⌘K
t
| Date | 7 Dec 2021 |
| Time | 07:00:04 |
| Category | Results |
| ID | 7517U |
Corcel PLC
("Corcel" or the "Company")
Final Audited Results
for the Year Ended 30 June 2021 and Notice of Annual General Meeting
07 December 2021
The Company's Annual Report and Financial Statements for 2021, extracts from which are set out below, together with the Notice of the Company's Annual General Meeting (AGM) will be published to shareholders on Wednesday, 8 December 2021 and a copy of the documents will be available on the Company's website at www.corcelplc.com.
The AGM is to be held at We Work, 3 Waterhouse Square, 138-142 Holborn, London, EC1N 2SW at 1:00p.m. on Friday, 31 December 2021.
Given the continuing concerns regarding COVID-19, Shareholders, whilst able to attend the AGM in person this year, are requested to consider their safety carefully prior to attending the meeting. The Company will continue to monitor the guidelines set by the Government and any changes to attendance of the meeting will be communicated via RNS.
Overview
During the twelve-month period to 30 June 2021, which marked my second year as Chairman at Corcel Plc (the "Company", "Corcel"), we have continued building the core Net Asset Value (NAV) in our portfolio, which spans the exciting intersection of battery metals mining and their end use in both energy storage and the electric vehicle revolution. Despite the varied challenges of the global pandemic, this progress has included three asset acquisitions: the Tring Road peaker plant acquired during the year in review; secondly, the Avonmouth peaker plant in the UK; and thirdly, Wowo Gap Nickel / Cobalt asset acquired after the period end in PNG. The year has also included operational progress at Mambare, where we secured the environmental permit - a critical step on the route to a Mining Lease. Progress was also made at the Dempster Vanadium project, where operational results highlight exceptionally good rock and soil samples, which, amongst other signs, indicate the presence and grade of the Canol Formation and enable good formation tracking.
It is my firm belief that our strategy, leveraged to battery metals across both the upstream and downstream, is very much the right strategy as global economies continue their drive towards electrification. I remain very excited about this space and see Corcel continuing to position its business strategically in anticipation of the inevitable structural price hikes in battery metals.
The Board and I want to thank our shareholders for their support during 2021, which we know has not always been easy. We are amongst the first movers in this space in the micro-cap sector and we believe that our shareholders will, in due course, see significant rewards from the hard miles we have covered building the foundations to support this strategic positioning. Our commitment to transforming your company into a substantial value generating business remains absolute.
We therefore are pleased to present the Annual Report and Accounts for the year to 30 June 2021.
Battery Metals Exploration : PNG and Canada
A key element of the Company's strategy is to increase its exposure to critical battery metal positions (through both acquisitions of new deposits and advanced development at Mambare) prior to the widely expected supply crunch and associated structural price rise. Of particular focus for the Company is nickel and cobalt, which are both core battery metals with supply deficits widely expected in the mid-2020s as the electric vehicle revolution and economic decarbonisation gains pace.
The Company has again made good progress at its legacy Mambare nickel-cobalt project in Papua New Guinea, where it has focused on securing a mining lease covering the project where it holds a 41% position. Various critical milestones in this process have now been secured, with a positive outcome at the Warden's Hearing in July 2020 and the grant of the environmental permit in May 2021 being particularly significant. This positions the Company and its Joint Venture partners to secure the mining lease in the near term opening up opportunities ranging from a transaction to fast tracking DSO production.
In early 2020, the Company began the process of acquiring a second PNG nickel-cobalt project through the acquisition of the AUD 4,761,087 corporate debt of Resource Mining Corporation Pty Ltd (ASX: RMI) ("RMI"), the 100% owner of the Wowo Gap nickel-cobalt project. The debt was acquired, in two stages in April 2020 and October 2020, for a highly attractive 65% discount from the face value. The Wowo Gap project, potentially highly complementary to Mambare, is located 200km from the Papua New Guinea Capital of Port Moresby and some 150km southeast of the Company's existing Mambare asset. The Project is held through one tenement in Papua New Guinea, EL 1165, which expired on 28 February 2020 and (as is common in PNG) is currently under reapplication for a further 2-year period.
Subsequent to the year end, in August 2021, the Company signed a binding but conditional share purchase agreement with RMI to acquire 100% of the issued share capital in Australian-registered Niugini Nickel Pty Ltd, which owns 100% of the Wowo Gap nickel-cobalt project. As consideration for the acquisition, the Company released all liabilities and obligations in connection with its AUD 4,761,087 senior debt position in RMI. I am delighted to report that, following a successful shareholder vote at RMI in October 2021, the Company became 100% owner of the Wowo Gap project on 18 October 2021.
The Company sees significant synergies between the two PNG battery metal projects and sees this acquisition as a significant step in its evolution towards building a leading regional battery metal and nickel /cobalt business with material scale.
The Company also successfully completed its 2020 exploration programme at the Dempster Vanadium project in Yukon, Canada. Vanadium is another battery metal, where supply is not expected to be able to grow sufficiently to support forthcoming demand. The results highlight exceptionally good rock and soil samples, which, amongst other signs, indicate the presence and grade of the Canol Formation and enable good formation tracking. Preparation work is underway for a drill programme as part of a broader vanadium focused exploration programme in 2022.
The interests and potential combination of the Mambare and Wowo Gap assets provide a strong regional nickel-cobalt platform of scale, which is expected, together with the Dempster Vanadium exposure, to provide material upside to shareholders as global electric vehicle growth fuels increasing demand for nickel, cobalt and vanadium. The Company continues to explore further acquisitions in the battery metals space designed to broaden the Company's current exposure to substantially all of the key battery metals going forward.
Flexible Grid Solutions
Alongside the battery metals portfolio, the Company is also materially growing its UK based energy generation and storage portfolio.
The Company owns 100% of a 50MW battery storage project at Burwell, Cambridgeshire. In November 2021, the Company was informed by UK Power Networks of an extension of its 100MW grid connection offer at Burwell beyond December 2021 and also an extension of the Company's obligation to make any payment at that date. This extension in part reflects anticipated grid upgrade works that may be undertaken in the Burwell area, which, if confirmed, would affect all projects in the area and likely delay the connection date of the Burwell site and other such sites. The Company awaits further details regarding any works required and the revised connection date and associated payment schedule and the impact that may have on the Company's previously indicated target of 2022 for the project to become operational. Meanwhile, the Company continues to explore access to land and potential partnership arrangements for the project, including with the new site landowner.
In addition to its existing Burwell project, the Company announced in May 2021 the acquisition of a 40% interest in the "shovel ready" Tring Road 50MW gas peaking project outside of Aylesbury, approximately 40 miles northwest of London. The project has a 50MW grid connection already secured, allowing primarily export of electricity alongside a binding option to lease and planning permission. The consideration for the purchase was £400,000, which was satisfied by £150,000 cash and 12,026,168 new ordinary shares.
Also in May 2021, the Company announced the acquisition of exclusive rights over the "shovel ready" Avonmouth 50MW gas peaking project approximately 7 miles Northwest of Bristol. The greenfield site is located within an established industrial estate and comprising a total of 4.36 acres. Similar to the Tring Road project, the project has a 50MW grid connection, gas connection, planning permission and land rights. The Company has executed a Heads of Terms with FPC Electric Land and has committed to paying £72,000 in historic costs of the project at the time of execution of the Agreement for Lease over the site. If the project were to reach financial close, then a further £72,000 of historic costs would be payable out of the proceeds of the project funding that would then be in place.
The addition of the "shovel ready" Tring Road and Avonmouth projects to the existing Burwell project dramatically bolsters the Company's position in the increasingly competitive UK flexible energy space. We believe that gas peaking assets of this nature are essential to assist the transition to renewables and will provide significant trading margins given the variability of renewable energy production and the inherent volatility of UK energy demands, as repeatedly demonstrated in Q3 and Q4 2021.
The Company has been working since May 2021 to fund these peaker projects, which are seen as critical to the UK's transitional energy strategy, providing flexible energy supply to support the inherent volatility of the growing UK renewables supply, particularly wind and solar. It was announced after the year-end, in October and November 2021 that, following a comprehensive marketing process, Corcel is now in advanced discussions with select investors to fund both Tring Road and Avonmouth. This, if successful, would be hugely accretive for shareholders and validate the Company's flexible grid solutions strategy and the prospects for projects currently at early stages of development.
These energy storage and production projects, with their low-risk near-term cash flow potential, will offer Corcel investors an attractive balance to the significant blue-sky upside of the Company's battery metals projects and align Corcel with one of the most significant global energy trends in the world today.
Finances
On 26 October 2020, the Company announced that it had raised £750,000 at a price of £0.01 per share. Subsequently, on 18 February 2021, the Company announced it had agreed a funding package of equity and debt, raising £300,000 from the issuance of 24,000,000 shares a price of £0.0125 per share. The Company also issued 48,000,000 two-year warrants exercisable at £0.02 per share. The debt element of the funding included a £300,000 unsecured loan facility to be drawn in 5 tranches. The loan plus a fixed coupon was repayable on 28 December 2021 and was repaid in full on 12 May 2021.
Also on 12 May 2021, the Company announced that it had agreed a new loan note to provide £500,000 through an unsecured loan facility to be drawn down in 5 tranches. The loan plus a fixed coupon of 8% was to be payable upon maturity, which is 31 April 2022.
Discussion of Results
The Group incurred a loss of £1.227 million in the period ended 31 June 2021. Finance costs over the year fell to £0.065 million, reflecting interest and finance fees (2020: £0.247million). Overall, administrative costs increased slightly for the year to £1.014 million (2020: £0.838 million).
Prospects
After a successful year with progress on all fronts we look forward to both further execution on our strategy and enhanced recognition of the compelling opportunities our portfolio of key battery metals and transitional energy production and storage assets offers investors.
Corcel remains committed to playing its role in the decarbonisation and electrification of the global economy, seeking to both create value for stakeholders, while enabling development of the clean energy economy.
James Parsons Scott Kaintz
Executive Chairman Chief Executive Officer
Results and Dividends
The Group made a loss after taxation of £1.227 million (2020: £1.482 million). The Directors do not recommend the payment of a dividend. The following financial statements are extracted from the audited financial statements, which were approved by the Board of Directors and authorised for issuance on 05 December 2021.
For further information, please contact:
Scott Kaintz 020 7747 9960 Corcel Plc CEO
James Joyce / Andrew de Andrade 0207 220 1666 WH Ireland Ltd NOMAD & Broker
Simon Woods 0207 3900 230 Vigo Consulting IR
This announcement contains inside information under Article 7 of Regulation (EU) 596/2014.
to the members of Corcel Plc
Opinion
We have audited the Financial Statements of Corcel Plc (the "Parent Company") and its subsidiaries (the "Group") for the year ended 30 June 2021, which comprise the Consolidated and Parent Company Statements of Financial Position, the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and notes to the Financial Statements, including a summary of 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 30 June 2021 and of the Group'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 and as applied in accordance with the provisions of the Companies Act 2006; and
· the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.
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 listed entities, 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.
Material Uncertainty Related to Going Concern
We draw attention to Note 1.2 in the Financial Statements, which indicates that the Group is reliant on securing further financing to meet committed expenditure requirements and working capital needs as they fall due. As stated in Note 1.2, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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 Company's ability to continue to adopt the going concern basis of accounting included a review of cash flow projections for a period up to 31 December 2022, providing challenge to key assumptions used.
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
We draw attention to Note 14, which discloses the debt instrument in Resource Mining Corporation Limited, purchased by the Company during the current and previous years and valued at £987,000 within the Financial Statements. The license relating to the Wowo Gap project, Resource Mining Corporation Limited's key project, remains under renewal as at the year end. The good standing of this licence is critical for project development and subsequent value extraction, which is key to the recoverability of the debt. Should the license not be renewed, an impairment may be required to the value of the debt as at 30 June 2021.
Our Application of Materiality
The materiality applied to the group Financial Statements was £122,000 (2021: £98,000), based on a percentage of net assets, as it is from these net assets that the Group seeks to deliver returns for shareholders, in particular the value of exploration and development projects the Group is interested in through its associates and joint ventures. Headline materiality for the Parent Company Financial Statements was set at £120,000 (2020: £97,500), based on a percentage of net assets. Performance materiality has been set at 80% (2020: 70%) of headline materiality, and the threshold for which we communicate errors to management has been set at 5%.
We apply the concept of materiality in both planning and performing the audit, and in evaluating the effect of misstatements. At the planning stage, materiality is used to determine the Financial Statement areas that are included within the scope of the audit and the extent of the sample sizes during the audit. Materiality has been reassessed during the fieldwork and closing stages of the audit, taking into consideration new information, which arose. No alterations were made to materiality either during or at the conclusion of the audit.
Our Approach to the Audit
In designing our audit, we looked at areas which deemed to involve significant judgement and estimation by the Directors, such as the key audit matter surrounding the carrying value of investments in joint ventures and associates, and receivables from other Group Companies. Other judgemental areas are the accounting treatment and valuation of financial assets, including the debt instrument purchased during the year, as well as the valuation of share-based payment transactions. We also addressed the risk of management override of controls, including consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
Work on all significant components of the Group has been performed by us as Group auditor.
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. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.
|
Key Audit Matter |
How Our Scope Addressed this Matter |
|
Carrying value of Investments in Joint Ventures and Associates and Intragroup Balances (Notes 11 and 14)
Investments in joint ventures and associates, and receivables from other Group Companies, are the most significant balances in the financial statements and the recoverability of these balances involves judgement.
The Group and Company own a 50% interest in DVY196 Holdings Corp, and a 41% interest in Oro Nickel JV entity as at 30 June 2021, both of which have material value in the Financial Statements.
Given the continuing losses in these entities, and delays in advancing developments at the underlying projects, there is a risk that the investment and any associated receivable balances cannot be recovered and that the balances should be impaired.
|
Our work in this area included: · Review of management's assessment of recoverability of intragroup receivables in accordance with IFRS 9 criteria; · Consideration of recoverability of investments and intragroup loans by reference to underlying net asset values, including the recoverability potential of the underlying exploration projects (Mambare Nickel-Cobalt Project; Dempster Vanadium Project); · Review of Board impairment papers in respect of investments, including challenge and obtaining corroboration for key assumptions used; · Obtaining and reviewing any relevant agreements relating to investments (shareholder agreements; JV agreements; license agreements etc) to ensure all terms are complied with; and · Review of disclosures made in respect of these balances in accordance with IFRS.
We draw attention to the fact that the exploration license held by Oro Nickel JV in respect of the Mambare project remains under renewal and the mining license applied for has yet to be granted. If these applications were to be unsuccessful, this may result in an impairment to the carrying value of the investment in JV. |
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 on 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 Group and Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
· the financial statements are not in agreement with the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the statement of Directors Responsibilities, 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 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 in this regard through discussions with management. We also selected a specific audit team based on experience with auditing entities within this industry facing similar audit and business risks.
· We determined the principal laws and regulations relevant to the Group and Parent Company in this regard to be those arising from:
o AIM Rules
o UK employment law
o Local environmental and mining regulations
· 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. These procedures included, but were not limited to:
o Making enquiries of management;
o A review of Board minutes;
o A review of legal ledger accounts; and
o A review of RNS announcements.
