TIDMMNRG
RNS Number : 6563E
MetalNRG PLC
03 July 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK
LAW PURSUANT TO THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS (SI
2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT,
THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
3 July 2023
MetalNRG plc
(the "Company" or "MetalNRG")
Financial Results for the year ended 31 December 2022
MetalNRG plc (LON:MNRG), the natural resources and energy
investment company, announces the Company's Financial Results for
the year ended 31 December 2022.
STRATEGIC REPORT
The Directors present the strategic report for MetalNRG plc (the
"Company" or "MetalNRG", and collectively with its subsidiary
companies, the "Group") for the year ended 31 December 2022.
PRINCIPAL ACTIVITY
The Group's principal activity during the year was that of a
natural resources and energy investing company listed on the Main
Market for listed securities of the London Stock Exchange.
BUSINESS REVIEW
2022 has been a year which saw the Company address a number of
legal issues which are summarised below and have been time
consuming and a drain on the Group's finances. However, during this
difficult time, the Group did progress with additional exploration
work and geosampling on its GoldRidge Project in Arizona producing
further positive results. Under its business development
partnership with EQTEC plc, the Group also continued its
re-commissioning of the waste to energy plant in Italy, which is
now commissioned and producing electricity.
The Company's claim for (i) the return of GBP1.02million it paid
and (ii) damages from the former Director, Mr Rocco, for breach of
director's duties has already been successful by way of summary
judgement on the first point, with judgement given for the GBP1.02
million. The corporate defendants have paid the Company
c.GBP450,000, and the remainder has been paid into Court. Now that
the appeal process has run its full course and the defendants have
lost their request to appeal, the Court has now released funds it
held to the Company. The defendants have also been given a Court
order to pay costs and interests which we are awaiting agreement
and settlement on. As at 30 April 2023 total legal costs incurred
to date are GBP1,631,566 of which GBP448,893 has been settled with
GBP55,173 of this amount recovered from the defendants. The Company
expects to recover the majority of these costs once an agreement
has been reached. However, as a result of this uncertainty no
receivable has been recognised in the financial statements at 31
December 2022.
The case proceeds on the director's duties claim in which the
Company seeks damages from Mr. Rocco. A case management and cost
hearing was held on 8 February 2023 to set a timetable for the
remainder of the claims but this was adjourned on the Defendant's
application on a technical matter, and whilst a new date is now set
for this case on 6 July 2023, the Company is trying to secure an
earlier date, the Court schedule permitting.
As to the s994 Prejudice Petition brought by Mr. Rocco against
the Company and the current Directors personally, Mr. Rocco
withdrew the claim in December 2022, accepting to pay the Company
and the Directors their legal costs incurred to date.
Mr. Rocco filed a claim in Scotland under his employment
agreement to be indemnified for his legal costs by the Company. The
defendant lost the claim at first instance and was ordered to pay
legal costs to the Company. The defendant appealed, the appeal was
heard in December 2022, and the Sheriff in Scotland has now
rejected the appeal and given order to the defendant to pay cost to
the Company and the Directors agreement is being sought on the
costs to be covered by the Defendant.
Mr Rocco has also taken the Company to the Employment Tribunal
in Scotland. The case is on hold until the resolution of the
proceedings in the English High Court, for damages from Mr Rocco
for breach of director's duties. The process is lengthy, however
the Company is convinced that it has taken the best route for its
shareholders and continues to work towards a successful outcome on
all cases which we hope will conclude soon.
Following a review carried out by the Board in connection with
the carrying value of some of its investments, the Directors have
determined that the fair value of the Group's investment in IMC and
BritNRG Limited should be fully impaired by GBP440,582 (2021:
GBPnil) to GBPnil. The Board is however confident that once the
relevant legal processes have been concluded the Directors will be
in a position to re-evaluate these investments and re-establish a
reasonable fair value. See 'Review of Investments and Operations'
in the Strategic Report for further information relating to these
investments.
REVIEW OF INVESTMENTS AND OPERATIONS:
Gold Ridge - Gold in Arizona .
MetalNRG's wholly owned subsidiary investment in Gold Ridge
Holdings Limited ("GHL") is GBP536,975 (2021: GBP536,975). In
addition, MetalNRG has made cash advances to GHL for the purpose of
carrying out and maintaining its exploration license commitments.
To date, a total of GBP315,584 has been advanced to GHL. The amount
advanced to GHL is accruing interest at 5% per annum on the
outstanding balance and at the year end, interest of GBP30,309
(2021: 16,689) has accrued and is payable on demand.
The Competent Person's Report by SRK Exploration Services Ltd
("SRK") in 2021 recommended that MetalNRG develop a full and
detailed understanding of the areas' geology and mineralisation as
they suggested the area offers a better economic prospect that
could be compromised if the waste dumps and pillars were to be
exploited upfront. As a result, the Company proceeded in 2022 with
detailed desktop research and the amalgamation of all previous
records and results of various campaigns to develop a new database
for Gold Ridge.
Following the completion of this work, the Board followed SRK's
advice and completed an on-site geochemical sampling program which
delivered positive results. Soil Geochemistry has provided evidence
for multiple geologic events. The main implication of our findings
is that historically mined gold mineralisation was transposed
northwards where no previous exploration drilling has occurred.
Having now found gold anomalies in these previously unexplored
areas a new linear gold anomaly has been defined as a result of the
work completed.
A new significant multi-element geochemical anomaly also occurs
1km west of the Dives Mine. Copper anomalies in volcanic rocks show
strong evidence for radial fracturing, a common feature of porphyry
deposits. The findings of the geochemical program encourages the
Board to conclude that the area may host a larger mineralising
system controlling all the surface mines and showings.
MetalNRG has completed just under 600 (Phase I) of the 1,000
geochemical samples planned. The laboratory analysis was conducted
for Gold, Silver and 49 other elements by ALS Chemex. The largest
gold anomalies were found in historical areas mined for gold;
however, gold anomalies were found in areas previously unexplored
and in particular on the new linear zone of gold mineralization in
the Southern Precambrian block.
All sample results to date show: Gold above 25ppb = 14%, silver
above 0.3ppm = 38%, Lead above 35ppm = 47%, Copper above 35 ppm =
40% and Zinc above 115 ppm = 33%.
Bart Stryhas, Senior Geologist on the project, commented: "These
results confirm our previous beliefs, that there is indeed a real
possibility of a larger un-discovered gold/base metal system at
Gold Ridge."
As a result of these encouraging findings, Bart and the Board
have defined the next steps to be taken and are now working towards
implementing these in 2023. The next steps include completing the
Geo-sampling program of another 400 samples in the areas of
interest. Upon analysis, the Company will define a drilling program
to be completed as funds become available from the legal
processes.
EQTEC Italia - Waste to Energy Project in Italy
In May 2021, the Company announced, in partnership with EQTEC
plc, its participation in the acquisition and planned
recommissioning of a 1MWe waste-to-energy plant in Italy.
Originally commissioned in 2015, the plant was built around EQTEC's
proprietary and patented Advanced Gasification Technology. MetalNRG
invested a total of EUR700,000 (GBP605,280) into the project via
its wholly owned subsidiary, MetalNRG Eco Ltd. At the year end the
carrying value of MetalNRG's investment in the EQTEC Italia project
is GBP605,280 (2021: GBP605,280).
MetalNRG joined a consortium led by EQTEC to repower, own and
operate the biomass-to- energy p lant (the "Plant") in Castiglione
d'Orcia, Tuscany, Italy. It was planned that, once operational, the
plant would transform straw and forestry wood waste from local
farms and forests into green electricity and heat for use in the
local community.
In 2022, EQTEC Italia MDC in Italy worked at recommissioning the
plant and during that process additional operational improvements
were identified and implemented, including the installation of a
dryer. While this increased the Capex of the project, it did
improve the flexibility of wood chip inputs and will reduce the
cost of the wood chips once the plant is operational. The
recommissioning of the plant is now complete and is producing not
only electricity as per plan but also Biochar (an organic
fertiliser) which will be sold for Euro 500 to 800 per tonne
depending on the level of quality produced.
Certification is currently being processed to determine the
quality of this by-product. Additional revenue streams are also
being explored and could lead to an improved financial performance
of the plant.
EQTEC Italia MDC is also in the process of refinancing the plant
and this will enable the Company to recover a portion of its
original investment with a dilution of its equity position which
currently stands at 12%.
BritNRG Limited - UK Conventional Onshore Oil & Gas
With the ongoing legal process (as detailed on page 3) and the
lack of meaningful financial information provided by BritNRG
Limited, the Board has determined that its 14.9% investment in
BritNRG Limited should be fully impaired by GBP175,000 (2021:
GBPnil) to GBPnil.
We have not received any operational or financial updates from
the company due to the legal processes we have been involved with.
BritNRG Limited did seek our support for a recent funding round as
per the outline below;
BritNRG Limited - Proposed Allotment of Shares and Invitation to
Participate
Further to an email of 28 November 2022, the company has been
required to make some adjustments
BritNRG is electing to issue the following shares (including
shares to settle convertible loan obligations):
-- Number of Shares to be Issued: 304
-- Class of Shares to be Issued: Ordinary
-- Par Value per Share: GBP0.001
-- Price Per Share: GBP1,900 (*)
(*) Shares are being offered to you at a preferential rate,
taking into account the lowest realisable share price.
As a registered holder of 194 Ordinary Shares, you are entitled
to pre-emption rights in accordance with the Companies Act 2006 in
respect of 46 (rounded up) Ordinary Shares for a consideration of
GBP87,400, representing 14.9% of the amount proposed to be
issued.
The Company elected not to participate in this funding round as
no information was supplied on the proposed investment, on the use
of funds and no appropriate information was provided on the current
financial and operational status of BritNRG.
IMC - Uranium Project in Kyrgyzstan
Project operations are currently on hold due to the Government
in Kyrgyzstan banning the exploitation of Uranium. IMC, the owner
of the licence, has now moved towards an arbitration process.
