TIDMEDL
RNS Number : 9613C
Edenville Energy PLC
21 June 2019
21 June 2019
EDENVILLE ENERGY PLC
("Edenville" or the "Company" or the "Group")
Annual Results for the year ended 31 December 2018
Edenville Energy plc (AIM: EDL), the company developing a coal
project in southwest Tanzania, is pleased to announce its audited
results for the year ended 31 December 2018.
2018 Highlights
-- Commercial mining and wash plant operation commenced full production phase with a variety of sized coal products
being produced;
-- Significant plant upgrades undertaken during the year;
-- In 2018 approximately 75,000 tonnes of Run of Mine (ROM) coal, 15,000 tonnes of washed coal and 32,000 tonnes of
fine coal produced; and
-- Revenue recognised for the first time.
Post Period Highlights
-- Funding secured to advance coal production;
-- Coal wash plant upgraded and further optimised, including the installation of a pre-screen to remove hard to
process material such as fine coal; and
-- Completion of road access to the new Northern Mining Area, which has the potential to deliver greater yields than
previously mined areas.
Annual Report and Notice of AGM
The Company's Annual Report for the year ended 31 December 2018
and Notice of Annual General Meeting will be posted to shareholders
on Monday 24 June 2019 and will be available on the Company's
website at: https://edenville-energy.com/annual-reports/ on 24 June
2019..
The Company's Annual General Meeting will be held at the offices
of Womble Bond Dickinson (UK) LLP, 4 More London Riverside, London,
SE1 2AU at 11.00 a.m. on Tuesday 23 July 2019.
Commenting, Jeffrey Malaihollo, Chairman of Edenville, said:
"2018 was a significant, but very challenging year for the Company.
We made substantial progress, becoming a revenue producing
commercial coal producer for the first time, although it has taken
longer than we had hoped to overcome the challenges we faced and
reach the positive position we are now in.
"Having gone through the operational and financial challenges in
2018 and early 2019, I believe the Company is now in the best
position it's been for many years. It is now a coal producing
company, with a wide range of customers and monthly income. With
the expected start of mining of the Northern Area in the coming
weeks we remain on track to become cashflow positive within the
next 10 months, targeting an initial 6,000 tonnes per month of
washed coal production, which we consider to be a breakeven level,
increasing to 10,000+ tonnes per month thereafter."
For further information please contact:
Edenville Energy Plc
Jeff Malaihollo - Chairman
Rufus Short Ð CEO +44 (0) 20 3934 6630
SP Angel Corporate Finance LLP
(Nominated Adviser and Joint
Broker)
David Hignell
Jamie Spotswood
Abigail Wayne +44 (0) 20 3470 0470
Brandon Hill Capital Ltd
(Joint Broker)
Oliver Stansfield, Jonathan Evans +44 20 7936 5200
IFC Advisory Limited
(Financial PR and IR)
Tim Metcalfe
Graham Herring
Heather Armstrong +44 (0) 20 3934 6630
Chairman's Statement
2018 was a significant, but very challenging year for the
Company. The year started with the Company fulfilling test orders
for washed coal and during the year we managed to increase our
production, widened our customer base and signed several long-term
supply contracts. We also overcame some challenges related to an
unusually heavy rainy period, lack of available transportation and
a high percentage of fine coal arising from our production. We had
to make modifications to increase the plant capacity and bought
additional mining equipment to enable production to go up to 10,000
tonnes per month of washed coal, further details of which are
outlined in the CEO's report.
During the year 2018 we also had to raise capital both through
equity and convertible loan means to execute our plans. This was
done against a background of a very tough market worldwide for
junior mining companies. In early 2019 we also invited all
Shareholders to support the Company through an Open Offer and
subsequently undertook a placing to provide the additional capital
required.
Having gone through the operational and financial challenges in
2018 and early 2019, I believe the Company is now in the best
position for many years. It is now a coal producing company, with a
wide range of customers and monthly income. We have all the
equipment and manpower to bring our production to the maximum
capacity of the current plant. In addition the Company now has
supportive institutional shareholders.
Looking ahead in 2019, our short-term goal is to open the
Northern Mining Area, increase our production to reach break-even
point in Q3 2019 and be cash flow positive within the next 10
months.
In the medium term we are looking at ways to monetise the large
amount of fine coal by-product being produced, which could make a
significant difference to the profitability of the Company. We will
also look further into the economics of having our own
transportation fleet to supply selected customers.
In the longer term we are still pursuing the coal to power
project and will always look for opportunities for additional
cash-flow positive projects.
In closing I would like to thank all our stakeholders, including
you the Shareholders, our partners, the local authorities and local
communities, my fellow Directors, our employees and contractors who
have collectively overcome the significant challenges of 2018. This
gives me confidence that we will be able to face up to any
difficulties ahead of us and make the Company as success.
We look forward to reporting further sales and progress from our
Rukwa Mine in the coming months.
Dr Jeffrey Malaihollo
Chairman
Chief Executive Officer's Report
2018 was a year of significant progress for the Company's Rukwa
coal project in southwest Tanzania (the "Project"). Following
commissioning of the wash plant in late 2017, the Company started
2018 supplying test orders to several customers. This period
coincided with the wet season rains and whilst access to site was
sometimes challenging, deliveries continued to be dispatched.
Further development of site infrastructure was carried out in
January, in particular with the completion of the coal test
laboratory facilities.
As the upper levels of the coal were mined we were greatly
encouraged by the often high calorific values present, test results
from washed coal as high as 6,700GCV were obtained, whilst fine
coal reported over 4,700GCV in certain batches.
Early in the year the plant was running at a throughput of
approximately 30 tonnes per hour. Challenges with water supply,
operating in the wet season and a high proportion of fines in the
feed contributed to this lower than modelled throughput.
On 23 February 2018 the Tanzanian Deputy Minister of Minerals,
Mr Doto Biteko visited the Project site along with other Regional
government officials. The Deputy Minister was shown the mine and
the plant and it was explained how the coal could be for both third
party commercial use and any future power plant development in the
region. Mr Biteko was also very interested in how the Project was
benefiting the local community through employment and business
opportunities.
Early in the Project life there were challenges for customers to
source transport for the collection of their product. By the second
half of 2018 this was largely solved as reliable transport became
more readily available. The Company has also considered having its
own base fleet of trucks to make deliveries where needed, but has
not yet considered this needs to be implemented.
In April 2018 the Company raised GBP740,000 (before expenses) to
continue the development of the Project and provide working
capital.
As the year progressed and the dry season arrived, coal
production continued to increase and the customer base was
strengthened. However, customers were keen to have extended trials
before entering into long term contracts and this resulted in the
first supply contract not being signed until late August 2018. This
was for 5,000 tonnes of coal per month and was followed in October
by two further contracts for up to 500 and 3,500 tonnes
respectively. In parallel we had been looking at ways to increase
throughput in the plant and had commissioned a water treatment
plant to be built (the "Lamella Plant"). The Lamella Plant was
completed and operational in December 2018. Several options for a
pre-screening plant to take out the fine coal had been reviewed and
whilst a planned initial plant purchase was not completed,
construction was started on a suitable facility in country. We had
planned to have this operational in Q4 2018, but substandard
contractor performance meant the Company had to take over
construction. The unit was subsequently completed in December 2018
and was operational from January 2019.
The Company's mining consultants, Sound Mining Systems (SMS) of
Johannesburg completed an updated mine plan in September 2018,
focused on the area to the north of the current mining operations.
We have targeted significantly larger coal measures that in places
have thicknesses of over 40m. It is planned the Northern Mining
Area, as we refer to it, will provide feed for the Project for at
least the next 10 years at a very low strip ratio of below 1:1
.
In November due to the requirements to expand production and
meet customers' requirements the Company took out a convertible
facility for US$750,000 before expenses. This was used primarily
for capital purchases, including a second loader, a second
excavator, completion of the pre-screen plant, in pit lighting for
night shift operations and land compensation measurements and
payments in the Northern Mining Area.
During 2018 the Project produced approximately 75,000 tonnes of
Run of Mine (ROM) coal, 15,000 tonnes of washed coal and 32,000
tonnes of fine coal.
Coal to Power
During the early part of 2018 we had several productive meetings
with senior management of Tanzania Electric Supply Company
("Tanesco") and were greatly encouraged by their willingness to
move forward to look at solutions for coal to power
implementation.
A very positive development occurred in June 2018 when the World
Bank announced it had approved US$455 million of funding for power
transmission line construction in Tanzania. This included the
transmission line from Sumbawanga to Tunduma in the south, along
with the associated Sumbawanga substation near to the Company's
Rukwa Project area. This step forward in the development of the
infrastructure needed to realise the construction of Edenville's
Coal to Power Project is very significant. It is understood that
the construction procurement plan is currently being implemented
and we hope to have further positive news on the development of
power line infrastructure to Sumbawanga in 2019.
In parallel with this news the Company decided to extend its
Memorandum of Understanding with Sinohydro Corporation of China for
a further 18 months in June 2018. Whilst a feasibility study on a
120MW plant has already been carried out, the potential for a
significantly larger plant of up to 300MW is now being considered
and much of Sinohydro's work will continue to be focused towards
this option.
In September 2018 Tanesco came forward with a Request for
Qualification ("RFQ") for coal fired generation projects in
Tanzania. The RFQ was considered the first step in a formal tender
process to move forward to an eventual Power Purchase Agreement and
subsequently construction and operation of a coal fired power
plant. There was a very compact time schedule in which to prepare
the necessary submission, this being one month from notification.
The Company successfully submitted the necessary documents in
October 2018 and Tanesco officially accepted these as being
complete and complying with TanescoÕs requirements.