· We also identified the risks of material misstatement of the Financial Statements due to fraud. Aside from the non-rebuttable presumption of a risk of fraud arising from management override of controls, we did not identify any significant fraud risks.
· 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, 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.
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.
Joseph Archer (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
05 December 2021
as at 30 June 2021
|
|
Notes |
30 June 2021 £'000 |
30 June 2020 £'000 |
|
ASSETS |
|
|
|
|
Non-current assets |
|
|
|
|
Investments in associates and joint ventures |
11 |
2,380 |
1,947 |
|
Property, plant and equipment |
|
62 |
- |
|
Goodwill |
10 |
- |
25 |
|
Financial instruments - fair value through other comprehensive income (FVTOCI) |
12 |
7 |
4 |
|
Financial instruments at fair value through profit and loss (FVTPL) |
13 |
72 |
- |
|
Other receivables |
14 |
1,362 |
1,690 |
|
Total non-current assets |
|
3,883 |
3,666 |
|
Current assets |
|
|
|
|
Cash and cash equivalents |
19 |
392 |
415 |
|
Financial instruments with fair value through profit and loss (FVTPL) |
13 |
- |
5 |
|
Trade and other receivables |
14 |
1,215 |
175 |
|
Total current assets |
|
1,607 |
595 |
|
Total assets |
|
5,490 |
4,261 |
|
EQUITY AND LIABILITIES |
|
|
|
|
Equity attributable to owners of the Parent |
|
|
|
|
Called up share capital |
17 |
2,746 |
2,726 |
|
Share premium account |
17 |
24,161 |
23,032 |
|
Shares to be issued |
17 |
75 |
- |
|
Other reserves |
|
2,018 |
908 |
|
Retained earnings |
|
(24,630) |
(23,403) |
|
Total equity attributable to owners of the Parent |
|
4,370 |
3,263 |
|
Non-Controlling interests |
|
- |
13 |
|
Total equity |
|
4,370 |
3,276 |
|
LIABILITIES |
|
|
|
|
Non-current liabilities |
|
|
|
|
Lease liability |
|
- |
30 |
|
Long-term borrowings |
15 |
- |
760 |
|
Total non-current liabilities |
|
- |
790 |
|
Current liabilities |
|
|
|
|
Trade and other payables |
15 |
237 |
183 |
|
Lease liability |
|
- |
12 |
|
Short-term borrowings |
15 |
883 |
- |
|
Total current liabilities |
|
1,120 |
195 |
|
Total equity and liabilities |
|
5,490 |
4,261 |
The accompanying notes form an integral part of these Financial Statements.
These Financial Statements, were approved by the Board of Directors and authorised for issue on 05 December 2021 and are signed on its behalf by:
James Parsons
Executive Chairman
for the year ended 30 June 2021
|
|
Notes |
Year to 30 June 2021 £'000 |
Year to 30 June 2020 £'000 |
|
|
|
|
|
|
Gain on sale of financial instruments designated as FVTPL |
|
(5) |
- |
|
Exploration expenses |
|
- |
(205) |
|
Project expenses |
|
(121) |
- |
|
Impairment of investments in joint ventures |
11 |
- |
- |
|
Impairment of goodwill |
|
(25) |
(106) |
|
Impairment of right-of-use asset |
|
- |
(41) |
|
Impairment of loans and receivables |
|
- |
(37) |
|
Administrative expenses |
4 |
(1,014) |
(838) |
|
Foreign currency loss |
|
- |
(26) |
|
Other income |
|
9 |
21 |
|
Finance costs, net |
5 |
(65) |
(247) |
|
Share of loss of associates and joint ventures |
11 |
(6) |
(3) |
|
Loss for the year before taxation |
3 |
(1,227) |
(1,482) |
|
Taxation |
|
- |
- |
|
Loss for the year |
|
(1,227) |
(1,482) |
|
Loss per share attributable to: |
|
|
|
|
Equity holders of the Parent |
|
(1,227) |
(1,477) |
|
Non-controlling interest |
|
- |
(5) |
|
|
|
(1,227) |
(1,482) |
|
|
|||
|
Earnings per share attributable to owners of the Parent*: |
|||
|
Basic |
9 |
(1) pence |
(2) pence |
|
Diluted |
9 |
(1) pence |
(2) pence |
for the year ended 30 June 2021
|
|
30 June 2021 £'000 |
30 June 2020 £'000 |
|
Loss for the year |
(1,227) |
(1,482) |
|
Other comprehensive income |
|
|
|
Items that will be not be reclassified subsequently to profit or loss |
|
|
|
Revaluation of FVTOCI investments |
3 |
(42) |
|
Unrealised foreign currency gain/(loss) on translation of foreign operations |
- |
16 |
|
Total other comprehensive income for the year |
3 |
(26) |
|
Total comprehensive loss for the year |
(1,224) |
(1,508) |
|
Total comprehensive loss attributable to: |
|
|
|
|
Equity holders of the Parent |
|
(1,224) |
(1,503) |
|
Non-controlling interest |
|
- |
(5) |
|
|
|
(1,224) |
(1,508) |
All of the Group's operations are considered to be continuing.
The accompanying notes form an integral part of these Financial Statements.
for the year ended 30 June 2021
The movements in equity during the year were as follows:
|
|
Share capital £'000 |
Share premium account £'000 |
Shares to be issued £'000 |
Retained earnings £'000 |
Other reserves £'000 |
Total Equity attributable to owners of the Parent £'000 |
Non-controlling interests £'000 |
Total Equity £'000 |
|
As at 1 July 2019 |
1,999 |
21,113 |
|
(20,960) |
(329) |
1,823 |
18 |
1,841 |
|
Changes in equity for 2020 |
|
|
|
|
|
|
- |
|
|
Loss for the year |
- |
- |
- |
(1,477) |
- |
(1,477) |
(5) |
(1,482) |
|
Acquisition of new subsidiary (Note 10) |
- |
- |
- |
- |
- |
- |
12 |
12 |
|
Partner buy-out on a subsidiary (Note 10) |
- |
- |
- |
- |
- |
- |
(12) |
(12) |
|
Transfer of FVTOCI reserve in relation to impaired assets (Note 12) |
- |
- |
- |
(400) |
400 |
- |
- |
- |
|
Other comprehensive income for the year |
|
|
|
|
|
|
|
|
|
Revaluation of FVTOCI investments |
- |
- |
- |
- |
(42) |
(42) |
- |
(42) |
|
Transfer of FVTOCI revaluation reserve in relation to disposals |
- |
- |
- |
(567) |
567 |
- |
- |
- |
|
Unrealised foreign currency gain arising on re-translation of foreign operations |
- |
- |
- |
- |
16 |
16 |
- |
16 |
|
Total comprehensive income for the year |
- |
- |
- |
(567) |
541 |
(26) |
-
|
(26) |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
Issue of shares |
727 |
2,228 |
- |
- |
- |
2,955 |
- |
2,955 |
|
Share issue costs |
- |
(309) |
- |
- |
273 |
(36) |
- |
(36) |
|
Share options granted during the year |
- |
- |
- |
- |
23 |
23 |
- |
23 |
|
Total transactions with owners |
727 |
1,919 |
- |
- |
296 |
2,942 |
- |
2,942 |
|
As at 1 July 2020 |
2,726 |
23,032 |
- |
(23,403) |
908 |
3,263 |
13 |
3,276 |
|
Changes in equity for 2021 |
|
|
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(1,227) |
- |
(1,227) |
- |
(1,227) |
|
Acquisition of non controlling interests |
- |
- |
- |
- |
- |
- |
(13) |
(13) |
|
Other comprehensive income for the year |
|
|
|
|
|
|
|
|
|
Revaluation of FVTOCI investments |
- |
- |
- |
- |
3 |
3 |
- |
3 |
|
Total comprehensive income for the year |
- |
- |
|
(1,227) |
3 |
(1,224) |
(13) |
(1,237) |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
Issue of shares |
20 |
2,287 |
- |
- |
- |
2,307 |
- |
2,307 |
|
Shares to be issued |
- |
- |
75 |
- |
- |
75 |
- |
75 |
|
Share issue costs |
- |
(51) |
- |
- |
- |
(51) |
- |
(51) |
|
Warrants issued |
- |
(1,107) |
- |
- |
1,107 |
- |
- |
- |
|
Total transactions with owners |
20 |
1,129 |
75 |
- |
1,107 |
2,331 |
- |
2,331 |
|
As at 30 June 2021 |
2,746 |
24,161 |
75 |
(24,630) |
2,018 |
4,370 |
- |
4,370 |
See Note 16 for a description of each reserve included above.
|
Other reserves
|
FVTOCI financial asset reserve £'000 |
Share-based payment reserve £'000 |
Warrant reserve £'000 |
Foreign currency translation reserve £ |
Total other reserves £ |
|
As at 1 July 2019 |
(924) |
76 |
- |
519 |
(329) |
|
Revaluation of FVTOCI investments |
(42) |
- |
- |
- |
(42) |
|
Transfer of FVTOCI reserve relating to impaired assets and disposals |
967 |
- |
- |
- |
967 |
|
Share options granted during the year |
- |
23 |
- |
- |
23 |
|
Warrants granted during the year |
- |
- |
273 |
- |
273 |
|
Unrealised foreign currency gain on translation of foreign operations |
- |
- |
- |
16 |
16 |
|
As at 1 July 2020 |
1 |
99 |
273 |
535 |
908 |
|
Revaluation of FVTOCI investments |
3 |
- |
- |
- |
3 |
|
Warrants granted during the year |
- |
- |
1,107 |
- |
1,107 |
|
As at 30 June 2021 |
4 |
99 |
1,380 |
535 |
2,018 |
See Note 16 for a description of each reserve included above.
for the year ended 30 June 2021
|
|
Year to 30 June 2021 £ |
Year to 30 June 2020 £ |
|
Cash flows from operating activities |
|
|
|
Loss before taxation |
(1,227) |
(1,482) |
|
Increase in receivables |
(53) |
(28) |
|
Increase in payables |
374 |
78 |
|
Decrease in lease liabilities |
(42) |
|
|
Share-based payments |
- |
63 |
|
Currency adjustments |
- |
26 |
|
Finance cost, net (Note 5) |
65 |
247 |
|
Gain on sale of FVTPL investments |
(5) |
- |
|
Share of loss in associates and joint ventures, net of tax (Note 11) |
(6) |
(3) |
|
Impairment of goodwill related to FGO (Note 10) |
- |
106 |
|
Impairment of goodwill related to WDD |
25 |
- |
|
Impairment of right-of-use asses |
- |
41 |
|
Impairment of loans and receivables |
- |
37 |
|
Net cash outflow from operations |
(869) |
(909) |
|
Cash flows from investing activities |
|
|
|
Proceeds from sale of FVTOCI and FVTPL investments (Note 12 and 13) |
14 |
109 |
|
Purchase of financial assets carried at amortised cost (Note 14) |
(355) |
(220) |
|
Purchase of property, plant and equipment |
(62) |
- |
|
Acquisition of a new subsidiary (Note 10) |
- |
(34) |
|
Acquisition of non controlling interest |
(15) |
- |
|
Payments for investments in associates and joint ventures (Note 11) |
(183) |
(5) |
|
Net cash (outflow)/inflow from investing activities |
(601) |
(150) |
|
Cash inflows from financing activities |
|
|
|
Proceeds from issue of shares net of issue costs |
1,382 |
1,439 |
|
Interest paid (Note 21) |
- |
(5) |
|
Proceeds of new borrowings, as received net of associated fees (Note 21) |
65 |
7 |
|
Repayment of borrowings (Note 21) |
- |
(30) |
|
Net cash inflow from financing activities |
1,447 |
1,410 |
|
Net (decrease)/increase in cash and cash equivalents |
(23) |
351 |
|
Cash and cash equivalents at the beginning of period |
415 |
64 |
|
Cash and cash equivalents at end of period |
392 |
415 |
Major non-cash transactions are disclosed in Note 21.
The accompanying notes and accounting policies form an integral part of these Financial Statements.
Corcel Plc (Registration Number: 05227458)
as at 30 June 2021
|
|
Notes |
30 June 2021 £ |
30 June 2020 £ |
|
ASSETS |
|
|
|
|
Non-current assets |
|
|
|
|
Investments in subsidiaries |
10 |
- |
- |
|
Investments in associates and joint ventures |
11 |
2,501 |
2,067 |
|
Financial assets with fair value through other comprehensive income (FVTOCI) |
12 |
7 |
4 |
|
Financial instruments with fair value through profit and loss (FVTPL) |
|
72 |
- |
|
Other receivables |
14 |
1,379 |
1,740 |
|
Total non-current assets |
|
3,959 |
3,811 |
|
Current assets |
|
|
|
|
Cash and cash equivalents |
19 |
387 |
389 |
|
Trade and other receivables |
14 |
1,148 |
175 |
|
Total current assets |
|
1,535 |
564 |
|
Total assets |
|
5,494 |
4,375 |
|
EQUITY AND LIABILITIES |
|
|
|
|
Called up share capital |
17 |
2,746 |
2,726 |
|
Share premium account |
17 |
24,161 |
23,032 |
|
Shares to be issued |
17 |
75 |
- |
|
Other reserves |
|
1,483 |
373 |
|
Retained earnings |
|
(24,065) |
(22,698) |
|
Total equity |
|
4,440 |
3,433 |
|
LIABILITIES |
|
|
|
|
Non-current liabilities |
|
|
|
|
Long-term borrowings |
15 |
- |
760 |
|
Total non-current liabilities |
|
- |
760 |
|
Current liabilities |
|
|
|
|
Trade and other payables |
15 |
211 |
182 |
|
Short-term borrowings |
15 |
883 |
- |
|
Total current liabilities |
|
1,094 |
182 |
|
Total equity and liabilities |
|
5,494 |
4,375 |
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the financial year was £1,366,448 (2020: loss of £1,949,687). The Company's Total comprehensive loss for the financial year was £1,363,300 (2020: loss £1,991,647).
