TIDMSTGR
RNS Number : 7171C
Stratmin Global Resources PLC
30 June 2016
30 June 2016
StratMin Global Resources Plc
("StratMin" or the "Company")
Final Results for the Year to 31 December 2015
CHAIRMAN'S STATEMENT
YEAR TO 31 DECEMBER 2015
2015 was a difficult year for StratMin as its operational
subsidiary Graphmada moved into commercial scale production of
graphite concentrates from the mine and operations in Madagascar
during a period of falling graphite prices. Despite a significant
deterioration in flake graphite prices however, the company was
able to achieve operational breakeven by the year end through a
partnership with Tirupati Carbons and Chemicals Limited
("Tirupati") that enabled a move to 24x7 production with
diversified sales into the higher priced European and Asian
markets.
In keeping with the Company's strategy of partnering to reduce
risk and improve returns on investments, StratMin welcomed Shishir
Poddar on to the Board to lead the technical and commercial efforts
in the graphite space alongside the partnership with his broader
team at Tirupati. The Company also secured an option to partner on
a new graphite mine and processing plant with Tirupati at their
Vatomaina project, some twenty kilometres from the current
Madagascar operations.
StratMin also sought partnership at a corporate level with
Australian listed Bass Metals Limited ("Bass") bringing them in as
a joint venture partner in Graphmada. The Australian stock market
has a robust Graphite and Lithium sector with valuations at a
premium to other markets. By partnering with Bass we were able to
raise capital at a premium to the share price and this transaction
then extended to a proposed restructuring of the investment in
Graphmada to a proposed divestment of Graphmada in return for cash
and an indirect holding in Graphmada through StratMin being issued
with equity in Bass. The prescribed accounting treatment under IFRS
for this transaction means the Graphmada investment has been
classified as a Disposal Group and as such it's results are
excluded from the rest of the Group in the following statements.
The transaction has been assessed and recommended by the Board
however it still requires final regulatory and shareholder
approval. In addition, any positive gain from the profit on
disposal of the operations to Bass will be included in the results
for 2016.
The transaction has progressed through formal due diligence and
is expected to close on schedule in July subject to final
shareholder approval. At the completion of this transaction,
StratMin will have a holding in Bass that will have a lower cost of
capital and a better funding platform to undertake the necessary
refurbishment and expansion of operations in Madagascar. It will
also strengthen the StratMin Balance sheet and position the Company
to pursue the other projects such as Vatomaina and broader
diversification into the renewable energy and energy storage
industry, which is a growing consumer of graphite.
This disposal is still subject to shareholder approval and the
Company hopes to publish a circular to shareholders on the matter
shortly.
Acknowledgement must be made of the sustained effort from the
in-country leadership team who have kept Graphmada operations
running on a very tight budget, enabling us to keep working on a
solution with Bass to secure financing when we saw a number of our
peers fail. Wilhelm Reitz, Mirela Gheorghe and their teams have
ensured continued production and Shishir Poddar and Tirupati have
ensured that every ton of graphite concentrate produced during the
period has been sold.
We look forward to working with Bass on building the Graphmada
business in the years ahead and thank all the shareholders for
their continued support.
Brett Boynton
Interim Chairman and Managing Director
29 June 2016
STRATEGIC REPORT
YEAR TO 31 DECEMBER 2015
The directors present their strategic report for the Group for
the year ended 31 December 2015.
REVIEW OF THE BUSINESS
The Group is currently invested in graphite production and
exploration.
On 28 January 2013 StratMin completed the reverse acquisition of
Graphmada Equity Pte. Limited, the parent of Graph Mada SARL, a
minerals exploration and development company in Madagascar with
graphite resources.
A variety of investments were made in the business during the
last year, including direct capital expenditure in the plant and
the capture of new key staff and joint venture partners to help
grow the business.
FINANCIAL HIGHLIGHTS
The operating loss from continuing operations decreased from
GBP1,227,000 in 2014 to GBP868,000 resulting in a loss per share
from continuing operations of 0.55p (2014:1.28p).
RESULTS AND DIVIDS
In 2015, the Group's overall loss after taxation was
approximately GBP2,200,000 (2014: GBP2,400,000 loss). The Directors
do not recommend the payment of a dividend (2014: GBPnil).
KEY PERFORMANCE INDICATORS
The key performance indicators are set out below.
GROUP STATISTICS 2015 2014 Change %
-------------------------- ------------ ------------ --------
Net asset value GBP5,441,000 GBP6,198,000 (12.21)
Net asset value per share 3.89p 5.55p (33.87)
Closing share price 2.92p 7.67p (61.93)
Market capitalisation GBP4,392,674 GBP8,634,000 (49.12)
-------------------------- ------------ ------------ --------
KEY RISKS AND UNCERTAINTIES
Currently the principal risks are two-fold. Firstly, the market
price risk affecting the value of the graphite produced which may
not provide sufficient profit to enable the business to continue to
operate. Secondly, the timing and any delay in getting the graphite
plant into full production. The Company has made a significant
investment during the operational phase in bringing the plant into
production and only once it has achieved a level of production that
results in positive cash flow will it be confident of its long term
viability.
Details of other financial risks and their management are given
in Note 24 to the financial statements.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Group's financial risk management objectives and
policies are set out in Note 24 to these financial statements.
Brett Boynton
Director
29 June 2016
DIRECTORS' REPORT
YEAR TO 31 DECEMBER 2015
The Directors present their annual report and the audited
financial statements of the Group for the year ended 31 December
2015.
PRINCIPAL ACTIVITY AND BUSINESS REVIEW
The Company is no longer required to include the Principal
Activity and Review of the Business within the Directors Report.
This information is now included within the Strategic Report above,
as part of the 'Review of the Business' under the Amendment to the
Companies Act 2006 of s.414c(2a).
DIRECTORS
The Board comprised the following directors who served
throughout the year and up to the date of this report save where
disclosed otherwise:
Name Position
----------------- ------------------ -------------------------
Manoli Yannaghas Managing Director (resigned 26 May 2015)
Laurie Hunter Chairman
Brett Boynton Managing Director (appointed 26 May 2015)
Shishir
Poddar Director (appointed 18 June 2015)
Non-Executive
Jeff Marvin Director
Non-Executive
Marius Pienaar Director (resigned 18 June 2015)
Non-Executive
David Premraj Director
*Laurie Hunter and Jeff Marvin resigned on 16 February 2016
DIRECTORS' INTERESTS
The Directors' interests in the share capital of the Company at
31 December 2015, held either directly or through related parties,
were as follows:
Name of director Number of ordinary shares % of ordinary share capital and Voting Rights
----------------------------------------- -------------------------- ----------------------------------------------
David Premraj 305,556 0.26
Jeff Marvin (resigned 16 February 2016) 916,667 0.81
Shishir Poddar - -
Brett Boynton - -
-------------------------- ----------------------------------------------
1,222,223 1.07
Details of the options granted to or held by the Directors or
former Directors are as follows:
At 31
December At 31 December
Name of 2014 2015 or
director or date date of Average Earliest Average
or former of appointment Options Options cessation Exercise date Date
director if later granted lapsed if earlier price of exercise of expiry
------------------- --------------- ---------- --------- -------------- --------- ------------ ----------
Jeff Marvin 479,040 - - 479,040 22.5p 2/03/2012 1/03/2022
Shishir
Poddar* - 10,000,000 - 10,000,000 7.5p 16/06/2015 16/12/2016
Manoli Yannaghas 2,250,000 - (750,000) 1,500,000 15.9p 30/09/2014 1/05/2017
Laurie Hunter 2,000,000 - - 2,000,000 15.7p 12/03/2014 1/09/2017
------------------- --------------- ---------- --------- -------------- --------- ------------ ----------
*The options included under the name of Shishir Poddar are held
in the name of Tirupati Carbons and Chemicals Group(P) Limited
("Tirupati"), as part of the strategic agreement signed with them
on 18 June 2015. Mr Poddar is a major shareholder and Director of
Tirupati and as such the options have been reflected as above.
The Company has made qualifying third party indemnity provisions
for the benefit of the Directors in the form of Directors' and
Officers' Liability insurance during the year which remain in force
at the date of this report.
DIRECTORS' REPORT
YEAR TO 31 DECEMBER 2015 (continued)
DONATIONS
The Group did not make any political or charitable donations
during the year (2014: GBPnil).
EMPLOYEE CONSULTATION
The Group places considerable value on the involvement of its
employees and has continued to keep them informed on matters
affecting them as employees and on various factors affecting the
performance of the Group. This is achieved through formal and
informal meetings. Equal opportunity is given to all employees
regardless of their sex, age, colour, race, religion or ethnic
origin.
SIGNIFICANT SHAREHOLDINGS
On 1 June 2016 the following were interested in 3 per cent. or
more of the Company's share capital (including Directors, whose
interests are also shown above):
% of ordinary
Number share capital
Name of shareholder of ordinary and voting
shares rights
-------------------------------- ------------- ---------------
Consolidated Resources Pte Ltd 16,813,319 10.31
Viking Investments Limited 12,150,000 7.45
Mrs Kesava Padmavathi 8,100,000 4.96
Mrs Caryl Melissa Jane Pienaar 6,500,000 3.98
Ghanshyam Champakal 5,025,000 3.08
POST YEAR EVENTS
On 16 February 2016 Mr Laurie Hunter and Mr Jeffrey Marvin
resigned.
On 4 March 2016, the Company completed the placing of 12,000,000
new ordinary shares of 0.01p each at a price 2.5p each, raising in
aggregate gross proceeds of approximately GBP300,000.
As part of the placing on 4 March 2016, the Company issued
warrants to subscribe for one new Ordinary share for every twenty
Placing shares, being 600,000 warrants in total, each exercisable
at 2.5p per Ordinary share at any time before 4 March 2018.
On 1 April 2016 the Company announced the entering into heads of
terms with Bass Metals Limited to acquire the remaining 93.75%
which it had yet to acquire for a consideration of up to
AUS$15.25million. The deal is subject to regulatory and shareholder
approval.
GOING CONCERN
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operation or existence for the
foreseeable future thus we continue to adopt the going concern
basis in preparing the financial statements. Further details
regarding the adoption of the going concern basis can be found in
note 4 of the financial statements.
DISCLOSURE OF INFORMATION TO THE AUDITORS
In the case of each of the persons who are directors of the
Company at the date when this report is approved:
-- So far as each director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and
-- Each of the directors has taken all steps that they ought to
have taken as a director to make themselves aware of any relevant
audit information and to establish that the auditors are aware of
the information.