However, two weeks later, for reasons not given by Tanesco, the
RFQ was cancelled and subsequently reinstated for a resubmission
date in December 2018. Edenville resubmitted their RFQ documents in
line with the criteria set forward by Tanesco, which appeared
identical to the previous criteria.
Post Period
January 2019 got off to a good start with the second excavator
being utilised in the mine along with our original machine. The
Lamella Plant was operational and the newly constructed pre-screen
plant started processing test material in January 2019 and became
fully operational in February.
In January 2019 the Company decided to carry out an Open Offer
to existing shareholders in order to raise the remaining capital
needed to open up the Northern Mining Area and subsequently
increase production. The Open Offer however was poorly subscribed
and only approximately 10% of the planned GBP619,099 was eventually
raised. This left the Company in a challenging situation on how to
meet customers' orders and expand the operation.
At the time of the closing of the Open Offer on 14 February 2019
Tanesco informed the Company that it had been unsuccessful in
moving through the RFQ process to supply power to Tanesco. No clear
explanation has been given for this decision. As far as the Company
is aware no other privately held coal projects in Tanzania
progressed successfully through the process. The Company remains
confident that if and when the transmission line infrastructure is
built to Sumbawanga the opportunity for a power plant development
at the Rukwa Coal Project will continue to move forward.
From February 2019, with limited funds available, the Company
took measures to conserve capital and continue supply to key
customers whilst seeking alternative funding arrangements. The
resulting lack of working capital to complete the mine upgrade
meant that production was adversely impacted in H1 2019 with
approximately 19,000 tonnes of ROM coal processed to produce 3,900
washed tonnes and 9,700 fine coal tonnes between 1 January 2019 and
31 May 2019. On 29 April 2019 the Company announced a successful
conditional fundraising of GBP510,000 and started to make
preparations to apply some of this funding to the Project
development. The main areas to be targeted are opening up the pit
in the Northern Mining Area and small upgrades on the plant and
infrastructure, such as an improved water pumping system and
installation of a coal sizer prior to the plant. Following the
completion of the funding the Project is now well placed to move
forward in 2019 to increase production and provide a quality
product to its customers.
The target is to firstly reach a steady state of 6,000 tonnes
per month of washed coal product, which we consider will make the
Tanzania operations break even. Following this the second target is
to reach 10,000 tonnes of washed coal produced per month which will
provide positive cash flow for the Company.
The fine coal is effectively produced as a by-product and to
that end we are continuing discussions with the previously outlined
buyers of fine coal. Other opportunities available to the Company
with regards to sales of fine coal are also being assessed. These
include briquetting or the introduction of secondary processing to
beneficiate the coal and improve the calorific value, thereby
enhancing the desirability of the product. Although this would
require additional capital expenditure, the Company believes this
to be modest with a short payback period. The Company's Directors
expect to be able to fund any upgrades to infrastructure from free
cash flow from future mining operations. As an immediate measure we
are targeting areas of stockpiled fine coal that may contain
economically recoverable coal to feed through the pre-screen. We
also expect the pre-screen to increase the available tonnage from
newly mined coal for subsequent processing through the wash
plant.
The AFR RI-3A Tanzania - Zambia Transmission Interconnector
project, which is being part financed by the World Bank, is
continuing to move forward which we continue to believe could have
positive implications for our planned coal to power project. The
financing agreement for credit is now in place and the procurement
plan is continuing to progress. As previously stated the Company's
long term plan is to provide electricity to this transmission grid
once it is completed and we are continuing to work towards this
goal. Currently completion is stated as being in 2024.
Financing
The Company raised equity of GBP740,000 (before expenses) in
April 2018, primarily for working capital and additional
enhancements to the operations.
A further GBP586,000 was raised in November 2018 in the form of
a convertible loan with Lind Partners. This was used primarily for
expansion of the operation and the completion of the new items for
the wash plant. Several new items of equipment were purchased
including a new loader and second excavator. Land compensation for
the Northern Mining Area was largely completed in 2018 using this
funding.
Post period end in February 2019, the Company raised gross
proceeds of GBP62,418 through the Open Offer, together with a
further GBP15,000 following the issue of Director Subscription
Shares to Jeffrey Malaihollo, the Company's Chairman. In April and
May 2019 the Company raised a total of GBP510,000, before expenses
in a placing to new and existing shareholders.
The Company also undertook certain cost saving measures,
including the Directors only taking part of their salary
entitlements in 2018 and the subsequent reduced salary arrangements
and conversion of certain outstanding salaries to shares in the
Company in May 2019 along with the waiving of portions of their
outstanding salaries.
Corporate Social Responsibility
The Company has continued to take its corporate social
responsibility very seriously and understands it social licence to
operate in Tanzania is an essential part of making its projects
viable in the long term. The construction of the mining Project
provided several opportunities to improve infrastructure for the
local community, the most visible being the construction of the
road from Kipandi, past Mkomolo village and beyond, to the mine.
This has opened up a major artery in the area which services
farmers, the local population and communications as well as the
mine itself.
Wherever possible we have sought to employ local people from
surrounding villages. Many of the operators and management are
local and are proving to be highly competent and skilled employees.
The positive social benefits also overflow into the general
community where enterprising individuals are providing services
such as food supply for workers.
Now that the Project is more established we plan to carry out
projects for the local population, including establishment of water
wells subject to the appropriate hydrological conditions.
Relinquishments
Following the completion of mapping work carried out over the
area of exploration licence PL6098/2009 at Muze, the Company
decided to relinquish this licence. After geological interpretation
it was concluded that all the likely economic coal measures in the
Muze area are contained within the Company's primary mining
licences which lie approximately 2km to the south of PL6098/2009.
Relinquishment of this licence will result in an annual saving to
the Company of approximately US$30,000 for licence fees and work
requirements.
Renewals
PL7799 expired in April 2019 but an application had been made
and fees paid, prior to the expiry date, to renew the licence.
Although there is some paperwork from the Tanzanian authorities
outstanding the Company understands that the licence has been
renewed. The Directors do not forsee any reason why the renewal
process will not be completed. Should renewal not be granted it
would not affect the coal resources available to the group which
are all contained within its current mining licence. The area of PL
7799 would be used to put in place mining infrastructure at a later
date. The loss of PL7799 may lead to a revision of infrastructure
plans.
Summary
2018 was the Rukwa Coal Project's first year of full production
following construction in 2017. During the year the Company built
up a number of regular orders that resulted in three long term
contracts for coal supply being signed. The mine was fully opened
up and supplied approximately 75,000 tonnes of raw coal during the
year. The Project faced challenges, amongst them the sizing of the
raw coal which contained an excess of fine material. This resulted
in lower than planned throughput in the plant with consequently
lower volumes of washed coal products. The plant has since been
modified to deal with any fine coal and this along with the opening
up of the Northern Mining Area will underpin the planned increase
in production to turn the project cash flow positive within the
next 10 months.
The coal to power project has faced challenges to its progress
in the decision by Tanesco to reject it in the RFQ process.
However, the Company considers the opportunity still exists to
develop a power plant at the Project site as the catalyst for
development, the AFR RI-3A Tanzania - Zambia Transmission
Interconnector, is proceeding through its pre-construction stages
with finance in place and the procurement plan moving forward. When
this transmission line, which will run from Sumbawanga to Tunduma
in the south, is operational it will enable power from a project at
the Rukwa coal deposit to be distributed not only throughout
Tanzania but also the region as a whole.
Rufus Short
Chief Executive Officer
Group Statement of Comprehensive Income
Year Ended 31 December 2018
Note 2018 2017
GBP GBP
Revenue 337,125 -
Cost of sales (1,191,312) -
Gross loss (854,187) -
Administration expenses 6 (839,515) (927,640)
Share based payments 25 (76,319) (155,077)
Written off intangible assets 15 - (104,211)
Group operating loss (1,770,021) (1,186,928)
Finance income 10 529 864
Finance costs 11 (16,212) -
Loss on operations before taxation (1,785,704) (1,186,064)
Income tax 12 - -
Loss for the year (1,785,704) (1,186,064)
Other comprehensive (loss)/income
Loss/(gain) on translation of overseas
subsidiary 378,531 (553,211)
Total comprehensive loss for the year (1,407,173) (1,739,275)
Attributable to:
Equity holders of the Company (1,404,725) (1,738,557)
Non-controlling interest (2,448) (718)
Loss per Share (pence)
Basic and diluted loss per share 13 (0.12) (0.11)
All operating income and operating gains and losses relate to
continuing activities.
No separate statement of comprehensive income is provided as all
income and expenditure is disclosed above.