With the ongoing ban on the exploitation of Uranium in
Kyrgyzstan together with the uncertainty of the outcome of the
arbitration process, the Board has determined that its investment
in IMC should be fully impaired by GBP265,582 (2021: GBPnil) to
GBPnil.
Lake Victoria Gold - Gold in Tanzania
MetalNRG holds a minority equity position in Lake Victoria Gold
("LVG") as a result of cash advances to LVG converting into shares
after the Company terminated its investment in this gold project in
Tanzania. The current owners are seeking to bring the project into
production. The current exploration licence expires in 2025 and the
terms for agreeing the renewal of this licence and the commencement
of production within the next two years are ongoing but are
expected to be agreed later this year. MetalNRG will not be
increasing its equity position and has received regular updates
from LVG, who is looking to find a suitable partner to progress the
project into production.
The total amount advanced to LVG was US$ 332,150 (GBP255,565)
which was converted into the equivalent of AUD 434,439 on 29
January 2021 or 4,344,389 AUD 0.10 shares which is a 3.84% equity
share in LVG. MetalNRG's carrying value of its investment in LVG is
GBP255,565 (2021: GBP255,565) at the year end.
RESULTS AND DIVIDS
The loss of the Group for the year ended 31 December 2022, after
taxation, attributable to equity holders of MetalNRG, the Parent
Company, amounted to GBP2,218,437 (2021: GBP1,864,279).
The Directors do not recommend the payment of dividends but are
working towards establishing a suitable dividend policy that can be
considered in the future (2021: GBPnil).
EVENTS AFTER THE REPORTING PERIOD
There are no significant post period events to disclose for the
year ended 31 December 2022, other than those set out in Note 24 to
the Financial Statements.
MAIN TRS AND FACTORS LIKELY TO IMPACT FUTURE BUSINESS
PERFORMANCE
The Board considers the following to be the key trends and
factors that are likely to impact future business performance:
-- General commodity cycle - Commodity prices, base and precious
metals and gold specifically, have seen a marked improvement over
the last year. The Board maintains a positive outlook for commodity
prices, and the gold price in particular.
-- Project development - the Company's partnership with EQTEC
Plc on its EQTEC Italia MDC waste-to-energy project is expected to
start generating revenues in the near term and the success of this
project could lead to the Company investing in other similar
projects in the future.
-- Exploration results - the Management's ability to
successfully execute MetalNRG's exploration strategy is a key
factor in the future business performance of the Company. Specific
business principles designed to maximize the Company's chances of
long-term success in this regard are highlighted in the following
section headed "Principal Risks and Uncertainties".
PRINCIPAL RISKS AND UNCERTAINTIES
Management of the business and the execution of the Board's
strategy are subject to a number of key risks and
uncertainties:
Mineral exploration
Inherent with mineral exploration is that there are no
guarantees that the Company can identify a mineral resource that
can be extracted economically. In order to minimise this risk and
to maximise the Company's chance of long-term success, we are
committed to the following strategic business principles:
-- The Board regularly reviews the Company's exploration and
development programmes and allocates capital in a manner that it
believes will maximise risk-adjusted return on capital.
-- The Board applies advanced exploration techniques to areas
and regions that it believes are relatively under-explored
historically.
-- Exploration work is conducted on a systematic basis. More
specifically, exploration work is carried out in a phased,
results-based fashion and leverages a wide range of exploration
methods including modern geochemical and geophysical techniques and
various drilling methods.
-- The Board focuses the Company's activities on jurisdictions
that the Board believes represent low political and operational
risk. Moreover, the Board strongly prefers to operate in
jurisdictions where the Company's exploration teams have
considerable 'on the ground' experience. At the present time, all
of the Company's active exploration related projects are in
Arizona, USA, a country with established mining codes, stable
government, skilled labour force, excellent infrastructure and a
well-established mining industry.
Commodity price risk
The principal commodities that are the focus of the Company's
exploration and development efforts (precious metals and base
metals specifically gold and copper) are subject to highly cyclical
patterns in global demand and supply, and consequently, the price
of those commodities can be highly volatile.
Recruiting and retaining highly skilled directors and
employees
The Company's ability to execute its strategy is highly
dependent on the skills and abilities of its people. The Board
undertakes ongoing initiatives to foster good staff engagement and
ensure that remuneration packages are competitive in the
market.
Occupational health and safety
Every Director and employee of the Company is committed to
promoting and maintaining a safe workplace environment, including
adopting COVID safe work practices. The Company regularly reviews
occupational health and safety policies and compliance with those
policies. The Company also engages with external occupational
health and safety expert consultants to ensure that policies and
procedures are appropriate as the Company expands its activity
levels.
Financing risk
Raising sufficient debt and equity to fund the Company's
corporate and investments activities is crucial to enable the Group
to maintain its investment strategy. The Board is confident that
sufficient funding can be raised to progress its investment
activities.
Interest rate risk
The Company's interest rate exposure arises mainly from the
interest-bearing borrowings as disclosed in Note 15. All of the
Company's facilities are at fixed interest rates and a provision
for interest has been made in the accounts at the year end.
FINANCIAL INSTRUMENTS
The Group's financial instruments comprise investments, cash at
bank and various items such as available for sale assets, other
debtors, loans and creditors. The Group has not entered into
derivative transactions and nor does it trade financial instruments
as a matter of policy.
Credit Risk
The Group's credit risk arises primarily from cash at bank,
other debtors and the risk that a counterparty fails to discharge
its obligations. At 31 December 2022, (2021: GBPnil) no shares in
the Company were un-paid for. The Board determined that the
Company's investments of GBP175,000 in BritNRG Limited and
GBP265,582 in IMC should be impaired in full. See 'Review of
investments and operations' in the Strategic Report for more
information.
The Company's credit risk primarily arises from inter-company
debtors, which are considered to form part of the Company's
investment in the subsidiaries (see Note 11 to the Financial
Statements) and cash at bank and other debtors. Should the
subsidiaries' exploration activities not be successful, it is
possible that these debtors may become irrecoverable.
Liquidity Risk
Liquidity risk arises from the management of cash funds and
working capital. The risk is that the Group will fail to meet its
financial obligations as they fall due. The Group operates within
the constraints of available funds and cash flow projections are
produced and regularly reviewed by management.
Interest rate risk profile of financial assets
The only financial assets (other than short term debtors) are
cash at bank and in hand, which comprises money at call. The
Directors believe the fair value of the financial instruments is
not materially different to the book value.
Interest rate risk profile of financial liabilities
The only financial liabilities (other than short term creditors)
are interest bearing loans and convertible loan notes. The
Directors believe the fair value of the financial instruments is
not materially different to the book value.
Foreign currency risk
The Group has a United States subsidiary and it operates in
Europe through its UK subsidiary with an investment in Italy, which
can affect the Group's sterling denominated reported results as a
consequence of movements in the Sterling/US dollar/Euro exchange
rates. The Group also incurs costs denominated in foreign
currencies which gives rise to short term exchange risk. The Group
does not currently hedge against these exposures as they are deemed
immaterial and there is no material exposure as at the year end
(2021: GBPnil).
Market risk
The Group is also exposed to market risk arising from unlisted
investments which are stated at their fair value.
KEY PERFORMANCE INDICATORS (KPIs)
The Company's financial statements can provide a moment in time
snapshot of the financial health of the Company but do not provide
a reliable guide to the performance of the Company or its
Board.
At this stage in the Company's development, the Directors
regularly monitor key performance indicators associated with
funding risk, being primarily projected cash flows associated with
general administrative expenses and projected cash flows on a
project-by-project basis. This year, the Company has been able to
raise the funds as needed to finance its activities.
KPIs are not appropriate as a means of assessing the value
creation of a company which is involved in natural resource
investments, and which currently has no turnover. The Board
considers that the detailed information in the Business Review in
the Strategic Report is the most appropriate guide to the Group's
performance during the year.
CORPORATE RESPONSIBILITY
MetalNRG aims to be socially and environmentally responsible,
following and exceeding standards set for exploration and
investment companies around the world. As a responsible operator,
the Company has developed a Corporate Social Responsibility ("CSR")
policy that aims to align exploration and investment activities
with the expectation of local stakeholders in relation to
environmental, economic and social impacts. As an explorer,
MetalNRG's impact on local communities is the most significant area
of focus.
The firm's CSR framework places the emphasis on stakeholder
engagement and information dissemination, ensuring the local
community is aware of the Company plans and activities where
appropriate.
GOVERNANCE
The Board considers sound governance as a critical component of
the Company's success and the highest priority. The Company seeks
to retain a strong non-executive presence drawn from varied
backgrounds and with well-functioning governance committees.
Through the Company's compensation policies and variable components
of employee remuneration, the Remuneration Committee of the Board
seeks to ensure that the Company's values are reinforced in
employee behaviour and that effective risk management is
promoted.
ANALYSIS BY GER
Category Male Female
Directors 3 0
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Other Employees 1 0
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EMPLOYEES AND EMPLOYEE DEVELOPMENT
The Company is dependent upon the qualities and skills of its
employees and their commitment plays a major role in the Company's
business success. Employees' performance is aligned to the
Company's goals through an annual performance review process and
via incentive programmes. The Company provides employees with
information about its activities through regular briefings and
other media. The Company operates a share option scheme, operated
at the discretion of the Remuneration Committee.
DIVERSITY AND INCLUSION
The Company does not discriminate on the grounds of age, gender,
nationality, ethnic or racial origin, non-job-related-disability,
sexual orientation or marital status. The Company gives due
consideration to all applications and provides training and the
opportunity for career development wherever possible. The Board
does not tolerate discrimination of any form, positive or negative,
and all appointments are based solely on merit.
HEALTH AND SAFETY
The Company includes Health and Safety ("H&S") procedures
and frameworks in all of its planning and field activities, with an
emphasis on top-down as well as bottom-up ownership and
responsibility, quality training of all personnel, and risk
assessments that go beyond mere regulatory compliance.