These Financial Statements were approved by the Board of Directors and authorised for issue on 05 December 2021 and are signed on its behalf by:
James Parsons
Executive Chairman
The accompanying notes form an integral part of these Financial Statements.
for the year ended 30 June 2021
The movements in reserves during the year were as follows:
|
|
Share capital £'000 |
Share premium account £'000 |
Shares to be issued £'000 |
Retained earnings £'000 |
Other reserves £'000 |
Total equity £'000 |
|
As at 30 June 2019 |
1,999 |
21,113 |
- |
(20,181) |
(448) |
2,483 |
|
Changes in equity for 2020 |
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(1,950) |
- |
(1,950) |
|
Other comprehensive income for the year |
|
|
|
|
|
|
|
Revaluation of FVTOCI investments |
- |
- |
- |
- |
(42) |
(42) |
|
Transfer of FVTOCI reserve relating to impaired assets and disposals |
- |
- |
- |
(567) |
567 |
- |
|
Total comprehensive income for the year |
- |
- |
- |
(567) |
525 |
(42) |
|
Transactions with owners |
|
|
|
|
|
|
|
Issue of shares |
727 |
2,228 |
- |
- |
- |
2,955 |
|
Share issue and fundraising costs |
- |
(309) |
- |
- |
273 |
(36) |
|
Share options granted during the year |
- |
- |
- |
- |
23 |
23 |
|
Total transactions with owners |
727 |
1,919 |
- |
- |
296 |
2,942 |
|
As at 1 July 2020 |
2,726 |
23,032 |
- |
(22,698) |
373 |
3,433 |
|
Changes in equity for 2021 |
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(1,367) |
- |
(1,367) |
|
Other comprehensive income for the year |
|
|
|
|
|
|
|
Revaluation of FVTOCI investments |
- |
- |
- |
- |
3 |
3 |
|
Total comprehensive income for the year |
- |
- |
- |
(1,367) |
3 |
(1,364) |
|
Transactions with owners |
|
|
|
|
|
|
|
Issue of shares |
20 |
2,287 |
- |
- |
- |
2,307 |
|
Shares to be issued |
- |
- |
75 |
- |
- |
75 |
|
Share issue and fundraising costs |
- |
(51) |
- |
- |
- |
(51) |
|
Share warrants granted during the year |
- |
(1,107) |
- |
- |
1,107 |
- |
|
Total transactions with owners |
20 |
1,129 |
75 |
- |
1,107 |
2,331 |
|
As at 30 June 2021 |
2,746 |
24,161 |
75 |
(24,065) |
1,483 |
4,400 |
|
Other reserves |
FVTOCI financial asset reserve £'000 |
Share-based payment reserve £'000 |
Warrants reserve £'000 |
Total other reserves £'000 |
|
As at 30 June 2019 |
(524) |
76 |
- |
(448) |
|
Changes in equity for 2020 |
|
|
- |
|
|
Other comprehensive income for the year |
|
|
- |
|
|
Revaluation of FVTOCI investments |
(42) |
- |
- |
(42) |
|
Transfer of FVTOCI reserve relating to impaired assets and disposals |
567 |
- |
- |
567 |
|
Share options granted during the year |
- |
23 |
- |
23 |
|
Warrants issued during the year |
- |
- |
273 |
273 |
|
Total Other comprehensive (expenses) / income |
525 |
23 |
273 |
821 |
|
As at 1 July 2020 |
1 |
99 |
273 |
373 |
|
Changes in equity for 2021 |
|
|
|
|
|
Other comprehensive income for the year |
|
|
|
|
|
Revaluation of FVTOCI investments |
3 |
- |
- |
3 |
|
Transfer of FVTOCI reserve relating to impaired assets and disposals |
- |
- |
- |
- |
|
Share options granted during the year |
- |
- |
- |
- |
|
Warrants issued during the year |
- |
- |
1,107 |
1,107 |
|
Total Other comprehensive expenses |
3 |
- |
1,107 |
1,110 |
|
As at 30 June 2021 |
4 |
99 |
1,380 |
1,483 |
See Note 16 for a description of each reserve included above.
for the year ended 30 June 2020
|
|
Year to 30 June 2021 £'000 |
Year to 30 June 2020 £'000 |
|
Cash flows from operating activities |
|
|
|
Loss before taxation |
(1,366) |
(1,950) |
|
Increase in receivables |
13 |
(30) |
|
Increase/(decrease) in payables |
377 |
92 |
|
Share-based payments |
- |
63 |
|
Finance income |
65 |
247 |
|
Currency gains |
- |
26 |
|
Impairment of loans and receivables |
- |
678 |
|
Net cash outflow from operations |
(911) |
(874) |
|
Cash flows from investing activities |
|
|
|
Payments for investments in associates and joint ventures |
(183) |
(5) |
|
Purchase of financial assets carried at amortised cost |
(355) |
(220) |
|
Payments made on behalf of subsidiaries |
- |
(66) |
|
Proceeds from sale of FVTOCI financial instruments |
- |
109 |
|
Net cash (outflow)/inflow from investing activities |
(538) |
(182) |
|
Cash inflows from financing activities |
|
|
|
Proceeds from issue of shares, net of issue costs |
1,382 |
1,439 |
|
Interest paid (Note 21) |
- |
(5) |
|
Proceeds of new borrowings (Note 21) |
65 |
7 |
|
Repayments of borrowings (Note 21) |
- |
(30) |
|
Net cash inflow from financing activities |
1,447 |
1,411 |
|
Increase in cash and cash equivalents |
(2) |
355 |
|
Cash and cash equivalents at the beginning of period |
389 |
34 |
|
Cash and cash equivalents at end of period |
387 |
389 |
Major non-cash transactions are disclosed in Note 21.
The accompanying notes and accounting policies form an integral part of these Financial Statements.
1. Principal Accounting Policies
1.1 Authorisation of Financial Statements and Statement of Compliance with IFRS
The Group Financial Statements of Corcel Plc (the "Company", "Corcel" or the "Parent Company"), for the year ended 30 June 2021, were authorised for issue by the Board on 05 December 2021 and signed on the Board's behalf by James Parsons. Corcel Plc is a public limited company, incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on AIM.
1.2 Basis of Preparation
The Financial Statements have been prepared in accordance with international accounting standards ('IFRS') in conformity with the requirements of the Companies Act 2006. They are presented in thousand Pounds Sterling (£'000), unless stated otherwise.
The principal accounting policies adopted are set out below.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the Group remains a going concern. At 30 June 2021, the Group had cash and cash equivalents of £0.392 million and £0.818 million of borrowings and, as at the date of signing these Financial Statements, the cash balance was £0.341 million. Current borrowings of £729,000 of principal are due 23 December 2021 and at time of publication of this report are in the process of being refinanced to December 2022. The Directors anticipate having to raise additional funding over the course of the financial year.
Having considered the prepared cashflow forecasts and the Group budgets, which includes the possibility of Directors reducing or foregoing their salaries if required, the progress in activities post year-end, including the anticipated fundraising of £390,000, the Directors consider that they will have access to adequate resources in the 12 months from the date of the signing of these Financial Statements. As a result, they consider it appropriate to continue to adopt the going concern basis in the preparation of the Financial Statements, with the understanding that there is no certainty that required fundraisings during the year will be successful.
Should the Group be unable to continue trading as a going concern, adjustments would have to be made to reduce the value of the assets to their recoverable amounts, to provide for further liabilities, which might arise, and to classify non-current assets as current. The Financial Statements have been prepared on the going concern basis and do not include the adjustments that would result if the Group was unable to continue as a going concern. Due to the factors described above, a material uncertainty exits, which may cast significant doubt on the Group and the Company's ability to act as a going concern. The auditors have made reference to this within their Audit Report.
The auditors have made reference to going concern within their audit report by way of a material uncertainty.
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the financial year was £1.366 million (2020: loss of £1.949 million). The Company's other comprehensive loss for the financial year was £1.363 million (2020: loss £1.991 million).
New Standards, Amendments and Interpretations
The Group and Parent Company have adopted all of the new and amended standards and interpretations issued by the International Accounting Standards Board that are relevant to its operations and effective for accounting periods commencing on or after 1 July 2020.
The following new IFRS standards and / or amendments to IFRS standards were adopted for the first time during the year, none of which had a material impact on the financial statements:
· Amendments to IFRS 3: Business Combinations (effective 1 January 2020);
· Amendments to IAS 1 and IAS 8: Definition of Material (effective 1 January 2020);
· Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Rate Benchmark Reform (effective 1 January 2020).
No standards or Interpretations, that came into effect for the first time for the financial year beginning 1 July 2020, have had an impact on the Group or Company.
New Standards, Amendments and Interpretations Not Yet Adopted
At the date of approval 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:
· Amendments to IAS 1: Presentation of Financial Statements - Classification of Liabilities as Current or Non-current (effective date not yet confirmed);
· Amendments to IFRS 3: Business Combinations - Reference to Conceptual Framework (effective 1 January 2022);
· Amendments to IAS 16: Property, Plant and Equipment (effective 1 January 2022);
· Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets (effective 1 January 2022);
· Annual Improvements to IFRS Standards 2018-2020 Cycle (effective 1 January 2022);
· Amendments to IAS 8: Accounting Policies, Changes to Accounting Estimates and Errors (effective date not yet confirmed);
· Amendments to IAS 12: Income Taxes - Deferred Tax arising from a Single Transaction (effective date not yet confirmed).
The effect of these new and amended Standards and Interpretations, which are in issue but not yet mandatorily effective, is not expected to be material.
Standards Adopted Early by the Group
The Group has not adopted any standards or interpretations early in either the current or the preceding financial year.
1.3 Basis of Consolidation
The consolidated Financial Statements of the Group incorporate the Financial Statements of the Company and entities controlled by the Company, its subsidiaries, made up to 30 June each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain economic benefits from their activities. Subsidiaries are consolidated from the date on which control is obtained, the acquisition date, until the date that control ceases. They are deconsolidated from the date on which control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, contingent consideration and liabilities incurred or assumed at the date of exchange. Costs, directly attributable to the acquisition, are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date.
Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the acquisition date about facts or circumstances existing at the acquisition date. Other changes in provisional fair values are recognised through profit or loss.
Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated on consolidation, except to the extent that intra-group losses indicate an impairment.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the Consolidated Statement of Comprehensive Income. Any impairment recognised for goodwill is not reversed.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:
· derecognises the assets (including goodwill) and liabilities of the subsidiary;
· derecognises the carrying amount of any non-controlling interest;
· derecognises the cumulative translation differences recorded in equity;
· recognises the fair value of the consideration received;
· recognises the fair value of any investment retained;
· recognises any surplus or deficit in profit or loss; and
· reclassifies the Parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.
Non-Controlling Interests
Profit or loss and each component of other comprehensive income are allocated between the Parent and non-controlling interests, even if this results in the non-controlling interest having a deficit balance.
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions. Any differences between the adjustment for the non-controlling interest and the fair value of consideration paid or received are recognised in equity.
1.4 Summary of Significant Accounting Policies
1.4.1 Investment in Associates
An associate is an entity over which the Company is in a position to exercise significant influence, but not control or jointly control, through participation in the financial and operating policy decisions of the investee.
Investments in associates are recognised in the Consolidated Financial Statements, using the equity method of accounting. The Group's share of post-acquisition profits or losses is recognised in profit or loss and its share of post-acquisition movements in other comprehensive income are recognised directly in other comprehensive income. The carrying value of the investment, including goodwill, is tested for impairment when there is objective evidence of impairment. Losses in excess of the Group's interest in those associates are not recognised unless the Group has incurred obligations or made payments on behalf of the associate.
Where a Group company transacts with an associate of the Group, unrealised gains are eliminated to the extent of the Group's interest in the relevant associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment.
Where the Company's holding in an associate is diluted, the Company recognises a gain or loss on dilution in profit and loss. This is calculated as the difference between the Company's share of proceeds received for the dilutive share issue and the value of the Company's effective disposal.
In the Company accounts investments in associates are recognised and held at cost. The carrying value of the investment is tested for impairment, when there is objective evidence of impairment. Impairment charges are included in the Company Statement of Comprehensive Income.
1.4.2 Interests in Joint Ventures
A joint venture is a joint arrangement, whereby the partners, who have joint control of the arrangement, have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of the joint arrangement, which exists only when decisions on relevant activities require the unanimous consent of the parties sharing control. The Group recognises its interest in the entity's assets and liabilities, using the equity method of accounting. Under the equity method, the interest in the joint venture is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of its net assets, less distributions received and less any impairment in value of individual investments. The Group Income Statement reflects the share of the jointly controlled entity's results after tax.
Any goodwill arising on the acquisition of a jointly controlled entity is included in the carrying amount of the jointly controlled entity and is not amortised. To the extent that the net fair value of the entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised and added to the Group's share of the entity's profit or loss in the period in which the investment is acquired.
Financial Statements of the jointly controlled entity will be prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies used into line with those of the Group and to reflect impairment losses where appropriate. Adjustments are also made in the Group's Financial Statements to eliminate the Group's share of unrealised gains and losses on transactions between the Group and its jointly controlled entity. The Group ceases to use the equity method on the date from which it no longer has joint control over, or significant influence in, the joint venture.
At 30 June 2021, the Group had following contractual arrangements, which were classified as investments in associates and joint ventures:
· Oro Nickel Ltd, a contractual arrangement with Battery Metals Pty Ltd, which represents a joint venture established through an interest in a jointly controlled entity, in order to develop and exploit the Mambare nickel project;
· DVY196 Holdings Corp ("DVY"), 50% interest in a North American vanadium project;
· ARL 021 Limited, a 40% interest in the Tring Road 50MW gas peaker project.
1.4.3 Taxation
Corporation tax payable is provided on taxable profits at the prevailing UK tax rate. The tax expense represents the sum of the current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition, other than in a business combination, of other assets and liabilities in a transaction, which affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax relates to income tax levied by the same tax authorities on either:
· the same taxable entity; or
· different taxable entities, which intend to settle current tax assets and liabilities on a net basis or to realise and settle them simultaneously in each future period when the significant deferred tax assets and liabilities are expected to be realised or settled.
1.4.4 Property, Plant and Equipment
Property, plant and equipment acquired and identified as having a useful life that exceeds one year is capitalised at cost and is depreciated on a straight-line basis at annual rates that will reduce book values to estimated residual values over their anticipated useful lives as follows:
Office furniture, fixtures and fittings - 33% per annum
Leasehold improvements - 5% per annum
1.4.5 Foreign Currencies
Both the functional and presentational currency of Corcel Plc is Sterling (£). Each Group entity determines its own functional currency and items included in the Financial Statements of each entity are measured using that functional currency.
The functional currencies of the foreign subsidiaries and joint ventures are the Australian Dollar ("AUD"), the Papua New Guinea Kina ("PNG") and the US Dollar ("USD").
Transactions in currencies other than the functional currency of the relevant entity are initially recorded at the exchange rate prevailing on the dates of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the exchange rate prevailing at the reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date, when the fair value was determined. Gains and losses arising on retranslation are included in profit or loss for the period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in other comprehensive income, when the changes in fair value are recognised directly in other comprehensive income.
On consolidation, the assets and liabilities of the Group's overseas operations are translated into the Group's presentational currency at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates have fluctuated significantly during the year, in which case, the exchange rate at the date of the transaction is used. All exchange differences arising, if any, are recognised as other comprehensive income and are transferred to the Group's foreign currency translation reserve.
1.4.6 Exploration Assets
Exploration assets comprise exploration and evaluation costs, incurred on prospects at an exploratory stage. These costs include the cost of acquisition, exploration, determination of recoverable reserves, economic feasibility studies and all technical and administrative overheads directly associated with those projects. These costs are carried forward in the Statement of Financial Position as non-current intangible assets less provision for identified impairments. Costs associated with an exploration activity will only be capitalised if, in management's opinion, the results from that activity led to a material increase in the market value of the exploration asset, which is determined by management to be following the economic feasibility stage. Generally, costs associated with non-drilling activities, such as geophysical and geochemical surveys, are not capitalised.
Recoupment of exploration and development costs is dependent upon successful development and commercial exploitation of each area of interest and will be amortised over the expected commercial life of each area once production commences. The Group and the Company currently have no exploration assets, where production has commenced.
The Group adopts the "area of interest" method of accounting whereby all exploration and development costs, relating to an area of interest, are capitalised and carried forward until abandoned. In the event that an area of interest is abandoned, or if the Directors consider the expenditure to be of no value, accumulated exploration costs are written off in the financial year in which the decision is made. All expenditure incurred prior to approval of an application is expensed, with the exception of refundable rent, which is raised as a receivable.
Upon disposal, the difference between the fair value of consideration receivable for exploration assets and the relevant cost within non-current assets is recognised in the Income Statement.