This information is given and should be interpreted in
accordance with the provisions of Section 418 of the Companies Act
2006.
DIRECTORS' REPORT
YEAR TO 31 DECEMBER 2015 (continued)
AUDITOR
Welbeck Associates have expressed their willingness to continue
in office as auditor and it is expected that a resolution to
reappoint them will be proposed at the next annual general
meeting.
CORPORATE GOVERNANCE
The requirements of the UK Corporate Governance Code are not
mandatory for companies traded on AIM. The Directors recognise the
value of the Quoted Companies Alliance Corporate Governance Code
for Small and Mid-sized Quoted Companies, to the extent that they
consider it appropriate and having regard to the size, current
stage of development and resources of the Group. While under the
AIM Rules full compliance is not required, the Directors believe
that the Company applies the recommendations in so far as it is
appropriate for a Company of its size.
BOARD OF DIRECTORS
The Company supports the concept of an effective Board leading
and controlling the Company. The Board of Directors is responsible
for approving Company policy and strategy. It meets regularly and
has a schedule of matters specifically reserved to it for decision.
All Directors have access to advice from independent professionals
at the Company's expense. Training is available for new and
existing Directors as necessary.
The Board consists of interim Chairman and Managing Director,
Brett Boynton, Executive Director, Shishir Poddar, and
Non-Executive director, David Premraj.
Matters which would normally be referred to appointed
committees, such as the AIM Compliance committee, are dealt with by
the full Board.
AUDIT COMMITTEE
The Audit Committee comprises Brett Boynton (Chairman), Shishir
Poddar and David Premraj. The Committee meets at least twice a year
and is responsible for ensuring the financial performance of the
Group is properly reported on and monitored. It liaises with the
auditor and reviews the reports from the auditor relating to the
accounts.
REMUNERATION COMMITTEE
The Remuneration Committee comprises David Premraj (Chairman),
Brett Boynton and Shishir Poddar. The Committee meets at least
twice a year and is responsible for reviewing the performance of
Executive Directors and sets the scale and structure of their
remuneration on the basis of their service agreements, with due
regard to the interests of the shareholders and the performance of
the Group
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority by
the management. In addition to the publication of an annual report
and an interim report, there is regular dialogue with shareholders
and analysts. The Annual General Meeting is viewed as a forum for
communicating with shareholders, particularly private investors.
Shareholders may question the Managing Director and other members
of the Board at the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group's
system of internal control and for reviewing the effectiveness of
these systems. The risk management process and systems of internal
control are designed to manage rather than eliminate the risk of
the Group failing to achieve its strategic objectives. It should be
recognised that such systems can only provide reasonable and not
absolute assurance against material misstatement or loss. The Group
has well established procedures which are considered adequate given
the size of the business.
AUDITORS
The Board as a whole considers the appointment of external
auditors, including their independence, specifically including the
nature and scope of non-audit services provided.
DIRECTORS' REPORT
YEAR TO 31 DECEMBER 2015 (continued)
REMUNERATION
The remuneration of the directors has been fixed by the Board as
a whole. The Board seeks to provide appropriate reward for the
skill and time commitment required so as to retain the right
calibre of director at a cost to the Company which reflects current
market rates.
Details of directors' fees and of payments made for professional
services rendered are set out in Note 8 to the financial statements
and details of the directors' share options are set out in the
Directors' Report.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Group's financial risk management objectives and
policies are set out in Note 24 to these financial statements.
By order of the Board on 29 June 2016
David Premraj
Director
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the report of the
directors and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and Company
financial statements for each financial year. The Directors are
required by the AIM Rules of the London Stock Exchange to prepare
group financial statements in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European
Union ("EU") and have also elected to prepare the Company financial
statements in accordance with IFRS as adopted by the EU. Under
company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of
the state of affairs and profit or loss of the company and group
for that period. In preparing these financial statements, the
directors are required to:
-- select suitable accounting policies and then apply them consistently
-- make judgments and accounting estimates that are reasonable and prudent
-- state whether applicable IFRSs have been followed, subject to
any material departures disclosed and explained in the financial
statements
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
By order of the Board on 29 June 2016
David Premraj
Director
INDEPENT AUDITORS' REPORT TO THE MEMBERS OF STRATMIN GLOBAL
RESOURCES PLC
We have audited the financial statements of StratMin Global
Resources plc for the year ended 31 December 2015 which comprise
the Group income statement, the Group statement of comprehensive
income, the Group and Parent Company statements of changes in
equity, the Group and Parent Company statements of financial
position, the Group and Parent Company statements of cash flows,
and the related notes. The financial reporting framework that has
been applied in the preparation of the group and parent company
financial statements is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
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.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As explained more fully in the statement of directors'
responsibilities set out on page 8, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board's (APB's) Ethical Standards for
Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the directors; and the
overall presentation of the financial statements. In addition, we
read all the financial and non-financial information in the annual
report to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for
our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Parent Company's affairs as at 31
December 2015 and of the Group's loss for the year then ended;
-- the Group and Parent Company financial statements have been
properly prepared in accordance with IFRS as adopted by the
European Union; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the information given in the Strategic Report and
the Report of the Directors for the financial year for which the
financial statements are prepared is consistent with the financial
statements.
OPINION
Emphasis of Matter - Going Concern
In forming our opinion on the financial statements, which is not
modified, we draw your attention to the disclosures made in note 4
to the financial statements concerning the Company's ability to
continue as a going concern.
These conditions, along with other matters explained in note 4
to the financial statements, indicate the existence of uncertainty
which may cast doubt about the ability of the Group and Company to
continue as a going concern. However, the directors have plans to
manage the cash flows of the Company to enable it to continue as a
going concern. The financial statements do not include the
adjustments that would result if the Group and Company was unable
to continue as a going concern.
INDEPENT AUDITORS' REPORT TO THE MEMBERS OF STRATMIN GLOBAL
RESOURCES PLC (continued)
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the Parent Company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Jonathan Bradley Hoare (Senior statutory auditor)
for and on behalf of Welbeck Associates
Chartered Accountants and Statutory Auditor
London, United Kingdom
29 June 2016
2015 2014
Notes GBP'000 GBP'000
---------------------------------- ----- -------- --------
Continuing operations
Revenue - -
Cost of sales - -
Gross (loss)/profit - -
Administrative expenses (664) (1,177)
Other operating expenses 9 (195) (15)
Operating loss 6 (859) (1,192)
Finance costs 10 (9) (35)
Loss from continuing operations (868) (1,227)
Loss from discontinued operations 12 (1,317) (1,153)
Loss before tax (2,185) (2,380)
Tax 11 - (4)
Loss for the year (2,185) (2,384)
Loss attributable to owners
of the parent company (2,185) (2,384)
Earnings per share attributable
to owners of the parent company 13
Basic and diluted (pence per
share)
From continuing operations (0.55) (1.28)
From discontinued operations (1.01) (1.19)
From total operations (1.56) (2.47)
The accounting policies and notes are an integral part of these
financial statements.
2015 2014
Notes GBP'000 GBP'000
--------------------------------------- ----- -------- --------
Loss for the year (2,185) (2,384)
Other comprehensive income:
Items that may be subsequently
reclassified to profit and loss:
(226) (49)
Market value adjustment to investments 17 (1) (20)
Other comprehensive income/(expense)
for the period (227) (69)
Total comprehensive loss for the
year attributable to equity holders
of the parent (2,412) (2,453)
The Company has elected to take the exemption under section 408
of the Companies Act 2006 not to present the parent company pro t
and loss account. The loss for the parent company for the year was
GBP23,205,000 (2014: GBP1,243,000).
The accounting policies and notes are an integral part of these
financial statements.
GROUP COMPANY
------------------ ------------------
2015 2014 2015 2014
Notes GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ----- -------- -------- -------- --------
Non-Current assets
Goodwill 14 - 5,012 - -
Property, plant and
equipment 15 2 1,230 2 3
Investment in subsidiaries 16 - - 4,318 26,469
Available for sale
investments 17 1 6 1 6
Loans to group undertakings 16 - - 3,274 2,286
3 6,248 7,595 28,764
---------------------------- ----- -------- -------- -------- --------
Current assets
Assets of the disposal
group classified as
held for sale 12 6,543 - - -
Inventories 18 - 242 - -
Trade and other receivables 19 124 357 947 1,116
Cash and cash equivalents 20 156 91 154 79
6,823 690 1,101 1,195
--------
Current liabilities
Liabilities of the
disposal group classified
as held for sale 12 495 - - -
Trade and other payables 21 616 382 698 271
Short term borrowings 22 87 226 87 226
1,198 608 785 497
---------------------------- ----- -------- -------- -------- --------
Non-Current liabilities
Decommissioning obligation 28 - 132 - -
---------------------------- ----- -------- -------- -------- --------
Net assets/(liabilities) 5,628 6,198 7,911 29,462
---------------------------- ----- -------- -------- -------- --------
Equity
Share capital 26 6,046 4,505 6,046 4,505
Share premium account 26 31,818 31,771 31,818 31,771
Merger reserve 23,460 23,460 23,460 23,460
Reverse acquisition
reserve 23 (48,478) (48,478) - -
Investment reserve (33) (32) (700) (699)
Other reserves 134 293 417 350
Retained earnings (7,506) (5,321) (53,130) (29,925)
---------------------------- ----- -------- -------- -------- --------
Equity attributable
to owners of the Company 5,441 6,198 7,911 29,462
Non-controlling interests 187 - - -
5,628 6,198 7,911 29,462
---------------------------- ----- -------- -------- -------- --------
These financial statements were approved by the Board of
Directors on 29 June 2016.