Comprehensive Risk Assessments of Health and Safety Systems have
been developed to identify existing risks, to implement relevant
mitigation measures and to identify new risks before they may be
directly applicable to our operations. MetalNRG's H&S strategy
includes project and location specific training, H&S
inductions, Emergency Response Plans and field team reporting
procedures applied to MetalNRG's projects worldwide.
SECTION 172(1) STATEMENT
MetalNRG and its Board members understand the importance and
relevance of considering stakeholder groups in long-term decision
making; we therefore engage in a systematic manner with our key
stakeholders.
First and foremost, the Directors act in a way that they
consider, in good faith and with the information available, to be
most likely to promote the success of our Company and of all our
stakeholders. This includes considering the interests of employees,
contractors, advisers and consultants, maintaining high standards
of business conduct while considering the impact on communities and
the environment.
Section 172 specifies that the Directors must act in good faith
when promoting the success of the Company and have regards (amongst
other things) to the following:
-- the likely consequences of any Board decision in the long-term;
-- to the extent the Company has employees, the interests of the Company's employees;
-- the need to foster the Company's business relationships with suppliers, customers and others;
-- the impact of the Company's operations on the community and the environment;
-- the desirability of the Company's maintaining a reputation
for high standards of business conduct;
-- and to act fairly as between members of the Company
The Board of Directors is collectively responsible for the
decisions made towards the long-term success of the Company.
Considering the broad range of interests in the Company is an
important part of the way the Board makes decisions; however, in
balancing those different perspectives, it won't always be possible
to deliver everyone's desired outcome.
Engaging with stakeholders
We consistently engage with stakeholders to inform our decision
making and to support the Board's understanding of how our
activities impact them. Specifically, the Directors take time to
meet and discuss various topics with our advisers, contractors,
suppliers, brokers and our shareholders.
The Board considers and discusses information received from
across the organisation to help it understand the impact of its
operations, and the interests and views of our key stakeholders.
The Board of Directors are presented with a CEO report and
financial management accounts on a monthly basis and from time to
time commentary from other relevant executive team members. The CEO
report and financial management accounts form the basis for formal
Board meetings. In addition to the formal Board meetings, informal
meetings of the Board are also regularly held. At the beginning of
each financial year, a strategic business plan and budgets are
presented to the Board by the CEO and these form the basis for on
ongoing and regular reviews of the Company's performance.
The Company regularly releases social media commentary, which
any stakeholder can reply to, our PR advisers monitor comments on
social media and will review the comments with the CEO and together
they will develop and adjust their communications plan based on
issues that arise.
As a result of these activities, the Board has an overview of
engagement with stakeholders, and other relevant factors, which
enables the Directors to comply with their legal duty under section
172 of the Companies Act 2006.
Employees, contractors and consultants
The Company has few employees, however we do work with a number
of contractors and consultants and the Board will engage with all
three of the above as we see them as an extension of the Company
when working together. We hold regular face to face and virtual
online meetings to ensure that all health & safety matters are
adhered to and that the Company's Code of Business Conduct is
followed by all. We also actively seek their input to further
improve performance, health and safety and our own engagement
processes. Due to the fact that we work with specialist consulting
firms, we also recognise that in certain areas their knowledge and
expertise might be better than our own and we will take advice from
them but we will retain ultimate responsible on those matters.
Partners
The Company works in close partnership with EQTEC plc to develop
waste to energy projects which is part of our efforts towards the
achievement of zero emissions. Our first joint investment in Italy
is a good example of how we work closely together in the interest
of all stakeholders involved in the project. While recommissioning
the plant, we have been involved in all the decision-making
processes, engaging with local political representatives who have
an interest in the project while at the same time working closely
with the contractors and suppliers on site to secure ultimate
success. We have attended regular meetings and are part of the
Board of the SPV set up to manage the project.
Governments & Regulators
We seek to build strong and transparent relations with host
governments and regulatory bodies. This is carried out by the Board
members of the SPVs who are charged with developing the specific
asset; together we will agree the framework to follow and they will
adapt it to the local regulatory environment and report back to the
Company's main Board via monthly reports. These reports are
discussed at Board meetings and the CEO is charged with supplying
the SPVs' managements and Board with feedback. For example, our
partner in Kyrgyzstan holds regular meetings with government
representatives in country seeking to resolve the uranium mining
licence suspension in country. Prior to any meeting, we discuss our
approach internally and following every meeting the local
management team supplies the Board with a written report on the
meeting and supplies us with any written correspondence along with
its translation; the Board will then discuss these documents and
will supply feedback where required.
Community & Environment
MetalNRG is extremely conscious of the potential impact on the
environment its activities may have and also on the local
communities. As a Board we consider these aspects carefully in our
decision making and we ensure that environmental considerations and
implications are integrated in the business plans developed by the
SPVs developing specific assets. The SPVs also have to follow their
industry requirements on environmental impact and in most of our
assets environment impact studies must be presented to the
regulators. The Company's Board will work with the SPVs'
managements to adhere to the regulators requirements and provide
guarantees as and when they might be required.
Maintaining High standards of Business Conduct
MetalNRG is incorporated in the UK and governed by the Companies
Act 2006. The Company has adopted a Code of Business Conduct and
the Board recognises the importance of maintaining a good level of
corporate governance, which, together with the requirements to
comply with Market Regulatory rules, ensures that stakeholders
interests are safeguarded. The Board requires ethical behaviour and
business practices to be implemented throughout its business and
the SPVs it has an interest in. Our anti-bribery statement is clear
and straight-forward and the Company expects and demands
professional, honest and fair behaviour at all times and there is a
zero tolerance for bribery and unethical behaviour, which as a
Board we follow with conviction.
Shareholders
As a company whose issued ordinary share capital is listed on
the standard segment of the Official List and which are traded on
the Main Market for listed securities of the London Stock Exchange,
the Board responsibilities are clear and our legal advisers work
closely with us on ensuring the Company's compliance. The investor
section on our web site serves as our primary method for
shareholder communications and on which we publish our reports,
results and other relevant information on the Company and its
assets. Regular dialogue is maintained with our shareholders
through presentations, meetings and social media. The Company
conducts a quarterly review of its shareholders and reviews the
results at Board level, the Board also engages formally with
shareholders at the AGM.
The requirements for compliance to section 172 of the Companies
Act will be monitored on an ongoing basis and the Board is
committed to making ongoing improvements in this area.
CLIMATE RELATED FINANCIAL DISCLOSURES
Introduction
MetalNRG knows that transparency regarding climate-related risks
and opportunities is critical to maintaining the trust of our
stakeholders and allows our investors to better understand the
implications of climate change. This is why we are adopting the
recommendations of the Task Force on Climate-related Financial
Disclosures (the "TCFD"). Our first report is aligned to the TCFD's
guidelines and is structured into four sections: Governance, Risk
Management, Strategy and Metrics & Targets. These topics align
to the TCFD's recommended disclosures and provide a comprehensive
view into how we understand and manage the risks and opportunities
associated with climate change at MetalNRG.
Governance
The Board of Directors actively oversees MetalNRG's investment
strategy. At each Board meeting our Board engages in robust
discussions about its current investments and any potential
investment opportunities where they address any emerging challenges
and disruptions. At the same time, our Board works with senior
management to develop a comprehensive view of MetalNRG's short and
long-term business risks. Both our Board and senior management team
recognise that operating responsibly, which includes minimizing the
environmental impact of our operations, is fundamental to the
long-term success of MetalNRG. We believe building a better future
involves making climate awareness "business as usual" throughout
our organization, starting at the top.
Our Board oversees the management of specific risks and
opportunities, including climate-related risks and opportunities.
The senior management team provides regular updates to our Board on
their activities and, in addition, our Board reviews the risks
associated with MetalNRG's investment strategy throughout the
year.
Risk Management
MetalNRG recognises that climate change risk is a global issue
that may impact how we run our business, both today and in the
future. As such, we continue to look for ways to improve our
understanding of climate-related risks. However, although the
impact of climate change is relatively low at this stage in
MetalNRG's development, we are conscious that "doing nothing" isn't
an acceptable response to the impact climate change may have on the
business in the future. We are therefore working to integrate
climate risk variables into our overall risk management process and
establish formal multi-disciplinary processes that engage both our
Board and senior management team.
Strategy
MetalNRG operates from a corporate head office in the UK but
holds investments in several global jurisdictions including the UK,
USA (through its wholly owned subsidiary, Gold Ridge Holdings Ltd),
Tanzania and Italy (through its wholly owned subsidiary, MetalNRG
Eco Ltd). The nature of these investments includes oil and gas,
gold and copper exploration, mining and extraction and producing
energy from waste.
The Board is conscious of the inherently "dirty" nature of
mining and exploration activities. However, the Board actively
encourages its investment partners to operate within international
mining guidelines and to carry out its activities using the most
up-to-date equipment. In fact, as part of MetalNRG's due diligence
undertaken prior to any investment, it insists that any mining and
exploration activities are carried out within the International
Council on Mining and Metals' ("ICMM") mining principals.
In addition, MetalNRG's most recent investment in a
waste-to-energy facility in Italy (through its wholly owned
subsidiary, MetalNRG Eco Ltd) in conjunction with its partner,
EQTEC plc, which utilises its advanced gasification technique to
convert agricultural and forestry waste into electrical power and
biochar, is evidence of MetalNRG's commitment to investing in clean
energy production.
Metrics & Targets
MetalNRG is committed to reducing its impact on the environment
in all aspects of its business activities and in all jurisdictions
in which it operates. The Board engages with all its key
stakeholders and partners and encourages the reduction of Co2
emissions throughout the value chain to promote an environment that
actively strives towards achieving 'net zero' by 2035. However, at
this stage in the Company's development there are no formal metrics
or targets to measure the Company's emissions against, but the
Board continues to review the need to implement metrics &
targets.
CAPITAL MANAGEMENT
The Company's objective when managing capital is to safeguard
the Group's ability to continue as a going concern and develop its
mining, exploration and investment activities to provide returns
for shareholders. The Group's funding comprises equity and debt.