1.4.7 Impairment of Non-Financial Assets
The carrying values of assets, other than those to which IAS 36 "Impairment of Assets" does not apply, are reviewed at the end of each reporting period for impairment, when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.
An impairment loss is recognised immediately in the Consolidated Statement of Comprehensive Income.
When there is a change in the estimates, used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.4.8 Share-Based Payments
Share Options
The Group operates equity-settled share-based payment arrangements, whereby the fair value of services provided is determined indirectly by reference to the fair value of the instrument granted.
The fair value of options granted to Directors and others, in respect of services provided, is recognised as an expense in the Income Statement with a corresponding increase in equity reserves - the share-based payment reserve until the award has been settled and then make a transfer to share capital. On exercise or lapse of share options, the proportion of the share-based payment reserve, relevant to those options is transferred to retained earnings. On exercise, equity is also increased by the amount of the proceeds received.
The fair value is measured at grant date and charged over the vesting period during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes model, taking into account the terms and conditions upon which the options were granted. The exercise price is fixed at the date of grant.
Non-market conditions are performance conditions that are not related to the market price of the entity's equity instruments. They are not considered, when estimating the fair value of a share-based payment. Where the vesting period is linked to a non-market performance condition, the Group recognises the goods and services it has acquired during the vesting period, based on the best available estimate of the number of equity instruments expected to vest. The estimate is reconsidered at each reporting date, based on factors such as a shortened vesting period, and the cumulative expense is "trued up" for both the change in the number expected to vest and any change in the expected vesting period.
Market conditions are performance conditions that relate to the market price of the entity's equity instruments. These conditions are included in the estimate of the fair value of a share-based payment. They are not taken into account for the purpose of estimating the number of equity instruments that will vest. Where the vesting period is linked to a market performance condition, the Group estimates the expected vesting period. If the actual vesting period is shorter than estimated, the charge is be accelerated in the period that the entity delivers the cash or equity instruments to the counterparty. When the vesting period is longer, the expense is recognised over the originally estimated vesting period.
For other equity instruments, granted during the year (i.e. other than share options), fair value is measured on the basis of an observable market price.
Share Incentive Plan
Where the shares are granted to the employees under Share Incentive Plan, the fair value of services provided is determined indirectly by reference to the fair value of the free, partnership and matching shares granted on the grant date. Fair value of shares is measured on the basis of an observable market price, i.e. share price as at grant date and is recognised as an expense in the Income Statement on the date of the grant. For the partnership shares, the charge is calculated as the excess of the mid-market price on the date of grant over the employee's contribution.
1.4.9 Pension
The Group operates a defined contribution pension plan, which requires contributions to be made to a separately administered fund. Contributions to the defined contribution scheme are charged to the profit and loss account as they become payable.
1.4.10 Finance Income/Expense
Finance income and expense is recognised as interest accrues, using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period, using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts/re-payments through the expected life of the financial asset or liability to the net carrying amount of the financial asset or liability.
1.4.11 Financial Instruments
The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. Other than financial assets in a qualifying hedging relationship, the Group's accounting policy for each category is as follows:
Fair Value through Profit or Loss (FVTPL)
This category comprises in-the-money derivatives and out-of-money derivatives, where the time value offsets the negative intrinsic value. They are carried in the Statement of Financial Position at fair value with changes in fair value recognised in the Consolidated Statement of Comprehensive Income in the finance income or expense line. Other than derivative financial instruments, which are not designated as hedging instruments, the Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.
Amortised Cost
These assets comprise the types of financial assets, where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost, using the effective interest rate method, less provision for impairment. Impairment provisions for current and non-current trade receivables are recognised, based on the simplified approach within IFRS 9, using a provision matrix in the determination of the lifetime expected credit losses. During this process, the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For the receivables, which are reported net, such provisions are recorded in a separate provision account, with the loss being recognised in the consolidated statement of comprehensive income. On confirmation that the receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Impairment provisions, for receivables from related parties and loans to related parties, are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those, where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the Consolidated Statement of Financial Position. Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and - for the purpose of the statement of cash flows - bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the Consolidated Statement of Financial Position.
Fair Value through Other Comprehensive Income (FVTOCI)
The Group held a number of strategic investments in listed and unlisted entities, which are not accounted for as subsidiaries, associates or jointly controlled entities. For those investments, the Group has made an irrevocable election to classify the investments at fair value through other comprehensive income rather than through profit or loss as the Group considers this measurement to be the most representative of the business model for these assets. They are carried at fair value with changes in fair value recognised in other comprehensive income and accumulated in the fair value through other comprehensive income reserve. Upon disposal any balance within fair value through other comprehensive income reserve is reclassified directly to retained earnings and is not reclassified to profit or loss.
Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment, in which case the full or partial amount of the dividend is recorded against the associated investments carrying amount.
Purchases and sales of financial assets, measured at fair value through other comprehensive income, are recognised on settlement date with any change in fair value between trade date and settlement date being recognised in the fair value through other comprehensive income reserve.
Financial Liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired:
Other Financial Liabilities
Other financial liabilities include:
· Borrowings, which are initially recognised at fair value net of any transaction costs, directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost, using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the Consolidated Statement of Financial Position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption as well as any interest or coupon payable, while the liability is outstanding.
· Liability components of convertible loan notes are measured as described further below.
· Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost, using the effective interest method.
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
· In the principal market for the asset or liability; or
· In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured, using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and, for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities, for which fair value is measured or disclosed in the Financial Statements, are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
· Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
· Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
· Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
More information is disclosed in Note 20.
1.4.12 Investments in the Company Accounts
Investments in subsidiary companies are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairments.
For acquisitions of subsidiaries or associates achieved in stages, the Company re-measures its previously held equity interests in the acquiree at its acquisition-date fair value and recognises the resulting gain or loss, if any, in profit or loss. Any gains or losses, previously recognised in other comprehensive income, are transferred to profit and loss.
Investments in associates and joint ventures are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairment.
1.4.13 Share Capital
Financial instruments, issued by the Group, are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Group's ordinary shares are classified as equity instruments.
1.4.14 Convertible Debt
The proceeds, received on issue of the Group's convertible debt, are allocated into their liability and equity components. The amount, initially attributed to the debt component, equals the discounted cash flows, using a market rate of interest that would be payable on a similar debt instrument that does not include an option to convert. Subsequently, the debt component is accounted for as a financial liability, measured at amortised cost until extinguished on conversion or maturity of the bond. The remainder of the proceeds is allocated to the conversion option and is recognised in the "Convertible debt option reserve" within shareholders' equity, net of income tax effects.
1.4.15 Warrants
Derivative contracts, that only result in the delivery of a fixed amount of cash or other financial assets for a fixed number of an entity's own equity instruments, are classified as equity instruments. Warrants, relating to equity finance and issued together with ordinary shares placement, are valued by residual method and treated as directly attributable transaction costs and recorded as a reduction of share premium account, based on the fair value of the warrants. Warrants, classified as equity instruments, are not subsequently re-measured (i.e., subsequent changes in fair value are not recognised).
1.4.16 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting, provided to the chief operating decision-maker as required by IFRS 8 "Operating Segments". The chief operating decision-maker, responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. The accounting policies of the reportable segments are consistent with the accounting policies of the Group as a whole. Segment profit/(loss) represents the profit/(loss) earned by each segment without allocation of foreign exchange gains or losses, investment income, interest payable and tax. This is the measure of profit that is reported to the Board of Directors for the purpose of resource allocation and the assessment of segment performance. When assessing segment performance and considering the allocation of resources, the Board of Directors review information about segment non-current assets. For this purpose, all non-current assets are allocated to reportable segments.
1.4.17 Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
· Leases of low value assets; and
· Leases with a duration of 12 months or less.
IFRS 16 was adopted 1 June 2019 without restatement of comparative figures.
On initial recognition, the carrying value of the lease liability also includes:
· amounts expected to be payable under any residual value guarantee;
· the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to assess that option;
· any penalties payable for terminating the lease if the term of the lease has been estimated on the basis of termination option being exercised.
Lease liabilities are subsequently measured at the present value of the contractual payments due to the lessor over the lease term.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received and increased for:
· lease payments made at or before commencement of the lease;
· initial direct costs incurred; and
· the amount of any provision recognised, where the Group is contractually required to dismantle, remove or restore the leased asset.
1.5 Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group's Consolidated Financial Statements, requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.
Significant Judgements and Accounting Estimates
In the process of applying the Group's accounting policies, management has made the following judgements and estimates, which have the most significant effect on the amounts recognised in the Consolidated Financial Statements:
Impairment of Investments in Associates and Joint Ventures
The carrying amount of investments in joint ventures is tested for impairment annually and this process is considered to be key judgement along with determining whenever events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable.
The continued progress at the Mambare nickel/cobalt project during the year, when considered alongside the increases in nickel prices, have encouraged the Board to continue to hold the value of its stake in the Mambare joint venture at the previous valuation of £1.77 million alongside a £1.3 million receivable.
The Company believes that the carrying values reflect the sizeable JORC resource and work done to date as well as the potential to progress the project to a mining license and Direct Shipping Ore "DSO" production in 2021 and beyond. During the year, the JV had a successful Warden's Hearing over the mining plans and was awarded the environmental permit, both key metrics prior to the award of a Mining Lease. The Company has assessed the viability of the project, given current and expected nickel prices and the anticipated cost of a DSO operation, and believes the project can be successfully taken into production in the mid-term. The Board further believes that the likelihood of recovery of the receivable has also increased over the past 12-24 months due to the progress made on the JV, and that full repayment of this figure is likely through either a disposal and trade sale prior to production or through dividends once the project begins shipping ore.
The Company, following a successful exploration season at the Dempster Vanadium project in Canada in 2020, believes it is prudent to hold this asset at cost pending decisions to conduct a follow-on exploration programme that may include a significant drill campaign.
At year-end the Company owned AUD 4.7m of senior debt in Resource Mining Corporation Limited ("RMI"), the purchase of which was completed on 17 November 2020. The cost of the acquisition of this position was £987,000 or AUD 1.8m. After the year-end on 12 August 2021, the Company announced that it had agreed to acquire a 100% interest in the Australian registered Niugini Nickel Pty Ltd ("Niugini Nickel"), which owned 100% of the Wowo Gap nickel-cobalt project in Papua New Guinea. As consideration for this acquisition, the Company released all liabilities and obligations in connection with its AUD 4.7m senior debt position. On 18 October 2021, the Company announced that it had completed the share purchase agreement with RMI to acquire the 100% interest in Niugini Nickel. As such, the Company believes that holding the cost of the debt at year end at the cost of acquisition is appropriate at this time and will ultimately reflect the fair value of the Wowo Gap project.
More information is disclosed in Note 11.
The Company acquired a 40% interest in ARL 021, which gave it partial ownership of the Tring Road gas peaker plant, immediately before the year end. Given the very short period of time prior to the year and the progress on funding Tring Road subsequent to the year end, the Company feels it is appropriate to retain the carrying value of this asset at cost. The Company has further decided to write-off its existing investment in Weirs Drove Development, owner of the Burwell Energy Storage project, as the project is currently working through potential delays relating to grid congestion and potential upgrades in the area. While the Burwell project may successfully progress to financial close, there remains uncertainty around the timeframe in which this is likely to occur.
The Company has also made judgements in respect of the success of licence renewals on the core projects.
Share-Based Payment Transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options is determined using the Black-Scholes model and the estimates used within this model are disclosed in Note 18.
Valuation of a receivable from Oro Nickel JV
The Directors believe that the receivable from the Oro Nickel Joint Venture will be fully recoverable in light of the project's ongoing progress towards a mining lease, supporting a shipping ore operation at the site. Substantial progress has been made on the mining lease application during the course of the year end, including a successful Warden's Hearing and the award of the critical Environmental Permit. While the existing exploration licenses remain under renewal at the year-end, the Company and the joint venture partners believe there remains a high likelihood of renewal, given ongoing dialogue with the PNG authorities, and would expect to have these renewed independently of any outcome of the mining lease application.
2. Segmental Analysis
Once the Group's main focus of operations becomes production of battery metal mineral resources or flexible production and storage of energy, the nature of management information, examined by the Board, will alter to reflect the need to monitor revenues, margins, overheads and trade balances as well as cash.
IFRS 8 requires the reporting of information about the revenues derived from the various areas of activity and the countries in which revenue is earned regardless of whether this information is used in by management in making operating decisions. Management determined that the most useful presentation of revenues and expenses came from an analysis by operational type as opposed to geographic representation due to the similar nature of the revenues and expenses when grouped in these categories.
|
Year to 30 June 2021 |
Battery Metals £'000 |
Flexible Grid Solutions (UK) £'000 |
Corporate and unallocated £'000 |
Total £'000 |
|
Revenue |
- |
- |
- |
- |
|
Management services |
- |
- |
- |
- |
|
Project expenses |
- |
(121) |
- |
(121) |
|
Exploration expenses |
- |
- |
- |
- |
|
Administrative expenses |
- |
- |
(1,014) |
(1,014) |
|
Impairment of right of use asset |
- |
- |
- |
-) |
|
Impairment of goodwill |
- |
(25) |
- |
(25) |
|
Currency (loss)/gain |
- |
- |
- |
- |
|
Share of profits in joint ventures |
(6) |
- |
- |
(6) |
|
Impairment of financial assets carried at amortised cost |
- |
- |
- |
- |
|
Loss on sale of financial instruments FVTPL |
- |
- |
(5) |
(5) |
|
Other income |
- |
- |
9 |
9 |
|
Finance cost - net |
- |
- |
(65) |
(65) |
|
Net (loss) before tax from continuing operations |
(6) |
(146) |
(1,075) |
(1,227) |
|
Year to 30 June 2020 |
Battery Metals £'000 |
Flexible Grid Solutions (UK) £'000 |
Corporate and unallocated £'000 |
Total £'000 |
|
Revenue |
- |
- |
- |
- |
|
Management services |
- |
- |
- |
- |
|
Management services |
- |
- |
- |
- |
|
Exploration expenses |
(178) |
- |
(27) |
(205) |
|
Administrative expenses |
- |
(21) |
(817) |
(838) |
|
Impairment of right of use asset |
- |
(41) |
- |
(41) |
|
Impairment of goodwill |
- |
(106) |
- |
(106) |
|
Currency (loss)/gain |
- |
- |
(26) |
(26) |
|
Share of profits in joint ventures |
(3) |
- |
- |
(3) |
|
Impairment of financial assets carried at amortised cost |
- |
- |
(37) |
(37) |
|
Other income |
- |
- |
21 |
21 |
|
Finance cost - net |
- |
- |
(247) |
(247) |
|
Net (loss) before tax from continuing operations |
(181) |
(168) |
(1,133) |
(1,482) |
Information by Geographical Area
Presented below is certain information by the geographical area of the Group's activities. Investment sales revenue and exploration property sales revenue are allocated to the location of the asset sold.
|
Year to 30 June 2021 |
UK £'000 |
Australia £'000 |
Papua New Guinea £'000 |
USA £'000 |
Canada £'000 |
Total £'000 |
|
Revenue |
- |
- |
- |
- |
- |
- |
|
Total segment revenue and other gains |
- |
- |
- |
- |
- |
- |
|
Non-current assets |
|
|
|
|
|
|
|
Investments in associates and joint ventures |
472 |
- |
1,654 |
- |
326 |
2,452 |
|
Goodwill |
- |
- |
- |
- |
- |
- |
|
Property, plant and equipment |
62 |
- |
- |
- |
- |
62 |
|
Receivable from a joint venture |
12 |
- |
1,349 |
- |
- |
1,351 |
|
Purchased debt |
- |
- |
987 |
- |
- |
987 |
|
FVTOCI financial instruments |
- |
- |
- |
- |
7 |
7 |
|
Total segment non-current assets |
546 |
- |
3,990 |
- |
333 |
4,869 |
|
Year to 30 June 2020 |
UK £'000 |
Australia £'000 |
Papua New Guinea £'000 |
USA £'000 |
Canada £'000 |
Total £'000 |
|
Revenue |
- |
- |
- |
- |
- |
- |
|
Total segment revenue and other gains |
- |
- |
- |
- |
- |
- |
|
Non-current assets |
|
|
|
|
|
|
|
Investments in associates and joint ventures |
- |
- |
1,654 |
- |
293 |
1,947 |
|
Goodwill |
25 |
- |
- |
- |
- |
25 |
|
Receivable from a joint venture |
- |
- |
1,323 |
- |
- |
1,323 |
|
Purchased debt |
- |
- |
367 |
- |
- |
367 |
|
FVTOCI financial instruments |
- |
- |
- |
- |
4 |
4 |
|
Total segment non-current assets |
25 |
- |
3,344 |
- |
297 |
3,666 |
3. Loss on Ordinary Activities Before Taxation
|
Group |
2021 £'000 |
2020 £'000 |
|
Loss on ordinary activities before taxation is stated after charging: |
|
|
|
Auditor's remuneration: |
|
|
|
- fees payable to the Company's auditor for the audit of consolidated and Company Financial Statements |
30 |
25 |
|
Directors' emoluments (Note 8) |
449 |
379 |
As declared in Note 8, Directors are remunerated in part by third parties with whom the Company and Group have contractual arrangements.
