,587,165
Information about major customers
Included in revenues arising from the sale of coal are revenues
which arose from sales to the Group's largest customers based in
Tanzania. No other customers contributed 10% or more to the Group's
revenue in either 2020 or 2019.
2020 2019
GBP GBP
Customer 1 31,386 149,236
Customer 2 - 39,399
Customer 3 - 25,014
31,386 213,649
6. Expenses by nature
2020 2019
GBP GBP
(restated)
Staff costs 235,557 198,793
Audit fees 38,019 34,850
Office and other administrative services 70,257 60,445
AIM related costs including investor relations 3,220 37,097
Professional, legal and consultancy fees 113,110 418,681
Travel, entertaining and subsistence 7,906 16,456
Exchange gain (10,482) (13,584)
Depreciation 43,167 61,217
Provisions and expected credit losses 1,929 45,332
Other costs 26,949 28,268
529,632 887,555
7. Auditors' remuneration
2020 2019
GBP GBP
Fees payable to the Company's auditor for the audit
of the parent Company and consolidated accounts 40,000 34,850
8. Employees
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
Wages and salaries 325,009 336,448 179,250 128,202
Social security costs 20,781 47,499 - 5,912
Pensions 10,071 40,226 303 741
355,861 424,173 179,553 134,855
Included within Development expenditure/Exploration and
evaluation assets (note 15) are capitalised wages and salary costs
of GBP225,891 (2019: GBP233,397).
The average number of employees and directors during the year
was as follows:
Group Company
2020 2019 2020 2019
Administration 11 12 3 3
Mining , plant processing and security 29 35 - -
40 47 3 3
9. Directors' remuneration
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
Emoluments 151,250 128,220 179,250 128,202
Compensation for loss of office 28,000 - - -
Pensions 303 741 303 741
179,553 128,943 179,553 128,943
The highest paid director received remuneration of GBP97,500
(2019: GBP71,375).
Included in the above are accrued Director's remuneration of
GBP122,750 (2019: GBP69,287)
Directors' interest in outstanding share options per director is
disclosed in the directors' report on page 13.
Remuneration of key management personnel
The remuneration of the directors and other key management
personnel is set out below:
2020 2019
GBP GBP
Emoluments 197,988 190,871
Compensation for loss of office 28,000 -
Pensions 303 741
226,291 191,612
10. Finance income
2020 2019
GBP GBP
Interest income on short-term bank deposits 112 113
112 113
11. Finance Costs
2020 2019
GBP GBP
(restated)
Interest on convertible loan notes 87,977 160,379
Convertible loan finance costs 12,652 7,446
Bank interest 61 -
Hire purchase interest 6,423 2,712
Interest on rehabilitation provision 4,390 -
111,503 170,537
12. Income tax
2020 2019
GBP GBP
Current tax:
Current tax on loss for the year - -
Total current tax - -
Deferred tax
On write off/impairment on intangible assets - -
Tax charge for the year - -
No corporation tax charge arises in respect of the year due to
the trading losses incurred. The Group has Corporation Tax losses
available to be carried forward and used against trading profits
arising in future periods of GBP7,313,803 (2019: GBP7,034,804).
A deferred tax asset of GBP1,389,369 (2019: GBP1,336,275)
calculated at 19% (2019: 19%) has not been recognised in respect of
the tax losses carried forward due to the uncertainty that profits
will arise against which the losses can be offset.
The tax assessed for the year differs from the standard rate of
corporation tax in the UK as follows:
2020 2019
GBP GBP
(restated)
Loss on ordinary activities before tax (1,241,445) (1,846,122)
Expected tax credit at standard rate
of UK Corporation Tax
19% (2017: 19%) (235,875) (350,763)
Disallowable expenditure 21,116 30,968
Capital allowances in excess of depreciation (310,464) (326,253)
Movement in deferred tax not recognised 525,223 646,048
Tax charge for the year -
13. Earnings per share
The basic loss per share is calculated by dividing the loss attributable
to equity shareholders by the weighted average number of shares in issue.
The loss attributable to equity shareholders and weighted average number
of ordinary shares for the purposes of calculating diluted earnings per
ordinary share are identical to those used for basic earnings per ordinary
share. This is because the exercise of warrants would have the effect
of reducing the loss per ordinary share and is therefore anti-dilutive.