Group Statement of Financial Position AS AT 31 DECEMBER 2018
Note 2018 2017
GBP GBP
Non-current assets
Property, plant and equipment 14 1,139,031 1,059,583
Intangible assets 15 5,775,829 5,071,318
6,914,860 6,130,901
Current assets
Inventories 16 256,082 -
Trade and other receivables 17 396,671 299,666
Cash and cash equivalents 18 160,042 951,078
812,795 1,250,744
Current liabilities
Trade and other payables 19 (556,063) (146,797)
Convertible loan notes 20 (288,118) -
(844,181) (146,797)
Current assets less current
liabilities (31,386) 1,103,947
Total assets less current
liabilities 6,883,474 7,234,848
Non-current liabilities
Convertible loan notes 20 (282,076) -
6,601,398 7,234,848
Equity
Called-up share capital 21 2,722,036 2,679,750
Share premium account 18,566,642 17,910,928
Share option reserve 275,463 309,943
Foreign currency translation
reserve 933,496 554,965
Retained earnings (15,884,731) (14,212,274)
Attributable to the equity shareholders
of the company 6,612,906 7,243,312
Non- controlling interests (11,508) (8,464)
Total equity 6,601,398 7,234,848
The financial statements were approved by the board of directors
and authorised for issue on 21 June 2019 and signed on its behalf
by:
Rufus Short
Director
Company registration number: 05292528
Group Statement of Changes in Equity
Year Ended 31 December 2018
--------------------------------------------------Equity
Interests---------------------------------------
Share Capital Share Premium Retained Share Option Foreign Total Non-controlling Total
Earnings Reserve Currency interest
Account Reserve
GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January 2017 2,563,325 14,250,401 (13,026,926) 108,802 1,108,176 5,003,778 4,179 5,007,957
Issue of share
capital 116,425 3,869,091 - - - 3,985,516 - 3,985,516
Cost of issue - (162,500) - - - (162,500) - (162,500)
Share
options/warrants
charge - (46,064) - 201,141 - 155,077 - 155,077
Foreign currency
translation - - - - (553,211) (553,211) (9,327) (562,538)
Loss for the year - - (1,185,348) - - (1,185,348) (718) (1,186,066)
Non- controlling
interest share
of
goodwill - - - - - - (2,598) (2,598)
_
At 31 December
2017 2,679,750 17,910,928 (14,212,274) 309,943 554,965 7,243,312 (8,464) 7,234,848
Issue of share
capital 42,286 697,714 - - - 740,000 - 740,000
Cost of share
issue - (42,000) - - - (42,000) - (42,000)
Share
options/warrants
charge - - - 76,319 - 76,319 - 76,319
Cancellation of
share options - - 110,799 (110,799) - - - -
Foreign currency
translation - - - - 378,531 378,531 (746) 377,785
Loss for the year - - (1,783,256) - - (1,783,256) (2,448) (1,785,704)
Non- controlling
interest share
of
goodwill - - - - - - 150 150
_ __ ____ __ __ __
At 31 December
2018 2,722,036 18,566,642 (15,884,731) 275,463 933,496 6,612,906 (11,508) 6,601,398
.
Group Cash Flow Statements
Year Ended 31 December 2018
Year ended Year ended
31 December 31 December
Note 2018 2017
GBP GBP
Cash flows from operating activities
Operating loss (1,770,021) (1,186,928)
Impairment of tangible & intangible non-current
assets - 104,211
Depreciation 229,732 65,726
Amortisation 57,928
Share based payments 76,319 155,077
Increase in inventories (256,082)
Increase in trade and other receivables (77,196) (149,109)
Increase in trade and other payables 390,069 21,905
Foreign exchange differences 37,584 (142,174)
Net cash outflow from operating activities (1,311,667) (1,131,292)
Cash flows from investing activities
Purchase of exploration and evaluation assets (468,145) (882,649)
Purchase of property, plant and equipment (259,601) (1,104,381)
Finance income 529 864
Net cash used in investing activities (727,217) (1,986,166)
Cash flows from financing activities
Proceeds from issue of convertible loan
notes 548,853
Proceeds from issue of ordinary shares 740,000 3,985,515
Share issue costs (42,000) (162,500)
Net cash inflow from financing activities 1,246,853 3,823,015
Net increase/(decrease) in cash and cash
equivalents (792,031) 705,557
Cash and cash equivalents at beginning of
year 951,078 246,120
Effect of foreign exchange rate changes
on cash and cash equivalents 995 (599)
Cash and cash equivalents at end of year 18 160,042 951,078
Notes to the Group Financial Statements
Year Ended 31 December 2018
1. General Information
Edenville Energy Plc is a public limited company incorporated in
England and Wales. The address of the registered office is Aston
House, Cornwall Avenue, London, N3 1LF. The companyÕs shares are
listed on AIM, a market operated by the London Stock Exchange.
The principal activity of the Group is the exploration,
development and mining of energy commodities predominantly coal in
Africa.
2. Group Accounting Policies
Basis of preparation and statement of compliance
The GroupÕs financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union, IFRIC Interpretations and the
parts of the Companies Act 2006 applicable to companies reporting
under IFRS. The Group's financial statements have also been
prepared under the historical cost convention, as modified by the
revaluation of available for sale investments.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Group's financial
statements are disclosed in Note 4.
The Company's financial statements continue to be prepared under
IFRS. Therefore, the Company's financial statements and the
associated notes, together with the auditors' report on these
financial statements, are presented separately from the Group.
Going concern
At 31 December 2018 the Group had cash balances totalling
GBP160,042.
The Group meets its day to day working capital requirements
through the sale of its coal resource, and monies raised in
follow-on offerings. The Group's forecasts and projections indicate
that the Group has sufficient cash reserves to operate within the
level of its current facilities. These forecasts are based upon
expected saleable levels of production.
Expenditure on excavation is related to the level of orders and
both head office costs and Tanzanian administration costs can be
reduced if it is found that order levels together with available
cash resources are insufficient to meet the Group's working capital
needs.
Whilst it is the Group's intention to rely on the available cash
reserves, future income generated and if required reductions in its
cost base, a negative variance in the forecasts and projections
would make the Group's ability to continue as a going concern
dependent on an additional fund raise. If the Group's forecasts are
not achieved, the Directors would seek to raise the additional
funds through equity issues which would be dependent upon investor
appetite. After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future.
The Company therefore continues to adopt the going concern basis
in preparing both its consolidated financial statements and for its
own financial statements
Standards and interpretations in issue but not yet effective or
not yet relevant
At the date of authorisation of these financial statements the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
Effective
date for accounting
period beginning
on or after
IFRS Amendments resulting from Annual Improvements 1 January
3, IFRS 2015-2017 Cycle (remeasurement of previously 2019*
11 held interest)
IFRS Amendments regarding prepayment features 1 January
9 with negative compensation and modifications 2019
of financial liabilities
IFRS Leases Ð new standard 1 January
16 2019
IAS 12 Amendments resulting from Annual Improvements 1 January
2015Ð2017 Cycle (income tax consequences 2019
of dividends)
IAS 19 Amendments regarding plan amendments, 1 January
curtailments or settlements 2019
IAS 23 Amendments resulting from Annual Improvements 1 January
2015Ð2017 Cycle (intended use or 2019
sale)
IAS 28 Long-term interests in associates and 1 January
joint venture 2019
*Not yet endorsed by the European Union.
The Directors anticipate that the adoption of these Standards
and Interpretations in future periods will have no material impact
on the Group's financial statements.
The Group has applied IFRS 15 and IFRS 9 from 1 January 2018. As
a result of the adoption of these standards, there has been a
change to the significant accounting policies.
Due to the transition methods adopted by the Group in applying
these standards, comparative information throughout these financial
statements has not been restated to reflect the requirements of the
new standards.
Both of the standards did not have a significant impact on the
Group's financial statements.
(i) IFRS 15 Revenue from Contracts with Customers
IFRS 15 establishes a comprehensive framework for determining ,
how much and when revenue is recognised. Under IFRS 15, revenue is
recognised when a customer obtains control of the goods or
services. Determining the timing of the transfer of control at
either a point in time or over a period of time requires
judgement.
The Group has adopted IFRS 15 using the cumulative effect method
(without practical expedients), with effect on initially applying
this standard on 1 January 2018. Accordingly, the information
presented in 2017 has not been restated.
Revenue is measured based on the consideration specified in a
contract with a customer. The Group recognises revenue when it
transfers control over goods to a customer.
The following table provides information about the nature and
timing of the satisfaction of performance obligations in contracts
with customers, including significant payment terms and related
revenue recognition policies.
Type of product Nature and timing of Revenue recognition Revenue recognition
satisfaction of performance under IFRS 15 under IAS 18
obligation including
significant payment terms
Sale of coal Customers obtain control Revenue is recognised The Group started
of coal when the goods when coal has been selling commercial
leave the Group's premises loaded in the customer's washed coal during
after being checked at truck and the delivery the year. Hence
the weigh bridge for note has been signed IAS 18 was not applicable
verification of coal by the customer's in prior years.
tonnage (the Group does driver.
not arrange for transport).
Invoices are generated
at that point in time.
For those specific contracts
where the entity has
an order to supply specific
contracts, where the
entity has an order to
supply specific tonnage
of coal per month, payments
are made on account.
For other one-off customers,
payments are first made
before coal is sold.
------------------------------ -------------------------- ---------------------------
(i) IFRS 9 Financial Instruments
Classification and measurement of financial instruments
IFRS 9 contains three principal classification categories for
financial assets measured at amortised costs, FVOCI and FVTPL. The
classification of financial assets under IFRS 9 is generally based
on the business model in which a financial asset is managed and its
contractual cash flow characteristics. IFRS 9 eliminates the
previous IAS 39 categories of held to maturity, loans and
receivables and available for sale.
The following table and the accompanying notes below explain the
original measurement categories under IAS 39 and the new
measurement categories under IFRS 9 for each class of the Group's
financial assets and financial liabilities as at 1 January
2018.
Original classification New classification Original New carrying
under IAS 39 under IFRS 9 carrying value under
value under IFRS 9
IAS 39
Assets GBP GBP
Trade receivables Loans and receivables Amortised cost - -
Other receivables Loans and receivables Amortised cost 288,944 288,944
Cash and cash equivalents Loans and receivables Amortised cost 951,078 951,078
Liabilities
Trade and other
payables Other financial liabilities Amortised cost 139,795 139,795
Impairment of financial assets
IFRS 9 replaces the "incurred loss" model in IAS 39 with the
"expected credit loss" model. The new impairment model applies to
financial assets measured at amortised cost, contract assets and
debt investments at FVOCI, but not investments in equity
instruments. Under IFRS 9, credit losses are recognised earlier
than under IAS 39.
There has not been a significant impact on the Group as at 1
January 2018 as a result of adopting IFRS 9.