4. Administrative Expenses
|
|
Group 2021 £'000 |
Group 2020 £'000 |
Company 2021 £'000 |
Company 2020 £'000 |
|||
|
Staff costs |
|
|
|
|
|||
|
Payroll |
453 |
369 |
465 |
369 |
|||
|
Pension |
31 |
15 |
19 |
15 |
|||
|
Share-based payments |
- |
33 |
- |
33 |
|||
|
Consultants |
- |
32 |
- |
32 |
|||
|
Insurance |
2 |
1 |
1 |
1 |
|||
|
Employers NI |
50 |
36 |
50 |
36 |
|||
|
Professional services |
|
|
|
|
|||
|
Accounting |
67 |
72 |
65 |
69 |
|||
|
Legal |
33 |
15 |
33 |
15 |
|||
|
Business development |
25 |
1 |
2 |
1 |
|||
|
Marketing |
20 |
14 |
20 |
12 |
|||
|
Investor relations |
88 |
- |
80 |
- |
|||
|
Funding costs |
- |
42 |
- |
42 |
|||
|
Other |
- |
26 |
- |
25 |
|||
|
Regulatory compliance |
127 |
101 |
127 |
101 |
|||
|
Travel |
7 |
8 |
4 |
8 |
|||
|
Office and Admin |
|
|
|
|
|||
|
General |
21 |
(2) |
22 |
(5) |
|||
|
IT costs |
46 |
8 |
45 |
8 |
|||
|
Rent |
16 |
58 |
16 |
44 |
|||
|
Insurance |
28 |
9 |
28 |
9 |
|||
|
Total administrative expenses |
1,014 |
838 |
977 |
815 |
|||
5. Finance Costs, Net
|
Group |
2021 £'000 |
2020 £'000 |
|
Interest expense |
(65) |
(247) |
|
|
(65) |
(247) |
6. Taxation
|
|
2021 £'000 |
2020 £'000 |
|
Current period transaction of the Group |
|
|
|
UK corporation tax at 19.00% (2020: 19.00%) on profits for the period |
- |
- |
|
Deferred tax |
|
|
|
Origination and reversal of temporary differences |
- |
- |
|
Deferred tax assets derecognised |
- |
- |
|
Tax (credit) |
- |
- |
|
Factors affecting the tax charge for the year |
|
|
|
Loss on ordinary activities before taxation |
(1,227) |
(1,482) |
|
Loss on ordinary activities at the average UK standard rate of 19% (2020: 19.00%) |
(233) |
(282) |
|
Effect of non-deductible expense |
37 |
136 |
|
Effect of tax benefit of losses carried forward |
196 |
267 |
|
Tax losses brought forward |
- |
(121) |
|
Current tax (credit) |
- |
- |
Deferred tax amounting to £nil (2020: £nil), relating to the Group's investments was recognised in the Statement of Comprehensive Income. No deferred tax charge has been recognised due to uncertainty as to the timing of future profitability of the Group. Unutilised trading losses are estimated at circa £3,281 thousand (2020: £3,085) and capital losses estimated circa £nil (2020: £nil).
7. Staff Costs
The aggregate employment costs of staff for the Group (including Directors) for the year was:
|
|
2021 £'000 |
2020 £'000 |
|
Wages and salaries |
453 |
369 |
|
Pension |
31 |
15 |
|
Social security costs, net of allowances |
50 |
36 |
|
Medical costs |
2 |
1 |
|
Employee share-based payment charge |
- |
34 |
|
Total staff costs |
536 |
455 |
The average number of Group employees (including Directors) during the year was:
|
|
2021 Number |
2020 Number |
|
Directors |
4 |
4 |
|
Administration |
1 |
1 |
|
|
5 |
5 |
During the year, for all Directors and employees, who have been employed for more than three months, the Company contributed to a defined contributions pension scheme as described under Directors' remuneration in the Directors' Report and a Share Incentive Plan ("SIP") as described under Management incentives in the Directors' Report.
All emoluments presented for current and comparative years, except for pension, are short-term in nature.
8. Directors' Emoluments
|
2021 |
Directors' fees £'000 |
Consultancy fees £'000 |
Bonus £'000 |
Share Incentive Plan £'000 |
Pension contributions £'000 |
Short term benefits £'000 |
Total £'000 |
|
Executive Directors |
|
|
|
|
|
|
|
|
J Parsons* |
146 |
- |
14 |
- |
12 |
- |
172 |
|
S Kaintz |
175 |
- |
15 |
7 |
15 |
2 |
214 |
|
Non-executive Directors |
|
|
|
|
|
|
|
|
N Burton |
23 |
- |
- |
- |
- |
- |
23 |
|
E Ainsworth |
30 |
10 |
- |
- |
- |
- |
40 |
|
|
374 |
10 |
29 |
7 |
27 |
2 |
449 |
|
2020 |
Directors' fees £'000 |
Consultancy fees £'000 |
Bonus £'000 |
Share Incentive Plan £'000 |
Pension contributions £'000 |
Social security costs £'000 |
Total £'000 |
|
Executive Directors |
|
|
|
|
|
|
|
|
A R M Bell |
43 |
- |
- |
- |
1 |
- |
44 |
|
J Parsons* |
85 |
- |
- |
- |
- |
- |
85 |
|
S Kaintz |
145 |
- |
- |
7 |
11 |
2 |
165 |
|
Non-executive Directors |
|
|
|
|
|
|
|
|
N Burton |
45 |
- |
- |
- |
- |
- |
45 |
|
E Ainsworth |
17 |
23 |
- |
- |
- |
- |
40 |
|
|
335 |
23 |
- |
7 |
12 |
2 |
379 |
* Includes 8% pension contribution paid in cash as a part of gross salary.
The number of Directors, who exercised share options in year, was nil (2020: nil).
During the year, the Company contributed to a Share Incentive Plan, more fully described in the Directors' Report where shares were issued to each employee, including Directors, making a total of 14,717,790 (2020: 14,717,790) partnership and matching shares. Those shares were issued in relation to services provided by those employees during the reporting year.
9. Earnings per Share
The basic earnings/(loss) per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue. Diluted earnings/(loss) per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue plus the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.
|
|
|
2021 |
|
2020 |
|
|
|
Loss attributable to equity holders of the Parent Company, £'000 |
(1,227) |
|
(1,482) |
|
|
|
Weighted average number of ordinary shares of £0.0001 in issue, used for basic EPS, adjusted for 100:1 share consolidation |
279,406,266 |
|
75,338,810 |
|
|
|
Earnings per share - basic, pence |
(1) |
|
(2) |
|
|
|
Earnings per share - fully diluted, pence |
(1) |
|
(2) |
|
|
|
At 30 June 2021 and at 30 June 2020, the effect of all the instruments in issue is anti-dilutive as it would lead to a further reduction of loss per share, therefore, they were not included into the diluted loss per share calculation.
Options and warrants with conditions not met at the end of the period, that could potentially dilute basic EPS in the future, but were not included in the calculation of diluted EPS for the periods presented:
|
||||
|
|
|
2021 |
|
2020 |
|
|
|
(a) Share options granted to employees - total, of them |
6,212,534 |
|
6,212,534 |
|
|
|
- Vested at the end of reporting period |
122,900 |
|
122,900 |
|
|
|
- Not vested at the end of the reporting period |
6,089,634 |
|
6,089,634 |
|
|
|
(b) Number of warrants in issue |
170,399,328 |
|
60,839,078 |
|
|
|
Total number of contingently issuable shares that could potentially dilute basic earnings per share in future and anti-dilutive potential ordinary shares that were not included into the fully diluted EPS calculation |
182,824,396 |
|
67,051,612 |
|
There were no ordinary share transactions after 30 June 2021, that that could have changed the EPS calculations significantly if those transactions had occurred before the end of the reporting period.
10. Investments in Subsidiaries and Goodwill
|
Company |
Investments in subsidiaries 2021 £ |
Investments in subsidiaries 2020 £ |
Goodwill 2021 £'000 |
Goodwill 2020 £'000 |
|
Cost |
|
|
|
|
|
At 1 July 2019 and 1 July 2020 |
483 |
483 |
131 |
42 |
|
Additions |
- |
- |
- |
89 |
|
At 30 June 2021 and 30 June 2020 |
483 |
483 |
131 |
131 |
|
Impairment |
|
|
|
|
|
At 1 30 June 2021 and 30 June 2020 |
- |
- |
(131) |
(106) |
|
|
|
|
|
|
|
Net book amount at 30 June 2021 and at 30 June 2020 |
483 |
483 |
- |
25 |
The Parent Company of the Group holds more than 50% of the share capital of the following companies, the results of which are consolidated:
|
Company Name |
Country of registration |
Class |
Proportion held by Group |
Nature of business |
|
Regency Mines Australasia Pty Limited |
Australia |
Ordinary |
100% |
Mineral exploration |
|
Flexible Grid Solutions Limited (former ESTEQ Limited) |
UK |
Ordinary |
100% |
Holding company |
|
Flexible Grid One Limited (former Allied Energy Services Ltd (indirectly owned through ESTEQ Limited)) |
UK |
Ordinary |
100% |
Energy storage and trading and grid backup |
|
Weirs Drove Development Limited |
UK |
Ordinary |
100% |
Energy storage |
Regency Mines Australasia Pty Limited registered office is c/o Paragon Consultants PTY Ltd, PO Box 903, Claremont WA, 6910, Australia.
Regency Resources Inc registered office is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, United States of America.
Flexible Grid Solutions Limited registered office is Salisbury House, London Wall, London EC2M 5PS, United Kingdom.
Flexible Grid One Limited registered office is Salisbury House, London Wall, London EC2M 5PS, United Kingdom.
Weirs Drove Development Limited registered office is 20-22 Wenlock Road, London N1 7GU, United Kingdom.
Flexible Grid One Limited (FGO) (former Allied Energy Services Ltd (indirectly owned through Flexible Grid Solutions Limited))
On 10 November 2017, Corcel formed a 100% owned subsidiary, Flexible Grid Solutions Limited, to act as the vehicle for development of opportunities in the battery and energy storage technology sector across the UK. On 15 March 2018, Flexible Grid Solutions Limited committed to investing up to £250,000 into Flexible Grid One Limited, representing an 80% interest in that entity. Non-controlling shareholders brought with them a development pipeline, including land rights and connections for combined battery and gas and anaerobic digestion generation plants to be constructed and operated across the UK. On 3 January 2020, the Company announced the completion of a buy-out of the 20% minority shareholders in Flexible Grid One Limited through the issuance of 2,461,538 new ordinary shares in the Company. The investment in Flexible Grid One Limited was subsequently written off in the prior year.
Weirs Drove Development Limited (indirectly owned through Flexible Grid Solutions Limited)
On 19 June 2020, the Company announced an investment acquiring a 50% stake in Weirs Drove Development Limited, a developer of UK based energy storage and flexible production projects. The cost of the transaction was an initial investment and directly attributable acquisitions costs, totalling £37,750, with the agreement to extend a further £100,000, following the project meeting all shovel ready criteria. At year end, these conditions had not been met and so the Company will hold the project at the cost of the initial investment, pending further developments. Goodwill in the amount of £25,250 was recognised in relation to this acquisition and subsequently impaired to £nil as at 30 June 2021.
On 1 December 2020, the Company announced the acquisition of the remaining 50% interest in Weirs Drove Development Limited, thereby becoming the 100% owner of the Burwell project for consideration of £90,000. This total potential consideration was broken down into £15,000 payable in cash and £75,000 payable in new Corcel ordinary shares due at financial close of the initial 50MW of capacity of the Burwell project
11. Investments in Associates and Joint Ventures
|
|
Group |
|
Company |
|
Carrying balance |
£'000 |
|
£'000 |
|
At 1 July 2019 |
1,950 |
|
2,067 |
|
Additions |
(3) |
|
- |
|
Share of loss in joint venture |
- |
|
- |
|
Impairment of investment in associate |
- |
|
- |
|
At 30 June 2020 |
1,947 |
|
2,067 |
|
Additions |
439 |
|
439 |
|
Share of loss in joint venture |
(6) |
|
(6) |
|
Impairment of investment in associate |
- |
|
- |
|
Net book amount at 30 June 2021 |
2,380 |
|
2,500 |
At 30 June 2021, the Parent Company of the Group had a significant influence by virtue other than a shareholding of over 20% or had joint control through a joint venture contractual arrangement in the following companies:
|
Company Name |
Country of registration |
Class |
Proportion held by Group at 30 June 2021 |
Proportion held by Group at 30 June 2020 |
Status at 30 June 2021 |
Accounting year end |
|
Direct |
|
|
|
|
|
|
|
Oro Nickel Ltd (Held indirectly through |
Papua New Guinea |
Ordinary |
41% |
41% |
Active |
30 June 2021 |
|
DVY196 Holdings Corp |
UK |
Ordinary |
50% |
50% |
Active |
30 Sept 2021 |
|
ARL 021 Limited |
UK |
Ordinary |
40% |
0% |
Active |
31 July 2021 |
Oro Nickel Ltd registered office is c/o Sinton Spence Chartered Accountants, 2nd Floor, Brian Bell Plaza, Turumu Street, Boroko, National Capital District, Papua New Guinea.
DVY196 Holdings Corp registered office is 3081 3rd Avenue, Whitehorse, Yukon, Canada Y1A 4Z7.
