TIDMCRCL
RNS Number : 7517U
Corcel PLC
07 December 2021
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.
Chairman and CEO Statement
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
GBP400,000, which was satisfied by GBP150,000 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
GBP72,000 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 GBP72,000 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
GBP750,000 at a price of GBP0.01 per share. Subsequently, on 18
February 2021, the Company announced it had agreed a funding
package of equity and debt, raising GBP300,000 from the issuance of
24,000,000 shares a price of GBP0.0125 per share. The Company also
issued 48,000,000 two-year warrants exercisable at GBP0.02 per
share. The debt element of the funding included a GBP300,000
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 GBP500,000 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 GBP1.227 million in the period
ended 31 June 2021. Finance costs over the year fell to GBP0.065
million, reflecting interest and finance fees (2020:
GBP0.247million). Overall, administrative costs increased slightly
for the year to GBP1.014 million (2020: GBP0.838 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 GBP1.227 million (2020:
GBP1.482 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 .
Independent Auditor's Report
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
GBP987,000 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
GBP122,000 (2021: GBP98,000), 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 GBP120,000 (2020:
GBP97,500), 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 Our work in this area included:
Joint Ventures and Associates and * Review of management's assessment of recoverability
Intragroup Balances (Notes 11 and of intragroup receivables in accordance with IFRS 9
14) criteria;
Investments in joint ventures and
associates, and receivables from * Consideration of recoverability of investments and
other Group Companies, are the intragroup loans by reference to underlying net asset
most significant balances in the values, including the recoverability potential of the
financial statements and the underlying exploration projects (Mambare
recoverability Nickel-Cobalt Project; Dempster Vanadium Project);
of these balances involves judgement.
The Group and Company own a 50% * Review of Board impairment papers in respect of
interest in DVY196 Holdings Corp, investments, including challenge and obtaining
and a 41% interest in Oro Nickel corroboration for key assumptions used;
JV entity as at 30 June 2021, both
of which have material value in
the Financial Statements. * Obtaining and reviewing any relevant agreements
relating to investments (shareholder agreements; JV
Given the continuing losses in agreements; license agreements etc) to ensure all
these entities, and delays in advancing terms are complied with; and
developments at the underlying
projects, there is a risk that
the investment and any associated * Review of disclosures made in respect of these
receivable balances cannot be recovered balances in accordance with IFRS.
and that the balances should be
impaired.
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
Financial Statements
Consolidated Statement of Financial Position
as at 30 June 2021
30 June 30 June
2021 2020
Notes GBP'000 GBP'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
Consolidated Income Statement
for the year ended 30 June 2021
Year to Year to
30 June 30 June
2021 2020
Notes GBP'000 GBP'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
------------------------------------------------- ----- --------- ---------
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2021
30 June 30 June
2021 2020
GBP'000 GBP'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.
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
The movements in equity during the year were as follows:
Total
Equity
attributable
Share Shares to owners
Share premium to be Retained Other of the Non-controlling Total
capital account issued earnings reserves Parent interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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.
FVTOCI Foreign
financial Share-based currency Total
asset payment Warrant translation other
reserve reserve reserve reserve reserves
Other reserves GBP'000 GBP'000 GBP'000 GBP GBP
-------------------------------------- ---------- ------------- -------- ------------ ---------
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.
Consolidated Statement of Cash Flows
for the year ended 30 June 2021
Year to Year to
30 June 30 June
2021 2020
GBP GBP
---------------------------------------------------------- -------- --------
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.
Company Statement of Financial Position
Corcel Plc (Registration Number: 05227458)
as at 30 June 2021
30 June 30 June
2021 2020
Notes GBP GBP
----------------------------------------------- ----- -------- --------
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 GBP1,366,448 (2020: loss
of GBP1,949,687). The Company's Total comprehensive loss for the
financial year was GBP1,363,300 (2020: loss GBP1,991,647).
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.
Company Statement of Changes in Equity
for the year ended 30 June 2021
The movements in reserves during the year were as follows:
Share
Share premium Shares Retained Other Total
capital account to be issued earnings reserves equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
---------------------------------- -------- -------- -------------- --------- --------- --------
FVTOCI
financial Share-based Total
asset payment Warrants other
reserve reserve reserve reserves
Other reserves GBP'000 GBP'000 GBP'000 GBP'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.