Share based payments
The Group operates a number of equity-settled, share-based
compensation plans, under which the entity receives services from
employees as consideration for equity instruments (options) of the
Group. The fair value of the employee services received in exchange
for the grant of options is recognised as an expense. The total
amount to be expensed is determined by reference to the fair value
of the options granted:
* including any market performance conditions;
* excluding the impact of any service and non-market performance
vesting conditions (for example, profitability,
sales growth targets and remaining an employee of the entity
over a specified time period); and
* excluding the impact of any non-vesting conditions (for example,
the requirement of employees to save).
Assumptions about the number of options that are expected to
vest include consideration of non-market vesting conditions. The
total expense is recognised over the vesting period, which is the
period over which all of the specified vesting conditions are to be
satisfied. At the end of each reporting period, the entity revises
its estimates of the number of options that are expected to vest
based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
When the options are exercised, the Group issues new shares. The
proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium when the options are exercised
Basis of consolidation
The Group's financial statements consolidate the financial
statements of Edenville Energy Plc and all its subsidiary
undertakings (Edenville International (Seychelles) Limited,
Edenville International (Tanzania) Limited and Edenville Power (TZ)
Limited) made up to 31 December 2018. Profits and losses on
intra-group transactions are eliminated on consolidation.
Subsidiaries are all entities over which the group has control.
The group controls an entity when the group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the group. They are deconsolidated
from the date that control ceases.
Business combinations
The Group adopts the acquisition method in accounting for the
acquisition of subsidiaries. On acquisition the cost is measured at
the fair value of the assets given, plus equity instruments issued
and liabilities incurred or assumed at the date of exchange. The
assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured at their fair value at the
date of acquisition. Any excess of the fair value of the
consideration over the fair value of the identifiable net assets
acquired is recorded as goodwill.
Any deficiency of the fair value of the consideration below the
fair value of identifiable net assets acquired is credited to the
income statement in the period of the acquisition.
The results of subsidiary undertakings acquired or disposed of
during the year are included in the group statement of
comprehensive income statement from the effective date of
acquisition or up to the effective date of disposal.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the group. Inter-company transactions
and balances between group companies are eliminated.
Revenue recognition
Revenue from the sale of energy commodities is recognised upon
delivery of goods to the customers.
The Group recognises sales revenue related to the transfer of
goods when control of the goods passes to the customer. The amount
of revenue recognised reflects the consideration to which the Group
is or expects to be entitled in exchange of those goods.
Sales revenue is recognised on individual sales when control
transfers to the customer. In most cases, control passes and sales
revenue is recognised when goods leave the entity's premises after
being checked at the weighbridge for verification of coal
tonnage.
Interest income is recognised on a proportional basis taking
into account the effective interest rates applicable to the
financial assets.
Presentational and functional currency
This financial information is presented in pounds sterling,
which is the Group's functional currency.
In preparing the financial statements of individual entities,
transaction in currencies other than the entity's functional
currency (foreign currencies) are recorded at the rates of exchange
prevailing on the dates of the transactions. At each balance sheet
date, monetary items denominated in foreign currencies are
retranslated at the rates prevailing at the balance sheet date.
For the purposes of presenting consolidated financial
statements, the assets and liabilities of the Group's foreign
operations (including comparatives) are expressed in pounds
sterling using exchange rates prevailing at the balance sheet date.
Income and expense items are translated at the average exchange
rate for the period. Exchange differences arising, if any, are
classified as equity and transferred to the Group's foreign
currency translation reserve. Such translation differences are
recognised in the income statement in the period in which the
foreign operation is disposed.
Financial instruments
The Group has elected to apply the limited exemption in IFRS 9
relating to classification, measurement and impairing requirements
for financial instruments, and accordingly comparative periods have
not been restated and remain in line with the previous standard IAS
39 "Financial Instruments: Recognition and Measurement"; For
further understanding of the impact of the transition to IFRS 9,
refer to note 2.
Financial assets
Financial assets comprise investments, cash and cash equivalents
and receivables. Unless otherwise indicated, the carrying amounts
of the Group's financial assets are a reasonable approximation of
their fair values.
Classification and measurement
The Group classifies its financial assets into the following
categories: those to be measured subsequently at fair value (either
through other comprehensive income (FVOCI) or through the income
statement (FVPL) and those to be held at amortised cost.
Classification depends on the business model for managing the
financial assets and the contractual terms of the cash flows.
Management determines the classification of financial assets at
initial recognition. The Group's policy with regard to financial
risk management is set out in note 3. Generally, the group does not
acquire financial assets for the purpose of selling in the short
term.
The group's business model is primarily that of "hold to
collect" (where assets are held in order to collect contractual
cash flows). When the group enters into derivative contracts, these
transactions are designed to reduce exposures relating to assets
and liabilities, firm commitments or anticipated transactions.
Financial Assets held at amortised cost
The classification applies to debt instruments which are held
under a hold to collect business model and which have cash flows
that meet the "solely payments of principal and interest" (SPPI)
criteria.
At initial recognition, trade receivables that do not have a
significant financing component, are recognised at their
transaction price. Other financial assets are initially recognised
at fair value plus related transaction costs, they are subsequently
measured at amortised costs using the effective interest method.
Any gain or loss on derecognition or modification of a financial
asset held at amortised cost is recognised in the income
statement
Financial Assets held at fair value through other comprehensive
income (FVOCI)
The classification applies to the following financial
assets:
- Debt instruments that are held under a business model where they
are held for the collection of contractual cash flows and also for
sale ("collect and sale") and which have cash flows that meet the
SPPI criteria. An example would be where trade receivable invoices
for certain customers were factored from time to time. All movements
in the fair value of these financial assets are taken through comprehensive
income, except for the recognition of impairment gains and losses,
interest revenue (including transaction costs by applying the effective
interest method), gains or losses arising on derecognition and foreign
exchange gains and losses which are recognised in the income statement.
When the financial asset is derecognised, the cumulative fair value
gain or loss previously recognised in other comprehensive income
is reclassified to the income statement.
- Equity investments where the group has irrevocably elected to present
fair value gains and losses on revaluation of such equity investments,
including any foreign exchange component, are recognised in other
comprehensive income. When equity investment is derecognised, there
is no reclassification of fair value gains or losses previously recognised
in other comprehensive income to the income statement. Dividends
are recognised in the income statement when the right to receive
payment is established.
Financial Assets held at fair value through profit or loss
(FVPL)
The classification applies to the following financial assets. In
all cases, transaction costs are immediately expensed to the income
statement.
- Debt instruments that do not meet the criteria of amortised costs
or fair value through other comprehensive income.
- Equity investments which are held for trading or where the FVOCI
election has not been applied. All fair value gains or losses and
related dividend income are recognised in the income statement.
- Derivatives which are not designated as a hedging instrument. All
subsequent fair value gains or losses are recognised in the income
statement.
Financial liabilities
Borrowings and other financial liabilities (including trade
payables but excluding derivative liabilities) are recognised
initially at fair value, net of transaction costs incurred, and are
subsequently measured at amortised costs.
Impairment of financial assets
A forward looking expected credit loss (ECL) review is required
for: debt instruments measured at amortised costs are held at fair
value through other comprehensive income: loan commitments and
financial guarantees not measured at fair value through profit or
loss; lease receivables and trade receivables that give rise to an
unconditional right to consideration.
As permitted by IFRS9, the group applies the "simplified
approach" to trade receivable balances and the "general approach"
to all other financial assets. The general approach incorporates a
review for any significant increase in counter party credit risk
since inception. The ECL reviews including assumptions about the
risk of default and expected loss rates. For trade receivables, the
assessment takes into account the use of credit enhancements, for
example, letters of credit. Impairments for undrawn loan
commitments are reflected as a provision.
Inventories
Inventories are measured at the lower of costs and net
realisable value. The cost of inventory is based on the average
period over the relevant period of production and includes
expenditure in accumulating the inventories, production costs and
other costs incurred in bringing them to their existing location
and condition. Stockpiles tonnages are verified by periodic
surveys.
Cost is based on Average costing principle and includes
expenditure incurred in acquiring the inventories and bringing them
to their existing location and condition plus appropriate share of
overheads based on normal operating capacity.
The Company performs inventory obsolescence at each reporting
date. In determining whether inventories are obsolete, the Company
assesses the age at which inventories held in the store in order to
make an assessment of the inventory write down to net realisable
value.
Trade and other receivables
Provision for impairment of trade receivables is made when there
is objective evidence that the Group will not be able to collect
all amounts due to it in accordance with the original terms of
those receivables. The amount of the write-down is the difference
between the receivables carrying amount and the present value of
the estimated future cash flows.
An assessment for impairment is undertaken at least
annually.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand,
demand deposits and other short term highly liquid investments that
are readily convertible to a known amount of cash and are subject
to insignificant risk of changes in value.
Convertible loan notes
The component parts of convertible loan notes issued by the
Company are classified separately as financial liabilities and
equity in accordance with the substance of contractual
arrangements. At the date of issue, the fair value of the liability
component is estimated using the prevailing market interest rate
for a similar non-convertible instrument. This amount is recorded
as a liability on an amortised cost basis using the effective
interest method until extinguished upon conversion or at the
instrument's maturity date. The equity component is determined be
deducting the amount of the liability component from the fair value
of the convertible loan notes as a whole. This is recognised and
included in equity, net of income tax effects, and is not
subsequently remeasured.
Property, plant and equipment
Property, plant and equipment are stated at cost on acquisition
less accumulated depreciation and accumulated impairment
losses.
Depreciation is provided on all property, plant and equipment
categories at rates calculated to write off the cost, less
estimated residual value on a reducing balance basis over their
expected useful economic life. The depreciation rates are as
follows:
Basis of depreciation
Fixtures, fittings and 25% reducing balance
equipment
Plant and machinery 5 years straight line or 25% reducing
balance
Office equipment 25% reducing balance
Motor vehicles 25% reducing balance
Costs capitalised include the purchase price of an asset and any
costs directly attributable to bringing it into working condition
for its intended use.