The Directors consider the Company's capital and reserves to be
capital. When considering the future capital requirements of the
Group and the potential to fund specific project development via
debt, the Directors consider the risk characteristics of all the
underlying assets in assessing the optimal capital structure. This
includes the Company's ability to maintain the investment for the
foreseeable future, its ability to settle any outstanding debt and
the potential return on the investment to shareholders.
DIRECTORS' REPORT
The Directors are pleased to submit their Annual Report and
audited financial statements for MetalNRG plc ("MetalNRG" or the
"Company" and collectively with its subsidiaries the "Group") for
the year ended 31 December 2022.
The Strategic Report contains details of the Group's principal
activities and includes an Operational Review which provides
detailed information on the development of the Group's businesses
during the year ended 31 December 2022 and which provided
indications of likely future developments and events that have
occurred after the Balance Sheet date. The Strategic Report also
contains details of the Company's Principal Risks and Uncertainties
of the Group's exposure to risks and uncertainties and the
Company's risk management.
This Directors' Report includes the information required to be
included under the Companies Act 2006 or, where provided elsewhere,
an appropriate cross-reference is given. The Corporate Governance
Statement, approved by the Board, is provided and is incorporated
by reference herein.
GOING CONCERN
In common with many other natural resource investing and mineral
exploration companies, the Company raises finance for its natural
resources and energy investing activities in tranches as and when
required. When any of the Group's projects move to the development
stage specific project financing is required.
The Directors prepare budgets that extend beyond the period of
18 months from the date of this report. Taking into account the
Company's cash resources at the year end, these projections include
the proceeds of further fundraisings that may be required within
the next 12 months to meet the Group's overheads and planned
project expenditure and maintain the Company and its subsidiaries
as going concerns. Although the Company has been successful in
raising funding in the past, there is no guarantee that it will be
able to raise sufficient funding in the future. This represents a
material uncertainty related to events or conditions which may cast
significant doubt on the Company's and the Group's ability to
continue as going concerns and accordingly the Company and the
Group may be unable to realise their assets and discharge their
liabilities in the normal course of business. Nevertheless, the
Directors are confident that that they will be able to secure
additional funding when required to meet further costs for the
foreseeable future as well as its corporate overheads and the
Directors therefore believe that the going concern basis is
appropriate for the preparation of the Group's financial
statements.
RISKS AND UNCERTAINTIES AND FINANCIAL INSTRUMENTS
The business of mineral exploration, evaluation and development
has inherent risks. The Company's exposure to risks is explained in
Principal Risks and Uncertainties in the Strategic Report together
with the policies of the Board for the review and management of
those risks.
THE GROUP'S PERFORMANCE AND FUTURE DEVELOPMENTS
A review of the Group's projects and their performance during
the financial year and details of future developments and an
indication of the outlook for the future, are contained in the
Strategic Report.
The Board will continue with its strategic plans to generate
growth in value for shareholders in line with its business model
which is explained in the Strategic Report.
DIRECTORS
The Directors of the Company during the year were:
Christopher Peter Latilla-Campbell - Non-Executive Chairman of
the Board and Chairman of the Audit Committee
Rolf Ad Gerritsen - Executive Director
Christian Schaffalitzky de Muckadell - Non-Executive Director
and Chairman of the Remuneration Committee
ATTANCE AT BOARD AND COMMITTEE MEETINGS
The Board retains control of the Group with day-to-day
operational control delegated to Rolf Gerritsen, the Chief
Executive Officer. The full Board meets at least 4 times a year and
on other occasions when necessary. During the financial year under
review the Directors held 7 Board Meetings, all of which were held
by video conference.
A table setting out the Directors' attendance at Board and
Committee meetings during the financial year under review is set
out below.
Board Meetings Audit Committee Remuneration
Meetings Committee
Meetings
Held Attended Held Attended Held Attended
------ --------- ------ ---------- ----- ---------
C P Latilla-Campbell 7 6 2 2 - -
------ --------- ------ ---------- ----- ---------
R A Gerritsen 7 7 - - - -
------ --------- ------ ---------- ----- ---------
C Schaffalitzky 7 7 2 2 - -
------ --------- ------ ---------- ----- ---------
DIRECTORS' INTERESTS
The Directors who served during the year under review and their
beneficial interests (held directly or indirectly, including
interests held by spouses, children and associated parties) in the
Company's ordinary shares as at 31 December 2022 are set out
below:
Ordinary shares of GBP0.0001 each
----------------------------------------------------------------
Number % of issued Number of % of issued
of Ordinary Share Capital Ordinary Share Capital
Shares at at 31 Dec Shares at at 31 Dec
31 Dec 2022 2022 31 Dec 2021 2021
---------------
C P Latilla-Campbell
* 54,877,904 4.46% 44,277,904 3.90%
R A Gerritsen ** 30,711,556 2.49% 25,427,840 2.24%
C Schaffalitzky 12,099,999 0.98% 12,099,999 1.04%
--------------------------------- --------------- --------------- ------------- ---------------
* Christopher Latilla-Campbell's interests includes 24,750,000
ordinary shares held by Buchanan Trading Inc, in whose shares he is
deemed to be interested, as he is a potential beneficiary of a
discretionary trust which controls it. In addition, Mr.
Latilla-Campbell is the beneficial owner of 100,000 ordinary shares
held by London Finance & Investment Corporation, a company he
is a director of. Mr. Latilla-Campbell is also the beneficial owner
of 8,523,775 ordinary shares held by CGWL Nominees Ltd.
** Rolf Gerritsen's interests includes 30,109,573 ordinary
shares held by Pearman Investment Partners LLP, a company Mr.
Gerritsen is a designated member of.
DIRECTORS' WARRANTS AND OPTIONS
As at 31 December 2022, the Directors held the following
warrants and options over the Company's ordinary shares:
Christopher Latilla-Campbell holds 1,500,000 options exercisable
within 3 years from 1 February 2021 at an exercise price of 0.67p
per share.
Rolf Gerritsen holds 5,977,612 options exercisable within 3
years from 1 February 2021 at an exercise price of 0.67p per
share.
Christian Schaffalitzky de Muckadell holds 1,500,000 options
exercisable within 3 years from 1 February 2021 at an exercise
price of 0.67p per share.
Save for the options referred to above, none of the Directors
held any other options or warrants over the Company's ordinary
shares as at 31 December 2022.
SHARE CAPITAL
The Company's issued ordinary share capital is listed on the
standard segment of the Official List and the ordinary shares are
admitted to trading on the Main Market for listed securities of the
London Stock Exchange. As at 31 December 2022, the Company had
1,231,704,269 ordinary shares of GBP0.0001 in issue.
RE-ELECTION OF DIRECTORS
At the next Annual General Meeting of the Company, to be held on
28 July 2023, all of the Directors will retire in accordance with
the Articles of Association and, being eligible, offer themselves
for re-election.
INDEPENT ADVICE TO THE BOARD
The Board has the ability to seek independent professional
advice and during the year and in the previous year the Board
sought independent legal advice from Orrick, Herrington &
Sutcliffe (UK) LLP and CMS Cameron McKenna Nabarro Olswang LLP
during its dispute with BritNRG Limited et el.
SUBSTANTIAL INTERESTS
As at 30 June 2023, the Company had been notified that, other
than the Directors, the following shareholders were interested in
3% or more of the issued ordinary share capital of the Company:
Substantial shareholder Ordinary shares Percentage
of GBP0.0001 of issued
each share capital
Edward Spencer 90,000,000 7.31%
EQTEC plc 60,606,061 4.92%
---------------------------- ---------------- ---------------
The Company is not aware of any other interests which may be 3%
or more.
MATTERS COVERED IN THE STRATEGIC REPORT
The business review, review of KPI's and details of future
developments are included in the Strategic Report.
ENVIRONMENTAL RESPONSIBILITY
The Company is aware of the potential impact that its subsidiary
companies may have on the environment. The Company policy is to
follow the best international practice in mitigating and minimising
impacts through exploration and mining activities. The Company
ensures that it and its subsidiaries comply with the local
regulatory requirements and industry standards for environmental
and social risk management.
CO2 EMISSIONS
Given the early developmental stage of the projects in the Group
portfolio, the Board does not consider it a practical possibility
to reliably assess the carbon emissions of the Group's operations
and so has not included disclosure of emissions estimates in this
Annual Report. The Board will continue to assess the possibility of
measuring these levels as the Company continues to grow and
develop.
POLITICAL AND CHARITABLE DONATIONS
No political or charitable donations have been made during the
year under review.
POST PERIOD EVENTS
See the Strategic Report and Note 24 to the Financial
Statements.
DISCLOSURE GUIDANCE AND TRANSPARENCY RULES - COMPLIANCE
STATEMENT
The following disclosures relating to the Company's share
capital and control and its Directors are made pursuant to Rule
7.2.6.R of the Financial Conduct Authority's Disclosure Guidance
and Transparency Rules ("DTRs").
As at 31 December 2022:
a) Details of significant direct or indirect holdings of
ordinary shares in the capital of the Company are set out above in
this Directors' Report.
b) The Company is not aware of any agreements between
shareholders which may result in restrictions on the transfer of
securities or on voting rights.
c) There are no persons who hold securities carrying special
rights regarding control of the Company.
d) The Company is not a party to any significant agreements
which take effect, alter or terminate upon a change of control of
the Company following a takeover bid.
e) All ordinary shares carry one vote per share without restriction.
f) The Company's rules about the appointment and replacement of
directors are contained in the Company's Articles of Association
and accord with the Companies Act 2006. Amendments to the Company's
Articles of Association must be approved by the Company's
shareholders by passing a special resolution.
g) The Company may exercise in any manner permitted by the
Companies Act 2006 any power which a public company limited by
shares may exercise under the Companies Act 2006. The business of
the Company is managed by or under the direction of the Directors.