2020 2019
GBP GBP
(restated)
Net loss for the year attributable
to ordinary shareholders (1,241,445) (1,846,122)
Weighted average number of shares
in issue 7,452,470,072 3,554,665,440
Basic and diluted loss per share (0.02p) (0.05p)
14. Investment in subsidiaries
Shares in Loans to
subsidiaries subsidiaries Total
Company GBP GBP GBP
Cost
At 1 January 2019 7,043,312 8,569,417 15,612,729
Additions - 547,984 547,984
Disposal - - -
_________ _________ _________
At 31 December 2019 7,043,312 9,117,401 16,160,713
Accumulated impairment
As at 1 January 2019 - - -
Impairment - - -
_________ _________ _________
At 31 December 2019 - - -
Net Book Value
As at 31 December 2019 7,043,312 9,117,401 16,160,713
Shares in Loans to
subsidiaries subsidiaries Total
Company GBP GBP GBP
Cost
At 1 January 2020 7,043,312 9,117,401 16,160,713
Additions - 400,904 400,904
_________ _________ _________
At 31 December 2020 7,043,312 9,518,305 16,561,617
Accumulated impairment
As at 1 January 2020 - - -
Impairment - - -
_________ _________ _________
At 31 December 2020 - - -
Net Book Value
As at 31 December 2020 7,043,312 9,518,305 16,561,617
The value of the Company's investment and any indications of
impairment is based on the prospecting and mining licences held by
its subsidiaries.
The Tanzanian licences comprise a mining licence and various
prospecting licences. The licences are, located in a region
displaying viable prospects for coal and occur in a country where
the government's policy for development of the mineral sector aims
at attracting and enabling the private sector to take the lead in
exploration mining, development, mineral beneficiation and
marketing.
During 2018 the activities of the Company's subsidiary evolved
from exploration and evaluation to development and as a result the
exploration and evaluation assets held by the Company's subsidiary
were transferred to development expenditure. The Directors carried
out an impairment review on reclassification of exploration and
evaluation assets to development assets, which covered the
Company's investments in, and loans to, its subsidiaries. Following
the impairment reviews the Directors did not consider the Company's
investments to be impaired.
In April 2019, the subsidiary moved into the production
phase.
The Directors have carried out an impairment review and consider
the value in use to be greater than the book value in respect of
The Company's investment in its subsidiary Company Edenville
International (Tanzania) Limited.
The Directors considered the recoverable amount by assessing the
value in use by considering future cash flow projections of the
revenue generated by its subsidiary through the sale of its coal
resources.
Cash flows were based on the revenue generated to date plus
expected growth from current production levels to 10,000 tons per
month in the short to medium term.
In addition, the projections include future potential revenue
generated from the Company's plans relating to the Rukwa Coal to
Power Project. It is expected that the Project will move ahead in
parallel with the transmission development which is currently in
the procurement stage and the Directors understand should be
completed sometime in 2024. There is no guarantee that the Company
will be chosen as the successful party to develop the Power
Project, and therefore there is no guarantee that revenue will be
generated from this Project. Should this be the case then the
Company would need to review its cash flow projections, and review
the carrying value of its investment in Edenville International
Tanzania Limited
However, based upon current know resources the subsidiary has
significant coal resources which based upon current projections
prepared by the Directors would be sufficient to support the book
value in the financial statements. The Directors are of the view
that this amount is adequately supported by proposed returns
generated by the Power Plant Project. The Directors have applied a
10% discount rate in their forecasts. Additional factors that may
affect these projections include the following: -
A 30% reduction in the margin per ton of coal would result in an
impairment of the Edenville International (Tanzania) Limited
investment by GBP736k.
An increase in the discount factor to 16% would result in an
impairment of the Edenville International (Tanzania) Limited
investment by GBP824k.
A decrease of 50% of the EBITA would result in an impairment of
the Edenville International (Tanzania) Limited investment by
GBP5.7m.
The mining licence is due to expire in 2026. Should the mining
licence not be renewed this would result in an impairment of
GBP7.043m.
Holdings of more than 20% :
The Company holds more than 20% of the share capital of the
following companies:
Subsidiary undertaking Country of incorporation Class Shares held
Edenville International (Seychelles)
Limited Seychelles Ordinary 100%
Edenville International (Tanzania) Tanzania Ordinary 99.75%*
Limited
Edenville Power (Tz) Limited Tanzania Ordinary 99.9%
Edenville (South Africa)
Limited England Ordinary 100%
* These shares are held by Edenville International (Seychelles) Limited.