Finance costs
Finance costs of debt, including premiums payable on settlement
and direct issue costs are charged to the income statement on an
accruals basis over the term of the instrument, using the effective
interest method.
Income taxation
The taxation charge represents the sum of current tax and
deferred tax.
The tax currently payable is based on the taxable profit for the
period using the tax rates that have been enacted or substantially
enacted by the balance sheet date. Taxable profit differs from the
net profit as reported in the income statement because it excludes
items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or
deductible.
Deferred taxation
Deferred tax is recognised, using the liability method, in
respect of temporary differences between the carrying amount of the
GroupÕs assets and liabilities and their tax base. Deferred tax
liabilities are offset against deferred tax assets within the same
taxable entity or qualifying local tax group. Any remaining
deferred tax asset is recognised only when, on the basis of all
available evidence, it can be regarded as probable that there will
be suitable taxable profits, within the same jurisdiction, in the
foreseeable future against which the deductible temporary
difference can be utilised. Deferred tax is determined using tax
rates that are expected to apply in the periods in which the asset
is realised or liability settled, based on tax rates and laws that
have been enacted or substantially enacted by the balance sheet
date. Deferred tax is recognised in the income statement, except
when the tax relates to items charged or credited directly in
equity, in which case the tax is also recognised in equity.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as deduction, net of tax, from the proceeds.
Exploration and evaluation, Development and production
assets
Capitalisation
Certain costs (other than payments to acquire the legal right to
explore and costs which are directly attributable to those
payments) incurred prior to acquiring the rights to explore are
charged directly to the income statement. All costs incurred after
the rights to explore an area have been obtained, such as
geological and geophysical costs and other direct costs of
exploration and appraisal are accumulated and capitalised as
intangible exploration and evaluation ("E&E") assets. These
costs are only carried forward to the extent that they are expected
to be recouped through the successful development of the areas or
where activities in the areas have not yet reached a stage which
permits reasonable assessment of the existence of economically
recoverable reserves.
E&E costs are not amortised prior to the conclusion of
appraisal activities.
At completion of appraisal activities, if technical feasibility
is demonstrated and commercial reserves are discovered, then,
following development sanction, the carrying value of the relevant
E&E asset will be reclassified as a development and production
("D&P") asset, but only after the carrying value of the
relevant E&E asset has been assessed for impairment, and where
appropriate, its carrying value adjusted. If after completion of
appraisal activities in the area, it is not possible to determine
technical feasibility and commercial viability or if the legal
right to explore expires or if the Company decides not to continue
exploration and evaluation activity, then the costs of such
unsuccessful exploration and evaluation are written off to the
income statement in the period the relevant events occur.
Impairment
Management consider on a regular basis the geological resources
and exploration and evaluation results of each licence and based on
their analysis may relinquish or abandon a particular licence area.
When this occurs, the costs related to the relinquished area are
written off to the income statement.
Where the licences will be retained an impairment review is
performed when facts and circumstances indicate that the carrying
value of E&E assets may exceed its recoverable amount.
For E&E assets when there are such indications, an
impairment test is carried out by grouping the E&E assets with
the D&P assets belonging to the same geographic segment to form
the Cash Generating Unit ("CGU") for impairment testing. The
equivalent combined carrying value of the CGU is compared against
the CGU's recoverable amount and any resulting
Impairment loss is written off to the income statement. The
recoverable amount of the CGU is determined as the higher of its
fair value less costs to sell and its value in use.
Depletion of Development and Production Assets
The net carrying amount of development and production assets is
depleted using the unit of production method by reference to the
ration of production in the year to the related proven and probable
reserves, taking into account estimated future development costs
necessary to bring those reserves into production. If he useful
life of the asset is less than the reserve life, in which case the
asset is depreciated over its estimate life using the straight line
method.
Future development costs are estimated taking into account the
level of development required to produce the reserves. These
estimates are reviewed by independent reserve engineers. Changes in
factors such as estimates of reserves that affect unit of
production calculations are dealt with on a prospective basis.
Capital costs for assets under construction included in development
and production assets are excluded from depletion until the asset
is available for use, that is, when it is in the location and
condition necessary for it to be capable of operating in the manner
intended by management.
Development assets
When the technical feasibility and commercial viability of
extracting a mineral resource are demonstrable, the Group:
* stops capitalising E&E costs for that area
* tests recognised E&E assets for impairment; and
* ceases classifying any unimpaired E&E assets (tangible and intangible)
as E&E.
For Evaluation and Exploration assets reclassified to
development assets, the Group classifies such assets either as
tangible or intangible development assets. Intangible E&E
assets may be reclassified into tangible development assets or
intangible development assets and vice versa. Identifiable tangible
assets that cease to be classified as E&E assets are generally
classified as tangible development assets. Any costs incurred in
testing the assets to determine if they are functioning as
intended, are capitalised, net of any proceeds received from
selling any product produced while testing. Identifiable intangible
E&E assets may continue to be classified as an intangible
asset, or may be reclassified as a tangible asset if the intangible
asset is considered to be integral to the tangible development
asset and the tangible element of the asset is more
significant.
Amortisation
On reclassification of E&E assets, an entity depreciates
(amortises) the resulting tangible development assets. Intangible
development assets are not depreciated until the production stage
is reached at which point both tangible and intangible development
assets, are depreciated using the units-of-production method is
used.
The net carrying amount of development or production assets is
depleted using the unit of production method by reference to the
ratio of production in the year to the related proven and probable
reserves, taking into account estimated future development costs
necessary to bring those reserves into production. If the useful
life of the asset is less than the reserve life, in which case the
asset is depreciated over its estimated useful life using the
straight-line method.
Future development costs are estimated taking into account the
level of development required to produce the reserves. These
estimates are reviewed by independent reserve engineers. Changes in
factors such as estimates of reserves that affect
unit-of-production calculations are dealt with on a prospective
basis. Capital costs for assets under construction included in
development and production assets are excluded from depletion until
the asset is available for use, that is, when it is in the location
and condition necessary for it to be capable of operating in the
manner intended by management.
Goodwill
At the date of acquisition of a subsidiary undertaking, fair
values are attributed to the acquired identifiable assets,
liabilities and contingent liabilities. Goodwill represents the
difference between the fair value of the purchase consideration and
the acquired interest in the fair value of those net assets.
Goodwill is initially recognised at fair value. Any negative
goodwill is credited to the income statement in the year of
acquisition. If an undertaking is subsequently sold, the amount of
goodwill carried on the balance sheet at the date of disposal is
charged to the income statement in the period of disposal as part
of the gain or loss on disposal.
Goodwill is associated with exploration and evaluation and
development assets, the impairment of which is discussed in the
accounting policy note for exploration and evaluation assets.
3. Financial risk management
Fair value estimation
The carrying value less impairment provision of trade
receivables and payables is assumed to approximate their fair
values, due to their short-term nature. The fair value of financial
liabilities for disclosure purposes is estimated by discounting the
future contractual cash flows at the current market interest rate
that is available to the group for similar financial
instruments
4. Critical accounting estimates and areas of judgement
The Group makes estimates and assumptions concerning the future,
which by definition will seldom result in actual results that match
the accounting estimate. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amount of assets and liabilities within the next financial year are
those in relation to:
* the impairment of intangible assets;
* classification of exploration and evaluation assets;
* share based payments
Impairment Ð intangible assets
The Group is required to perform an impairment review, on
reclassification of exploration and evaluation assets to
development assets, for each CGU to which the asset relates.
Impairment review is also required to be performed on goodwill
annually and on other intangible assets when facts and
circumstances suggest that the carrying amount of the asset may
exceed its recoverable amount. The recoverable amount is based upon
the Directors' judgements and are dependent upon the discovery of
economically recoverable reserves, the ability of the Company to
obtain necessary financing to complete the development and future
profitable production or proceeds from the disposal until the
technical feasibility and commercial viability of extracting a
mineral resource becomes demonstrable, at which point the value is
estimated based upon the present value of the discounted future
cash flows.
The outcome of ongoing exploration and evaluation and
development assets, and therefore whether the carrying value of
exploration and evaluation and development assets will ultimately
be recovered, is inherently uncertain.
In assessing whether an impairment is required for the carrying
value of an asset, its carrying value is compared with its
recoverable amount. The recoverable amount is the higher of the
assetÕs fair value less costs to sell and value in use. Given the
nature of the Group's activities, information on the fair value of
an asset is usually difficult to obtain unless negotiations with
potential purchasers or similar transactions are taking place.
Consequently, unless indicated otherwise, the recoverable amount
used in assessing the impairment charges described below is value
in use.
The calculation of value in use is most sensitive to the
following assumptions:
* Production volumes
* Discount rates
* Coal prices
* Operating overheads
Estimated production volumes are based on the production
capability of the plant and estimated customer demand.
The Group generally estimates value in use using a discounted
cash flow model. The future cash flows are adjusted for risks
specific to the asset and discounted using a pre-tax discount rate
of 10%.
The directors have assessed the value of exploration and
evaluation expenditure and development assets and goodwill carried
as intangible assets. In their opinion there has been no impairment
loss to these intangible assets in the period, other than the
amounts charged to the income statement.
At the reporting date, the carrying value of evaluation
expenditure and/or development assets is GBP5,443,363 (2017:
GBP4,757,087) and the carrying value of goodwill is GBP332,466
(2017: GBP314,231).