Signed on behalf of the Board by:
Brett Boynton
Director Company number: 05173250
The accounting policies and notes are an integral part of these
financial statements
Equity attributable to equity holders
of the Company
-------------------------------------------------------------------------
Reverse
Share Share Merger acquisition Other Retained Non-controlling Total
capital Premium reserve reserve reserves earnings Total interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- -------- -------- ------------ --------- -------- -------- ---------------- -------
Balance at 1
January 2014 2,797 30,167 23,460 (48,478) 133 (2,937) 5,142 - 5,142
Total
comprehensive
income for
the period - - - - (69) (2,384) (2,453) - (2,453)
Net proceeds of
share issues 1,708 1,862 - - 35 - 3,605 - 3,605
Share issue
costs - (258) - - 53 - (205) - (205)
Share based
payment costs - - - - 109 - 109 - 109
Balance at 31
December 2014 4,505 31,771 23,460 (48,478) 261 (5,321) 6,198 - 6,198
Total
comprehensive
income for
the period - - - - (227) (2,185) (2,412) - (2,412)
Proceeds of
share issues 1,541 173 - - - - 1,714 - 1,714
Share issue
costs - (126) - - - - (126) - (126)
Share based
payment costs - - - - 67 - 67 - 67
Disposal of
non-controlling
interest - - - - - - - 187 187
Balance at 31
December 2015 6,046 31,818 23,460 (48,478) 101 (7,506) 5,441 187 5,628
The Company completed in 2013 the acquisition of Graphmada
Equity Pte. Limited, a graphite mining business, based in
Madagascar. The consideration for the acquisition was GBP25.5
million satisfied through the issue of 51,000,000 new ordinary
shares.
The Merger reserve includes a balance relating to when the
Company acquired the entire issued share capital of Direct
Excellence Limited (previously known as Interactive Prospect
Targeting Limited) pursuant to a share for share exchange on 1
December 2004.
The accounting policies and notes are an integral part of these
financial statements.
Share Merger Investment Other Retained
capital Share Premium Reserve reserve reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- ------------- --------- ----------- ---------- --------- --------
Balance at 1 January 2014 2,797 30,167 23,460 (679) 153 (28,696) 27,202
Total comprehensive income
for the year - - - (20) - (1,229) (1,249)
Net proceeds of share issues 1,708 1,862 - - 35 - 3,605
Share issue costs - (258) - - 53 - (205)
Share based payment costs - - - - 109 - 109
Balance at 31 December 2014 4,505 31,771 23,460 (699) 350 (29,925) 29,462
Total comprehensive expense
for the year - - - (1) - (23,205) (23,206)
Net proceeds of share issues 1,541 173 1,714
Share issue costs - (126) - - - (126)
Share based payment costs - - - - 67 - 67
Balance at 31 December 2015 6,046 31,818 23,460 (700) 417 (53,130) 7,911
The other reserve includes charge to the warrant reserve for the
year for warrants issued of GBPnil (2014: GBP88,000).
The accounting policies and notes are an integral part of these
financial statements.
GROUP COMPANY
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------- --------- --------
OPERATING ACTIVITIES
Loss for the year before
taxation (2,185) (2,380) (23,205) (1,229)
Adjusted for:
Finance expense 9 35 9 35
Depreciation 135 58 2 1
Share based payment charge 67 109 67 109
Shares issued in settlement
of fees 189 30 189 30
Loss on disposal of property,
plant and equipment 54 36 - -
Loss on disposal of investments - - 1,151 -
Impairment of investment - - 20,500 -
Operating cash flows before
movements in working capital (1,731) (2,112) (1,287) (1,054)
Increase in inventory (142) (14) - -
(Increase)/Decrease in
trade and other receivables 63 (167) (73) (16)
Increase/(Decrease) in
trade and other payables 493 (6) 344 (17)
Net cash used in operations (1,317) (2,299) (1,016) (1,087)
Tax paid - (4) - -
Net cash used in operating
activities (1,317) (2,303) (1,016) (1,087)
--------------------------------- -------- -------- --------- --------
INVESTING ACTIVITIES
Purchase of property, plant
and equipment (145) (416) - (3)
Advances to group companies - - (664) (1,620)
Disposal of investments 504 - 504 -
Net cash from/(used in)
investing activities 359 (416) (160) (1,623)
--------------------------------- -------- -------- --------- --------
FINANCING ACTIVITIES
Net proceeds from share
issues 1,399 3,095 1,399 3,095
Repayment of short term
borrowings (139) (621) (139) (621)
Interest paid (9) (35) (9) (35)
Net cash from/(used in)
financing activities 1,251 2,439 1,251 2,439
Net (decrease)/increase
in cash and cash equivalents 293 (280) 75 (271)
Cash and cash equivalents
of the disposal group (2) - - -
Cash and cash equivalents
at beginning of year 91 420 79 350
Effect of foreign exchange
rate changes (226) (49) - -
Cash and cash equivalents
at end of year 156 91 154 79
--------------------------------- -------- -------- --------- --------
The accounting policies and notes are an integral part of these
financial statements.
1 GENERAL INFORMATION
StratMin Global Resources Plc is a company incorporated
in the United Kingdom under the Companies Act
2006. The nature of the Group's operations and
its principal activities are set out in the
Strategic Report and the Directors' Report on
pages 3 and 4.
2 STATEMENT OF COMPLIANCE
The financial statements comply with International
Financial Reporting Standards as adopted by
the European Union. At the date of authorisation
of these financial statements, the following
Standards and Interpretations affecting the
Group, which have not been applied in these
financial statements, were in issue, but not
yet effective (and in some cases had not been
adopted by the EU):
-- IFRS 9 Financial Instruments
-- IFRS 15 Revenue from Contracts with Customers
-- IFRS 11 (amendments) Accounting for Acquisitions
of Interests in Joint Operations
-- IAS 16 and IAS 38 (amendments) Clarification
of Acceptable Methods of Depreciation and Amortisation
-- IAS 19 (amendments) Defined Benefit Plans:
Employee Contributions
-- IAS 27 (amendments) Equity Method in Separate
Financial Statements
-- IFRS 10 and IAS 28 (amendments) Sale or Contribution
of Assets between an Investor and its Associate
or Joint Venture
-- Annual Improvements to IFRSs: 2010-2012 Amendments
to: IFRS 2 Share-based Payment, IFRS 3 Business
Combinations, IFRS 8 Operating Segments, IFRS
13 Fair Value Measurement, IAS 16 Property,
Plant and Equipment, IAS 24 Related Party Disclosures
and IAS 38 Intangible Assets
-- Annual Improvements to IFRSs: 2011-2013 Amendments
to: IFRS 3 Business Combinations, IFRS 13 Fair
Value Measurement and IAS 40 Investment Property
-- Annual Improvements to IFRSs: 2012-2014 Cycle
Amendments to: IFRS 5 Non-current Assets Held
for Sale and Discontinued Operations, IFRS 7
Financial Instruments: Disclosures, IAS 19 Employee
Benefits and IAS 34 Interim Financial Reporting
The Directors anticipate that the adoption of the above
Standards and Interpretations in future periods will have little or
no impact on the financial statements of the Group when the
relevant Standards come into effect for future reporting
periods.
3 Accounting Policies
The principal accounting policies adopted and
applied in the preparation of the Group and
Company Financial statements are set out below.
These have been consistently applied to all
the years presented unless otherwise stated:
BASIS OF ACCOUNTING
The financial statements of StratMin Global
Resources plc (the "Company") and its subsidiaries
(the "Group") have been prepared in accordance
with International Financial Reporting Standards
(IFRS) as adopted for use in the European Union
("EU") applied in accordance with the provisions
of the Companies Act 2006.
IFRS is subject to amendment and interpretation
by the International Accounting Standards Board
("IASB") and the International Financial Standards
Interpretations Committee ("IFRS IC") and there
is an ongoing process of review and endorsement
by the European Commission. The accounts have
been prepared on the basis of the recognition
and measurement principles of IFRS that were
applicable at 31 December 2015.
3 Accounting Policies (continued)
GOING CONCERN
Any consideration of the foreseeable future
involves making a judgement, at a particular
point in time, about future events which are
inherently uncertain. The ability of the Group
to carry out its planned business objectives
is dependent on its continuing ability to raise
adequate financing from equity investors and/or
the achievement of profitable operations.
Nevertheless, at the time of approving these
Financial Statements and after making due enquiries,
the Directors have a reasonable expectation
that the Group has adequate resources to continue
operating for the foreseeable future. For this
reason they continue to adopt the going concern
basis in preparing the Financial Statements.
BASIS OF CONSOLIDATION
The Group's consolidated financial statements
incorporate the financial statements of StratMin
Global Resources Plc (the "Company") and entities
controlled by the Company (its subsidiaries).
Subsidiaries are entities over which the Group
has the power to govern the financial and operating
policies generally accompanying a shareholding
of more than one half of the voting rights.
The existence and effect of potential voting
rights that are currently exercisable or convertible
are considered when assessing whether the Group
controls another entity.
Subsidiaries are fully consolidated from the
date on which control is transferred to the
Group. They are de-consolidated from the date
that control ceases.
Inter-company transactions, balances and unrealised
gains on transactions between Group companies
are eliminated. Profits and losses resulting
from inter-company transactions that are recognised
in assets are also eliminated. Accounting policies
of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted
by the Group.
Where necessary, adjustments are made to the
financial statements of subsidiaries to bring
the accounting policies used into line with
those used by the Group.
All intra-group transactions, balances, income
and expenses are eliminated on consolidation.
Business Combinations
The acquisition of subsidiaries is accounted
for using the acquisition method under IFRS
3. The cost of the acquisition is measured at
the aggregate of the fair values, at the date
of exchange, of assets given, liabilities incurred
or assumed, and equity instruments issued by
the Group in exchange for control of the acquiree,
plus any costs directly attributable to the
business combination. The acquiree's identifiable
assets, liabilities and contingent liabilities
that meet the conditions for recognition under
IFRS 3 are recognised at their fair value at
the acquisition date, except for non-current
assets (or disposal groups) that are classified
as held for resale in accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued
Operations, which are recognised and measured
at fair value less costs to sell.
Goodwill arising on acquisition is recognised
as an asset and initially measured at cost,
being the excess of the cost of the business
combination over the Group's interest in the
net fair value of the identifiable assets, liabilities
and contingent liabilities recognised. If, after
reassessment, the Group's interest in the net
fair value of the acquirer's identifiable assets,
liabilities and contingent liabilities exceed
the cost of the business combination, the excess
is recognised immediately in the income statement.
revenue recognition
The Group's Revenue is predominantly generated
from the sale of Graphite all of which is governed
by an Off-take agreement signed in 2014. The
agreement is with an external third party, the
terms of which are subject to a confidentiality
agreement. Revenue is recognised net of any
sales taxes and discounts. Customers are invoiced
on an Free On Board basis (FOB), Meaning ownership
transfers to the customer following clearance
of customs at the port of departure.
3 ACCOUNTING POLICIES (continued)
AVAILABLE FOR SALE INVESTMENTS
Investments are initially measured at fair value
plus directly attributable incidental acquisition
costs. Subsequently, they are measured at fair
value in accordance with IAS 39. This is either
the bid price or the last traded price, depending
on the convention of the exchange on which the
investment is quoted.