15. Property, plant and equipment
Group
Fixtures,
Coal Production Plant and fittings
assets machinery and equipment Motor vehicles Total
GBP GBP GBP GBP GBP
Cost
As at 1 January
2019 5,501,291 1,435,541 7,360 93,946 7,038,138
Additions - 680 - 105,829 106,509
Disposals - (168,189) - - (168,189)
Foreign exchange
adjustment (183,654) (42,060) (107) (2,579) (228,400)
As at 31 December
2019 5,317,637 1,225,972 7,253 197,196 6,748,058
Depreciation
As at 1 January
2019 57,928 306,410 7,010 84,396 455,744
Depletion/Charge
for the year 27,348 226,110 87 8,093 261,638
Disposal - (33,638) - - (33,638)
Foreign exchange
adjustment (1,934) (16,481) (107) (2,557) (21,089)
As at 31 December
2019 83,342 482,401 6,990 89,925 662,655
Net book value
As at 31 December
2019 5,234,295 743,571 263 107,271 6,085,403
Coal Production Fixtures,
assets Plant and fittings Motor
machinery and equipment vehicles Total
GBP GBP GBP GBP GBP
Cost
As at 1 January
2020 5,317,637 1,225,972 7,253 197,196 6,748,058
Additions 17,788 - - - 17,788
Foreign exchange
adjustment (171,033) (39,191) (100) (5,806) (216,130)
As at 31 December
2020 5,164,392 1,186,781 7,153 191,390 6,549,716
Depreciation
As at 1 January
2020 83,342 482,401 6,990 89,925 662,658
Depletion/ Charge
for the year 25,547 224,719 65 27,590 277,921
Foreign exchange
adjustment (2,674) (28,648) (97) (4,021) (35,440)
As at 31 December
2020 106,215 678,472 6,958 113,494 905,139
Net book value
As at 31 December
2020 5,058,177 508,309 195 77,896 5,644,577
Plant and machinery depreciation amounting to GBP209,208 (2019:
GBP173,073) is included within cost of sales as it relates to
mining equipment.
Company
Fixtures,
Plant and fittings Motor Vehicles
machinery and equipment Total
GBP GBP GBP GBP
Cost
As at 1 January 2019 and 31
December 2019 7,471 4,153 16,691 28,315
Depreciation
As at 1 January 2019 6,847 3,807 15,290 25,944
Charge for the year 156 87 350 593
As at 31 December 2019 7,003 3,894 15,640 26,537
Net book value
As at 31 December 2019 468 259 1,051 1,778
Fixtures,
Plant and fittings Motor Vehicles
machinery and equipment Total
GBP GBP GBP GBP
Cost
As at 1 January 2020 and 31
December 2020 7,471 4,153 16,691 28,315
Depreciation
As at 1 January 2020 7,003 3,894 15,640 26,537
Charge for the year 117 64 263 444
As at 31 December 2020 7,120 3,958 15,903 26,981
Net book value
As at 31 December 2020 351 195 788 1,334
16. Intangible assets
Group
Mining Licences
GBP
Cost or valuation
As at 1 January 2019 1,572,197
Foreign exchange adjustment (52,485)
At 31 December 2019 1,519,712
Accumulated depletion, amortisation
and impairment
As at 1 January 2019 1,239,731
Amortisation -
Foreign exchange adjustment (41,387)
At 31 December 2019 1,198,344
Net book value
As at 31 December 2019 321,368
Mining
Licences
GBP
Cost or valuation
As at 1 January 2020 1,519,712
Foreign exchange adjustment (48,879)
At 31 December 2020 1,470,833
Accumulated depletion, amortisation
and impairment
As at 1 January 2020 1,198,344
Foreign exchange adjustment (38,543)
At 31 December 2020 1,159,801
Net book value
As at 31 December 2020 311,032
Mining Licences
Intangible assets arose as a result of the valuation placed on
the original six Tanzanian licences acquired on the acquisition of
Edenville (Tanzania) Limited. The allocation price was based on the
price paid to acquire these the Group's licences.
These assets are reviewed for impairment annually alongside the
coal production assets.(see note 4 for Critical accounting
estimates and judgements).
17. Inventories
Group
2020 2019
GBP GBP
ROM stockpiles 10,752 11,108
Fines 223,480 230,906
Washed coal 17,504 5,524
251,736 247,538
The cost of inventories recognised as an expense during the year
in was GBP78,448 (2019: GBP329,604 restated).
All inventory as at 31 December 2019 was written off during the
period.
18. Trade and other receivables
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
Trade Receivables - - - -
Less: provision for impairment of - - - -
trade receivables
Trade receivables - net - - - -
Other receivables - 34,324 - 46,328
VAT receivable 301,251 329,133 8,499 -
Prepayments - 2,084 - 2,084
301,251 365,541 8,499 48,412
Included within VAT receivable is VAT owed to Edenville
International (Tanzania) Limited which is only recoverable against
future sales made by Edenville International (Tanzania) Limited.
The Group expects to recover the above VAT from sales of commercial
coal.