The Directors may exercise all the powers of the Company except any
powers that the Companies Act 2006 or the Articles of Association
requires the Company to exercise.
h) Subject to any rights and restrictions attached to a class of
shares and in compliance with the Companies Act 2006, the Company
may allot and issue unissued shares and grant options over unissued
shares, on any terms, at any time and for any consideration, as the
Directors resolve. This power of the Company can only be exercised
by the Directors. The Company may reduce its share capital and
buy-back shares in itself on any terms and at any time. However,
the Companies Act 2006 sets out certain procedures which must be
followed in relation to reductions in share capital and the
buy-back of shares.
DISCLOSURE OF INFORMATION TO THE AUDITOR
In the case of each person who was a Director at the time this
report was approved:
-- so far as that Director was aware there was no relevant audit
information of which the Company's auditor was unaware; and
-- that Director had taken all steps that the Director ought to
have taken as a director to make himself or herself aware of any
relevant audit information and to establish that the Company's
auditor was aware of that information.
This information is given and should be interpreted in
accordance with the provisions of section 418 of Companies Act
2006.
AUDITORS
RPG Crouch Chapman LLP were appointed as the Company's Auditors
on 5 April 2023. A resolution to re-appoint RPG Crouch Chapman LLP
will be proposed at the next Annual General Meeting of the Company,
to be held on 28 July 2023.
Approved by the Board of Directors
and signed on behalf of the Board
Rolf Gerritsen
Director
30 June 2023
Directors' responsibilities for the financial statements
The Directors are responsible for preparing the Strategic
Report, the Directors' Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the group and parent company financial
statements in accordance with applicable law and International
Financial Reporting Standards ("IFRSs") as adopted by the European
Union and as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies Act
2006. Under company law, the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and of
the Group and of the profit or loss of the Group for that year.
In preparing those financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRSs as adopted by the European
Union have been followed subject to any material departures
disclosed and explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company/Group will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions. The maintenance and
integrity of the Company's website is the responsibility of the
Directors. The Directors' responsibility also extends to the
ongoing integrity of the financial statements contained
therein.
They are further responsible for ensuring that the Strategic
Report and the Directors' Report and other information included in
the Annual Report and Financial Statements is prepared in
accordance with applicable law in the United Kingdom.
The Directors, after making enquiries, have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. They therefore
continue to adopt the going concern basis in preparing the
accounts.
Auditor
RPG Crouch Chapman LLP has signified its willingness to be
appointed as independent auditor to the Company. Under the
Companies Act 2006 section 487(2) RPG Crouch Chapman LLP will be
automatically re-appointed as auditor 28 days after these financial
statements are sent to members, unless the members exercise their
rights under the Companies Act 2006 to prevent the
re-appointment.
The Directors have taken all the steps that they ought to have
taken to make themselves aware of any information needed by the
Company's independent auditor for the purposes of the audit and to
establish that the independent auditor is aware of that
information. The Directors are not aware of any relevant audit
information of which the independent auditor is unaware.
Website publication
The maintenance and integrity of the MetalNRG website is the
responsibility of the Directors; the work carried out by the
independent auditor does not involve the consideration of these
matters and, accordingly, the independent auditor accept no
responsibility for any changes that may have occurred in the
accounts since they were initially presented on the MetalNRG
website. Legislation in the United Kingdom governing the
preparation and dissemination of the accounts and the other
information included in annual reports may differ from legislation
in other jurisdictions.
CHAIRMAN'S STATEMENT ON CORPORATE GOVERNANCE
The Board considers the Corporate Governance Code 2018,
published by the Quoted Companies Alliance (the "QCA Code"), to be
the most suitable corporate governance code for the Company. The
Company has adopted the QCA Code and the Principles which it
contains. The QCA Code's 10 Principles and an explanation of how
these are complied with by the Company are set out after this
overview.
The Board is collectively responsible to shareholders for the
success of the Group. The Board is responsible for the management
of the business of the Company, setting the strategic direction of
the Company, establishing the policies of the Company and
appraising the making of all material investments.
It is also the Board's responsibility to oversee the financial
position of the Company and to monitor the business and affairs of
the Company on behalf of the shareholders, to whom the directors
are accountable. The primary duty of the Board is to act in the
best interests of the Company at all times. The Board will also
address issues relating to internal control and the Company's
approach to risk management. To this end, the Company has
established an audit committee of the Board (the "Audit Committee")
with formally delegated duties and responsibilities.
The Audit Committee, which comprises myself, Christopher
Latilla-Campbell, as Chairman and Christian Schaffalitzky de
Muckadell will meet at least twice a year. The Audit Committee will
be responsible for the Company's internal controls and ensuring
that the financial performance of the Group is properly measured
and reported. In addition, the Audit Committee will receive and
review reports from management and the auditor relating to the
interim report, the annual report and accounts and the internal
control systems of the Company. There is no internal audit
function, however the Audit Committee is responsible for ensuring
that the interim and annual financial statements comply with
appropriate accounting policies, practices and legal requirements,
to recommend to the Board their adoption, and to consider the
independence of and to oversee the management's appointment of the
external auditor.
The Audit Committee will also make recommendations to the Board
on the appointment of the auditor and the audit fee.
The Company has also established a remuneration committee of the
Board (the "Remuneration Committee") with formally delegated duties
and responsibilities.
The Remuneration Committee which comprises Christian
Schaffalitzky de Muckadell as Chairman and myself, Christopher
Latilla-Campbell, will meet at least once a year, however the
Remuneration Committee held no meetings this year. The Remuneration
Committee will be responsible for reviewing, determining and
recommending to the Board the future policy for the remuneration of
the executive directors and officers. The Remuneration Committee
will consider base fees, salaries and incentive entitlements and
awards and, where appropriate, pension arrangements. The aggregate
remuneration of the directors is limited by the Company's Articles
of Association and this aggregate amount can only be changed by the
Company in general meeting.
The Company's diversity and inclusion policy is included within
the Strategic Report.
The Board has adopted a share dealing code (the "Dealing Code")
regulating trading in the Company's shares for the Directors and
other persons discharging managerial responsibilities (and their
persons closely associated) which contains provisions appropriate
for a company whose shares are listed on the Official List and
admitted to trading on the Main Market for listed securities of the
London Stock Exchange (particularly relating to dealing during
closed periods which will be in line with the Market Abuse
Regulation). The Company will take all reasonable steps to ensure
compliance by the Directors and any relevant employees with the
terms of the Dealing Code.
The Board currently comprises three directors of which two are
non-executive and one is executive. The Board as a whole believes
that its current composition provides an appropriate level of
balance in the Board and the Company's management. However, the
Board is currently considering the possibility of making an
additional appointment to the Board.
Christopher Latilla-Campbell
Non-Executive Chairman
CORPORATE GOVERNANCE STATEMENT
QCA Code and Company compliance
The QCA Code, which the Company has adopted, contains 10
Principles which are set out below together with an explanation of
how the Company applies each Principle.
Principle One: Establish a strategy and business model which
promote long-term value for shareholders.
The Company has a clearly defined strategy and business model
which has been adopted and implemented by the Board and which it
believes will achieve long term value for the shareholders. Details
of the Company's strategy are set out in the Strategic Report.
Principle Two: Seek to understand and meet shareholder needs and
expectations.
The Board is committed to maintaining good communications with
its shareholders and with investors with a view to understanding
their needs and expectations. The Board and, in particular, the
Chairman and Chief Executive Officer, maintain close contact with
many of the shareholders.
All shareholders are encouraged to attend the Company's Annual
General Meetings where they can meet and directly communicate with
the Board. Shareholders and investors are also able to meet with
members of the Board at investor presentations and investor shows
where the Company may be attending as a presenter or an exhibitor
and where up to date corporate presentations may be made after
which members of the Board are available to answer questions from
shareholders and investors.
The Company publishes an Annual Report and Accounts and an
Interim Results Announcement both of which are posted to the
Company's website. The Annual Report and Accounts provides
shareholders and investors with details of the Company's Financial
Statements for the financial year under review together with the
Strategic and Directors' Reports and other reports. The Interim
Results Announcement provides shareholders and investors with
details of the Company's Financial Statements for the six months
under review together with Operational Highlights and a Business
Review.
The Company also provides regular regulatory announcements and
business updates through the Regulatory News Service (RNS) and
copies of such announcements are posted to the Company's website.
The Company also provides information and topics for discussion
through social media channels.
Shareholders and investors also have access to information on
the Group through the Company's website, www.metalnrg.com, which is
updated on a regular basis and which also includes the latest
corporate presentation on the Group.
Principle Three: Take into account wider stakeholder and social
responsibilities and their implications for long-term success.
The Board recognises that the long-term success of the Group is
reliant on the efforts and participation of its staff, partners,
contractors, suppliers, advisers, and other stakeholders. The Board
maintains close contact and liaison with these important
relationships.
The Board is very aware of the significance of social,
environmental and ethical matters affecting the business of the
Group.
The Company will engage positively and seek to develop close
relationships with local communities, regulatory authorities and
stakeholders which are in close proximity to or connected with its
overseas operations and, where appropriate, the Board will take
steps to safeguard the interests of such stakeholders.
The Board plans, in due course, to adopt appropriate
environmental and corporate responsibility policies to ensure that
the Group's activities have minimal environmental impact on the
local environment and communities close to the Group's
projects.
Principle Four: Embed effective risk management, considering
both opportunities and threats, throughout the organisation.
Mining exploration, evaluation and development generally carry
high levels of risk and the Board recognises that the principal
risks and uncertainties facing the Group at this stage in relation
to its projects are inherently high.
The Board regularly reviews its business strategy and, in
particular, identifies and evaluates the risks and uncertainties
which the Group is or may be exposed to. As a result of such
reviews, the Board will take steps to manage risks or seek to
remove or reduce the Group's exposure to them as much as possible.
The risks and uncertainties to which the Group is exposed at
present and in the foreseeable future are detailed in Principal
Risks and Uncertainties in the Strategic Report together with risk
mitigation strategies employed by the Board.