Classification of exploration and evaluation, development and
production assets
E&E assets are reclassified from Exploration and Evaluation,
to development assets, when evaluation procedures have been
completed and the Directors consider commercial viability has
occurred. The Directors consider commercial viability occurs when
the project development reaches a stage where the mining and
processing of the mineral is at commissioning stage and the project
has been successfully built or developed in such a way that cash
flow can be received for the product in question. Critically this
point shows the project has been able to be developed for a cost
that can be both quantified and also sourced in some way to allow
the project to reach this stage. Commissioning is generally defined
in mineral exploitation as the point at which the project can
deliver products in a regular and sustainable way, be that from the
mine or a processing plant.
When the commissioning stage has completed, it is considered
that the mine has moved into the production phase of its lifecycle.
The Directors considered that this stage was reached in April
2018.
Share based payments
The estimate of share based payments costs requires management
to select an appropriate valuation model and make decisions about
various inputs into the model including the volatility of its own
share price, the probable life of the options, the vesting date of
options where non-market performance conditions have been set and
the risk free interest rate.
Depletion of Development and Production Assets
The net carrying amount of development and production assets is
depleted using the unit of production method by reference to the
ratio of production in the year to the related measured and
indicated resources. Measured and indicated resources are based on
a JORC compliant resource estimate carried out in 2013.
5. Segmental information
The Board considers the business to have one reportable segment
being Coal exploration and development projects.
Other represents unallocated expenses and assets held by the
head office. Unallocated assets primarily consist of cash and cash
equivalents.
Exploration
and Development
Projects
2018 Coal Other Total
Consolidated Income Statement GBP GBP GBP
Revenue - Tanzania 275,226 - 275,226
Revenue - other 61,899 - 61,889
Cost of sales (excluding
depreciation and amortisation) (868,549) - (868,549)
Impairment of stock (8,492) - (8,492)
Depreciation (226,343) - (226,343)
Depletion of development
assets (87,928) - (87,928)
Gross profit (854,187) (854,187)
Administrative expenses (131,990) (702,930) (834,920)
Share based payment - (76,319) (76,319)
Depreciation (3,805) (790) (4,595)
Group operating loss (989,982) (780,039) (1,770,021)
Finance income - 529 529
Finance cost - (16,212) (16,212)
Loss on operations before
taxation (989,982) (795,722) (1,785,704)
Income tax - - -
Loss for the year (989,982) (795,722) (1,785,704)
2017
Consolidated Income Statement
Intangible assets written
off (104,210) - (104,210)
Share based payments - (155,077) (155,077)
Other expenses (22,702) (735,002) (757,704)
Write off of evaluation
and exploration assets (104,211) - (104,211)
Depreciation (64,673) (1,053) (65,726)
Group operating loss (295,796) (891,132) (1,186,928)
Finance income - 864 864
Loss on operations before
taxation (295,796) (890,268) (1,186,064)
Income tax - - -
Loss for the year (295,796) (890,268) (1,186,064)
By Business Segment Carrying value of Additions to non-current Total liabilities
segment assets assets and intangibles
2018 2017 2018 2017 2018 2017
GBP GBP GBP GBP GBP GBP
Coal 7.568,618 6,421,089 727,746 1,987,031 414,289 92,898
Other 159,037 960,556 - - 711,967 53,899
7,727,655 7,381,645 727,746 1,987,031 1,126,256 146,797
By Geographical
Area
GBP GBP GBP GBP GBP GBP
Africa (Tanzania) 7,568,618 6,421,089 727,746 1,987,031 414,289 92,898
Europe 159,037 960,556 - - 711,967 53,899
7,727,655 7,381,645 727,746 1,987,031 1,126,256 146,797
Information about major customers
Included in revenues arising from the sale of coal are revenues
of GBP220,558 (2017: GBPNil) which arose from sales to the GroupÕs
largest customer based in Tanzania. No other single customer
contributed 10% or more to the Group's revenue in either 2018 or
2017.
6. Administration expenses
2018 2017
GBP GBP
Staff costs 232,858 356,805
Other expenses 606,657 570,835
839,515 927,640
7. AuditorsÕ remuneration
2018 2017
GBP GBP
Fees payable to the CompanyÕs auditor for
the audit of the parent company and consolidated
accounts 30,000 30,000
8. Employees
2018 2017
GBP GBP
Wages and salaries 212,873 221,552
Share based payments - 113,686
Social security costs 18,825 20,732
Pensions 1,160 835
232,858 356,805
Included within Development expenditure/Exploration and
evaluation assets (note 15) are capitalised wages and salary costs
of GBP241,458 (2017: GBP212,572).
The average number of employees and directors during the year
was as follows:
2018 2017
Administration and mining 7 5
Mining 31 5
38 10
9. Directors' remuneration
2018 2017
GBP GBP
Emoluments 211,000 221,000
Shared based payments - 113,686
Pensions 1,160 835
212,160 335,521
The highest paid director received remuneration of GBP130,702
(2017: GBP197,260).
Directors' interest in outstanding share options per director is
disclosed in the directors' report.
Remuneration of key management personnel
The remuneration of the directors and other key management
personnel is set out below:
2018 2017
GBP GBP
Emoluments 255,935 267,583
Shared based payments - 113,686
Pensions 1,160 835
257,095 382,104
10. Finance income
2018 2017
GBP GBP
Interest income on short-term bank deposits 529 864
529 864
11. Finance Costs
2018 2017
GBP GBP
Interest on convertible loan notes 11,496 -
Convertible loan finance costs 4,716 -
16,212 -
12. Income tax
2018 2017
GBP GBP
Current tax:
Current tax on loss for the year - -
Total current tax - -
Deferred tax
On write off/impairment on intangible assets - -
Tax charge for the year - -
No corporation tax charge arises in respect of the year due to
the trading losses incurred. The Group has Corporation Tax losses
available to be carried forward and used against trading profits
arising in future periods of GBP6,256,070 (2017: GBP5,550,871).
A deferred tax asset of GBP1,063,129 (2017: GBP943,110)
calculated at 17% (2017: 17%) has not been recognised in respect of
the tax losses carried forward due to the uncertainty that profits
will arise against which the losses can be offset.
The tax assessed for the year differs from the standard rate of
corporation tax in the UK as follows:
2018 2017
GBP GBP
Loss on ordinary activities before tax (1,785,704) (1,186,064)
Expected tax credit at standard rate
of UK Corporation Tax
19% (2017: 19%) (339,284) (225,352)
Disallowable expenditure 24,372 87,667
Movement in deferred tax not recognised 314,912 137,685
Tax charge for the year - -
13. Earnings per share
The basic loss per share is calculated by dividing the loss attributable
to equity shareholders by the weighted average number of shares in issue.
The loss attributable to equity shareholders and weighted average number
of ordinary shares for the purposes of calculating diluted earnings per
ordinary share are identical to those used for basic earnings per ordinary
share. This is because the exercise of warrants would have the effect
of reducing the loss per ordinary share and is therefore anti-dilutive.
2018 2017
GBP GBP
Net loss for the year attributable
to ordinary shareholders (1,785,704) (1,186,064)
Weighted average number of shares
in issue 1,476,497,888 1,106,162,059
Basic and diluted loss per share (0.12p) (0.11p)
14. Property, plant and equipment
Fixtures,
Plant and fittings
machinery and equipment Motor vehicles Total
GBP GBP GBP GBP
Cost
As at 1 January 2017 7,471 7,473 96,683 111,627
Additions 1,104,381 - - 1,104,381
Foreign exchange adjustment - (289) (6,974) (7,263)
As at 31 December 2017 1,111,852 7,184 89,709 1,208,745
Depreciation
As at 1 January 2017 6,362 6,854 79,189 92,405
Charge for the year 61,358 154 4,214 65,726
Foreign exchange adjustment (2,847) (289) (5,833) (8,969)
As at 31 December 2017 64,873 6,719 77,570 149,162
Net book value
As at 31 December 2017 1,046,979 465 12,139 1,059,583
Fixtures,
Plant and fittings and
machinery equipment Motor vehicles Total
GBP GBP GBP GBP
Cost
As at 1 January 2018 1,111,852 7,184 89,709 1,208,745
Additions 259,601 - - 259,601
Foreign exchange adjustment 64,088 176 4,237 68,501
As at 31 December 2018 1,435,541 7,360 93,946 1,536,847
Depreciation
As at 1 January 2018 64,873 6,719 77,570 149,162
Charge for the year 226,551 115 3,066 229,732
Foreign exchange adjustment 14,986 176 3,760 18,922
As at 31 December 2018 306,410 7,010 84,396 397,816
Net book value
As at 31 December 2018 1,129,131 350 9,550 1,139,031
Plant and machinery depreciation amounting to GBP226,343 is
included within cost of sales as it relates to mining
equipment.
15. Intangible assets
Evaluation
and Exploration
Assets
Tanzanian Development
Licences Expenditure Goodwill Total
GBP GBP GBP GBP
Cost or valuation
As at 1 January 2017 4,358,669 - 1,641,351 6,000,020
Additions 882,649 - - 882,649
Foreign exchange adjustment (380,020) - (143,106) (523,126)
Written off (104,211) - - (104,211)
Change in minority interest - - (12,280) (12,280)
Transfer to development expenditure (4,757,087) 4,757,087 - -
At 31 December 2017 - 4,757,087 1,485,965 6,243,052
Accumulated amortisation and
impairment
As at 1 January 2017 - - 1,294,260 1,294,260
Charge for the year - - - -
Change in minority interest - - (9,683) (9,683)
Foreign exchange adjustment - - (112,843) (112,843)
At 31 December 2017 - - 1,171,734 1,171,734
Net book value
As at 31 December 2017 - 4,757,087 314,231 5,071,318
Development
and Production
Expenditure Goodwill Total
GBP GBP GBP
Cost or valuation
As at 1 January 2018 4,757,087 1,485,965 6,243,052
Additions 468,145 - 468,145
Foreign exchange adjustment 276,059 86,232 362,291
At 31 December 2018 5,501,291 1,572,197 7,073,488
Accumulated depletion, amortisation
and impairment
As at 1 January 2018 - 1,171,734 1,171,734
Depletion of development and
production assets 57,928 - 57,928
Foreign exchange adjustment - 67,997 67,997
At 31 December 2018 57,928 1,239,731 1,297,659
Net book value
As at 31 December 2018 5,443,363 332,466 5,775,829
Tanzanian Licences and Goodwill
The Tanzanian licences comprise a mining licence and various
prospecting licences. The licences are located in a region
displaying viable prospects for both uranium and coal and occur in
a country where the government's policy for development of the
mineral sector aims at attracting and enabling the private sector
to take the lead in exploration mining, development, mineral
beneficiation and marketing.