Investments are recognised as available-for-sale
financial assets. Gains and losses on measurement
are recognised in other comprehensive income
except for impairment losses and foreign exchange
gains and losses on monetary items denominated
in a foreign currency, until the assets are
derecognised, at which time the cumulative gains
and losses previously recognised in other comprehensive
income are recognised in the income statement.
The Group assesses at each year end date whether
there is any objective evidence that a financial
asset or group of financial assets classified
as available-for-sale has been impaired. An
impairment loss is recognised if there is objective
evidence that an event or events since initial
recognition of the asset have adversely affected
the amount or timing of future cash flows from
the asset. A significant or prolonged decline
in the fair value of a security below its cost
shall be considered in determining whether the
asset is impaired.
When a decline in the fair value of a financial
asset classified as available-for-sale has been
previously recognised in other comprehensive
income and there is objective evidence that
the asset is impaired, the cumulative loss is
removed from other comprehensive income and
recognised in the income statement. The loss
is measured as the difference between the cost
of the financial asset and its current fair
value less any previous impairment.
foreign currencies
The individual financial statements of each
group company are presented in the currency
of the primary economic environment in which
it operates (its functional currency). For the
purpose of the Group financial statements, the
results and financial position of each group
company are expressed in Pounds Sterling, which
is the functional currency of the Company, and
the presentation currency for the Group financial
statements.
In preparing the financial statement of the
individual companies, transactions in currencies
other than the entity's functional currency
(foreign currencies) are recorded at the rates
of exchange prevailing on the dates of the transactions.
At each year end date, monetary assets and liabilities
that are denominated in foreign currencies are
retranslated at the rates prevailing on the
year end date. Non-monetary items 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. Non-monetary
items that are measured in terms of historical
cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement
of monetary items, and on the retranslation
of monetary items, are included in the income
statement. Exchange differences arising on the
retranslation of non-monetary items carried
at fair value are included in profit or loss
for the period, except for differences arising
on the retranslation of non-monetary items in
respect of which gains and losses are recognised
directly in equity. For such non-monetary items,
any exchange component of that gain or loss
is also recognised directly in equity.
For the purpose of presenting Group financial
statements, the assets and liabilities of the
Group's foreign operations are translated at
exchange rates prevailing on the year end date.
Income and expense items are translated at the
average exchange rates for the period. Exchange
differences arising are classified as equity
and transferred to the Group's translation reserve.
Such translation differences are recognised
as income or as expenses in the period in which
the operation is disposed of.
Goodwill and fair value adjustments arising
on the acquisition of a foreign entity are treated
as assets and liabilities of the foreign entity
and translated at the closing rate.
3 Accounting Policies (continued)
taxation
The tax expense represents the sum of the tax
currently payable and deferred tax.
The tax currently payable is based on taxable
profit for the year. Taxable profit differs
from net profit as reported in the income statement
because it excludes items of income or expense
that are taxable or deductible in other years
and it further excludes items that are never
taxable or deductible. The Group's liability
for current tax is calculated using tax rates
that have been enacted or substantively enacted
by the year end date.
Deferred tax is the tax expected to be payable
or recoverable on temporary differences between
the carrying amounts 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 generally 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
that affects neither the tax 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.
The carrying amount of deferred tax assets is
reviewed at each year end date and reduced to
the extent that it is no longer probable that
sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates
that are expected to apply in the period when
the liability is settled or the asset is realised.
Deferred tax is charged or credited in the income
statement, except when it relates to items charged
or credited directly to equity, in which case
the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
set off current tax assets against current tax
liabilities and where they relate to income
taxes levied by the same taxation authority
and the Group intends to settle its current
tax assets and liabilities on a net basis.
GOODWILL
Goodwill arising on consolidation represents
the excess of the cost of acquisition over the
Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associate
or jointly controlled entity at the date of
acquisition and is included as a non-current
asset.
Goodwill is tested annually, or more regularly
should the need arise, for impairment and is
carried at cost leff accumulated impairment
losses. Any impairment is recognised immediately
in the income statement and is not subsequently
reversed.
Goodwill is allocated to cash generating units
for the purpose of impairment testing.
On disposal of a subsidiary the attributable
amount of goodwill is included in the determination
of the profit or loss on disposal.
In accordance with IAS 36 the Group values Goodwill
at the lower of its carrying value or its recoverable
amount, where the recoverable amount is the
higher of the value if sold and its value in
use. In addition IAS38 requires intangible assets
with finite useful lives to follow the same
impairment testing as Goodwill including the
use of value in use calculations.
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND
INTANGIBLE ASSETS EXCLUDING GOODWILL
At each financial year end date, the Group reviews
the carrying amounts of its tangible and intangible
assets to determine whether there is any indication
that those assets have suffered an impairment
loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to
determine the extent of the impairment loss,
if any. Where the asset does not generate cash
flows that are independent from other assets,
the Group estimates the recoverable amount of
the cash-generating unit to which the asset
belongs. An intangible asset with an indefinite
useful life is tested for impairment annually
and whenever there is an indication that the
asset may be impaired.
3 Accounting Policies (continued)
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT AND
INTANGIBLE ASSETS EXCLUDING GOODWILL (continued)
If the recoverable amount of an asset or cash-generating
unit is estimated to be less than its carrying
amount, the carrying amount of the asset or
cash-generating unit is reduced to its recoverable
amount and the impairment loss is recognised
as an expense immediately.
When an impairment loss subsequently reverses,
the carrying amount of the asset or cash-generating
unit is increased to the revised estimate of
its recoverable amount, but so that the increased
carrying amount does not exceed the carrying
amount that would have been determined had no
impairment loss been recognised for the asset
or cash-generating unit in prior years. A reversal
of an impairment loss is recognised as income
immediately, unless the relevant asset is carried
at a revalued amount, in which case the reversal
of the impairment loss is treated as a revaluation
increase.
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and equipment are recorded at
cost, less depreciation, less any amount adjustments
for impairment, if any.
Significant improvements are capitalised, provided
they qualify for recognition as assets. The
costs of maintenance, repairs and minor improvements
are expensed when incurred.
Tangible assets retired or withdrawn from service
are removed from the balance sheet together
with the related accumulated depreciation. Any
profit or loss resulting from such an operation
is included in the income statement.
Mining properties (included within Plant & Equipment,
Fixtures & Fittings, Buildings and Motor Vehicles)
are depreciated using the unit of production
method under IAS 16 based on their total useful
economic life either by number of tonnes produced
or hours available in use. In the units of production
method, depreciation is charged according to
the actual usage of the asset. Therefore a higher
depreciation is charged at times of increased
activity and lower depreciation when the plant
is either yet to reach full production or idle
for the entire period. The Directors have applied
this method as they believe it to be a much
more accurate technique is estimated the current
fair value of their mining assets.
Other tangible and intangible assets are depreciated
on straight-line method based on the estimated
useful lives from the time they are put into
operations, so that the cost diminished over
the lifetime of consideration to estimated residual
value as follows:
Other Fixtures & Fittings - Over 5 years
Other Buildings - Between 5 and 10 years
Other Motor Vehicles - Over 5 years
DECOMMISSIONING, SITE REHABILITATION AND ENVIRONMENTAL
COSTS
Group companies are required to restore mine
and processing sites at the end of their producing
lives to a condition acceptable to the relevant
authorities and consistent with the Group's
environmental policies. The net present value
of estimated future rehabilitation costs is
provided for in the financial statements and
capitalised within Property, plant & equipment.
Under IAS 37 the present obligation as a result
of a past event criteria means that only infrastructure
currently in place will result in a provision.
Thus the liability excludes decommissioning
costs of facilities yet to be installed.
The costs of on-going programmes to prevent
and control pollution and to rehabilitate the
environment are charged to the Income statement
as incurred.
3 Accounting Policies (continued)
INVENTORY
Inventories are stated at the lower of cost
and net realisable value.
Cost comprises direct materials and, where applicable,
direct labour costs and those overheads that
have been incurred in bringing the inventories
to their present location and condition. Cost
is determined using FIFO method. This method
assumes that every product out of stock product
cost will be determined on the basis of the
earliest items purchased or produced.
Net realisable value is based on estimated selling
price in the ordinary course of business less
any costs of completion and selling expenses.
Inventory items are initially valued at cost
of acquisition, cost of production or entry
price currency converted at the exchange rate
in effect on the date of reception of goods
plus transportation at the rate in force on
customs import declaration ("DVI"), plus customs
duties, customs fees and transportation expenses,
net of any subsequent impairment or provision.
The Directors review on a monthly basis for
any damaged, slow moving or obsolete items,
where impairment has been incurred and thus
fair value adjustments are applied with the
amount recognised in the income statement.
TRADE RECEIVABLES, loans and other receivables
Trade receivables, loans and other receivables
that have fixed or determinable payments that
are not quoted in an active market are classified
under 'loans and receivables'. Loans and receivables
are measured at amortised cost using the effective
interest method, less any impairment. Interest
income is recognised by applying the effective
interest rate, except for short term receivables
when the recognition of interest would be immaterial.
Other receivables, that do not carry any interest,
are measured at their nominal value as reduced
by any appropriate allowances for irrecoverable
amounts.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand
and demand deposits and other short-term highly
liquid investments that are readily convertible
to a known amount of cash and are subject to
an insignificant risk of changes in value.
FINANCIAL LIABILITIES
Financial liabilities and equity instruments
are classified according to the substance of
the contractual arrangements entered into. Financial
liabilities are classified as either financial
liabilities 'at FVTPL' or 'other financial liabilities'.
There were no financial liabilities 'at FVTPL'
during the current, or preceding, period.
An equity instrument is any contract that evidences
a residual interest in the assets of the Group
after deducting all of its liabilities.
OTHER FINANCIAL LIABILTIES, BANK AND SHORT TERM
BORROWINGS
Interest-bearing bank loans and overdrafts are
recorded at the proceeds received, net of direct
issue costs. Finance charges are accounted for
on an accruals basis in profit or loss using
the effective interest rate method and are added
to the carrying amount of the instrument to
the extent that they are not settled in the
period in which they arise. Other short term
borrowings being intercompany loans and unsecured
convertible loan notes issued in the year are
recognised at amortised cost net of any financing
or arrangement fees.
TRADE PAYABLES
Trade payables are initially measured at fair
value and subsequently measured at amortised
cost using the effective interest method, less
provision for impairment.