Principle Five: Maintain the Board as a well-functioning,
balanced team led by the Chairman.
Christopher Latilla-Campbell, the non-executive Chairman, leads
the Board and is responsible for the effective performance of the
Board through control of the Board's agendas and the running of its
meetings at which, through the review and discussion of management
reports, the Group's performance can be regularly monitored.
Christopher Latilla-Campbell, in his capacity as non-executive
Chairman, also has overall responsibility for the corporate
governance of the Company. The day to day running of the Group is
delegated to Rolf Gerritsen, the Chief Executive Officer.
The Board holds Board meetings at least four times a year and
periodically, as and when issues arise which require the attention
of the Board. Prior to such meetings, the Board's members receive
an appropriate agenda and relevant information and reports for
consideration on all significant strategic, operational and
financial matters and other business and investment matters which
may be discussed and considered.
The Board is supported by the Audit and Remuneration Committees,
details of which are set out above.
In accordance with the Company's Articles of Association, all
Directors are required to retire each year at the Company's Annual
General Meeting and the retiring Directors may offer themselves for
re-election.
Principle Six: Ensure that between them the directors have the
necessary up to date experience, skills and capabilities.
The Directors have a wide range of skills and experience which
cover sector, technical, financial, operational and public markets
areas which are relevant to the management of the Group's
business.
Details of the current Board of Directors' biographies are set
out in the 2022 Annual Report & Accounts.
The Board regularly reviews its structure and whether it has the
right mix of relevant skills and experience for the effective
management of the Group's business. The Board considers that the
current balance of sector, technical, financial, operational and
public markets skills and experience which its directors have is
appropriate at present given the current size and stage of
development of the Company.
The Directors maintain their skills through membership of
various professional bodies, attendance at mining conferences and
seminars and through their various external appointments.
All Directors have access to the Company Secretary, City Group
PLC, which is responsible for ensuring that Board procedures and
applicable rules and regulations are observed and relevant
corporate and regulatory information is provided to the
Directors.
Principle Seven: Evaluate Board performance based on clear and
relevant objectives, seeking continuous improvement.
The Board's performance as a whole is reviewed and considered in
the light of the progress and achievements against the Group's
long-term strategy and its strategic objectives. This progress is
regularly reviewed in Board meetings and the structure, size and
composition of the Board are also considered.
All Directors are encouraged to maintain personal continuing
professional education programmes and all Directors are entitled to
receive relevant and appropriate training if required.
Principle Eight: Promote a corporate culture that is based on
ethical values and behaviours.
The Company has established corporate governance arrangements
which the Board believes are appropriate for the current size and
stage of development of the Company.
The Company has adopted a number of policies applicable to
directors, officers and employees and, in some cases, to suppliers
and contractors as well, which, in addition to the Company's
corporate governance arrangements set out above, are designed to
provide the Company with a positive corporate culture that
understands and meets shareholder and stakeholder needs and
expectations whilst delivering long-term value for shareholders.
The Company's policies include a Dealing Code; an Insider Dealing
and Market Abuse Policy, an Anti-Bribery and Corruption Policy, a
Whistleblowing Policy, a Social Media Policy and the Company's Code
of Business Conduct;
The Board recognises that its mineral exploration and
development activities can have an impact on the local environment
and communities in close proximity to its operations. The Company
seeks to engage positively and to develop close relationships with
local communities, regulatory authorities and stakeholders which
are in close proximity to or connected with its operations and
where appropriate the Board will take steps to safeguard the
interests of such stakeholders.
Principle Nine: Maintain governance structures and processes
that are fit for purpose and support good decision-making by the
Board.
Whilst the Board has overall responsibility for all aspects of
the business, Christopher Latilla-Campbell, the non-executive
Chairman, is responsible for overseeing the running of the Board
and ensuring that Board focuses on and agrees the Group's long-term
direction and its business strategy and reviews and monitors the
general performance of the Group in implementing its strategic
objectives and its achievements. Key operational and financial
decisions are reserved for the Board through quarterly and periodic
project reviews, annual budgets, and quarterly budget and cash-flow
forecasts and on an ad hoc basis where required.
As non-executive Chairman, Christopher Latilla-Campbell has
overall responsibility for corporate governance matters in the
Group. Christopher Latilla-Campbell and Christian Schaffalitzky de
Muckadell, the Company's two non-executive Directors, are
responsible for bringing independent and objective judgment to
Board decisions.
The Board delegates authority to two Committees to assist in
meeting its business objectives whilst ensuring a sound system of
internal control and risk management. The Committees meet
independently of Board meetings.
The Board notes that additional information supplied by the
Remuneration Committee and by the Audit Committee has been
disseminated across the whole of this Annual Report, rather than
included as separate Committee Reports.
Remuneration Committee
The Remuneration Committee comprises Christian Schaffalitzky de
Muckadell and Christopher Latilla-Campbell and is chaired by
Christian Schaffalitzky de Muckadell. The Committee is responsible
for the review and recommendation of the scale and structure of
remuneration for senior management, including any bonus
arrangements or the award of share options with due regard to the
interests of shareholders and the performance of the Company. The
remuneration committee did not meet during the year under
review.
Audit Committee
The Audit Committee comprises Christopher Latilla-Campbell and
Christian Schaffalitzky de Muckadell and is chaired by Christopher
Latilla-Campbell. The Audit Committee is responsible for ensuring
that the financial performance, position, and prospects of the
Group are properly monitored and reported on and for meeting with
the auditor and reviewing audit reports relating to the Group's
accounts. The Audit Committee is required to report formally to the
Board on its proceedings after each meeting on all matters for
which it has responsibility. The audit committee met twice during
the year under review.
The Group's external auditor is RPG Crouch Chapman LLP who were
appointed on 5 April 2023 after the resignation of the Group's
previous auditor, Edwards Veeder (UK) Limited, on that same date.
The role of external auditor last went to tender in 2006. The Audit
Committee closely monitors the level of audit and non-audit
services that they provide to the Company and Group.
Having assessed the performance, objectivity and independence of
the auditors, the Committee will be recommending the reappointment
of RPG Crouch Chapman LLP as auditors to the Company at the 2023
Annual General Meeting. During the year to 31 December 2022 the
Audit Committee considered the following key issues in relation to
the Financial Statements:
Issue Action
The Committee reviewed and discussed
* Accounting policies the significant accounting policies
with management and the external
auditor and reached the conclusion
that each policy was appropriate
to the Group and Company.
-----------------------------------------------
The Directors carried out an impairment
* Carrying value of intangible assets review of the intangible assets
and found that no impairment is
necessary. At 31 December 2022,
the Group held intangible assets
relating to Goodwill on acquisition
of Goldridge Ltd. The Goldridge
project is still being developed,
for which the most sensitive assumption
is the probability of technical
success and, given their nature,
impairment adjustments triggered
by future events that have yet to
occur which may be material. In
addition, there is a significant
risk that impairments recognised
in any one period may be subject
to material adjustments in future
periods. The carrying value of the
intangible assets at the year end
is GBP575,077 (2021: GBP575,077).
-----------------------------------------------
The Directors carried out an impairment
* Carrying value of investments review of the investments and found
that the carrying value of some
of its investments should be impaired,
as follows:
* BritNRG Limited
With the ongoing legal process (as
detailed in the Strategic Report)
and the lack of meaningful financial
information provided by BritNRG
Limited, the Board has determined
that its 14.9% investment in BritNRG
Limited should be fully impaired
by GBP175,000 (2021: GBPnil) to
GBPnil.
* IMC
With the ongoing ban on the exploitation
of Uranium in Kyrgyzstan together
with the uncertainty of the outcome
of the arbitration process, the
Board has determined that its investment
in IMC should be fully impaired
by GBP265,582 (2021: GBPnil) to
GBPnil.
The carrying value of the investments
at the year end is GBP860,843 (2021:
GBP1,265,749).
-----------------------------------------------
The Committee considered the
* Going concern review ability of the Group to operate
as a Going Concern considering
cash flow forecast for the next
12 months and operational milestone.
The Committee considers that
the Group has sufficient short
term funding to meet its operational
overheads and other costs for
the next twelve months, but
currently does not have the
funds available to settle its
outstanding legal costs on the
legal case until these costs
have been recovered from the
defendants. The Board continues
to manage outstanding creditors
in respect of the legal case
so that its cash flows stay
within available facilities,
and expects to be able to defer
settlement of these liabilities
until the costs have been recovered.
As a result of this the directors
have adopted the going concern
basis for the preparation of
these financial statements.
However, due to the positive
outcome of the litigation process,
the Directors are confident
that a significant portion of
the funds, as determined by
the Courts, will be received
in the short term. Following
the review of ongoing performance
and cash flows, the directors
have a reasonable expectation
that the Group has adequate
resources to continue operational
existence for the foreseeable
future.
The Committee reviewed the fees
* Review of audit and non-audit services and fees charged for the provision of
audit and services and determined
that they were in line with
fees charged to companies of
similar size and stage of development.
The Committee considered and
was satisfied the external auditor's
assessment of its own independence.
There were no non-audit services
provided during the year to
31 December 2022.
----------------------------------------
Nomination Committee
The Board as a whole will be responsible for the appointment of
executive and Non-Executive Directors. The Board does not currently
believe it is necessary to have a separate nominations committee at
this time. The requirement for a nominations committee will be
considered on an ongoing basis.
Rolf Gerritsen, the Chief Executive Officer, has the
responsibility for implementing the strategy of the Board and
managing the business activities of the Group on a day-to-day
basis.
City Group, the Company Secretary, is responsible for ensuring
that Board procedures are followed, and applicable rules and
regulations are complied with.
Principle Ten: Communicate how the Company is governed and is
performing by maintaining a dialogue with shareholders and other
relevant stakeholders.