19. Cash and cash equivalents
Cash and cash equivalents include the following for the purposes
of the cash flow statement:
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
Cash at bank and in hand 25,690 41,110 25,628 40,845
20. Trade and other payables
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
Trade and other payables 227,288 476,876 41,505 302,762
Amounts owed to subsidiary undertakings - 6,340 6,340
Social security costs and other
taxes 10,279 9,713 10,279 9,714
Other creditors - - 33,437 -
Accruals and deferred income 448,242 410,533 121,998 160,428
685,809 897,122 213,559 479,244
21. Borrowings
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
(restated)
Convertible loan notes
Repayable with 1 year 416,142 361,581 416,142 361,581
Repayable within 2 to 5 years 16,084 141,463 16,084 141,463
432,226 503,044 432,226 503,044
Other loans
Repayable with 1 year - 120,000 - 120,000
- 120,000 - 120,000
Hire purchase finance
Repayable with 1 year 24,689 22,863 - -
Repayable within 2 to 5 years 23,789 44,136 - -
48,478 66,999 - -
Total
Repayable with 1 year 440,831 504,444 416,142 481,581
Repayable within 2 to 5 years 39,873 185,599 16,084 141,463
480,704 690,043 432,226 623,044
Convertible loan
In November 2018 $750,000 conditionally convertible loan notes
were issued: the face value of these convertible securities is
$900,000. A commitment fee of GBP37,500, which has been offset
against the proceeds of issue of the convertible loan notes, was
payable by the Company as well as issuing share options over
99,568,966 ordinary shares exercisable for 4 years at a conversion
price on 0.29p per share. The Company is required to make
repayments of $45,000 over 20 months commencing in February 2019.
If repayments are made in cash, then an additional 3% is payable on
the $45,000. The Company may elect to make the repayment in its
shares priced at 90% of the average five day Volume Weighted
Average Price (VWAP) chosen by the investor during the 20 days
before issuance, or a combination of both.
The Company has the option to buy back the entire outstanding
face value at any time at a premium of 5%. If this right is
exercised the investor has an option to convert 25% of the face
value into shares at the lesser of the repayment price or 0.29p per
share. The repayment price being 130% of the 10-day VWAP
immediately prior to the Company entering the Convertible
Agreement.
In addition to the above the investor was offered 36,000,000
collateral shares which were issued by the Company on 20 February
2019.
In April 2019, the Company agreed a repayment holiday up to
September 2019 in respect of the convertible loan notes. As a
condition of granting the repayment holiday the outstanding balance
at the time. $855,000, was increased by 15% to $983,250
On 15 January 2021 the Company also agreed repayment terms with
Lind Partners LLC whereby it agreed to repay 20% of the outstanding
debt by 31 January 2021 with the balance to be paid in monthly
instalments from the end of April 2021. Lind Partners LLC also
agreed that no further interest is to be charged on the outstanding
balance.
As announced on 22 June 2021, following two fund raises in
January and May 2021, Edenville was able to pay off all outstanding
obligations to Lind.
Other loans
This represents a loan of GBP100,000 with a fixed coupon
interest rate of 20%.
22. Environmental rehabilitation liability
Group
2020 2019
GBP GBP
At 1 January 2020 - -
Additions 17,784 -
Interest 4,389 -
Foreign exchange movement (261) -
21,912 -
The group makes full provision for the future cost of
rehabilitating mine sites and related production facilities on a
discounted basis at the time of developing the mines and installing
and using those facilities. The rehabilitation provision represents
the present value of rehabilitation costs relating to mine sites
which are expected to be incurred in the future, which is when the
producing mine properties are expected to cease operations. Those
provisions have been created based on the Company's internal
estimates. Assumptions based on the current economic environment
have been made, which management believes are a reasonable basis
upon which to estimate the future liability. These estimates are
reviewed regularly to take into account any material changes to the
assumptions. However actual rehabilitation costs will ultimately
depend upon future market prices for the necessary rehabilitation
costs will ultimately depend upon future market prices for the
necessary rehabilitation works required that will reflect market
conditions at the relevant time. Furthermore, the timing of
rehabilitation is likely to depend on
when the mines cease to produce at economically viable rates.
This, in turn will depend upon future coal prices, which inherently
uncertain.