3 Accounting Policies (continued)
EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL
Equity instruments issued by the Company are
recorded at the proceeds received, net of incremental
costs attributable to the issue of new shares.
An equity instrument is any contract that evidences
a residual interest in the assets of a company
after deducting all of its liabilities. Equity
instruments issued by the Company are recorded
at the proceeds received net of direct issue
costs.
Share capital represents the amount subscribed
for shares at nominal value.
The share premium account represents premiums
received on the initial issuing of the share
capital. Any transaction costs associated with
the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Any bonus issues are also deducted from share
premium.
The merger reserve represents the premium on
the shares issued less the nominal value of
the shares, being the difference between the
fair value of the consideration and the nominal
value of the shares.
The reverse acquisition reserve arises from
the acquisition of Graphmada Equity Pte. Limited
by the Company and represents the total amount
by which the fair value of the shares issued
in respect of the acquisition exceed their total
nominal value.
The investment reserve represents the difference
between the purchase costs of the available
for sale investments less any impairment charge
and the market or fair value of those investments
at the accounting date.
The warrant reserve represents the fair value,
calculated at the date of grant, of warrants
unexercised at the balance sheet date.
Retained earnings include all current and prior
period results as disclosed in the statement
of comprehensive income.
SHARE-BASED PAYMENTS
The Group has applied the requirements of IFRS
2 Share-based payments. In accordance with the
transitional provisions, IFRS 2 has been applied
to all grants of equity instruments after 7
November 2002 that were unvested at 1 January
2005.
The Group operates a number of equity-settled
share-based payment schemes under which share
options are issued to certain employees. Equity-settled
share-based payments are measured at fair value
(excluding the effect of non market-based vesting
conditions) at the date of grant. The fair value
determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line
basis over the vesting period, based on the
Group's estimate of shares that will eventually
vest and adjusted for the effect of non market-based
vesting conditions.
Fair value is measured by use of the Black Scholes
model. The expected life used in the model has
been adjusted, based on management's best estimate,
for the effects of non-transferability, exercise
restrictions, and behavioural considerations.
REVERSE ACQUISITION
The acquisition of Graphmada Equity Pte. Limited
("GME") on 28 January 2013 was accounted for
using the reverse acquisition method. The following
accounting treatment was applied in respect
of the reverse acquisition:
* The assets and liabilities of the legal subsidiary
were recognised and measured in the consolidated
financial statements at their pre-combination
carrying amounts without restatement to fair value;
* The identifiable assets and liabilities of the legal
parent (the accounting acquiree) are recognised in
accordance with IFRS 3 at the acquisition date.
Goodwill is recognised in accordance with IFRS 3;
* The retained earnings and other equity balances
recognised in the consolidated financial statements
are those of the legal subsidiary (the accounting
acquirer) immediately before the business
combination.
3 Accounting Policies (continued)
REVERSE ACQUISITION (continued)
The amount recognised as issued equity instruments
in the consolidated financial statements is
determined by adding the fair value of the legal
parent (which is based on the number of equity
interests deemed to have been issued by the
legal subsidiary) determined in accordance with
IFRS 3 to the legal subsidiary's issued equity
immediately before the business combination.
However, the equity structure (that is, the
number and type of equity instruments issued)
shown in the consolidated financial statements
reflects the legal parent's equity structure,
including the equity instruments issued by the
legal parent to effect the combination. The
equity structure of the legal subsidiary (accounting
acquirer) is restated using the exchange ratio
established in the acquisition agreement to
reflect the number of shares issued by the legal
parent (the accounting acquiree) in the reverse
acquisition.
4 CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
In the application of the Group's accounting
policies, which are described in note 3, the
Directors are required to make judgements, estimates
and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent
from other sources. The estimates and associated
assumptions are based on historical experience
and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are
reviewed on an on-going basis. Revisions to accounting
estimates are recognised in the period. Judgements
and estimates that may affect future periods
are as follows:
GOING CONCERN
The Group's activities generated a small revenue
GBP445,000 prior to the agreed disposal (2014:
GBP92,000), incurred a loss of GBP2,185,000 during
the year (2014: GBP2,384,000 loss), had a cash
balance of GBP156,000 as at 31 December 2015,
and despite the recent improvements in volume
of production and grade, was yet to reach a level
of production at the mine-site that would generate
a positive cash flow as at the date of signing
these financial statements.
However, as disclosed in Note 12 the Company
plans to proceed with the disposal of its investment
in Graphmada Mauritius, pending shareholder approval
which would provide sufficient funds to enable
the Company to continue its operation and facilitate
further investments for the foreseeable future.
So, after making enquiries, the Directors have
formed a judgement that there is a reasonable
expectation that the Company can secure further
adequate resources when needed, to continue in
operational existence for the foreseeable future
and that adequate arrangements will be in place
to enable the settlement of their financial commitments.
The Directors agree that further investments
will only be made once sufficient financing is
in place either for the individual investment
or for a class of investments.
For this reason, the Directors continue to adopt
the going concern basis in preparing the financial
statements. Whilst there are inherent uncertainties
in relation to future events, and therefore no
certainty over the outcome of the matters described,
the Directors consider that, based upon financial
projections and dependent on the success of their
efforts to complete these activities, the Company
will be a going concern for the next twelve months.
If it is not possible for the Directors to realise
their plans, over which there is significant
uncertainty, the carrying value of the assets
of the Company is likely to be impaired.
SHARE BASED PAYMENTS
The calculation of the fair value of equity-settled
share based awards and the resulting charge
to the statement of comprehensive income requires
assumptions to be made regarding future events
and market conditions. These assumptions include
the future volatility of the Group's share price.
These assumptions are then applied to a recognised
valuation model in order to calculate the fair
value of the awards. Details of these assumptions
are set out in note 27.
DECOMMISSIONING OBLIGATIONS
The Directors calculated the net present value
of estimated future rehabilitation costs based
on the Plant & equipment and Buildings & infrastructure
currently in place. The discount factor applied
was based on the current cost of capital. There
is an expectation for future infrastructure
costs to be incurred as the plant expands, or
a second plant to be installed, but these have
not been recognised as these upgrades have yet
to be installed.
4 CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
(continued)
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Group holds investments that have been designated
as available for sale on initial recognition.
Where practicable the Group determines the fair
value of these financial instruments that are
not quoted (Level 3), using the most recent
bid price at which a transaction has been carried
out. These techniques are significantly affected
by certain key assumptions, such as market liquidity.
Other valuation methodologies such as discounted
cash flow analysis assess estimates of future
cash flows and it is important to recognise
that in that regard, the derived fair value
estimates cannot always be substantiated by
comparison with independent markets and, in
many cases, may not be capable of being realised
immediately.
5 SEGMENTAL INFORMATION
A segment is a distinguishable component of the
Group or Company's activities from which it may
earn revenues and incur expenses, whose operating
results are regularly reviewed by the Group's
chief operating decision maker to make decisions
about the allocation of resources and assessment
of performance and about which discrete financial
information is available.
As the chief operating decision maker reviews
financial information for and makes decisions
about the Group's activities as a whole, the
directors have identified a single operating
segment, that of trading in graphite. The directors
consider that it would not be appropriate to
disclose any geographical analysis of the Company's
activities at this point in time, given the current
activity and the sensitive nature of the Off-take
agreement signed during the year. Although the
Directors can confirm that all Revenue and Cost
of sales relate to the mining activity in Madagascar.
6 OPERATING LOSS
Continuing Discontinued
operations operations Total
------------------------ ------------------ ------------------ ------------------
2015 2014 2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- -------- -------- -------- -------- --------
Operating loss
is stated after
charging:
Staff costs as
per Note 8 below 448 643 544 378 992 1,021
Depreciation of
property, plant
and equipment 2 2 64 105 66 107
Loss on disposal
of property, plant
and equipment - - 20 63 20 63
Cost of inventories
recognised as an
expense - - 30 14 30 14
Write downs of
VAT receivable - - 168 11 168 11
Write downs of
inventories recognised
as an expense - - - 15 - 15
Net foreign exchange
(gain)/loss (195) (48) - - (195) (48)
---------------------------- -------- -------- -------- -------- -------- --------
7 auditors' remuneration
The analysis of auditors' remuneration is as
follows:
2015 2014
GBP'000 GBP'000
------------------------------------------- ---------- ---------
Fees payable to the Group's auditors
for the audit of the Group's annual
accounts 45 45
Total audit fees 45 45
Fees payable to the Group auditor
and their associates for other services
to the Group:
- Tax services 2 2
47 47
----------------------------------------------- ---------- ---------
8 staff costs
The average monthly number of employees (including
executive directors) for the continuing operations
was:
2015 2014
No. No.
Group total staff 133 97
2015 2014
GBP'000 GBP'000
------------------------------------------- ---------- ---------
Wages and salaries 924 876
Social security costs 6 36
Share based payment expense 62 109
992 1,021
----------------------------------------------- ---------- ---------
8 staff costs (continued)
Directors' emoluments were as follows:
2015 2015 2015 2014
Directors Consultancy Total Total
fees payments
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------------------ -------------------- -------------- --------------
L Laurie Hunter 80 - 80 64
Gobind Sahney - - - 65
Manoli Yannaghas 120 - 120 214
Jeff Marvin 30 - 30 30
David Premraj 30 - 30 30
Marius Pienaar 14 - 14 33
Shishir Poddar 45 100 145 -
Brett Boynton 48 - 48 -
--------------------------- ---------- ------------------ -------------------- -------------- --------------
367 100 467 436
-------------------------------------- ------------------ -------------------- -------------- --------------
Included in Manoli Yannaghas' director fees
is an amount of GBP15,500 (2014: GBP13,389)
that was settled by way of the issue of 310,000
ordinary shares of 4p each in the Company on
31 August 2015.
Included in Shishir Poddar's director fees is
an amount of GBP100,000 relating to a share
issue to Tirupati Carbons and Chemicals Group(P)
Limited ("Tirupati") as part of the strategic
agreement signed in 18 June 2015. Shishir Poddar
is a major shareholder and Director and as such
these fees have been included above. The GBP100,000
was settled through the issue of 1,972,387 ordinary
shares of 4p each in the Company on 31 August
2015.