ARL 021 Limited registered office is 70 Jermyn Street, London, UK SW1Y 6NY
Summarised financial information for the Company's associates and joint ventures, where available, is given below for the year as at 30 June 2021:
|
Company |
Revenue £'000 |
Loss £'000 |
Assets £'000 |
Liabilities £'000 |
Net Assets £'000 |
|
Oro Nickel Ltd |
- |
- |
3,667 |
(3,034) |
633 |
|
DVY196 Holdings Corp |
- |
- |
326 |
- |
326 |
|
ARL 021 Limited |
- |
- |
400 |
- |
400 |
|
|
|
Oro Nickel |
DVY196 |
ARL 021 |
|
Total Group |
|
Carrying balance |
|
£'000 |
£'000 |
£'000 |
|
£'000 |
|
At 1 July 2020 |
|
1,654 |
293 |
- |
|
1,947 |
|
Additions |
|
- |
39 |
400 |
|
439 |
|
Share of loss in joint venture |
|
- |
(6) |
|
- |
(6) |
|
Net book amount at 30 June 2021 |
|
1,654 |
326 |
400 |
|
2,380 |
During the year to 30 June 2021, there were no movements in the net loss within the joint ventures.
12. Financial Instruments with Fair Value through Other Comprehensive Income (FVTOCI)
|
|
|
30 June 2021 Group £'000 |
30 June 2020 Group £'000 |
30 June 2021 Company £'000 |
30 June 2020 Company £'000 |
|||||
|
FVTOCI financial instruments at the beginning of the period |
|
4 |
178 |
4 |
178 |
|
||||
|
Transferred from Available-for-sale category |
|
- |
- |
- |
- |
|
||||
|
Additions |
|
- |
- |
- |
- |
|
||||
|
Disposals |
|
- |
(132) |
- |
(132) |
|
||||
|
Revaluations and impairment |
|
3 |
(42) |
3 |
(42) |
|
||||
|
FVTOCI financial assets at the end of the period |
|
7 |
4 |
7 |
4 |
|
||||
Market Value of Investments
The market value as at 30 June 2021 of the investments', available for sale listed and unlisted investments, was as follows:
|
|
30 June 2021 Group £'000 |
30 June 2020 Group £'000 |
|
30 June 2021 Company £'000 |
30 June 2020 Company £'000 |
|
Quoted on other foreign stock exchanges |
7 |
4 |
|
7 |
4 |
|
At 30 June |
7 |
4 |
|
7 |
4 |
13. Financial instruments with Fair Value through Profit and Loss (FVTPL)
|
|
30 June 2021 Group £ |
30 June 2020 Group £ |
30 June 2021 Company £ |
30 June 2020 Company £ |
|
FVTPL financial instruments at the beginning of the period |
5 |
5 |
- |
- |
|
Transferred from Available-for-sale category |
- |
- |
- |
- |
|
Additions |
72 |
- |
72 |
- |
|
Disposals |
(5) |
- |
- |
- |
|
Revaluations |
- |
- |
- |
- |
|
FVTPL financial assets at the end of the period (audited) |
72 |
5 |
72 |
- |
14. Trade and Other Receivables
|
|
Group |
|
Company |
||
|
|
2021 £ |
2020 £ |
|
2021 £ |
2020 £ |
|
Non-current |
|
|
|
|
|
|
Amounts owed by Group undertakings |
- |
- |
|
17 |
51 |
|
Purchased debt |
- |
367 |
|
- |
367 |
|
Amounts owed by related parties |
|
|
|
|
|
|
- due from associates and joint ventures |
1,362 |
1,323 |
|
1,362 |
1,322 |
|
Total non-current |
1,362 |
1,690 |
|
1,379 |
1,740 |
|
Current |
|
|
|
|
|
|
Sundry debtors |
142 |
150 |
|
76 |
150 |
|
Prepayments |
86 |
25 |
|
86 |
25 |
|
Purchased debt |
987 |
- |
|
987 |
- |
|
Amounts owed by related parties |
|
|
|
|
|
|
- due from key management |
- |
- |
|
- |
- |
|
Total current |
1,215 |
175 |
|
1,149 |
175 |
Trade and other receivables include a balance of:
· £nil (2020: £16,549) owing to Red Rock Resources Plc, a related party entity as a result of having common Directors;
· £33,733 (2020: £20,619) owing to Curzon Energy Plc, a related party entity as a result of having a common Director.
Debt Purchased from Resource Mining Corporation Limited
On 7 April 2020, the Company completed the acquisition of a AUD 1.7m (£907,000) debt position in ASX listed Resource Mining Corporation Limited for consideration of £178,096 and 13,288,982 new ordinary shares of Corcel. The Company's share price on the date of transaction was £0.011. For this consideration, the Company also acquired a six-month option to buy the balance of Resource Mining Corporation Limited debt for the same proportional term, AUD 640,000 in cash and 23,711,018 new ordinary shares in Corcel. The option was exercised, for more details please see Note 25. Resource Mining Corporation Limited's exploration licenses in Papua New Guinea remain under renewal at the time of this report.
On 28 October 2020, the Company has also exercised the 6-month option to purchase the remaining RMI debt of AUD 3.05 million for consideration of 23,711,018 new ordinary shares and AUD 640,000 in cash (£355,259), which represents a similar discount to the initial acquisition. All the loan notes are interest free and unsecured.
Directly attributable transactions costs were also included in the carrying value of the debt, bringing the total of the debt value to £987,121 on 30 June 2021.
15. Trade and Other Payables
|
|
Group |
|
Company |
||
|
|
2021 £ |
2020 £ |
|
2021 £ |
2020 £ |
|
Trade and other payables |
202 |
140 |
|
176 |
139 |
|
Amounts due to related parties: - due to Red Rock Resources plc |
- |
8 |
|
- |
8 |
|
Accruals |
35 |
35 |
|
35 |
35 |
|
Trade and other payables |
237 |
183 |
|
211 |
182 |
|
Borrowings (note 21) |
883 |
760 |
|
883 |
760 |
|
Total |
1,120 |
943 |
|
1,094 |
942 |
Trade and other payables, include a balance of £nil (2020: £7,962), owing to Red Rock Resources Plc, a related party entity as a result of having common Directors.
Short Term Borrowings Maturity
|
|
2021 £'000 |
2020 £'000 |
|
Due by 23 December 2021 |
818 |
760 |
|
Due by 28 April 2022 |
65 |
- |
|
Total long-term borrowings |
883 |
760 |
C4 Energy Notes - YA PN II - Riverfort
On 5 December 2019, the Company announced that YA PN II and Riverfort Global Opportunities Limited, holders of Promissory Notes and Convertible Loan Notes, first announced on 6 June 2018 and updated on 22 July 2019, agreed to extinguish the entire remaining balance, through a subscription for New Loan Notes and a share conversion. The partial conversion of the Promissory Notes resulted in the issuance of 25,963,636 new ordinary shares of the Company and the investors have agreed to lock up the resulting promissory conversion shares: 100% of the total for three months, 70% of the total shares for a subsequent six months and 40% of the total shares of the promissory conversion shares for a further six-month period. The approximate residual balance of £286,756 of the promissory notes was retired, and YA PN II Ltd and Riverfort Global Capital Ltd have subscribed for new two-year loan notes, payable on 23 December 2021, bearing 8% interest per annum with no conversion rights.
Subsequent to year end, the Company is in the process of refinancing the YA PN II Ltd and Riverfort Global Capital Ltd borrowings to extend the payment period through to December 2022. The refinancing is currently on-going and expected to be formally agreed prior to the repayment date.
Also on 5 December 2019, the Company was informed by YA II PN Ltd and Riverfort Global Capital Limited that, following the subscription of New Loan Notes, both parties had granted an option over their interests in the New Loan Notes, totalling £729,272, to C4 Energy Ltd, a UK incorporated private entity. James Parsons, Chairman of Corcel Plc, is also a Director and shareholder of C4 Energy Ltd.
More details on all the borrowing are given in Note 22.
16. Reserves
Share Premium
The share premium account represents the excess of consideration received for shares issued above their nominal value net of transaction costs.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses that have arisen on the retranslation of overseas operations.
Retained Earnings
Retained earnings represent the cumulative profit and loss net of distributions to owners.
FVTOCI Revaluation Reserve
The fair value through other comprehensive income (FVTOCI) reserve represents the cumulative revaluation gains and losses in respect of FVTOCI investments.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge for options granted, still outstanding and not exercised.
Warrant Reserve
The warrant reserve represents the cumulative charge for warrants granted, still outstanding and not exercised.
16. Share Capital, Share Premium and Shares to be Issued of the Company
The share capital of the Company is as follows:
|
Authorised, issued and fully paid |
2021 £'000 |
2020 £'000 |
|
|
||
|
189,910,596 ordinary shares of £0.0001 each (2019: 1,516,894,159 ordinary shares of £0.0001 each) |
38 |
19 |
|
|
||
|
1,788,918,926 deferred shares of £0.0009 each |
1,610 |
1,610 |
|
|
||
|
2,497,434,980 A deferred shares of £0.000095 each |
237 |
237 |
|
|
||
|
8,687,335,200 B Deferred shares of £0.000099 each |
860 |
860 |
|
|
||
|
As at 30 June |
2,745 |
2,726 |
|
|
||
|
Movement in ordinary shares |
Number |
Nominal, £ |
Share Premium |
|||
|
As at 30 June 2019 - ordinary shares of £0.0001 each |
1,516,894,159 |
151,689 |
21,113,220 |
|||
|
Issued on 18 Dec 2019 at £0.0001 per share (cash) |
56 |
0.01 |
- |
|||
|
Issued on 23 Dec 2019 at £0.000275 per share (cash) |
3,021,818,173 |
302,182 |
489,358 |
|||
|
Issued on 23 Dec 2019 at £0.000275 per share (non-cash, debt extinguished) |
530,030,036 |
53,003 |
92,864 |
|||
|
Issued on 23 Dec 2019 at £0.000275 per share (non-cash, promissory notes conversion) |
2,596,363,636 |
259,636 |
454,364 |
|||
|
Issued on 23 Dec 2019 at £0.000275 per share (non-cash, CLN conversion) |
1,022,229,140 |
102,223 |
170,457 |
|||
|
23 December 2019 share subdivision into |
(8,687,335,200) |
(868,734) |
- |
|||
|
- 8,687,335,200 ordinary shares of £0.000001 each |
|
|
|
|||
|
- 8,687,335,200 B deferred shares of £0.000099 each |
|
|
|
|||
|
Total ordinary shares of £0.000001 each at 23 Dec 2019 prior to share 100:1 consolidation |
8,687,335,200 |
8,687 |
- |
|||
|
Share consolidation 100:1new ordinary shares of £0.0001 each |
86,873,352 |
8,687 |
- |
|||
|
Issued on 3 Jan 2020 at £0.0305 per share (non-cash, partner buy out) |
2,461,538 |
246 |
74,831 |
|||
|
Issued on 31 Jan 2020 at £0.0443 per share (non-cash, director's salary) |
122,312 |
12 |
5,403 |
|||
|
Issued on 31 Jan 2020 at £0.0458 per share (non-cash, director's salary) |
49,028 |
5 |
2,241 |
|||
|
Issued on 31 Jan 2020 at £0.0467 per share (non-cash, director's fees) |
141,901 |
14 |
6,619 |
|||
|
Issued on 31 Jan 2020 at £0.0278 per share (non-cash, settled creditor) |
168,421 |
17 |
4,783 |
|||
|
Issued on 6 Apr 2020 investor warrants issued at time of fundraising |
- |
- |
(117,529) |
|||
|
Issued on 7 Apr 2020 at £0.0083 per share (non-cash, settled creditor) |
4,909,610 |
491 |
40,259 |
|||
|
Issued on 7 Apr 2020 at £0.0110 per share (non-cash, debt purchase) |
13,288,982 |
1,329 |
144,850 |
|||
|
Issued on 7 Apr 2020 at £0.008 per share (cash) |
58,750,000 |
5,875 |
444,500 |
|||
|
Issued on 21 Apr 2020 at £0.0110 per share (non-cash, SIP shares) |
1,145,452 |
115 |
12,485 |
|||
|
Issued on 19 Jun 2020 investor warrants issued at time of fundraising |
- |
- |
(116,655) |
|||
|
Issued on 19 Jun 2020 at £0.0100 per share (cash) |
21,000,000 |
2,100 |
199,700 |
|||
|
Issued on 19 Jun 2020 at £0.0100 per share (non-cash, settled creditor) |
1,000,000 |
100 |
9,900 |
|||
|
As at 30 June 2020 - ordinary shares of £0.0001 each |
189,910,596 |
18,991 |
23,031,649 |
|||
|
Issued on 26 Oct 2020 at £0.0100 per share (cash) |
75,000,000 |
7,500 |
742,500 |
|||
|
Share issuance costs in relation to shares issued on 26 Oct 2020 |
- |
- |
(45,000) |
|||
|
Issued on 26 Oct 2020 at £0.0100 per share (non cash creditor settlement) |
3,000,000 |
300 |
29,700 |
|||
|
Issued on 26 Oct 2020 37,500,000 investor warrants issued at time of fundraise |
- |
- |
(210,000) |
|||
|
Issued on 28 Oct 2020 at £0.0098 per share (RMI debt acquisition) |
23,711,018 |
2,371 |
229,997 |
|||
|
Issued on 17 Feb 2021 at £0.0125 per share (non-cash, creditor settlement |
2,880,000 |
288 |
35,712 |
|||
|
Issued on 17 Feb 2021 51,200,000 investor warrants issued at time of fundraise |
- |
- |
(276,480) |
|||
|
Issued on 17 Feb 2021 23,000,000 investor warrants issued at time of fundraise |
- |
- |
(230,769) |
|||
|
17. Share Capital, Share Premium and Shares to be Issued of the Company Continued
|
|
|
|
|||
|
Share issuance costs in relation to shares issued on 17 Feb 2021 |
- |
- |
(9,000) |
|||
|
Issued on 18 Feb 2021 at £0.0125 per share (cash) |
24,000,000 |
2,400 |
297,600 |
|||
|
Issued on 18 Feb 2021 at £0.0125 per share (non cash creditor settlement) |
2,880,000 |
288 |
19,713 |
|||
|
Issued on 15 Apr 2021 at £0.0160 per share (cash, warrants exercised) |
8,500,000 |
850 |
135,150 |
|||
|
Issued on 20 Apr 2021 at £0.0160 per share (cash, warrants exercised) |
500,000 |
50 |
7,950 |
|||
|
Issued on 20 Apr 2021 at £0.0160 per share (cash, warrants exercised) |
12,639,750 |
1,264 |
200,972 |
|||
|
Issued on 22 Apr 2021 at £0.0160 per share (cash, warrants exercised) |
2,500,000 |
250 |
39,750 |
|||
|
Issued on 10 May 2021 at £0.0200 per share (non-cash, Tring Road interest) |
12,026,168 |
1,203 |
248,797 |
|||
|
Issued on 12 May 2021 25,000,000 investor warrants issued at time of fundraise |
- |
- |
(150,000) |
|||
|
Issued on 12 May 2021 20,000,000 investor warrants issued at time of fundraise |
- |
- |
(240,000) |
|||
|
Issued on 12 May 2021 at £0.0130 per share (non-cash creditor settlement) |
23,076,924 |
2,308 |
277,692 |
|||
|
Issued on 12 May 2021 at £0.0001 per share (non- cash creditor settlement) |
1,846,152 |
185 |
1,656 |
|||
|
Issued on 12 May 2021 at £0.0200 per share (non- cash interest settlement) |
1,200,000 |
120 |
23,880 |
|||
|
Issued on 12 May 2021 at £0.0001 per share (non- cash SIP) |
1,116,994 |
112 |
- |
|||
|
As at 30 June 2021 - ordinary shares of £0.0100 each |
384,787,602 |
38,480 |
24,161,469 |
|||
The Company's share capital consists of three classes of shares, being:
· Ordinary shares with a nominal value of £0.0001, which are the company's listed securities;
· Deferred shares with a nominal value of £0.0009;
· A Deferred shares with a nominal value of £0.000095;
· B Deferred share with a nominal value of £0.000099
Subject to the provisions of the Companies Act 2006, the deferred shares may be cancelled by the Company, or bought back for £1 and then cancelled. These deferred shares are not quoted and carry no rights whatsoever.