23. Share capital
Group and Company
No GBP No GBP GBP
Ordinary Ordinary Deferred shares Deferred Total
shares of shares of 0.001p shares share
0.02p each of 0.02p each of 0.001p capital
each each
Issued and fully paid
At 1 January 2019 1,547,746,369 309,551 241,248,512,346 2,412,485 2,722,036
On 20 February 2019
Ordinary shares were
issued at 0.02p 36,000,000 7,200 - - 7,200
On 20 February 2019
Ordinary shares were
issued at 0.12p 64,515,192 12,903 - - 12,903
On 2 May 2019 500,000
Ordinary shares at
0.02p 500,000,000 100,000 - - 100,000
On 20 May 2019 2,263,980,200
Ordinary shares at
0.02p 2,263,980,200 452,796 - - 452,796
On 11 September 2019
600,000,000 Ordinary
shares at 0.05p 600,000,000 120,000 - - 120,000
As at 31 December
2019 5,012,241,761 1,002,450 241,248,512,346 2,412,485 3,414,935
================ ========== ================ =========== ==========
No GBP No GBP GBP
Ordinary shares Ordinary Deferred Deferred Total
of 0.02p each shares shares of shares share
of 0.02p 0.001p each of 0.001p capital
each each
Issued and fully
paid
At 1 January 2020 5,012,241,761 1,002,450 241,248,512,346 2,412,485 3,414,935
On 9 January 2020
Ordinary shares were
issued at 0.05p 50,000,000 10,000 - - 10,000
On 21 January 2020
Ordinary shares were
issue at 0.04p 1,750,000,000 350,000 - - 350,000
On 8 June 2020 Ordinary
shares were issued
at 0.04p 1,250,000,000 250,000 - - 250,000
On 14 August 2020
Ordinary shares were
issued at 0.06p 83,333,333 16,666 - - 16,666
As at 31 December
2020 8,145,575,094 1,629,116 241,248,512,346 2,412,485 4,041,601
================ ========== ================ =========== ==========
The deferred shares have no voting rights, dividend rights or
any rights of redemption. On return of assets on winding up the
holders are entitled to repayment of amounts paid up after
repayment to ordinary share holders
24. Capital and reserves attributable Group Company
to shareholders
2020 2019 2020 2019
GBP GBP GBP GBP
(restated)
Share capital 4,041,601 3,414,935 4,041,601 3,414,935
Share premium 19,390,849 18,811,157 19,390,849 18,811,157
Other reserves 795,304 979,567 301,174 281,502
Retained deficit (18,866,991) (17,718,347) (7,782,331) (7,358,134)
________ ________
------------- ------------- ------------ ------------
Total equity 5,360,763 5,487,312 15,951,293 15,149,460
============= ============= ============ ============
There have been no significant changes to the Group's capital
management objectives or what is considered to be capital during
the year.
25. Capital management policy
The Group's policy on capital management is to maintain a low
level of gearing. The group funds its operation primarily through
equity funding.
The Group defines the capital it manages as equity shareholders'
funds less cash and cash equivalents.
The Group objectives when managing its capital are:
-- To safeguard the group's ability to continue as a going concern.
-- To provide adequate resources to fund its exploration,
development and production activities with a view to providing
returns to its investors.
-- To maintain sufficient financial resources to mitigate against risk and unforeseen events.
The group's cash reserves are reported to the board and closely
monitored against the planned work program and annual budget. Where
additional cash resources are required the following factors are
considered:
-- the size and nature of the requirement.
-- preferred sources of finance.
-- market conditions.
-- opportunities to collaborate with third parties to reduce the cash requirement.
26. Financial instruments
The Board of Directors determine, as required, the degree to
which it is appropriate to use financial instruments to mitigate
risk with the main risk affecting such instruments being foreign
exchange risk, which is discussed below.
Group Company
Categories of financial instruments 2020 2019 2020 2019
GBP GBP GBP GBP
Receivables at amortised cost including
cash and cash equivalents:
Investments and loans to subsidiaries - - 16,561,617 16,160,173
Cash and cash equivalents 25,690 41,110 25,628 40,845
Trade and other receivables 301,251 363,457 8,498 46,328
---------- ---------- ----------- -----------
Total 326,941 404,567 16,595,743 16,247,346
---------- ---------- ----------- -----------
Financial liabilities
Financial liabilities at amortised
cost:
Trade and other payables 675,330 887,409 203,280 564,530
Convertible loan notes 432,226 503,044 432,226 503,044
---------- ---------- ----------- -----------
1,107,566 1,390,453 635,506 1,067,574
---------- ---------- ----------- -----------
Net (780,625) (985,886) 15,960,237 15,179,772
========== ========== =========== ===========
Cash and cash equivalents
This comprises cash held by the Group and short-term deposits.
The carrying amount of these assets approximates to their fair
value.
General risk management principles
The Directors have an overall responsibility for the
establishment of the Group's risk management framework. A formal
risk assessment and management framework for assessing, monitoring
and managing the strategic, operational and financial risks of the
Group is in place to ensure appropriate risk management of its
operations.
The following represent the key financial risks that the Group
faces:
Interest rate risk
The Group only interest-bearing asset is cash invested on a
short-term basis which attracts interest at the bank's variable
interest rate.
The Group is exposed to interest rate risk through its
convertible loan notes, its only interest-bearing liabilities. The
level of interest payable will vary depending on whether the
repayments are made with shares or in cash. The effective interest
rate per month is 20.78% (2019:20.78%). If repayments are made in
cash then the monthly repayments increase by 3%.