9 OTHER OPERATING EXPENSE
2015 2014
GBP'000 GBP'000
--------------------------------------------- ---------- ---------
Loss on disposal of property, plant
and equipment* 20 63
Reclassified within discontinued (20) -
operations
(Gain)/loss on foreign currency
transactions (195) (48)
------------------------------------------------- ---------- ---------
(195) 15
------------------------------------------------- ---------- ---------
10 finance costs
2015 2014
GBP'000 GBP'000
-------------------------------------------- ---------- ---------
Charge in relation to the issuance - -
of warrants
Short term loan finance costs 9 35
Interest on convertible loan notes - -
-------------------------------------------- ---------- ---------
9 35
------------------------------------------------- ---------- ---------
11 taxation
There is no UK tax charge/credit in 2015 or
2014.
Reconciliation of tax charge:
Continuing operations
------------------------------------ ------------------------
2015 2014
GBP'000 GBP'000
------------------------------------ ----------- -----------
Loss on continuing operations
before tax (2,185) (2,380)
----------------------------------------- ----------- -----------
Tax at the UK corporation tax
rate of 20% (2014: 20%) 437 512
Effects of:
Tax effect of expenses that are
not deductible in determining
taxable profit: - -
Foreign taxes payable - (4)
Unutilised tax losses carried
forward (437) (512)
Tax charge for period - (4)
----------------------------------------- ----------- -----------
The total taxation charge in future periods
will be affected by any changes to the corporation
tax rates in force in the countries in which
the Group operates.
12 DISCONTINUED OPERATIONS
In December 2015 Bass Metals Limited acquired
6.25% of Graphmada Mauritius, the holding company
for the Group's graphite operations in Madagascar,
and in May 2016 it was announced that Bass Metals
Limited would proceed with an offer to acquire
the remaining 93.75% of Graphmada Mauritius that
it did not already own. Completion of the acquisition
is expected to take place following the Company's
Annual General Meeting in July 2016. Consequently
Graphmada Mauritius and its subsidiaries have
been treated as a disposal group and accounted
for as discontinued operations.
The results of the discontinued operations, which
have been included in the consolidated income
statement, were as follows:
2015 2014
GBP'000 GBP'000
----------------------------------------- -------- --------
Revenue 445 92
Expenses (1,762) (1,241)
---------------------------------------------- -------- --------
Loss before tax (1,317) (1,149)
Attributable tax expense - (4)
---------------------------------------------- -------- --------
Net loss attributable to discontinued
operations (1,317) (1,153)
---------------------------------------------- -------- --------
. The major classes of assets and liabilities
comprising the disposal group and classified as
held for sale are as follows
2015
GBP'000
--------------------------------------------------- --------
Goodwill 4,699
Property, plant and equipment 1,288
Inventories 384
Trade and other receivables 170
Cash and bank balances 2
-------------------------------------------------------- --------
Total assets classified as held for sale 6,543
-------------------------------------------------------- --------
Trade and other payables 259
Decommissioning obligation 236
-------------------------------------------------------- --------
Total liabilities associated with assets
classified as held for sale 495
-------------------------------------------------------- --------
Net assets of disposal group 6,048
-------------------------------------------------------- --------
During the year discontinued operations used net cash of
GBP404,000 (2014: GBP901,000) in operating activities, paid
GBP42,000 (2014: GBP413,000) in respect of investing activities,
and paid GBPnil (2014: GBPnil) in respect of financing
activities
13 EARNINGS PER SHARE
The basic earnings per share is based on the
profit/(loss) for the year divided by the weighted
average number of shares in issue during the
year. The weighted average number of ordinary
shares for the year ended 31 December 2015 assumes
that all shares have been included in the computation
based on the weighted average number of days
since issue.
2015 2014
GBP'000 GBP'000
---------------------------------------- ----------- ----------
Loss attributable to owners of the
Group:
Loss from continuing operations (868) (1,229)
Loss from continuing operations (1,317) (1,155)
Loss for the year attributable to
owners of the Group (2,185) (2,384)
--------------------------------------------- ----------- ----------
Weighted average number of ordinary
shares in issue for basic and fully
diluted earnings* 139,754,569 96,473,697
LOSS PER SHARE (PENCE PER SHARE)
BASIC AND FULLY DILUTED*:
- from continuing operations (0.55p) (1.28p)
- from discontinued operations (1.01p) (1.19p)
--------------------------------------------- ----------- ----------
- from continuing and total operations (1.56p) (2.47p)
--------------------------------------------- ----------- ----------
*Since the Group has incurred losses in both 2014 and 2015 the
basic loss and the diluted loss per share are the same as the
effect of exercise of options and warrants is not dilutive.
GOODWILL
14
Goodwill has arisen in 2012 on the acquisition
of Graph Mada S.A.r.l ("GMS") by Graphmada Equity
Pte. Ltd ("GME") and in 2013 on the acquisition
of Grahmada Equity Pte. Ltd by the Company.
2015 2014
GBP'000 GBP'000
--------------------------------- --------- ---------
At 1 January 5,012 5,012
Impairment (313) -
Reclassified to disposal
group as assets held
for sale (see Note 12) (4,699) -
----------------------------------- ---- --------- ---------
At 31 December - 5,012
----------------------------------- ---- --------- ---------
The Directors have reviewed the carrying value of Goodwill at 31
December 2015 and consider that no impairment provision is
required. The Impairment review involved calculating the NPV of the
Group's cash generating assets including the assets acquired in
2013 following the acquisition of GME. The NPV calculation involved
using the discounted cash flow forecast model based on current and
expected production results. As a result of carrying out this
impairment testing review the Directors felt there was no need for
any impairment of the carrying value of the Goodwill.
The Directors continue to review Goodwill on an on-going basis
and where necessary in future periods will request external
valuations to further support the valuation basis.
15 PROPERTY, plant AND EQUIPMENT
Plant Fixtures Buildings Motor Group
and Equipment and and infrastructure Vehicles Total
fittings
Cost GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- --------------- ----------- -------------------- ---------- --------
As at 1 January
2014 321 62 272 235 890
Additions 251 13 244 61 569
Disposals (37) - - - (37)
As at 31 December
2014 535 75 516 296 1,422
Additions 74 12 57 2 145
Decommissioning
provision - - 104 - 104
Disposals (30) - (20) (8) (58)
Reclassified
as assets held
for sale (576) (87) (657) (290) (1,610)
------------------------- --------------- ----------- -------------------- ---------- --------
As at 31 December
2015 3 - - - 3
------------------------- --------------- ----------- -------------------- ---------- --------
Depreciation
-------------------- --------------- ----------- -------------------- ---------- --------
As at 1 January
2014 9 6 6 65 86
Charge for the
year 49 14 20 24 107
Disposals (1) - - - (1)
As at 31 December
2014 57 20 26 89 192
Charge for the
year 48 17 28 42 135
Disposals (2) - (1) (1) (4)
Reclassified
as assets held
for sale (102) (37) (53) (130) (322)
------------------------- --------------- ----------- -------------------- ---------- --------
As at 31 December
2015 1 - - - 1
------------------------- --------------- ----------- -------------------- ---------- --------
Net book value
-------------------- --------------- ----------- -------------------- ---------- --------
As at 31 December
2015 2 - - - 2
------------------------- --------------- ----------- -------------------- ---------- --------
As at 31 December
2014 478 55 490 207 1,230
------------------------- --------------- ----------- -------------------- ---------- --------
16 INVESTMENT IN subsidiarY UNDERTAKINGS
The Company invests in its subsidiary and associated
undertakings
2015 2014
COMPANY GBP'000 GBP'000
------------------------------------------------------- -------------------- ------------------
Cost and net book value
At 1 January 26,469 26,469
Additions - -
Impairment (22,151) -
------------------------------------------------------- --- -------------------- ------------------
As at 31 December 4,318 26,469
------------------------------------------------------- --- -------------------- ------------------
All principal subsidiaries of the Group are consolidated
into the financial statements. At 31 December
2015 the subsidiaries were as follows:
Subsidiary undertakings Country Principal activity Holding Holding
of registration %
-------------------------------- -------------------- ---------------------- -------- --------
Direct Excellence Ordinary
Limited UK Dormant shares 100%
Graphmada Mauritius Intermediate Ordinary
Limited Mauritius holding company shares 100%
Graphmada Equity Ordinary
Pte. Limited Singapore Dormant shares 100%
Stratmin Global Operational Ordinary
Graphite Limited Jersey company shares 100%
Ordinary
Graph Mada S.A.R.L* Madagascar Mining shares 99%
-------------------------------- -------------------- -------------------------- -------- --------
**Held through subsidiary undertaking.
Following the transfer of the holding of Graph
Mada S.a.r.L from Graphmada Equity (Pte) Limited
to Graphmada Mauritius Limited during the year,
Graphmada Equity (Pte) Limited was dissolved
on 19 February 2016.
On 19 April 2016 Direct Excellence Limited was
dissolved.
The following amounts are investments made by
the Company in associated and subsidiary undertakings
by way of loan rather than equity, as above:
2015 2014
COMPANY GBP'000 GBP'000
-------------------------------------------------------- -------------------- ------------------
Loans to group companies
At 1 January 2,286 1,227
Additions 988 1,059
Repayments - -
As at 31 December 3,274 2,286
-------------------------------------------------------- -------------------- --------------------
17 AVAILABLE-FOR-SALE INVESTMENTS
GROUP COMPANY
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
Investments at fair value
at 1 January 6 26 6 26
Disposals (5) - (5) -
Investments acquired
on reverse acquisition - - - -
- 26 - 26
Market value adjustments
to investment 1 (20) 1 (20)
--------------------------------- -------- -------- -------- --------
Market value of investments
at 31 December 1 6 1 6
--------------------------------- -------- -------- -------- --------
Categorised as:
Level 1 Investments 1 6 1 6
The table above sets out the fair value measurements
using the IFRS 7 fair value hierarchy. Categorisation
within the hierarchy has been determined on the
basis of the lowest level of input that is significant
to the fair value measurement of the relevant
asset as follows:
Level 1 - valued using quoted prices in active
markets for identical assets.
Level 2 - valued by reference to valuation techniques
using observable inputs other than quoted prices
included within Level 1.
Level 3 - valued by reference to valuation techniques
using inputs that are not based on observable
market data.
There were no transfers between Level 1, Level
2 and Level 3 in either 2015 or 2014.
Measurement of fair value of financial instruments
The management team of StratMin Global Resources
plc perform valuations of financial items for
financial reporting purposes, including Level
3 fair values. Valuation techniques are selected
based on the characteristics of each instrument,
with the overall objective of maximising the
use of market-based information.