The Company is committed to maintaining good communication with
its shareholders, the Company's key stakeholder group. Members of
the Board regularly communicate with, and encourage feedback from,
its shareholders. The Company's website is regularly updated and
users, including shareholders, can contact the Company using the
contact details on the website should stakeholders wish to make
enquiries of management.
The Group's financial reports, its Annual Report and Accounts
and Interim Results Announcements, can be found in the Investors
section of the website, www.metalnrg.com.
Notices of General Meetings are posted to shareholders and
copies for past years are available on the Company's website.
The results of voting on all resolutions in future general
meetings will be posted to the Company's website, including any
actions to be taken as a result of resolutions for which votes
against have been received from 20 per cent or more of independent
votes cast.
This Corporate Governance Statement will be reviewed at least
annually to ensure that the Company's corporate governance
framework evolves in line with the Company's strategy and business
plan.
DIRECTORS' REMUNERATION REPORT
The Company has established a Remuneration Committee which is
responsible for reviewing, determining and recommending to the
Board the future policy for the remuneration of the Directors, the
scale and structure of the Directors' fees, taking into account the
interests of shareholders and the performance of the Company and
Directors.
The items included in this report are audited unless otherwise
stated.
Statement of MetalNRG Plc's policy on directors' remuneration by
the Chairman of the Remuneration Committee, Christian Schaffalitzky
de Muckadell
As Chairman of the Remuneration Committee, I am pleased to
introduce our Directors' Remuneration Report. The Directors'
Remuneration Policy, which is set out below, will be submitted to
shareholders for approval at our Annual General Meeting on 28 July
2023.
A key focus of the Directors' Remuneration Policy is to align
the interests of the Directors to the long-term interests of the
shareholders and it aims to support a high-performance culture with
appropriate reward for superior performance, without creating
incentives that will encourage excessive risk taking or
unsustainable company performance. This will be underpinned through
the implementation and operation of incentive plans.
The Remuneration Committee which comprises myself as Chairman,
and Christopher Latilla-Campbell, will meet at least once a year.
However, the Remuneration Committee agreed not to meet this year
due to the ongoing legal process and there were no remuneration
related matters requiring attention. Executive Directors' and
Officers' remuneration is set at these meetings although Board
meetings are held where the remuneration of Directors and the
Remuneration Committee's recommendations are considered.
Remuneration Components
The Company remunerates Executive Directors and Officers in line
with best market practice in the industry in which it operates. The
components of Director remuneration that are considered by the
Board for the remuneration of Directors consist of:
-- Base salaries
-- Pension and other benefits
-- Annual bonus
-- Share incentive arrangements
-- Share options
Rolf Gerritsen, Chief Executive Officer, and Windell Callaghan,
MetalNRG's Chief Financial Officer, have entered into service
agreements with the Company and are also paid base salaries.
Christopher Latilla-Campbell and Christian Schaffalitzky de
Muckadell are appointed by letters of appointment and are paid
Directors' fees.
All such contracts impose certain restrictions as regards the
use of confidential information and intellectual property and the
executive Directors' and Officer's service contracts impose
restrictive covenants which apply following the termination of the
agreements.
Other matters
In February 2021, the Company introduced a Share Option Plan
2021 (the "Plan") for executives and selected senior management,
designed to promote the retention, recruitment and incentivisation
of the Company's leadership team.
The Company has established a workplace pension scheme and Rolf
Gerritsen and Windell Callaghan qualify whereas Christopher
Latilla-Campbell is eligible under the auto-enrolment pension
rules. The workplace pension scheme currently pays pension amounts
in relation to directors' and officer's remuneration. The Company
has not paid out any excess retirement benefits to any directors or
past directors.
Recruitment Policy
Base salary levels take into account market data for the
relevant role, internal relativities, their individual experience
and their current base salary. Where an individual is recruited at
below market norms, they may be re-aligned over time, subject to
performance in the role. Benefits will generally be in accordance
with the approved policy. For external and internal appointments,
the Board may agree that the Company will meet certain relocation
and/or incidental expenses as appropriate.
Payment for loss of Office
If a service contract is to be terminated, the Company will
determine such mitigation as it considers fair and reasonable in
each case.
The Company reserves the right to make additional payments where
such payments are made in good faith in discharge of an existing
legal obligation (or by way of damages for breach of such an
obligation); or by way of settlement or compromise of any claim
arising in connection with the termination of an executive
director's office or employment.
Service Agreements and Letters of Appointment
In accordance with the Articles of Association, all the
Directors are subject to their re-election by the Company's
shareholders at Annual General Meetings.
The Executive Director's and the Officer's service agreements
are set out in the table below. The agreements are not for a fixed
term and may be terminated by either the Company or the Executive
Director or the Officer on giving appropriate notice.
Details of the terms of the agreement for the Executive Director
and the Officer are set out below:
Date of service Notice period Notice period by director
Name agreement by Company (months) or officer (months)
R Gerritsen 1 June 2020 6 months 6 months
---------------- --------------------- --------------------------
W Callaghan 1 October 2020 3 months 3 months
---------------- --------------------- --------------------------
The Non-Executive Directors of the Company have been appointed
by letters of appointment. Each Non-Executive Director's term of
office runs for an initial period of three years and thereafter,
with the approval of the Board, will continue subject to periodic
retirement and re-election or termination or retirement in
accordance with the terms of the letters of appointment.
The details of each Non-Executive Director's current term are
set out below:
Name Date of letter Notice period Notice period
of appointment by Company (months) by Director (months)
C Latilla-Campbell 14 June 2017 3 months 3 months
C Schaffalitzky 14 June 2017 3 months 3 months
---------------- --------------------- ----------------------
Executive directors' remuneration - Audited
The table below sets out the remuneration received by the
Executive Directors for the year ended 31 December 2022:
Remuneration Fees Bonus Total
2022 2022 2022 2022
Executive directors GBP GBP GBP GBP
R Gerritsen 100,158 85,960 10,000 196,118
Total 100,158 85,960 10,000 196,118
======================= ============= ======= ======= ========
Mr Gerritsen's remuneration includes a salary and bonus paid
under PAYE, reimbursement of expenses and consultancy fees paid to
his consulting businesses, ECRG Consulting Ltd and RCA Associates
Ltd. During the year consulting fees totalling GBP37,625 was paid
to ECRG Consulting Ltd and GBP37,625 was paid to RCA Associates
Ltd.
Pension contributions totalling GBP1,321 (2021: GBP1,319) were
paid by the Company into Mr Gerritsen's workplace pension scheme of
which GBP110 remained unpaid at the end of the year (2021:
GBP110).
The Board recognises the importance of linking executive
director remuneration against total shareholder return ("TSR"). The
graph below represents the executive's total remuneration against
TSR for the previous three years.
Officer's remuneration - Audited
The table below sets out the remuneration received by the
Officer for the year ended 31
December 2022:
Remuneration Fees Bonus Total
2022 2022 2022 2022
Officer GBP GBP GBP GBP
W Callaghan * 45,000 - 2,500 47,500
Total 45,000 - 2,500 47,500
=============== ============= ====== ====== =======
Pension contributions totalling GBP1,163 (2021: GBP1,088) were
paid by the Company into Mr Callaghan's workplace pension scheme of
which GBP97 remained unpaid at the end of the year (2021:
GBP97).
* W Callaghan resigned as an employee on 1 January 2023.
Non-executive directors' remuneration - Audited
The table below sets out the remuneration received by the
Non-Executive Directors during the year ended 31 December 2022:
Remuneration Fees Bonus Total
2022 2022 2022 2022
Non-executive GBP GBP GBP GBP
directors
C Latilla-Campbell 15,000 - - 15,000
C Schaffalitzky - 12,000 - 12,000
Total 15,000 12,000 - 27,000
==================== ============= ======= ====== =======
Pension contributions totalling GBP263 (2021: GBP263) were paid
by the Company into Mr Latilla-Campbell's workplace pension scheme
of which GBP22 remained unpaid at the end of the year (2021:
GBP22). Mr Schaffalitzky is not eligible to receive pension
contributions.
Relative importance of spend on pay
The table below illustrates a comparison between Directors'
total remuneration to distributions to shareholders and loss before
tax for the financial year ended 31 December 2022:
Distributions Total Directors Group Operational cash
to shareholders pay inflow
GBP GBP GBP
Year ended 31 December
2022 Nil 224,702 57,867
------------------ ---------------- -----------------------
Total Director remuneration includes salaries and fees, for
directors in continuing operations. Further details on Directors'
remuneration are provided in Note 6 to the Financial
Statements.
Group operational cash inflow has been shown in the table above
as cash flow monitoring and forecasting is an important
consideration for the Board when determining cash-based
remuneration for directors and employees. The operational cash
inflow is derived predominantly from the collection of a
significant portion of the Companies outstanding receivable which
was due from BritNRG et el.
Consideration of shareholder views
The Board considers shareholder feedback received and guidance
from shareholder bodies. This feedback, plus any additional
feedback received from time to time, is considered as part of the
Company's annual policy on remuneration.
Approved on behalf of the Board of Directors
Christian Schaffalitzky de Muckadell
Chairman of the Remuneration Committee
30 June 2023
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF METALNRG PLC
FOR THE YEARED 31 DECEMBER 2022
Opinion
We have audited the financial statements of MetalNRG plc (the
'parent company') and its subsidiaries (the 'group') for the year
ended 31 December 2022 which comprise the Consolidated statement of
comprehensive income, the Consolidated statement of changes in
equity, the Consolidated statement of financial position, the
Company statement of financial position, the Consolidated statement
of cash flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards as adopted in
the United Kingdom (IFRS).
In our opinion, the financial statements:
-- give a true and fair view of the state of the group's and of
the parent company's affairs as at 31 December 2022 and of the
group's loss for the year then ended;
-- have been properly prepared in accordance with IFRS; and;
have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material uncertainty related to going concern
We draw attention to the going concern note in the accounting
policies, concerning the Group's ability to continue as a going
concern. The matters explained indicate that the Group need to
recover legal costs from the defendants following its successful
litigation outcome announced earlier in the year.