Credit risk
Credit risk arises principally from the Group's trade
receivables and investments in cash deposits. It is the risk that
the counterparty fails to discharge its obligation in respect of
the instrument.
VAT receivable is owed to Edenville International (Tanzania)
Limited which is only recoverable against future sales made by
Edenville International (Tanzania) Limited. The Group expects to
recover the above VAT from sales of commercial coal.
The Group holds its cash balances with reputable financial
institutions with strong credit ratings. There were no amounts past
due at the balance sheet date.
The maximum exposure to credit risk in respect of the above at
31 December 2020 is the carrying value of financial assets recorded
in the financial statements.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as and when they fall due.
Liquidity risk is managed through an assessment of short, medium
and long-term cash flow forecasts to ensure the adequacy of working
capital.
The Group's policy is to ensure that it will always have
sufficient cash to allow it to meet its liabilities when they
become due. To achieve this aim, it seeks to maintain cash balances
to meet expected requirements for a period of one year.
Currency Risk
The Group is exposed to currency risk as the assets (see note 5)
of its subsidiaries are denominated in US Dollars. The Group's
policy is, where possible, to allow group entities to settle
liabilities denominated in their functional currency (primarily US
Dollars) with cash. The Company transfers amounts in sterling or US
dollars to its subsidiaries to fund its operations. Where this is
not possible the parent Company settles the liability on behalf of
its subsidiaries and will therefore be exposed to currency
risk.
The Group has no formal policy is respect of foreign exchange
risk; however, it reviews its currency exposure on a regular basis.
Currency exposures relating to monetary assets held by foreign
operations are included in the Group's income statement. The Group
also manages its currency exposure by retaining the majority of its
cash balances in sterling, being a relatively stable currency.
The effect of a 10% rise or fall in the US dollar/Sterling
exchange rate would result in an increase or decrease in the net
assets of the group of GBP700,210.
Fair value of financial assets and liabilities
Fair value is the amount at which a financial instrument could
be exchanged in an arm's length transaction between informed and
willing parties, other than a forced or liquidation sale and
excludes accrued interest. Where available, market values have been
used to determine fair values. Where market values are not
available, fair values have been calculated by discounting expected
cash flows at prevailing interest rates and by applying year end
exchange rates.
The Directors consider that there is no significant difference
between the book value and fair value of the Group's financial
assets and liabilities.
The tables below summarise the maturity profit of the combined
Group's non-derivative financial liabilities at each financial year
end based on contractual undiscounted payments.
Group
2019
Less than 1- 2 years 2-5 years
1 year
(restated
Trade payables 466,645 - -
Other payables 10,232 - -
Accruals 410,535 - -
Borrowings 504,444 185,599 -
---------- --------------------- ----------
1,391,856 185,599 -
========== ===================== ==========
2020
Less than 1- 2 years 2-5 years
1 year
Trade payables 227,288
Other payables 10,279
Accruals 448,242
Borrowings 440,831 39,873 -
========== ================== ==========
1,126,640 39,873 -
========== ================== ==========
Company
2019
Less than 1-2 years 2-5 years
1 year
Convertible loan notes (current
and non - current) 361,581 141,463 -
Trade payables 277,762 - -
Other payables 136,054 - -
Accruals 160,428 - -
---------- --------------------- ----------
935,825 141,463 -
========== ===================== ==========
2020
Less than 1-2 years 2-5 years
1 year
Convertible loan notes (current
and non - current) 416,142 16,084 -
Trade payables 41,505 - -
Other payables 39,777 - -
Accruals 121,998 - -
---------- ------------------ ----------
619,422 16,084 -
========== ================== ==========
27. Equity-settled share-based payments
The following options over ordinary shares have been granted by
the Company:
Number of options
Grant Date Expiry date Exercise As at 1 Granted Lapsed As at 31
price January December
2020 2020
21 October 20 October
2013 2023 5.00p 3,005,740 (3,005,740) -
28 March 27 March
2017 2022 1.08p 38,000,000 (14,666,666) 23,333,334
7 November 6 November
2018 2022 0.29p 99,568,966 99,568,966
9 May 2019 8 May 2023 0.26p 100,000,000 100,000,000
3 April 2020 2 April 2025 0.30p - 270,000,000 270,000,000
------------ ------------ ------------- ------------
240,574,706 270,000,000 (17,672,406) 492,903,300
============ ============ ============= ============
The following warrants over ordinary shares have been granted by
the Company:
Number of Warrants
Grant Date Expiry date Exercise As at 1 Granted Exercised As at 31
price January December
2020 2020
2 May 2019 31 May 2022 0.02p 127,500,000 - - 127,500,000
22
23 January January
2020 2022 0.06p - 875,000,000 (83,333,333) 791,666,667
6 June 2020 5 June 2023 0.04p - 125,000,000 - 125,000,000
6 June 2020 5 June 2023 0.06p - 85,900,800 - 85,900,800
------------ -------------- ------------- --------------
127,500,000 1,085,900,800 (83,333,333) 1,130,067,467
============ ============== ============= ==============
At the date of grant, the options were valued using the
Black-Scholes option pricing model. The fair value per option
granted and the assumptions used in the calculation were as
follows:
Date of grant 21 October 28 March 2017 5 November 26 April 17 April
2013 2018 2019 2020
Expected volatility 85% 131% 70% 101% 72%
Expected life 4 years 3 years 4 years 3.5 years 3 years
Risk-free interest
rate 1.23% 0.37% 0.96% 0.75% 0.11%
Expected dividend - - - - -
yield
Possibility of ceasing - - - - -
employment before
vesting
Fair value per option 0.09p 0.56p/0.42p/0.28p 0.08p 0.02 0.02p
Volatility was determined by reference to the standard deviation
of daily share prices for one year prior to the date of grant.