INVENTORY AND WORK IN
18 PROGRESS
GROUP COMPANY
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- -------- --------
Inventory 287 168 - -
Work in progress 97 74 - -
Reclassified to disposal
group as assets held
for sale (see Note 12) (384) - - -
----------------------------------- -------- -------- -------- --------
- 242 - -
----------------------------------- -------- -------- -------- --------
The Directors consider the carrying amount of inventory
equivalents approximates to their fair value.
19 TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- -------- --------
Prepayments and accrued
income 21 22 20 14
Trade receivable 104 65 103 21
VAT receivable 169 270 1 15
Reclassified to disposal
group as assets held
for sale (see Note 12) (170) - - -
----------------------------------- -------- -------- -------- --------
124 357 124 50
Short term loans to group
companies - - 823 1,066
----------------------------------- -------- -------- -------- --------
124 357 947 1,116
----------------------------------- -------- -------- -------- --------
No receivables were past due or provided for at the year-end or
at the previous year end.
The Directors consider the carrying amount of intercompany loans
and other receivables approximates to their fair value.
20 CASH AND CASH EQUIVALENTS
GROUP COMPANY
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------- ------- ------- -------
Cash and cash equivalents 158 91 154 79
Reclassified to disposal
group as assets held
for sale (see Note 12) (2) - - -
------------------------------- ------- ------- ------- -------
156 91 154 79
------------------------------- ------- ------- ------- -------
The Directors consider the carrying amount of cash and cash
equivalents approximates to their fair value.
TRADE AND OTHER PAYABLES
21
GROUP COMPANY
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ------- ------- ------- -------
Trade payables 454 161 261 85
Other payables 105 65 132 32
Accrued expenses 316 156 305 154
-------------------------------- ------- ------- ------- -------
875 382 698 271
Reclassified to disposal
group as liabilities
held for sale (see Note
12) (259) - - -
-------------------------------- ------- ------- ------- -------
616 382 698 271
-------------------------------- ------- ------- ------- -------
The Directors consider the carrying amount of trade payables
approximates to their fair value.
SHORT TERM BORROWINGS
The following amounts relate to Short term borrowings:
22
GROUP COMPANY
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ------- ------- ------- -------
Other short term borrowings* 87 226 87 226
------------------------------------ ------- ------- ------- -------
Included within Other short term borrowings is a short term loan
of GBP47,000 (2014: GBP219,000) from David Premraj. The loan
accrued interest of GBP10,923 and was repaid shortly after the year
end (see Note 30).
Also included are short term loans of GBP10,000 from former
Director Jeffrey Marvin and GBP30,000 from current Managing
Director Brett Boynton. The loans do not accrue interest and are
repayable on demand.
The Directors consider the carrying amount of short term
borrowings approximates to their fair value.
REVERSE ACQUISITION RESERVE
23
The reverse acquisition reserve arose from the
acquisition of GME by the Company in 2013 and
represents the total amount by which the fair
value of the shares issued in respect of the
acquisition exceed their total nominal value.
2015 2014
GBP'000 GBP'000
----------------------------- --------- ---------
At 1 January 48,478 48,478
Movement in the year - -
At 31 December 48,478 48,478
------------------------------- ---- --------- ---------
As mentioned in Note 12, the Company has made a decision to
dispose of its remaining shareholding in Graphmada Mauritius,
pending shareholder approval, meaning that should the disposal be
approved, the above reserve will be transferred to Retained
earnings.
1.1 FINANCIAL INSTRUMENTS
24
FINANCIAL ASSETS BY CATEGORY
The IAS 39 categories of financial assets included
in the Statement of financial position and the
headings in which they are included are as follows:
2015 2014
GBP'000 GBP'000
------------------------------------- --------- ---------
Financial assets:
Cash and cash equivalents 156 91
Available for sale investments 1 6
Loans and receivables 124 598
-------------------------------------- ---- --------- ---------
281 695
------------------------------------------- --------- ---------
FINANCIAL LIABILITIES BY CATEGORY
The IAS 39 categories of financial liability
included in the Statement of financial position
and the headings in which they are included
are as follows:
2015 2014
GBP'000 GBP'000
--------------------------------------- --------- --------
Financial liabilities at amortised
cost:
Trade and other payables 311 226
Short term borrowings 87 226
---------------------------------------- --------- --------
398 452
--------------------------------------- --------- --------
CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that
entities in the Group will be able to continue
as a going concern while maximising the return
to stakeholders through the optimisation of
the debt and equity balance. The capital structure
of the Group consists of debt, (previously includes
the borrowings) cash and cash equivalents and
equity attributable to equity holders of the
Parent Company, comprising issued capital, reserves
and retained earnings, all as disclosed in the
Statement of Financial Position.
FINANCIAL RISK MANAGEMENT OBJECTIVES
The Group is exposed to a variety of financial
risks which result from both its operating and
investing activities. The Group's risk management
is coordinated by the board of directors, and
focuses on actively securing the Group's short
to medium term cash flows by minimising the
exposure to financial markets.
The main risks the Group is exposed to through
its financial instruments are credit risk, liquidity
risk and market price risk.
24 Financial instruments (continued)
FOREIGN CURRENCY RISK MANAGEMENT
The Group undertakes transactions denominated
in foreign currencies. Hence, exposures to exchange
rate fluctuations arise. After the acquisition
of Graphmada Equity Pte. Ltd, the Group's major
activity is now in Madagascar, bringing exposure
to the exchange rate fluctuations of GBP/GBP
Sterling with both USD/$ Dollars and Madagascan
Ariary. The risk is reduced however, given the
selling contracts are in USD, Company cash liquidity
is in GBP and the Company is transferring cash
to its trading subsidiary only for specific operational
expenses.
Exchange rate exposures are managed within approved
policy parameters. The Group does not enter into
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 and the currencies
most widely traded are relatively stable.
The Directors consider the balances most susceptible
to foreign currency movements to be the Investment
in Subsidiaries.
These assets are denominated in the following
currencies:
USD
$'000
------------------------------------------------ -----------
Company 31 December 2015
Investment in Subsidiaries 6,396
-------------------------------------------------- -----------
Company 31 December 2014
Investment in Subsidiaries 46,889
-------------------------------------------------- -----------
FOREIGN CURRENCY RISK MANAGEMENT
The following table illustrates the sensitivity
of the value of investments in regards to the
relative GBP and USD exchange rates.
It assumes a +/- % change in the USD/GBP exchange
rate for the year ended 31 December 2015 and
a +/- 4.72% change in the USD/GBP exchange rate
for the year ended 31 December 2014. These percentages
have been based on the average market volatility
in exchange rates in the previous twelve months
for those periods.
Impact on investments in subsidiaries:
31 Dec 31 Dec
2015 2014
$'000 $'000
----------------------------------- ------ ----------- -----------
Change in equity
7.104% increase in USD
fx rate against GBP 306 -
7.104% decrease in USD
fx rate against GBP 306 -
4.72% increase in USD fx
rate against GBP - 2,213
4.72% decrease in USD fx
rate against GBP - (2,213)
------------------------------------------- -------------- -----------
Exposure to foreign exchange rates varies during
the year depending on the volume and nature of
foreign transactions. Nonetheless, the analysis
above is considered to be representative of the
Group's exposure to currency risk.
interest rate risk managEment
The Group's exposure to interest rates on financial
assets and financial liabilities is detailed
in the liquidity risk management section of this
note.
There are no long term loans or short term loans
that carry any interest and thus sensitivity
analyses have not been provided on the exposure
to interest rates for both derivatives and non-derivative
instruments during the year.
There would have been no effect on amounts recognised
directly in equity.
24 Financial instruments (continued)
Credit risk management
The Company's financial instruments, which are
subject to credit risk, are considered to be
cash and cash equivalents and trade and other
receivables, and its exposure to credit risk
is not material. The credit risk for cash and
cash equivalents is considered negligible since
the counterparties are reputable banks.
The Group's maximum exposure to credit risk is
GBP280,000 (2014: GBP689,000) comprising other
receivables and cash.
Liquidity risk management
Ultimate responsibility for liquidity risk management
rests with the Board of Directors, which monitors
the Group's short, medium and long-term funding
and liquidity management requirements on an appropriate
basis. The Group manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve
borrowing facilities. The Group's liquidity risk
arises in supporting the trading operations in
the subsidiaries, which hopefully will start
to generate profits and positive cash-flows in
the short term. However, as referred to in Note
4 the Company is currently exposed to significant
liquidity risk and needs to obtain external funding
to support the Group going forwards.
25 dEferred tax
At the year-end date, the Group had unused tax
losses of GBP8.1m (2014: GBP6.1m) available for
offset against future profits. No deferred tax
asset has been recognised in respect of these
losses (2014: GBPnil) due to the unpredictability
of future profit streams.
Called up share capital
26
Number Nominal Share premium
of shares value GBP'000
GBP'000
ISSUED AND FULLY PAID:
At 31 December 2013 69,920,756 2,797 30,167
Ordinary shares of
4p each 42,713,481 1,708 1,862
Expenses of share issues - - (258)
---------------------------------- ------------ --------- --------------
At 31 December 2014 112,634,237 4,505 31,771
Ordinary shares of
4p each 38,515,154 1,541 173
Expenses of share issues - - (126)
---------------------------------- ------------ --------- --------------
At 31 December 2015 151,149,393 6,046 31,818
---------------------------------- ------------ --------- --------------
The Company has one class of ordinary shares,
which carry no right of fixed income.
On 23 January 2015, the Company issued 945,043
new ordinary shares of 4p each to certain directors,
consultants and contractors of the Company in
lieu of unpaid salary and fees and to satisfy
certain other existing commitments.
On 26 January 2015, the Company completed the
placing of 18,947,369 new ordinary shares of
4p each at a price 4.75p each, raising in aggregate
gross proceeds of approximately GBP900,000.
On 1 July 2015, the Company issued 715,355 new
ordinary shares of 4p each at a price of 5p each
to satisfy certain existing commitments.
On 7 July 2015, the Company completed the placing
of 15,625,000 new ordinary shares of 4p each
at a price 4p each, raising in aggregate gross
proceeds of approximately GBP625,000.
On 7 July 2015, the Company issued 1,972,387
new ordinary shares of 4p each at a price of
5.07p each to satisfy certain existing commitments.
On 31 August 2015 the Company issued 310,000
new ordinary shares of 4p each to satisfy certain
existing commitments.