Company Statement of Cash Flows
for the year ended 30 June 2020
Year to Year to
30 June 30 June
2021 2020
GBP'000 GBP'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.
Notes to 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 (GBP'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 GBP0.392 million and
GBP0.818 million of borrowings and, as at the date of signing these
Financial Statements, the cash balance was GBP0.341 million.
Current borrowings of GBP729,000 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 GBP390,000,
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 GBP1.366 million (2020:
loss of GBP1.949 million). The Company's other comprehensive loss
for the financial year was GBP1.363 million (2020: loss GBP1.991
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 (GBP). 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
GBP1.77 million alongside a GBP1.3 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 GBP987,000 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.
Flexible Grid Corporate
Solutions and
Battery Metals (UK) unallocated Total
Year to 30 June 2021 GBP'000 GBP'000 GBP'000 GBP'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)
-------------------------------------- -------------- ------------- ------------ --------
Flexible Grid Corporate
Solutions and
Battery Metals (UK) unallocated Total
Year to 30 June 2020 GBP'000 GBP'000 GBP'000 GBP'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.
Papua
UK Australia New Guinea USA Canada Total
Year to 30 June 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
------------------------------ ----------- ----------- ----------- ----------- ----------- ------------------
Papua
Year to 30 UK Australia New Guinea USA Canada Total
June 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
2021 2020
Group GBP'000 GBP'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 Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'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
2021 2020
Group GBP'000 GBP'000
----------------- -------- --------
Interest expense (65) (247)
(65) (247)
----------------- -------- --------
6. Taxation
2021 2020
GBP'000 GBP'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 GBPnil (2020: GBPnil), 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 GBP3,281
thousand (2020: GBP3,085) and capital losses estimated circa GBPnil
(2020: GBPnil).
7. Staff Costs
The aggregate employment costs of staff for the Group (including
Directors) for the year was:
2021 2020
GBP'000 GBP'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 2020
Number 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
Directors' Consultancy Share Incentive Pension Short term
fees fees Bonus Plan contributions benefits Total
2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
------------------------ ---------- ----------- --------- --------------- --------------- ---------- --------
Social
Directors' Consultancy Share Incentive Pension security
fees fees Bonus Plan contributions costs Total
2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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, GBP'000 (1,227) (1,482)
Weighted average number of ordinary shares
of GBP0.0001 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
Investments Investments Goodwill Goodwill
in subsidiaries in subsidiaries 2021 2020
2021 2020 GBP'000 GBP'000
Company GBP GBP
------------------------------------ ---------------- ---------------- -------- --------
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:
Proportion
Country of held by Nature of
Company Name registration Class Group 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 Energy storage
Services Ltd (indirectly and trading and
owned through ESTEQ Limited)) UK Ordinary 100% 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 GBP250,000 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 GBP37,750, with the agreement to
extend a further GBP100,000, 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 GBP25,250 was recognised in relation to this acquisition
and subsequently impaired to GBPnil 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
GBP90,000. This total potential consideration was broken down into
GBP15,000 payable in cash and GBP75,000 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 GBP'000 GBP'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:
Proportion Proportion
held by held by Status
Country Group Group at
of at 30 at 30 30 June Accounting
Company Name registration Class June 2021 June 2020 2021 year end
-------------------------------- -------------- --------- ---------- ---------- --------- ------------
Direct
Oro Nickel Ltd (Held indirectly
through Papua
Oro Nickel Vanuatu) 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, 2(nd) Floor, Brian Bell Plaza, Turumu Street, Boroko,
National Capital District, Papua New Guinea.