Shares to be Issued
On 1 December, 2020 the Company acquired the remaining 50% interests in WDD for potential consideration of £90,000, payable in £15,000 in cash and £75,000 in new ordinary shares. The £75,000 consideration, payable in shares, is dependant on the financial close of the initial 50MW of capacity of the Burwell Project. Financial close is defined as having a fully funded SPV to take the project forward to operational capacity or any potential disposal or sale. As at 30 June 2021, these consideration had not been met and as such £75,000 remains in shares to be issued.
Warrants
At 30 June 2021, the Company had 170,399,328 warrants in issue (2020: 60,839,078) with exercise prices ranging £0.01245-£0.60 (2020: £0.01245-£0.60). Out of those, 3,999,999 (2020: 609,090,906) have market performance conditions that accelerate the expiry date. The weighted average remaining life of the warrants at 30 June 2021 was 695 days (2019: 979 days).
50,575,000 (post-consolidation) warrants were issued in the reporting year by the Group to its shareholders in the capacity of shareholders and therefore are outside of IFRS 2 scope.
Details related to valuation of all warrants are disclosed below.
|
Group and Company |
2021 number of warrants |
|
|
2020 number of warrants |
|
|
|
|
|
|
|
Outstanding at the beginning of the period |
60,839,078 |
|
|
689,567,098 |
|
Granted during the period |
156,776,923 |
|
|
86,834,317 |
|
Exercised during the period |
(47,216,673) |
|
|
- |
|
Adjusted number of warrants in issue in line with 100:1 share consolidation |
- |
|
|
(506,471,429) |
|
Lapsed during the period |
- |
|
|
(209,090,908) |
|
Outstanding at the end of the period |
170,399,328 |
|
|
60,839,078 |
At 30 June 2021, the Company had the following warrants to subscribe for shares in issue:
|
Grant date |
Expiry date |
Warrant exercise price, adjusted post consolidation |
Number of warrants before share consolidation |
Number of post consolidation warrants |
|
14 Jan 2019 |
12 Dec 2022 |
£0.60 |
91,587,303 |
915,873 |
|
15 Apr 2019 |
14 Apr 2021 |
£0.10 |
399,999,998 |
3,999,999 |
|
17 July 2019 |
1 July 2024 |
£0.25 |
20,000,000 |
200,000 |
|
31 Jan 2020 |
30 Jan 2023 |
£0.0285 |
- |
438,596 |
|
7 Apr 2020 |
6 Apr 2023 |
£0.01245 |
- |
4,909,610 |
|
7 Apr 2020 |
6 Apr 2023 |
£0.016 |
- |
29,375,000 |
|
19 Jun 2020 |
18 Jun 2023 |
£0.016 |
- |
21,000,000 |
|
26 Oct 2020 |
26 Oct 2023 |
£0.016 |
- |
13,360,250 |
|
18 Feb 2021 |
18 Feb 2023 |
£0.020 |
- |
51,200,000 |
|
18 Feb 2021 |
18 Feb 2024 |
£0.013 |
- |
- |
|
12 May 2021 |
31 Dec 2021 |
£0.020 |
- |
25,000,000 |
|
12 May 2021 |
12 May 2024 |
£0.025 |
- |
20,000,000 |
|
Total warrants in issue at 30 June 2021 |
|
|
511,587,301 |
170,399,328 |
The aggregate fair value recognised in warrants reserve in relation to the share warrants granted during the reporting period was £1,107,249 (2020: £272,785).
The following information is relevant in the determination of the fair value of warrants granted during the reporting period. Black-Scholes valuation model was applied for all the warrants below:
|
Grant date |
Expiry date |
Number of post consolidation warrants |
Warrant life, years |
Warrant exercise price, adjusted post consolidation, £ |
Share price at the grant date, £ |
UK risk-free rate at the date of grant, % |
Volatility, % |
FV of 1 warrant, £ |
FV of all warrants, £ |
|
|
26 Oct 2020 |
26 Oct 2023 |
37,500,000 |
3 |
0.016 |
0.0098 |
0.0001 |
103.50 |
0.0057 |
210,000 |
|
|
18 Feb 2021 |
18 Feb 2023 |
51,200,000 |
2 |
0.020 |
0.0120 |
0.0015 |
99.71 |
0.0054 |
276,480 |
|
|
18 Feb 2021 |
18 Feb 2024 |
23,076,923 |
3 |
0.013 |
0.0120 |
0.0015 |
99.71 |
0.0100 |
230,769 |
|
|
12 May 2021 |
31 Dec 2021 |
25,000,000 |
0.5 |
0.020 |
0.0212 |
0.0015 |
99.71 |
0.0060 |
150,000 |
|
|
12 May 2021 |
12 May 2024 |
20,000,000 |
3 |
0.025 |
0.0212 |
0.0015 |
99.71 |
0.0120 |
240,000 |
|
|
Total at 30 June 2021 |
|
156,776,923 |
|
|
|
|
|
|
1,107,249 |
|
Capital Management
Management controls the capital of the Group in order to control risks, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. The Group's debt and capital, includes ordinary share capital and financial liabilities, supported by financial assets. There are no externally imposed capital requirements.
Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
17. Share-Based Payments
Employee Share Options
In prior years, the Company established an employee share option plan to enable the issue of options as part of the remuneration of key management personnel and Directors to enable them to purchase ordinary shares in the Company. Under IFRS 2 "Share-based Payments", the Company determines the fair value of the options issued to Directors and employees as remuneration and recognises the amount as an expense in the Income Statement with a corresponding increase in equity.
At 30 June 2021, the Company had outstanding options to subscribe for post-consolidation Ordinary shares as follows:
|
|
Options issued 14 June 2016 exercisable at £0.45 per share expiring 29 January 2022 Number |
Options issued 9 September 2016 exercisable at £0.8 per share, expiring on 9 September 2022, Number |
Options issued 5 December 2019, exercisable at £0.0275 per share, expiring on 5 December 2024 |
Options issued 31 January 2020 exercisable at £0.0285 per share, expiring on 31 January 2025 |
Total Number |
|
S Kaintz |
28,200 |
96,000 |
- |
3,040,567 |
3,164,767 |
|
J Parsons |
- |
- |
3,040,567 |
- |
3,040,567 |
|
Employees |
7,200 |
- |
- |
- |
7,200 |
|
Total |
35,400 |
96,000 |
3,040,567 |
3,040,567 |
6,212,534 |
|
|
2021 |
|
2020 |
||
|
Company and Group |
Number of options Number |
Weighted average exercise price £ |
|
Number of options Number |
Weighted average exercise price Pence |
|
Outstanding at the beginning of the period |
6,212,534 |
0.42 |
|
27,060,000 |
0.71 |
|
Granted during the year |
- |
- |
|
6,081,134 |
0.28 |
|
Adjusted in line with 100:1 share consolidation |
- |
- |
|
(26,928,600) |
0.71 |
|
Outstanding at the end of the period |
6,212,534 |
0.42 |
|
6,212,534 |
0.42 |
The exercise price of options outstanding at 30 June 2021 and 30 June 2020, ranged between £0.0275 and £0.80. Their weighted average contractual life was 3.462 years (2020: 4.462 years).
Of the total number of options outstanding at 30 June 2021, 122,900 (2020: 122,900) had vested and were exercisable. The weighted average share price (at the date of exercise) of options, exercised during the year, was nil (2020: nil) as no options were exercised during the reporting year (2020: nil).
The following information is relevant in the determination of the fair value of share options granted during the reporting period to the Company Directors. Black-Scholes valuation model was applied to value the options with the inputs detailed in the table below:
|
Grant date |
Number of post consolidation options |
Vesting period, years |
Life of the option, years |
Option exercise price, adjusted post consolidation, £ |
Share price at the grant date, £ |
UK risk-free rate at the date of grant, % |
Volatility, % |
FV of 1 option, £ |
FV of all options, £ |
|
5 Dec 2019 |
3,040,567 |
3 |
5 |
0.0275 |
0.0400 |
0.00557 |
100.3 |
0.027 |
82,095 |
|
31 Jan 2020 |
3,040,567 |
3 |
5 |
0.0285 |
0.0278 |
0.425 |
101.0 |
0.01712 |
52,055 |
|
Total at 30 June 2021 |
6,081,134 |
|
|
|
|
|
|
|
|
Share-based remuneration expense, related to the share options granted during the reporting period, is included in the Administrative expenses line in the Consolidated Income Statement in the amount of £nil (2020: £23,193).
Share Incentive Plan
In January 2012, the Company implemented a tax efficient Share Incentive Plan (SIP), a government approved scheme, the terms of which provide for an equal reward to every employee, including Directors, who have served for three months or more at the time of issue. The terms of the plan provide for:
· each employee to be given the right to subscribe any amount up to £150 per month with Trustees, who invest the monies in the Company's shares;
· the Company to match the employee's investment by contributing an amount equal to double the employee's investment ("matching shares"); and
· the Company to award free shares to a maximum of £3,600 per employee per annum.
The subscriptions remain free of taxation and national insurance if held for five years.
All such shares are held by SIP Trustees and the shares cannot be released to participants until five years after the date of the award.
During the financial year, a total of 1,116,994 free, matching and partnership shares were awarded (2020: 1,145,452), resulting in a share-based payment charge of £5,400 (2020: £9,772), included into administrative expenses line in the Consolidated Income Statement.
18. Cash and Cash Equivalents
|
Group |
30 June 2021 £'000 |
30 June 2020 £'000 |
|
Cash in hand and at bank |
392 |
415 |
|
Company |
30 June 2021 £'000 |
30 June 2020 £'000 |
|
Cash in hand and at bank |
387 |
389 |
Credit Risk
The Group's exposure to credit risk, or the risk of counterparties defaulting, arises mainly from notes and other receivables. The Directors manage the Group's exposure to credit risk by the application of monitoring procedures on an ongoing basis. For other financial assets (including cash and bank balances), the Directors minimise credit risk by dealing exclusively with high credit rating counterparties.
Credit Risk Concentration Profile
The Group's receivables do not have significant credit risk exposure to any single counterparty or any group of counterparties, having similar characteristics. The Directors define major credit risk as exposure to a concentration exceeding 10% of a total class of such asset.
The Company maintains its cash reserves in Coutts & Co, which maintains an A-1 credit rating from Standard & Poor's.
19. Financial Instruments
20.1 Categories of Financial Instruments
The Group and the Company holds a number of financial instruments, including bank deposits, short-term investments, loans and receivables and trade payables. The carrying amounts for each category of financial instrument are as follows:
|
Group |
2021 £'000 |
2020 £'000 |
|
Financial assets |
|
|
|
Fair value through other comprehensive income financial assets |
|
|
|
Quoted equity shares (Note 12) |
7 |
4 |
|
Total financial assets carried at fair value, valued at observable market price |
7 |
4 |
|
|
|
|
|
Fair value through profit and loss financial assets |
|
|
|
Investments in warrant of a listed entity (Note 13) |
- |
5 |
|
Investments in a project of a private entity |
72 |
|
|
Total financial assets carried at fair value, valued using valuation techniques |
72 |
5 |
|
|
|
|
|
Cash and cash equivalents |
392 |
415 |
|
|
|
|
|
Loans and receivables |
|
|
|
Receivable from JVs |
1,362 |
1,322 |
|
Purchased debt - current (Note 14) |
987 |
367 |
|
Other receivables |
228 |
174 |
|
Total financial assets held at amortised cost |
2,577 |
1,863 |
|
|
|
|
|
Total financial assets |
3,048 |
2,287 |
|
|
|
|
|
Total current |
1,686 |
594 |
|
Total non-current |
1,362 |
1,693 |
|
Company |
2021 £'000 |
2020 £'000 |
|
||
|
Financial assets |
|
|
|
||
|
Fair value through other comprehensive income financial assets |
|
|
|
||
|
Quoted equity shares |
7 |
4 |
|
||
|
Total FVTOCI financial assets |
7 |
4 |
|
||
|
|
|
|
|
||
|
Fair value through profit and loss financial assets |
|
|
|
||
|
Investments in a project of a private entity |
72 |
- |
|
||
|
Total financial assets carried at fair value, valued using valuation techniques |
72 |
- |
|
||
|
|
|
|
|
||
|
Cash and cash equivalents |
387 |
389 |
|
||
|
|
|
|
|
||
|
Loans and receivables |
|
|
|
||
|
Receivable from JVs |
1,362 |
1,322 |
|
||
|
Purchased debt - current (Note 14) |
987 |
367 |
|||
|
Receivable from subsidiaries |
17 |
51 |
|||
|
Other receivables |
161 |
174 |
|||
|
Total financial assets held at amortised cost |
2,527 |
1,914 |
|
||
|
|
|
|
|
||
|
Total financial assets |
2,993 |
2,308 |
|
||
|
|
|
|
|
||
|
Total current |
1,631 |
564 |
|
||
|
Total non-current |
1,362 |
1,744 |
|
||
Financial Instruments Carried at Fair Value Using Valuation Techniques Other than Observable Market Value
Financial instruments, valued using other valuation techniques, can be reconciled from beginning to ending balances as follows:
|
Group |
2021 £'000 |
2020 £'000 |
|
Financial assets |
|
|
|
Purchased debt |
987 |
367 |
|
FVTPL |
72 |
5 |
|
Total financial assets valued using valuation techniques |
1,059 |
372 |
|
|
|
|
|
Financial liabilities |
|
|
|
Loans and borrowings |
|
|
|
Trade and other payables |
232 |
183 |
|
Borrowings |
818 |
760 |
|
Total financial liabilities |
1,050 |
943 |
Trade Receivables and Trade Payables
Management assessed that other receivables and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments.
Borrowings
The carrying value of interest-bearing loans and borrowings is determined by calculating present values at the reporting date, using the issuer's borrowing rate. The loan is due in December 2021 and impact of the discounting is immaterial and, therefore, not included into the valuation.