CALLED UP SHARE CAPITAL (continued)
26
WARRANTS
On 26 January 2015 the Company issued warrants
to subscribe for 9,473,684 ordinary shares at
8p per share, exercisable on or before 23 January
2016 to Hume Capital Limited.
On 7 July 2015 the Company issued warrants to
subscribe for 406,250 ordinary shares at 4p per
share, exercisable on or before 12 July 2018
to Hume Capital Limited.
On 28 March 2014 the Company issued warrants
to subscribe for 1,388,889 ordinary shares at
9p per share, exercisable on or before 28 March
2017 to Hume Capital Limited and warrants to
subscribe for 300,000 ordinary shares at 9p per
share, exercisable on or before 12 March 2019
to Strand Hanson Limited.
On 29 October 2014 the Company issued warrants
to subscribe for 5,714,283 ordinary shares at
10p per share to the subscribers to the placing
of GBP800,000 of the same date, exercisable on
or before 4 November 2015.
The above issues of warrants are summarised as
follows:
Number
of warrants Exercise
Issue Date issued price Expiry date
-------------------- ------------ ---------- ------------
20.6.2014
Brought forward 8,733,870 4p to 235p - 5.12.2016
28 March 2014 1,388,889 9.00p 28.03.2017
28 March 2014 300,000 9.00p 12.03.2019
29 October 2014 5,714,283 10.00p 04.11.2015
--------------------------- ------------ ---------- ------------
16,137,042
17 September 2013 (4,166,667) 20.00p 20.06.2014
1 January 2015 11,970,375
Issued in the year
26 January 2015 9,473,684 8.00p 23.01.2016
7 July 2015 406,250 4.00p 12.07.2018
--------------------------- ------------ ---------- ------------
21,850,309 4p to 235p
Exercised or lapsed
during the year
29 October 2014 (5,714,283) 10.00p 04.11.2015
--------------------------- ------------ ---------- ------------
At 31 December 2015 16,136,026 4p to 235p Various
--------------------------- ------------ ---------- ------------
27 Share-based payments
WARRANTS
Warrants issued in the period have been listed
out above in Note 26. The Company's position
with regards to warrants is as follows:
The estimated fair value of the warrants granted
in relation to the charge in the period for
the Warrants issued on 28 March 2014 was calculated
by applying the Black-Scholes option pricing
model. The assumptions used in the calculation
were as follows:
26 January 7 July 28 March 29 October
2015 2015 2014 2014
Share price 5.05 pence 4.02 pence 8.63 pence 8.00 pence
at date of grant 8.00 pence 4.00 pence 10.00 10.00
Exercise price 40% 40% pence pence
Expected volatility Nil Nil 40% 40%
Expected dividend Exercisable Exercisable Nil Nil
Vesting criteria on date on date Exercisable Exercisable
of grant of grant on date on date
Contractual 1 year 3 year of grant of grant
life 1.5% 1.5% 2 years 1 year
Risk free rate 4.5635 1.9894 1.5% 1.5%
Estimated fair pence pence 4.5635 1.9894
value of each pence pence
warrant
The total share-based payment expense recognised in the option
and warrant reserve for the year ended 31 December 2015 in respect
of the warrants issued was GBPnil (2014: GBP109,413) given the
warrants issued were part of fundraising. Thus the charge has been
taken against Share premium as part of the placing fees.
Details of the warrants outstanding during the
year are as follows:
2015 2014
Number Weighted Number Weighted
of Warrants average of Warrants average
exercise exercise
price price
000's GBP 000's GBP
----------------------- ------------- ---------- ------------- ----------
Outstanding at the
beginning of the
year 11,970 0.1389 8,734 0.1962
Granted during the
year 9,880 0.0784 7,403 0.9771
Exercised during - - -
the year*
Lapsed during the
year (5,714) 0.1389 (4,167) 0.2000
Reissued in the year - - -
----------------------- ------------- ---------- ------------- ----------
Outstanding at the
end of the year 16,136 0.0578 11,970 0.1389
Exercisable at the
end of the year 16,136 0.0578 11,970 0.1389
The warrants outstanding at 31 December 2015
had a weighted average exercise price of p (2014:
13.89p) and a weighted average remaining contractual
life of 1.9 years (2014: 2.1 years).
27 Share-based payments (continued)
Equity-settled share option schemes
On 18 June 2015, the Company granted options
over 10,000,000 ordinary shares to Tirupati
as part of the terms of the strategic agreement
signed on the same day. 50% of the options have
an exercise price of 6p and lapse on 16 June
2016, 50% of the options have an exercise price
of 9p and lapse on 16 December 2016.
The Group has granted a variety of options to
certain employees and consultants. Options are
exercisable at a price equal to the average
quoted market price of the Company's shares
on the date of grant. Previously if the options
remain unexercised after a period of between
3 and 10 years from the date of grant the options
expire, however during the year options held
by Directors and Senior Management were amended.
Options are forfeited if the employee leaves
the Group before the options vest.
The estimated fair value of the options granted
was calculated by applying the Black-Scholes
option pricing model. The assumptions used in
the calculation were as follows:
6p Options 9p Options 14p Options
Share price 5.25 pence 5.25 pence 9.00 pence
at date of 6.00 pence 9.00 pence 14.00 pence
grant 50% 50% 50%
Exercise price Nil Nil Nil
Expected volatility Exercisable Exercisable Exercisable
Expected dividend on date of on date of on date of
Vesting criteria grant grant grant
1.5 years 1.5 years 3 years
Contractual 1.5% 1.5% 2.5%
life
Risk free rate 1.05 pence 0.4502 pence 2.2054 pence
Estimated fair
value of each
Option
The total share-based payment expense recognised in the option
and warrant reserve for the year ended 31 December 2015 in respect
of the options granted was GBP66,714 (2014: GBP109,413).
27 Share-based payments (continued)
Details of the options outstanding during the
year are as follows:
2015 2014
Number Weighted Number Weighted
of options average of options average
exercise exercise
price price
000's GBP 000's GBP
----------------------- ------------ ---------- ------------ ----------
Outstanding at the
beginning of the
year 7,479 0.1610 958 0.2250
Granted during the
year 10,650 0.0740 7,000 0.1566
Cancelled during
the year (750) 0.0900 (479) 0.2250
Lapsed during the - - -
year -
Reissued in the year - - - -
----------------------- ------------ ---------- ------------ ----------
Outstanding at the
end of the year 17,379 0.1107 7,479 0.1610
Exercisable at the
end of the year 16,379 0.1129 3,229 0.1526
The option figures above take into account the
consolidation of the Company's ordinary shares
in issue at 28 January 2013.
The options granted before 2015 to Directors
and senior management at between 14p and 21p
were amended during the year for exercise prices
between 6p and 9p in light of the fall in the
Company share price.
The 10,650,000 options granted during the period
have been detailed out above, 10,000,000 of
which were issued to Tirupati.
The options outstanding at 31 December 2015
had a weighted average exercise price of 11.1p
(2014: 16.1p) and a weighted average remaining
contractual life of 2.4 years.
The charge in the income statement in respect
of options in 2015 was GBP66,714 (2014: GBP109,413).
DECOMMISSIONNING OBLIGATION
28
GROUP COMPANY
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------- ------- ------- -------
Balance at 1 January 132 28 - -
Provision in the year 104 104 - -
Reclassified to disposal
group as liabilities held
for sale (see Note 12) (236) - - -
---------------------------------- ------- ------- ------- -------
- 132 - -
---------------------------------- ------- ------- ------- -------
Provision has been made in respect of the eventual
decommissioning cost in respect of the graphite mine in Loharano in
accordance with the Group accounting policy. See Note 3.
29 EVENTS AFTER THE REPORTING PERIOD
On 16 February 2016 Mr Laurie Hunter and Mr
Jeffrey Marvin resigned.
On 4 March 2016, the Company completed the placing
of 12,000,000 new ordinary shares of 1p each
at a price 2.5p each, raising in aggregate gross
proceeds of approximately GBP300,000.
As part of the placing on 4 March 2016, the
Company issued warrants to subscribe for one
new Ordinary share for every twenty Placing
shares, being 600,000 warrants in total, each
exercisable at 2.5p per Ordinary share at any
time before 4 March 2018.
On 1 April 2016 the Company announced the entering
into heads of terms with Bass Metals Limited
to acquire the remaining 93.75% which it had
yet to acquire for a consideration of up to
AUS$15.25million. The deal is subject to regulatory
and shareholder approval.
30 Related party tranSactions
Transactions between the Company and its subsidiaries
which are related parties have been eliminated
on consolidation and are not disclosed in these
financial statements.
The remuneration of the Directors, who are the
key management personnel of the Group, is set
out in note 8.
During the year the Directors lent the Company
GBP152,000 (2014: GBP219,000) by way of short
term Director Loans free of interest. This has
been included within Short Term Borrowings.
The amount outstanding at year end was GBP87,170
(2014: GBP219,000).
During the year the following transactions took
place with Tirupati and subsidiary entities
of the Tirupati Group. As disclosed in Note
8, Shishir Poddar is a major shareholder and
Director of Tirupati:
Tirupati Carbons and Chemicals Group (P) Limited
("Tirupati") - Purchases
Goods and services were provided to the Group
for a total cost of GBP95,926. In addition GBP100,000
was settled through the issue in new ordinary
shares of the Company in relation to Technical
consultancy services. The amount outstanding
at year end to Tirupati being GBP30,637.
In addition, during the year, the Group sold
graphite to Tirupati totalling GBP34,302. The
amount outstanding at year end was GBP23,237.
Tirupati Resources Mauritius Limited ("Tirupati
Mauritius") - Client
During the year the Group sold graphite to Tirupati
Mauritius totalling GBP85,809. The amount outstanding
at year end was GBP28,299.
31 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
The Group had no capital commitments or contingent
liabilities as at 31 December 2015 (2014: GBPnil).
32 ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be one
single ultimate controlling party.
For further information please visit www.stratminglobal.com or
contact:
StratMin Global Resources Plc +44 (0) 20
Brett Boynton, CEO 3691 6160
Strand Hanson (Nominated & Financial
Adviser)
Rory Murphy / James Spinney / +44 (0) 20
Ritchie Balmer 7409 3494
Beaufort Securities (Broker) +44 (0) 20
Jon Bellis 7382 8300
Optiva Securities (Broker) +44 (0) 20
Christian Dennis 3137 1903
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKCDBOBKDPAB
(END) Dow Jones Newswires
June 30, 2016 02:00 ET (06:00 GMT)
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