Goodwill arose as a result of the valuation placed on the
original six Tanzanian licences acquired on the acquisition of
Edenville (Tanzania) Limited. The allocation of the Goodwill was
based on the valuation of the Group's licences and has been
allocated between coal and uranium licences.
In 2015 as the Group focused firmly on the development of the
Rukwa Coal to Power Project the directors have looked at
rationalisation of other licences which will allow available funds
to be focussed on the development of the Group's core asset at
Rukwa.
During 2016 the Group wrote off the last of its uranium licences
and associated goodwill; the licence was subsequently relinquished
in February 2017.
During 2017 the Company evolved from an exploration company to a
development company, as a result its exploration and evaluation
assets were transferred to development expenditure.
During 2018 the Company transitioned from development to
production on its Mkomolo licence ML562/2016.
The Directors carried out an impairment review on
reclassification of exploration and evaluation assets to
development and production assets.
Development and production assets have a finite useful economic
life. These assets are depleted on the unit of production method
based on measured and indicated resources as described in note
2.
Goodwill has a finite life and is reviewed for impairment
annually.
16. Inventories
2018 2017
GBP GBP
ROM stockpiles 11,493 -
Fines 238,881 -
Washed coal 5,708 -
256,082 -
The cost of inventories recognised as an expense during the year
in was GBP853,388 (2017: GBPNil).
Inventory of washed coal has been reduced by GBP8,492 as a
result of write-downs to net realisable value. This write down is
recognised as an expense during the year.
17. Trade and other receivables
2018 2017
GBP GBP
Trade Receivables 53,941 7,163
Less: provision for impairment of trade receivables (27,900) -
Trade receivables - net 26,041 7,163
Other receivables 77 70
VAT receivable 368,579 281,711
Prepayments 1,974 10,722
396,671 299,666
Included within VAT receivable is VAT owed to Edenville
International (Tanzania) Limited which is only recoverable against
future sales made by Edenville International (Tanzania) Limited.
The Group expects to recover the above VAT from sales of commercial
coal.
18. Cash and cash equivalents
Cash and cash equivalents include the following for the purposes
of the cash flow statement:
2018 2017
GBP GBP
Cash at bank and in hand 160,042 951,078
19. Trade and other payables
2018 2017
GBP GBP
Trade and other payables 366,175 22,398
Social security costs and other taxes 6,980 7,002
Accruals and deferred income 182,908 117,397
556,063 146,797
20. Convertible loan notes
2018 2017
GBP GBP
Current liabilities
Convertible loan notes 288,118 -
Non Ð current liabilities
Convertible loan notes 282,076 -
570,194 -
In November 2018 $750,000 conditionally convertible loan notes
were issued: the face value of these convertible securities is
$900,000. A commitment fee of GBP37,500 , which has been offset
against the proceeds of issue of the convertible loan notes, was
payable by the Company as well as issuing share options over
99,568,966 ordinary shares exercisable for 4 years at a conversion
price on 0.29p per share. The Company is required to make
repayments of $45,000 over 20 months commencing in February 2019.
If repayments are made in cash then an additional 3% is payable on
the $45,000. The company may elect to make the repayment in its
shares priced at 90% of the average five day Volume Weighted
Average Price (VWAP) chosen by the investor during the 20 days
before issuance, or a combination of both.
The Company has the option to buy back the entire outstanding
face value at any time at a premium of 5%. If this right is
exercised the investor has an option to convert 25% of the face
value into shares at the lesser of the repayment price or 0.29p per
share. The repayment price being 130% of the 10 day VWAP
immediately prior to the company entering the Convertible
Agreement.
In addition to the above the investor was offered 36,000,000
collateral shares which were issued by the Company on 20 February
2019.
21. Share capital
No GBP No GBP GBP
Ordinary Ordinary Deferred Deferred Total share
shares shares shares of shares capital
of 0.02p of 0.02p 0.001p each of 0.001p
each each each
Issued and fully
paid
At 1 January 2017 754,202,898 150,840 241,248,512,346 2,412,485 2,563,325
On 26 January 2017
the company issued
the following ordinary
shares
Ordinary shares
issued at 0.83p
in lieu of consultancy
services 963,855 193
Ordinary shares
issued at 0.77p
in lieu of consultancy
services 1,948,051 390
Ordinary shares
issued on exercise
of warrants at
0.80p 1,375,000 275
Ordinary shares
issued on exercise
of warrants at
0.60p 5,555,555 1,111
Ordinary shares
issued on exercise
of warrants at
0.54p 34,699,778 6,940
On 31 January 2017
Ordinary shares
issued on exercise
of warrants at
0.80p 3,304,167 661
On 6 February 2017Ordinary
shares issued on
exercise of warrants
at 0.80p 612,500 122
On 7 February 2017
Ordinary shares
issued on exercise
of warrants at
0.80p 6,625,002 1,325
On 7 February 2017
Ordinary shares
issued on exercise
of warrants at
0.60p 14,999,780 3,000
On 23 February
2017 the company
issued shares at
0.80p each 22,781,732 4,557
On 17 March 2017
the company issued
shares at 0.80p
each 227,218,268 45,443
20 March 2017 Ordinary
shares issued on
exercise of warrants
at 0.60p 10,000,000 2,000
29 March 2017 Ordinary
shares issued on
exercise of warrants
at 0.60p 2,777,778 556
On 16 June 2017
Ordinary shares
issued on exercise
of warrants at
0.60p 14,722,442 2,945
On 23 June 2017
Ordinary shares
issued on exercise
of warrants at
0.54p 4,273,505 855
On 26 September
2017 Ordinary shares
issued on exercise
of warrants at
0.54p 21,924,153 4,385
On 9 October 2017
Ordinary shares
issued on exercise
of warrants at
0.60p 208,333,333 41,667
-------------- ---------- ---------------- ----------- ------------
As at 31 December
2017 1,336,317,797 267,265 241,248,512,346 2,412,485 2,679,750
============== ========== ================ =========== ============
No GBP No GBP GBP
Ordinary Ordinary Deferred Deferred Total share
shares shares shares of shares capital
of 0.02p of 0.02p 0.001p each of 0.001p
each each each
Issued and fully
paid
At 1 January 2018 1,336,317,797 267,265 241,248,512,346 2,412,485 2,679,750
On 3 May 2018
Ordinary shares
issued at 0.35p 211,428,572 42,286 - - 42,286
As at 31 December
2018 1,547,746,369 309,551 241,248,512,346 2,412,485 2,722,036
============== ========== ================ =========== ============
22. Capital and reserves attributable to shareholders 2018 2017
GBP GBP
Share capital 2,722,036 2,679,750
Share premium 18,566,642 17,910,928
Other reserves 1,208,959 864,908
Retained deficit (15,884,876) (14,212,274)
________ ________
Total equity 6,612,761 7,243,312
There have been no significant changes to the Group's capital
management objectives or what is considered to be capital during
the year.
23. Capital management policy
The Group's policy on capital management is to maintain a low
level of gearing. The Group funds its operation primarily through
equity funding.
The Group defines the capital it manages as equity shareholders'
funds less cash and cash equivalents.
The Group objectives when managing its capital are:
* To safeguard the groupÕs ability to continue as a going concern.
* To provide adequate resources to fund its exploration, development
and production activities with a view to providing returns to its
investors.
* To maintain sufficient financial resources to mitigate against risk
and unforeseen events.
The Group's cash reserves are reported to the board and closely
monitored against the planned work program and annual budget. Where
additional cash resources are required the following factors are
considered:
* the size and nature of the requirement.
* preferred sources of finance.
* market conditions.
* opportunities to collaborate with third parties to reduce the cash
requirement.
24. Financial instruments
The Board of Directors determine, as required, the degree to
which it is appropriate to use financial instruments to mitigate
risk with the main risk affecting such instruments being foreign
exchange risk, which is discussed below.
Categories of financial instruments 2018 2017
GBP GBP
Financial assets
Receivables at amortised cost including cash and
cash equivalents:
Cash and cash equivalents 160,042 951,078
Trade and other receivables 394,697 288,944
Total 554,739 1,240,022
--------- ---------
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables 549,082 139,795
Convertible loan notes 570,194 -
1,119,276 139,795
========= =========
Net (565,537) 1,100,227
========= =========
Cash and cash equivalents
This comprises cash held by the Group and short-term deposits.
The carrying amount of these assets approximates to their fair
value.
General risk management principles
The Directors have an overall responsibility for the
establishment of the Group's risk management framework. A formal
risk assessment and management framework for assessing, monitoring
and managing the strategic, operational and financial risks of the
Group is in place to ensure appropriate risk management of its
operations.
The following represent the key financial risks that the Group
faces:
Interest rate risk
The Group only interest-bearing asset is cash invested on a
short-term basis which attracts interest at the bankÕs variable
interest rate.