DVY196 Holdings Corp registered office is 3081 3(rd) 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:
Revenue Loss Assets Liabilities Net Assets
Company GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 GBP'000 GBP'000 GBP'000 GBP'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 30 June 2020 30 June 2021 30 June
Group Group Company 2020
GBP'000 GBP'000 GBP'000 Company
GBP'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 30 June 2020 30 June 2021 30 June 2020
Group Group Company Company
GBP'000 GBP'000 GBP'000 GBP'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 30 June 2020 30 June 30 June
Group Group 2021 2020
GBP GBP Company Company
GBP GBP
------------------------------------- ------------- ------------- --------- ---------
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
GBP GBP GBP GBP
----------------------------------------- ----- ----- ----- -----
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:
-- GBPnil (2020: GBP16,549) owing to Red Rock Resources Plc, a
related party entity as a result of having common Directors;
-- GBP33,733 (2020: GBP20,619) 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 (GBP907,000) debt position in ASX listed Resource Mining
Corporation Limited for consideration of GBP178,096 and 13,288,982
new ordinary shares of Corcel. The Company's share price on the
date of transaction was GBP0.011. 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 (GBP355,259), 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 GBP987,121 on 30 June 2021.
15. Trade and Other Payables
Group Company
----------- -----------
2021 2020 2021 2020
GBP GBP GBP GBP
------------------------------------- ----- ---- ----- ----
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 GBPnil (2020:
GBP7,962), owing to Red Rock Resources Plc, a related party entity
as a result of having common Directors.
Short Term Borrowings Maturity
2021 2020
GBP'000 GBP'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 GBP286,756 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 GBP729,272,
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:
2021 2020
Authorised, issued and fully paid GBP'000 GBP'000
----------------------------------------------------------- --------------- ----------
189,910,596 ordinary shares of GBP0.0001 each
(2019: 1,516,894,159 ordinary shares of GBP0.0001
each) 38 19
1,788,918,926 deferred shares of GBP0.0009 each 1,610 1,610
2,497,434,980 A deferred shares of GBP0.000095
each 237 237
8,687,335,200 B Deferred shares of GBP0.000099
each 860 860
----------------------------------------------------------- --------------- ----------
As at 30 June 2,745 2,726
----------------------------------------------------------- --------------- ---------- ---------------
Share Premium
Nominal,
Movement in ordinary shares Number GBP
----------------------------------------------------------- --------------- ---------- ----------------
As at 30 June 2019 - ordinary shares of GBP0.0001
each 1,516,894,159 151,689 21,113,220
----------------------------------------------------------- --------------- ---------- ----------------
Issued on 18 Dec 2019 at GBP0.0001 per share
(cash) 56 0.01 -
Issued on 23 Dec 2019 at GBP0.000275 per share
(cash) 3,021,818,173 302,182 489,358
Issued on 23 Dec 2019 at GBP0.000275 per share
(non-cash, debt extinguished) 530,030,036 53,003 92,864
Issued on 23 Dec 2019 at GBP0.000275 per share
(non-cash, promissory notes conversion) 2,596,363,636 259,636 454,364
Issued on 23 Dec 2019 at GBP0.000275 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 GBP0.000001 each
* 8,687,335,200 B deferred shares of GBP0.000099 each
Total ordinary shares of GBP0.000001 each at
23 Dec 2019 prior to share 100:1 consolidation 8,687,335,200 8,687 -
Share consolidation 100:1new ordinary shares
of GBP0.0001 each 86,873,352 8,687 -
Issued on 3 Jan 2020 at GBP0.0305 per share
(non-cash, partner buy out) 2,461,538 246 74,831
Issued on 31 Jan 2020 at GBP0.0443 per share
(non-cash, director's salary) 122,312 12 5,403