20.2 Fair Values
Financial assets and financial liabilities, measured at fair value in the statement of financial position, are grouped into three levels of a fair value hierarchy. The three levels are defined, based on the observability of significant inputs to the measurement, as follows:
· Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
· Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
· Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The carrying amount of the Group and the Company's financial assets and liabilities is not materially different to their fair value. The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Where a quoted price in an active market is available, the fair value is based on the quoted price at the end of the reporting period. In the absence of a quoted price in an active market, the Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
The following table provides the fair value measurement hierarchy of the Group's assets and liabilities:
|
Group and Company |
Level 1 £'000 |
Level 2 £'000 |
Level 3 £'000 |
Total £'000 |
|
30 June 2021 |
|
|
|
|
|
Financial assets at fair value through other comprehensive income - Quoted equity shares |
7 |
- |
- |
7 |
|
Financial assets at fair value through profit and loss |
- |
- |
72 |
72 |
|
Group and Company |
Level 1 £'000 |
Level 2 £'000 |
Level 3 £'000 |
Total £'000 |
|
30 June 2020 |
|
|
|
|
|
Financial assets at fair value through other comprehensive income - Quoted equity shares |
4 |
- |
- |
4 |
|
Financial assets at fair value through profit and loss |
- |
- |
5 |
5 |
|
|
|
|
|
|
20.2 Financial Risk Management Policies
The Directors monitor the Group's financial risk management policies and exposures, and approve financial transactions.
The Directors' overall risk management strategy seeks to assist the consolidated Group in meeting its financial targets, while minimising potential adverse effects on financial performance. Its functions include the review of credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk and market risk, consisting of interest rate risk, liquidity risk, equity price risk and foreign exchange risk.
Credit Risk
Exposure to credit risk, relating to financial assets, arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial liability of significant customers and counterparties), ensuring, to the extent possible, that customers and counterparties to transactions are of sound creditworthiness. Such monitoring is used in assessing receivables for impairment.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating or in entities that the Directors have otherwise cleared as being financially sound.
Trade and other receivables, that are neither past due nor impaired, are considered to be of high credit quality. Aggregates of such amounts are as detailed in Note 14.
There are no amounts of collateral held as security in respect of trade and other receivables.
The consolidated Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the consolidated Group.
Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:
· monitoring undrawn credit facilities;
· obtaining funding from a variety of sources; and
· maintaining a reputable credit profile.
The Directors are confident that adequate resources exist to finance operations and that controls over expenditures are carefully managed. All financial liabilities are due to be settled within the next twelve months.
Market Risk
Interest Rate Risk
The Company is not exposed to any material interest rate risk because interest rates on loans are fixed in advance.
Equity Price Risk
Price risk relates to the risk that the fair value, or future cash flows of a financial instrument, will fluctuate because of changes in market prices, largely due to demand and supply factors for commodities, but also include political, economic, social, technical, environmental and regulatory factors.
Foreign Exchange Risk
The Group's transactions are carried out in a variety of currencies, including Australian Dollars, Canadian Dollars, United Stated Dollars, Papua New Guinea Kina and UK Sterling. To mitigate the Group's exposure to foreign currency risk, non-Sterling cash flows are monitored. Fluctuation of +/- 10% in currencies, other than UK Sterling, would not have a significant impact on the Group's net assets or annual results.
The Group does not enter forward exchange contracts to mitigate the exposure to foreign currency risk as amounts paid and received in specific currencies are expected to largely offset one another.
These assets and liabilities are denominated in the following currencies as shown in the table below:
|
Group |
GBP £'000 |
AUD £'000 |
USD £'000 |
CAD £'000 |
Total £'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
392 |
- |
- |
- |
392 |
|
Amortised cost financial assets - Other receivables |
228 |
987 |
- |
- |
1,215 |
|
FVTOCI financial assets |
7 |
- |
- |
- |
7 |
|
FVTPL financial assets - warrants |
- |
- |
- |
- |
- |
|
FVTPL financial assets |
72 |
- |
- |
- |
72 |
|
Amortised costs financial assets - Non-current receivables |
1,362 |
- |
- |
- |
1,362 |
|
Trade and other payables, excluding accruals |
237 |
- |
- |
- |
237 |
|
Short-term borrowings |
883 |
- |
- |
- |
818 |
|
Group |
GBP £'000 |
AUD £'000 |
USD £'000 |
CAD £'000 |
Total £'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
414 |
1 |
- |
- |
415 |
|
Amortised cost financial assets - Other receivables |
175 |
- |
- |
- |
175 |
|
FVTOCI financial assets |
4 |
- |
- |
- |
4 |
|
FVTPL financial assets - warrants |
- |
5 |
- |
- |
5 |
|
Amortised costs financial assets - Non-current receivables |
1,322 |
368 |
- |
- |
1,690 |
|
Trade and other payables, excluding accruals |
148 |
- |
- |
- |
148 |
|
Short-term borrowings |
- |
- |
- |
- |
- |
|
Long-term borrowings |
760 |
- |
- |
- |
760 |
|
Company |
GBP £'000 |
AUD £'000 |
USD £'000 |
CAD £'000 |
Total £'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
387 |
- |
- |
- |
387 |
|
Amortised cost financial assets - Other receivables |
161 |
987 |
- |
- |
1,148 |
|
FVTOCI financial assets |
7 |
- |
- |
- |
7 |
|
FVTPL financial assets |
72 |
- |
- |
- |
72 |
|
Amortised costs financial assets - Non-current receivables |
1,362 |
- |
- |
- |
1,362 |
|
Trade and other payables, excluding accruals |
211 |
- |
- |
- |
211 |
|
Short-term borrowings |
883 |
- |
- |
- |
818 |
|
Company |
GBP £'000 |
AUD £'000 |
USD £'000 |
CAD £'000 |
Total £'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
389 |
- |
- |
- |
389 |
|
Amortised cost financial assets - Other receivables |
175 |
- |
- |
- |
175 |
|
FVTOCI financial assets |
4 |
- |
- |
- |
4 |
|
Amortised costs financial assets - Non-current receivables |
1,372 |
368 |
- |
- |
1,740 |
|
Trade and other payables, excluding accruals |
148 |
- |
- |
- |
148 |
|
Short-term borrowings |
- |
- |
- |
- |
- |
|
Long-term borrowings |
760 |
- |
- |
- |
760 |
Exposures to foreign exchange rates vary during the year, depending on the volume and nature of overseas transactions.
21. Reconciliation of Liabilities Arising from Financing Activities and Major Non-Cash Transactions
Significant non-cash transactions, from financing activities in relation to loans and borrowings, are as follows:
|
|
30 June 2020 £'000 |
Cash flows Loans received £'000 |
Non-cash flow Restructured £'000 |
Non-cash flow Conversion £'000 |
Non-cash flow Forex movement £'000 |
Non-cash flow Interest and arrangement fees accreted £'000 |
Cash flows Principal repaid £'000 |
Cash flows Interest repaid £'000 |
30 June 2021 £'000 |
|
Riverfort Capital Ltd and YA II PN Ltd loan |
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
Riverfort Capital and YA II PN Ltd loan - new |
760 |
- |
- |
- |
- |
58 |
- |
- |
818 |
|
Convertible loan notes |
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
Total |
760 |
- |
- |
- |
- |
58 |
- |
- |
818 |
Significant non-cash transactions from financing activities in relation to raising new capital are disclosed in Note 17.
Significant non-cash transactions from investing activities were:
· 13,288,982 shares issued at £0.011 per share by the Company for the total of £146,178 to acquire discounted debt. More details are disclosed in Note 14.
Significant non-cash transactions from operating activities were as follows:
· Payment for services and Director remuneration (share-based payments in the form of options and warrants), in the amount of £nil (2020: £63,194), disclosed in Notes 17 and 18;
· Impairment of other receivables in the amount of £nil (2020: £36,599);
· Goodwill write off in the amount of £25,250 (2020: £105,815).
· Share based payments to settle creditor balances £392,000 (2020: £nil).
22. Significant Agreements and Transactions
Financing
· On 26 October 2020, the Company announced a fundraising of £750,000 at a price of £0.01 per share. A total of 37,500,000 three-year warrants were issued to investors at a price of £0.016 per share. The Company also issued 3,000,000 shares to service providers.
· On 18 February 2021, the Company announced had agreed a funding package of equity and debt. The equity funding raised proceeds of £300,000 from the issue of 24,000,000 new ordinary shares at a price of £0.0125 per share. The Company also issued 48,000,000 two-year warrants, exercisable at £0.02 per share. The debt element of the fundraising included a £300,000 unsecured loan facility to be drawn down in 5 tranches. The loan plus a fixed coupon of 8% was repayable on maturity on 28 December 2021. The coupon is repayable in cash or shares at the Lenders discretion and if in shares at a price of £0.013. As part of the loan the Company issued 23,076,923 three-year warrants, exercisable when the share price is at or above £0.02 per share, at a price of £0.013 per share or at the future price of any placing or subsequent funding during the first 12 months of the warrants being issued. The warrant exercise proceeds will be netted off against the repayment of the pro-rata drawn loan facility with the full 8% of interest also payable in shares at a price of £0.013 per share.
· On 12 May 2021, the Company announced that it had received notice of the exercise of 23,076,924 warrants at an exercise price of £0.012 per share for gross proceeds of £300,000. £200,000 of these proceeds were credited to the Company's account, with the balance having been netted off and used to repay in full the outstanding loan facility. The interest, due on the loan, was also repaid through the issuance of an additional 1,846,152 new ordinary shares. The Company has also agreed a new loan note, to provide in aggregate £500,000 through an unsecured loan facility to be drawn down in 5 tranches. The loan plus a fixed coupon of 8% was to be payable upon maturity, which is 31 April 2022. As part of the loan facility, the Company issued 25,000,000 warrants with a £0.02 strike price, expiring on 31 December 2021 and 20,000,000 three-year warrants with a £0.025 strike price. The coupon is repayable in either cash or shares at the lender's discretion and if payable in shares at a price of £0.02. Should the warrants be executed during the loan facility, the proceeds will be netted off the repayment of the pro-rata drawn loan facility.
Resource Mining Corporation Debt - Wowo Gap Nickel/Cobalt Project
· On 28 October 2020, the Company announced that it had exercised its option to buy AUD 3.05m of debt in Resource Mining Corporation Limited. Execution of the option consisted of the payment of AUD 640,000 and the issuance of 23,711,018 new ordinary shares to Base Asia Pacific Limited. The shares were locked in for a period of 12 months.
· On 17 November 2020, the Company announced the completion of the acquisition of AUD 3.05m from Resource Mining Corporation Limited and the subordination of the small remaining debt position of AUD 170,000 to Corcel's senior lending position.
Flexible Grid Solutions
· On 1 December 2020, the Company announced the acquisition of the remaining 50% interest in Weirs Drove Development Limited, thereby becoming the 100% owner of the Burwell project for consideration of £90,000. This total potential consideration was broken down into £15,000 payable in cash and £75,000 payable in new Corcel ordinary shares, payable at financial close of the initial 50MW of capacity of the Burwell project.
· On 10 May 2021, the Company announced that it had acquired a 40% interest in the shovel ready 50MW Tring Road gas peaker project from Arlington Energy Ltd. The consideration for the purchase was £400,000 satisfied through £150,000 in cash and 12,026,168 new ordinary shares in Corcel, locked in for six months.
· On 28 May 2021, the Company announced that it had acquired 100% of the rights to the Avonmouth gas peaker project as well as the rights to an additional 15MW of potential grid connection capacity and associated land at the Avonmouth complex. The consideration for the purchase was £72,000 payable immediately and a further £72,000 payable at financial close.
23. Commitments
As at 30 June 2021, the Company had entered into the following commitments:
· Exploration commitments: On-going exploration expenditure is required to maintain title to the Group mineral exploration permits. No provision has been made in the Financial Statements for these amounts as the expenditure is expected to be fulfilled in the normal course of the operations of the Group.
· On 8 November 2021, the Company entered into a new lease agreement for office space with WeWork Aldwych House. The initial lease runs from 1 January 2022 through 30 June 2022 and is non-cancellable during this period. Thereafter, the lease can be terminated by giving one full calendar month notice.
24. Related Party Transactions
· Related party receivables and payables are disclosed in Notes 14 and 15, respectively.
· The key management personnel are the Directors and their remuneration is disclosed within Note 8.
· Ewen Ainsworth, a Director of the Company, has provided consultancy services and the fee is disclosed within Note 8. This is paid to Discovery Energy Ltd, a company controlled by Mr Ainsworth. The consultancy services were terminated effective on 31 December 2020.
25. Events After the Reporting Period
· On 12 August 2021, the Company signed a binding but conditional share purchase agreement with Resource Mining Corporation Limited ("RMI") to acquire 100% of the issued share capital of Niugini Nickel Pty Ltd, which owns 100% of the Wowo Gap nickel-cobalt project in Papua New Guinea. As consideration for the acquisition, the Company is releasing all liabilities and obligations in connection with is AUD 4,761,087 senior debt position in RMI.
· On 2 September 2021, the Company extended by one month the repayment date in respect of part of its AUD 4,761,087 debt position in Resource Mining Corporation Limited. The repayment which was due on 30 September 2021 in the amount of AUD 2,741,087 became due on 31 October 2021.
· On 18 October 2021, the Company completed the share purchase agreement with Resource Mining Corporation Limited to acquire 100% of the issued share capital of Niugini Nickel Pty Ltd, which owns 100% of the Wowo Gap nickel-cobalt project in Papua New Guinea. As consideration for the acquisition, the Company released all liabilities and obligations with its AUD 4,761,087 senior debt position in RMI, of which the cost of the acquisition of the position was £987,000.
The consideration of £987,000 was satisfied through the release of liabilities and obligations of the Company's senior debt position in RMI.
The initial estimate of the fair value of the assets acquired and liabilities assumed of Niugini Nickel Pty Ltd at the date of acquisition based upon the Niugini Nickel Pty Ltd consolidated balance sheet at 18 October 2021 are as follows:
|
|
£'000 |
|
Property, plant and equipment |
43 |
|
Cash |
20 |
|
Trade and other payables |
(12) |
|
Total identifiable net assets acquired |
51 |
|
Goodwill |
936 |
|
Consideration |
|
|
Total consideration recorded at market value of debt extinguished |
987 |
Goodwill relates to the accumulated "know-how" and expertise of the business and its staff. None of the goodwill is expected to be deducted for income tax purposes. As we complete the purchase price allocation the Company expects to recognise specific identifiable intangible assets, which may be deductible for income tax purposes. Any separately identified intangible assets will reduce the value attributed to goodwill.
The initial accounting for the acquisition of Niugini Nickel Pty Ltd is incomplete as at the date of these financial statements given the limited period of time since the acquisition was completed.
· On 8 November 2021, the Company announced that it had agreed with FPC Electric Land Ltd to extend its 100% rights over the Avonmouth project to 1 February 2022 and is in discussion with Arlington Energy Ltd, regarding extending the option to lease the site at the Tring Road Project, where Corcel owns 40%. The extension of the Tring Road lease option was completed after the period end.
· On 08 November 2021, the Company entered into a new lease agreement for office space with WeWork Aldwych House. The initial lease runs from 1 January 2022 through 30 June 2022 and is non-cancellable during this period. Thereafter, the lease can be terminated by giving one full calendar month notice.
26. Control
There is considered to be no controlling party.
27. These results are audited, however the information does not constitute statutory accounts as defined under section 434 of the Companies Act 2006. The consolidated statement of financial position at 30 June 2021 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended have been extracted from the Group's 2021 statutory financial statements. Their report was unqualified and contained no statement under sections 498(2) or (3) of the Companies Act 2006. The financial statements for 2021 will be delivered to the Registrar of Companies by 31 December 2021.