The charge to the income statement for share-based payments for
the year ended 31 December 2020 was GBP50,398 (2019:
GBP16,077).
On 6 June 2020 85,900,800 warrants were issued to settle
liabilities of GBP51,540.
Movements in the number of options outstanding and their related
weighted average exercise prices are as follows:
2020 2019
Number of Weighted average Number of Weighted average
options exercise price options exercise price
per share per share
pence pence
At 1 January 240,574,707 0.46 147,580,448 0.71
Granted 270,000,000 0.30 100,000,000 0.26
Exercised - - - -
Cancelled (17,672,407) 1.75 (7,005,741) 2.76
At 31 December 492,902,300 0.33 240,574,707 0.46
Exercisable
at year end 482,235,632 215,241,373
The weighted average remaining contractual life of options as at
31 December 2020 was 3.15 years (2019: 2.78 years).
Warrants
Movements in the number of warrants outstanding and their
related weighted average exercise prices are as follows:
2020 2019
Number of Weighted average Number of Weighted average
options exercise price options exercise price
per share per share
pence pence
At 1 January 127,500,000 0.02 - -
Granted 1,085,900,800 0.06 127,500,000 0.02
Exercised (83,333,333) 0.06 - -
Cancelled/expired - - - -
At 31 December 1,130,067,467 0.05 127,500,000 0.02
The weighted average remaining contractual life of warrants as
at 31 December 2020 was 1.36 years (2019: 2.42 years).
28. Contingent liabilities
Edenville International (Tanzania) Limited has a dispute with a
third party and arises from an Acquisition and Option Agreement
signed in August 2010 (and its variation made in 2015)
("Agreement"). The third party is seeking financial compensation
and other costs in addition to a dispute over certain mining
licenses granted in the name of Edenville International (Tanzania)
Limited. In the opinion of the directors and after taking
appropriate legal advice, they have concluded that the case has no
merit. The Directors remain optimistic for a positive outcome and
await a decision from the judge which is currently scheduled for
the end of June 2021.
29. Reserves
The following describes the nature and purpose of each
reserve:
Share Capital represents the nominal value of equity shares
Share Premium amount subscribed for share capital in excess
of the nominal value
Share Option Reserve fair value of the employee and key personnel equity
settled share option scheme and broker warrants
as accrued at the balance sheet date.
Retained Earnings cumulative net gains and losses less distributions
made
30. Related Party Transactions
Key management personnel are those persons having authority and
responsibility for planning, directing and controlling activities
of the Company, and are all directors of the Company. For details
of their compensation please refer to the Remuneration report.
During the year the Company paid GBP400,904 (2019: GBP547,984)
to or on behalf of its wholly owned subsidiary, Edenville
International (Tanzania) Limited. The amount due from Edenville
International (Tanzania) Limited at year end was GBP9,518,305
(2019: GBP9,117,401). This amount has been included within loans to
subsidiaries.
Included in trade creditors is an amount of GBPNil (2019:
GBP3,584) owed to Aaridhi Consultants, in respect of Directors fees
for Arun Srivastava and GBP4,000 owed to Nicholas Von Schirnding,
in respect of Directors fees.
At the year end the Company was owed GBP3,712 (2019: GBP3,712)
by its subsidiary Edenville International (Seychelles) Limited.
At the year end the Company was owed GBP6,340 (2019: GBP6,340)
by its subsidiary Edenville Power Tz Limited.
At the year end Edenville International (Tanzania) limited was
owed $41,677 (2019: $41,677) by Edenville Power Tz Limited and
$9,517 (2019: $9,517) was owed to JICL Consultants.