Issued on 31 Jan 2020 at GBP0.0458 per share
(non-cash, director's salary) 49,028 5 2,241
Issued on 31 Jan 2020 at GBP0.0467 per share
(non-cash, director's fees) 141,901 14 6,619
Issued on 31 Jan 2020 at GBP0.0278 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 GBP0.0083 per share
(non-cash, settled creditor) 4,909,610 491 40,259
Issued on 7 Apr 2020 at GBP0.0110 per share
(non-cash, debt purchase) 13,288,982 1,329 144,850
Issued on 7 Apr 2020 at GBP0.008 per share
(cash) 58,750,000 5,875 444,500
Issued on 21 Apr 2020 at GBP0.0110 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 GBP0.0100 per share
(cash) 21,000,000 2,100 199,700
Issued on 19 Jun 2020 at GBP0.0100 per share
(non-cash, settled creditor) 1,000,000 100 9,900
----------------------------------------------------------- --------------- ---------- ----------------
As at 30 June 2020 - ordinary shares of GBP0.0001
each 189,910,596 18,991 23,031,649
----------------------------------------------------------- --------------- ---------- ----------------
Issued on 26 Oct 2020 at GBP0.0100 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 GBP0.0100 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 GBP0.0098 per share
(RMI debt acquisition) 23,711,018 2,371 229,997
Issued on 17 Feb 2021 at GBP0.0125 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 GBP0.0125 per share
(cash) 24,000,000 2,400 297,600
Issued on 18 Feb 2021 at GBP0.0125 per share
(non cash creditor settlement) 2,880,000 288 19,713
Issued on 15 Apr 2021 at GBP0.0160 per share
(cash, warrants exercised) 8,500,000 850 135,150
Issued on 20 Apr 2021 at GBP0.0160 per share
(cash, warrants exercised) 500,000 50 7,950
Issued on 20 Apr 2021 at GBP0.0160 per share
(cash, warrants exercised) 12,639,750 1,264 200,972
Issued on 22 Apr 2021 at GBP0.0160 per share
(cash, warrants exercised) 2,500,000 250 39,750
Issued on 10 May 2021 at GBP0.0200 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 GBP0.0130 per share
(non-cash creditor settlement) 23,076,924 2,308 277,692
Issued on 12 May 2021 at GBP0.0001 per share
(non- cash creditor settlement) 1,846,152 185 1,656
Issued on 12 May 2021 at GBP0.0200 per share
(non- cash interest settlement) 1,200,000 120 23,880
Issued on 12 May 2021 at GBP0.0001 per share
(non- cash SIP) 1,116,994 112 -
----------------------------------------------------------- --------------- ---------- ----------------
As at 30 June 2021 - ordinary shares of GBP0.0100
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 GBP0.0001, which are
the company's listed securities;
-- Deferred shares with a nominal value of GBP0.0009;
-- A Deferred shares with a nominal value of GBP0.000095;
-- B Deferred share with a nominal value of GBP0.000099
Subject to the provisions of the Companies Act 2006, the
deferred shares may be cancelled by the Company, or bought back for
GBP1 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 GBP90,000, payable
in GBP15,000 in cash and GBP75,000 in new ordinary shares. The
GBP75,000 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 GBP75,000 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 GBP0.01245-GBP0.60
(2020: GBP0.01245-GBP0.60). 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 2020
number of number of
warrants 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 Number of warrants Number of post
price, adjusted before share consolidation consolidation
post consolidation warrants
14 Jan 2019 12 Dec 2022 GBP0.60 91,587,303 915,873
15 Apr 2019 14 Apr 2021 GBP0.10 399,999,998 3,999,999
17 July 2019 1 July 2024 GBP0.25 20,000,000 200,000
31 Jan 2020 30 Jan 2023 GBP0.0285 - 438,596
7 Apr 2020 6 Apr 2023 GBP0.01245 - 4,909,610
7 Apr 2020 6 Apr 2023 GBP0.016 - 29,375,000
19 Jun 2020 18 Jun 2023 GBP0.016 - 21,000,000
26 Oct 2020 26 Oct 2023 GBP0.016 - 13,360,250
18 Feb 2021 18 Feb 2023 GBP0.020 - 51,200,000
18 Feb 2021 18 Feb 2024 GBP0.013 - -
12 May 2021 31 Dec 2021 GBP0.020 - 25,000,000
12 May 2021 12 May 2024 GBP0.025 - 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 GBP1,107,249 (2020: GBP272,785).