The Group is exposed to interest rate risk through its
convertible loan notes, its only interest bearing liabilities. The
level of interest payable will vary depending on whether the
repayments are made with shares or in cash. The effective interest
rate based on repayments of $45,000 per month is 17.93%. If
repayments are made in cash then the monthly repayments increase by
3% giving an effective interest rate of 20.95%, excluding
transaction costs.
Credit risk
Credit risk arises principally from the Group's trade
receivables and investments in cash deposits. It is the risk that
the counterparty fails to discharge its obligation in respect of
the instrument.
VAT receivable is owed to Edenville International (Tanzania)
Limited which is only recoverable against future sales made by
Edenville International (Tanzania) Limited. The Group expects to
recover the above VAT from sales of commercial coal.
The Group holds its cash balances with reputable financial
institutions with strong credit ratings. There were no amounts past
due at the balance sheet date.
The maximum exposure to credit risk in respect of the above at
31 December 2018 is the carrying value of financial assets recorded
in the financial statements.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as and when they fall due.
Liquidity risk is managed through an assessment of short, medium
and long-term cash flow forecasts to ensure the adequacy of working
capital.
The Group's policy is to ensure that it will always have
sufficient cash to allow it to meet its liabilities when they
become due. To achieve this aim, it seeks to maintain cash balances
to meet expected requirements for a period of one year.
Currency Risk
The Group is exposed to currency risk as the assets of its
subsidiaries are denominated in US Dollars. The GroupÕs policy is,
where possible, to allow group entities to settle liabilities
denominated in their functional currency (primarily US Dollars)
with cash. The Company transfers amounts in sterling or US dollars
to its subsidiaries to fund its operations. Where this is not
possible the parent company settles the liability on behalf of its
subsidiaries and will therefore be exposed to currency risk.
The Group has no formal policy is respect of foreign exchange
risk; however, it reviews its currency exposure on a regular basis.
Currency exposures relating to monetary assets held by foreign
operations are included in the GroupÕs income statement. The Group
also manages its currency exposure by retaining the majority of its
cash balances in sterling, being a relatively stable currency.
The effect of a 10% rise or fall in the US dollar/Sterling
exchange rate would result in an increase or decrease in the net
assets of the group of GBP715,195.
Fair value of financial assets and liabilities
Fair value is the amount at which a financial instrument could
be exchanged in an arm's length transaction between informed and
willing parties, other than a forced or liquidation sale and
excludes accrued interest. Where available, market values have been
used to determine fair values. Where market values are not
available, fair values have been calculated by discounting expected
cash flows at prevailing interest rates and by applying year end
exchange rates.
The Directors consider that there is no significant difference
between the book value and fair value of the Group's financial
assets and liabilities.
The tables below summarise the maturity profit of the combined
Group's non-derivative financial liabilities at each financial year
end based on contractual undiscounted payments
2017
Less than 1- 2 years 2-5 years
1 year
Borrowings (current and non - - -
Ð current)
Trade payables 12,394 - -
Other payables 17,006 - -
Accruals 117,397 - -
---------- ---------------- ----------
146,797
========== ================ ==========
2018
Less than 1- 2 years 2-5 years
1 year
Convertible loan notes (current
and non Ð current) 288,118 282,076 -
Trade payables 333,940 - -
Other payables 39,215 - -
Accruals 182,908 - -
---------- ------------------- ----------
844,181 282,076
========== =================== ==========
25. Equity-settled share-based payments
The following options over ordinary shares have been granted by
the Company:
Grant Date Exercise price Number of options
outstanding at
31 December 2018
21 October 2013 5.00p 6,011,481
28 March 2017 1.08p 42,000,000
5 November 2018 0.29p 99,568,966
The options granted on 21 October 2013 are exercisable from 21
October 2014. The options are valid for a period of 10 years from
the date of grant. There are no vesting conditions.
Of the 46,000,000 issued on 28 March 2017, 32,000,000 were
issued to the Directors and a member of senior management and
8,000,000 to two engineers, 4,000,000 of which lapsed during the
year.
The 38,000,000 options issued to the Directors and a member of
senior management will vest one third immediately, one third upon
production of in excess of 5,000 tonnes of commercial coal per
month over three consecutive months and one third upon completion
of the Bankable Feasibility Study for the Rukwa Power Plant.
8,000,000 of the options of which 4,000,000 have lapsed during
the year were granted to two engineers, will vest one half upon
production of in excess of 5,000 tonnes of commercial coal per
month over three consecutive months and one half upon production of
in excess of 10,000 tonnes of commercial coal per month over three
consecutive months.
The options are exercisable for a 5-year period from 27 March
2017.
During the year on the issue of convertible loan notes (see note
20), 99,568,966 options were issued to the investor. These options
are exercisable over a 4 year period at an exercise price of
0.29p
At the date of grant, the options were valued using the
Black-Scholes option pricing model. The fair value per option
granted and the assumptions used in the calculation were as
follows:
Date of grant 21 October 2013 28 March 2017 5 November 2018
Expected volatility 85% 131% 70%
Expected life 4 years 3 years 4
Risk-free interest rate 1.23% 0.37% 0.96%
Expected dividend yield - - -
Possibility of ceasing - - -
employment before vesting
Fair value per option 0.09p 0.56p/0.42p/0.28p 0.08p
Volatility was determined by reference to the standard deviation
of daily share prices for one year prior to the date of grant.
The charge to the income statement for share-based payments for
the year ended 31 December 2018 was GBP76,319 (2017:
GBP155,077).
Movements in the number of options outstanding and their related
weighted average exercise prices are as follows:
2018 2017
Number of Weighted average Number of Weighted average
options exercise price options exercise price
per share per share
pence pence
At 1 January 52,011,481 1.53 6,011,481 5.00
Granted 99,568,966 0.29 46,000,000 1.08
Exercised - - - -
Cancelled (4,000,000) 1.08 - -
At 31 December 147,580,447 0.71 52,011,481 1.53
Exercisable
at year end 118,247,114 18,678,148
The weighted average remaining contractual life of options as at
31 December 2018 was 3.42 years (2017: 4.42 years).
Warrants
Movements in the number of warrants outstanding and their
related weighted average exercise prices are as follows:
2018 2017
Number of Weighted average Number of Weighted average
options exercise price options exercise price
per share per share
pence pence
At 1 January 241,666,667 0.96 142,286,325 0.62
Granted - - 241,666,667 0.96
Exercised - - (120,869,661) 0.59
Cancelled/expired (241,666,667) (0.96) (21,416,664) 0.80
At 31 December - - 241,666,667 0.96
The weighted average remaining contractual life of warrants as
at 31 December 2018 was Nil years (2017: 0.69 years).
The charge in respect of the 12,500,000 Broker warrants granted
in 2017 was GBP46,064 and is included in share premium as cost of
issuing shares in the year ended 31 December 2017.
26. Reserves
The following describes the nature and purpose of each
reserve:
Share Capital represents the nominal value of equity shares
Share Premium amount subscribed for share capital in excess
of the nominal value
Share Option Reserve fair value of the employee and key personnel equity
settled share option scheme and broker warrants
as accrued at the balance sheet date.
Retained Earnings cumulative net gains and losses less distributions
made
27. Related Party Transactions
Key management personnel are those persons having authority and
responsibility for planning, directing and controlling activities
of the Company, and are all directors of the Company. For details
of their compensation please refer to the Remuneration report.
During the year the Company paid GBP1,435,463 (2017:
GBP2,413,192) to or on behalf of its wholly owned subsidiary,
Edenville International (Tanzania) Limited. The amount due from
Edenville International (Tanzania) Limited at year end was
GBP8,565,706 (2017: GBP7,130,243). This amount has been included
within loans to subsidiaries.
Included in trade creditors at year end is an amount of GBPNil
(2017:GBP1,639) owed to Rufus Short, a director, in respect of
expenses incurred on behalf of the company.
Also included in trade creditors is an amount of GBP13,500
(2017: GBPNil) owed to Aaridhi Consultants in respect of Directors
fees for Arun Srivasrava.
At the year end the Company was owed GBP3,712 (2017: GBP3,712)
by its subsidiary Edenville International (Seychelles) Limited.
At the year end the Company was owed GBP6,340 (2017: GBP6,340)
by its subsidiary Edenville Power Tz Limited.
28. Events after the reporting date
On 20 February 2019 the Company issued 36,000,000 ordinary
shares of 0.02p each at par, being collateral shares issued to the
investor for advancing funds (see note 20)
On 20 February 2019 the Company issued 64,515,192 ordinary
shares of 0.02p for 0.12p each. Of these shares 8,333,333 and
12,500,000 were issued to the Directors Rufus Short and Jeffrey
Malaihollo respectively.
On 29 April 2019 the Company raised GBP100,000 by issuing
500,000,000 new ordinary shares of 0.02p each and has conditionally
raised a further GBP410,000 before expenses by conditionally
placing 2,050,000,000 new ordinary shares at 0.02p each.
In April 2019, the Company agreed a repayment holiday up to
September 2019 in respect of the convertible loan notes disclosed
in note 20 to the accounts. As a condition of granting the
repayment holiday the repayment due at the time, US$855,000, was
increased by 15% to US$983,250.
In May 2019, the Company issued 213,980,200 to the Directors at
0.02p each in lieu of unpaid salary.
29. Financial commitments
The Group has future aggregate minimum lease payments under non-
cancellable operating leases of $43,472 (2017: $35,257) and
required expenditure of $Nil (2017: $16,125) in respect of its
licences for the forthcoming year.
30. Ultimate Controlling Party
The Group considers that there is no ultimate controlling
party.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FMMPTMBMTBFL
(END) Dow Jones Newswires
June 21, 2019 02:00 ET (06:00 GMT)
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