31. Prior year restatement
Edenville Energy Plc have identified an error relating to mining
licences capitalised under IFRS 16 in the prior year, which fall
outside the scope of the standard. As a result of the error, the
prior year financial statements had to be restated. Items
previously incorrectly capitalised as Right of use assets and lease
liabilities have all been reversed.
The following tables show the adjustments recognised for each
individual line item. The adjustments are explained in more detail
below.
2019 Restatement 2019
As previously Restated
stated
GBP GBP
Revenue 233,414 233,414
Cost of sales (982,261) (23,219) (1,005,480)
Gross loss (748,847) (23,219) (772,066)
Administration expenses (904,410) 16,855 (887,555)
Share based payments (16,077) (16,077)
Group operating loss (1,669,334) (6,364) (1,675,698)
Finance income 113 113
Finance costs (177,843) 7,306 (170,537)
Loss on operations before
taxation (1,847,064) (1,846,122)
Income tax - -
Loss for the year (1,847,064) (1,846,122)
31 December Restatement 31 December
2019 2019
As previously Restated
stated
GBP GBP GBP
Non-current assets
Investment in subsidiaries - -
Property, plant and equipment 6,085,403 6,085,403
Right of use assets 97,727 (97,727)
Intangible assets 321,368 321,368
6,504,498 6,406,771
Current assets
Inventories 247,538 247,538
Trade and other receivables 365,541 365,541
Cash and cash equivalents 41,110 41,110
654,189 654,189
Current liabilities
Trade and other payables (897,122) (897,122)
Borrowings (520,820) 16,376 (504,444)
(1,417,942) (1,401,566)
Current assets less current
liabilities (763,753) 16,376 (747,377)
Total assets less current
liabilities 5,740,745 5,659,394
Non-current liabilities
Borrowings (284,903) 99,304 (185,599)
Environmental rehabilitation
liability
5,455,842 5,473,795
Equity
Called-up share capital 3,414,935 3,414,935
Share premium account 18,811,157 18,811,157
Share option reserve 281,502 281,502
Foreign currency translation
reserve 698,095 (30) 698,065
Retained earnings A (17,736,330) 17,983 (17,718,347)
5,469,359 5,487,312
Non- controlling interests (13,517) (13,517)
Total equity 5,455,842 5,473,795
A. This is related to reversal of the initial application of
IFRS 16 of GBP17,042 plus transition adjustment of GBP941 as a
result of the reversal of previously recognized depreciation,
interest, and rental payments relating to the rent payable in
respect of the mining licences. A third balance sheet for the
earliest comparative period as required under IFRS 1 is not
presented as there was no impact to the opening figures at 1
January 2019 as the error only relates to transactions occurred in
the year to 31 December 2019.
32. Events after the reporting date
Following the year end the Company consolidated each existing
GBP0.0002 to ordinary shares of GBP0.02 each. These were then
subdivided into ordinary shares of GBP0.01p each and 19,000 new
deferred shares of GBP0.00001 each.
On 15 January 2021 the Company raised GBP900,000 before expenses
by way of placing 3,600,000 ordinary shares of 1p each.
On 15 January the Company granted warrants over 180,000 ordinary
shares as a result if the above placing. The warrants have a 3 year
life and an exercise price of 25p per share.
The Company also agreed repayment terms with Lind Partners LLC
whereby it agreed to repay 20% of the outstanding debt by 31
January 2021 with the balance to be paid in monthly instalments
from the end of April 2021. Lind Partners LLC also agreed that no
further interest was to be charged on the outstanding balance. In
June 2021, following two fund raises in January and May 2021, all
outstanding obligations to Lind were settled.
On 5 May 2021 the Company raised GBP2,475,000 before expenses by
way of placing 9,900,000 new ordinary shares of 1p each in the
Company at a placing price of 25p per ordinary share. Investors in
the placing also received one warrant for every placing share. The
warrants have an exercise price of 25p per share and will be
exercisable for a period of three years from the date of grant.
Subsequent to the year end, the Directors confirmed their
intention to convert the loan of GBP16,551,565 bfetween the Company
and its subsidiary into equity. This process will commence soon and
it is anticipated that the conversion will be completed before 31
December 2021.
33. Commitments
License commitments
Edenville owns a coal mining exploration licences in Tanzania.
These licences includes commitments to pay annual licence fees and
minimum spend requirements.
As at 31 December 2020 these are as follows:
Group License
fees Total
GBP GBP
-------------------------------------------------- -------- -------
Not later than one year 23,089 23,089
Later than one year and no later than five years 72,619 72,619
-------------------------------------------------- -------- -------
Total 95,708 95,708
-------------------------------------------------- -------- -------
34. Ultimate Controlling Party
The Group considers that there is no ultimate controlling
party.
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FR FLMLTMTATMPB
(END) Dow Jones Newswires
June 29, 2021 06:02 ET (10:02 GMT)
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