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 Expiry Number Warrant Warrant Share UK Volatility, FV of FV of
date date of post life, exercise price risk-free % 1 all
consolidation years price, at the rate warrant, warrants,
warrants adjusted grant at the GBP GBP
post date, date
consolidation, GBP of grant,
GBP %
26 Oct 26 Oct
2020 2023 37,500,000 3 0.016 0.0098 0.0001 103.50 0.0057 210,000
18 Feb 18 Feb
2021 2023 51,200,000 2 0.020 0.0120 0.0015 99.71 0.0054 276,480
18 Feb 18 Feb
2021 2024 23,076,923 3 0.013 0.0120 0.0015 99.71 0.0100 230,769
12 May 31 Dec
2021 2021 25,000,000 0.5 0.020 0.0212 0.0015 99.71 0.0060 150,000
12 May 12 May
2021 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 Options issued Options issued Total
9 September 5 December 31 January Number
Options issued 2016 exercisable 2019, exercisable 2020 exercisable
14 June 2016 at GBP0.8 at GBP0.0275 at GBP0.0285
exercisable at per share, per share, per share,
GBP0.45 per expiring on expiring expiring on
share expiring 9 September on 5 December 31 January
29 January 2022 2022, 2024 2025
Number 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
-------------------- -----------------------
Weighted Weighted
Number average average
of exercise Number of exercise
options price options price
Company and Group Number GBP Number 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 GBP0.0275 and GBP0.80. 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 Number of Vesting Life Option Share UK Volatility, FV of FV of
date post period, of the exercise price risk-free % 1 all
consolidation years option, price, at the rate option, options,
options years adjusted grant at the GBP GBP
post date, date
consolidation, GBP of grant,
GBP %
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 GBPnil (2020: GBP23,193).
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 GBP150 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 GBP3,600 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 GBP5,400 (2020: GBP9,772), included
into administrative expenses line in the Consolidated Income
Statement.
18. Cash and Cash Equivalents
30 June 30 June
2021 2020
Group GBP'000 GBP'000
------------------------- -------- --------
Cash in hand and at bank 392 415
------------------------- -------- --------
30 June 30 June
2021 2020
Company GBP'000 GBP'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 2020
30 June GBP'000 GBP'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 2020
30 June GBP'000 GBP'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 2020
30 June GBP'000 GBP'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:
Level
1 Level 2 Level 3 Total
Group and Company GBP'000 GBP'000 GBP'000 GBP'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
--------------------------------------- -------- -------- -------- --------
Level 1 Level 2 Level 3 Total
Group and Company GBP'000 GBP'000 GBP'000 GBP'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 AUD USD CAD Total
30 June 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 AUD USD CAD Total
30 June 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 AUD USD CAD Total
30 June 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 AUD USD CAD Total
30 June 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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:
Non-cash
flow
Interest
Cash Non-cash and Cash Cash
30 flows Non-cash Non-cash flow arrangement flows flows 30
June Loans flow flow Forex fees Principal Interest June
2020 received Restructured Conversion movement accreted repaid repaid 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 GBP0.011 per share by the Company
for the total of GBP146,178 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
GBPnil (2020: GBP63,194), disclosed in Notes 17 and 18;
-- Impairment of other receivables in the amount of GBPnil (2020: GBP36,599);
-- Goodwill write off in the amount of GBP25,250 (2020: GBP105,815).
-- Share based payments to settle creditor balances GBP392,000 (2020: GBPnil).
22. Significant Agreements and Transactions
Financing
-- On 26 October 2020, the Company announced a fundraising of
GBP750,000 at a price of GBP0.01 per share. A total of 37,500,000
three-year warrants were issued to investors at a price of GBP0.016
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 GBP300,000 from the issue of 24,000,000 new ordinary
shares at a price of GBP0.0125 per share. The Company also issued
48,000,000 two-year warrants, exercisable at GBP0.02 per share. The
debt element of the fundraising included a GBP300,000 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 GBP0.013. As part of the loan the
Company issued 23,076,923 three-year warrants, exercisable when the
share price is at or above GBP0.02 per share, at a price of
GBP0.013 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 GBP0.013 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 GBP0.012 per share for gross proceeds of GBP300,000. GBP200,000
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 GBP500,000 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 GBP0.02
strike price, expiring on 31 December 2021 and 20,000,000
three-year warrants with a GBP0.025 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 GBP0.02. 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 GBP90,000. This total potential consideration was
broken down into GBP15,000 payable in cash and GBP75,000 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
GBP400,000 satisfied through GBP150,000 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 GBP72,000 payable immediately
and a further GBP72,000 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 GBP987,000.
The consideration of GBP987,000 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:
GBP'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.
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