As at the date of approval of these financial statements the
timing of these cash receipts, and the ability of the defendants to
pay the outstanding legal costs in full is uncertain. These events
or conditions along with the matters set forth in in the accounting
policies indicate the existence of a material uncertainty which may
cast significant doubt over the Group's ability to continue as a
going concern. Our opinion is not modified in respect of this
matter.
We have highlighted going concern as a key audit matter. In
auditing the financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the Directors' assessment of the Group and the Parent
Company's ability to adopt the going concern basis of accounting
includes (but not limited to):
-- Review of managements cash flow projections for the period ended 30 June 2024;
-- Review of management's assumptions based on historical
expenditure and contractual commitments;
-- Sensitivity analysis on cash flow forecast to consider the
available headroom under different reasonably possible
scenarios;
-- Consideration of certainty of receipt of finance inflows
including review of conditions precedent on financing agreements;
and
-- Review of adequacy and completeness of disclosures in the
financial statements in respect of the going concern
assumption.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our approach to the audit
In planning our audit, we determined materiality and assessed
the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective
judgements, for example in respect of significant accounting
estimates. As in all of our audits, we also addressed the risk of
management override of internal controls, including evaluating
whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed
sufficient work to be able to issue an opinion on the financial
statements as a whole, taking into account the structure of the
group and the parent company, the accounting processes and
controls, and the industry in which they operate.
Key Audit Matters
Key audit matters are those that, in our professional judgement,
were of most significance in our audit of the Financial Statements
of the current year and include the most significant assessed risks
of material misstatement (whether or not due to fraud) we
identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit
and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
The use of the Going Concern basis of accounting was assessed as
a key audit matter and has already been covered in the previous
section of this report. The other key audit matters identified are
noted below.
Key audit matter How our work addressed this matter
Investment valuation Our work included:
The most significant assets of the group as at * Agreeing existence of the investment portfolio
December 2022 were investments of GBP860,843. holdings to the Custodian information;
Given the complexity involved in valuing
investments, we consider this to be a key audit * Reviewing and assessing the valuations made by the
matter. directors; and
* Evaluating the performance of each investment to
investigate as to whether an impairment is required,
including obtaining evidence to support the
investment's current activity level and obtaining the
investment's most recent financial results.
-----------------------------------------------------------------
Other debtor recoverability Our work included:
The most significant debtor of the group as at 31 * Review correspondence with solicitors to determine
December 2022 was relating to the amounts whether it is virtually certain that the monies will
receivable from BritNRG Ltd. This has arisen from be received;
a litigation case with BritNRG which MetalNRG
won during the year.
* Vouch to post year end receipts to determine whether
The debtor was part settled but given the the monies have been received; and
significant judgement involved in whether the
remaining
balance will be recovered, we consider this to be * Determine whether there are any additional costs that
a key audit matter. need to be accrued at year end in relation to the
case.
-----------------------------------------------------------------
Key audit matter How are work addressed the matter
Ongoing litigations Our work included:
The company has various litigations which are * Enquire with management all the ongoing litigations
linked to the debtor recoverability points above. as well as litigations which have been resolved and
the outcome;
There may be undisclosed liabilities in relation
to the litigations, hence why we consider
this to be a key audit matter. * Enquire regarding the existence of possible losses
arising from litigations and claims;
* Determining whether an associated contingent asset or
liability needs to be recognised in the financial
statements;
* Review the accounting records for the accounting year
and the period after the year end for any evidence of
future liabilities based on events which occurred
during the year;
* Contact solicitors to discuss legal cases which are
ongoing and assess the probability of an unfavourable
outcome; and
* Assess the impact of litigations on the financial
statements and disclosures.
-----------------------------------------------------------------
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements,
including omissions could influence the economic decisions of
reasonable users that are taken on the basis of the financial
statements.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
We consider gross assets to be the most significant determinant
of the Group's financial performance used by the users of the
financial statements. We have based materiality on 1.5% of reported
gross assets for each of the operating components. Materiality for
Goldridge Holdings Ltd was set at 25% of group materiality. Overall
materiality for the group was therefore set at GBP30,000. For each
component, the materiality set was lower than the overall group
materiality.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We
have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the parent
company and its environment obtained in the course of the audit, we
have not identified material misstatements in the strategic report
or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements of the parent company are not in
agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the parent company's ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the parent company
or to cease operations, or have no realistic alternative but to do
so.
Those charged with governance are responsible for overseeing the
Company's financial reporting process.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but it is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the legal and regulatory
frameworks within which the Company operates focusing on those laws
and regulations that have a direct effect on the determination of
material amounts and disclosures in the financial statements. The
laws and regulations we considered in this context were the
Companies Act 2006 and relevant taxation legislation.
-- We identified the greatest risk of material impact on the
financial statements from irregularities, including fraud, to be
the override of controls by management. Our audit procedures to
respond to these risks included enquiries of management about their
own identification and assessment of the risks of irregularities,
sample testing on the posting of journals and reviewing accounting
estimates for biases.
Because of the field in which the parent company operates, we
identified that employment law, LSE Listing Rules and compliance
with the Companies Act 2006 are most likely to have a material
impact on the financial statements.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our Auditor's Report.
Other matters that we are required to address
We were appointed on 5 April 2023 and this is the first year of
our engagement as auditors for the Group.
We confirm that we are independent of the Group and have not
provided any prohibited non-audit services, as defined by the
Ethical Standard issued by the Financial Reporting Council.
Our audit report is consistent with our additional report to the
Audit Committee / Board of Directors explaining the results of our
audit.
Use of our report
This report is made solely to the parent company's members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to
the parent company's members those matters we are required to state
to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the parent company and the
parent company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Paul Randall ACA (Senior Statutory Auditor)
For and on behalf of RPG Crouch
Chapman LLP
Chartered Accountants
Registered Auditor
5(th) Floor, 14-16 Dowgate Hill
London
EC4R 2SU
30 June 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEARED 31 DECEMBER 2022
Notes Year to Year to
31 December 31 December
2022 2021
GBP GBP
Administrative expenses (1,674,608) (1,873,866)
Other operating income - 24,361
Operating loss 2 (1,674,608) (1,849,505)
Finance income 35,782 -
Finance costs 4 (139,029) (14,774)
Impairment of investments 11 (440,582) -
Loss before tax (2,218,437) (1,864,279)
Taxation 7 - -
Loss for the year (2,218,437) (1,864,279)
============ ============
Attributable to:
Equity holders of the parent company (2,218,437) (1,864,279)
============ ============
Earnings/(Losses) per ordinary share
Basic 9 (0.19) pence (0.22) pence
Diluted 9 (0.19) pence (0.22) pence
============ ============
All operations are considered to be continuing.
The accompanying notes form part of these financial
statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2022
Year to Year to
31 December 31 December
2022 2021
GBP GBP
Loss after tax (2,218,437) (1,864,279)
Items that may subsequently be reclassified
to profit or loss:
* Foreign exchange movements (2,883) (12,439)
* Share option charge 19,649 17,999
Total comprehensive loss attributable
to equity holders of the parent company (2,201,671) (1,858,719)
============= =============
The accompanying notes form part of these financial
statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Notes Year to Year to
31 December 31 December
2022 2021
GBP GBP
Non-current assets
Intangible fixed assets 10 575,077 575,077
Investments 11 860,843 1,265,749
Total non-current assets 1,435,920 1,840,826
----------- -----------
Current assets
Trade and other receivables 12 581,553 1,089,026
Cash and cash equivalents 13 24,724 49,316
----------- -----------
Total current assets 606,277 1,138,342
----------- -----------
Current liabilities
Trade and other payables 14 (1,828,265) (649,135)
Total current liabilities (1,828,265) (649,135)
----------- -----------
Non-current liabilities
Other non-current payables 14 (25,680) (23,263)
----------- -----------
Total non-current liabilities (25,680) (23,263)
----------- -----------
Net assets 188,252 2,306,770
=========== ===========
Capital and reserves
Share capital 16 359,997 350,349
Share premium 6,495,541 6,422,036
Share based payment reserve 17 37,648 17,999
Retained losses (6,688,254) (4,469,817)
Foreign currency reserve (16,680) (13,797)
----------- -----------
Total equity 188,252 2,306,770
=========== ===========
The accompanying notes form part of these financial
statements.
These financial statements were approved and authorised for
issue by the Board of Directors
on 30 June 2023.
Signed on behalf of the Board of Directors
Rolf Gerritsen
Director
Company No. 05714562
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Notes Year to Year to
31 December 31 December
2022 2021
GBP GBP
Non-current assets
Investments 11 1,139,034 2,044,706
Total non-current assets 1,139,034 2,044,706
----------- -----------
Current assets
Trade and other receivables 12 1,186,924 1,089,026
Cash and cash equivalents 13 24,724 49,316
----------- -----------
Total current assets 1,211,648 1,138,342
----------- -----------
Current liabilities
Trade and other payables 14 (1,828,265) (649,135)
Total current liabilities (1,828,265) (649,135)
----------- -----------
Non-current liabilities
Other non-current payables 14 (25,680) (23,263)
----------- -----------
Total non-current liabilities (25,680) (23,263)
----------- -----------
Net assets 496,736 2,510,650
=========== ===========
Capital and reserves
Share capital 16 359,997 350,349
Share premium 6,495,541 6,422,036
Share based payment reserve 17 37,648 17,999
Retained losses (6,396,450) (4,279,734)
Equity shareholders' funds 496,736 2,510,650
=========== ===========
The loss of the parent company for the year was GBP2,116,716
(2021: GBP1,676,741).
The accompanying notes form part of these financial
statements.
These financial statements were approved and authorised for
issue by the Board of Directors
on 30 June 2023.
Signed on behalf of the Board of Directors
Rolf Gerritsen
Director
Company No. 05714562
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2022
Share Share Share based Retained Foreign Total
capital premium Payment reserve losses currency
reserve
GBP GBP GBP GBP GBP GBP
At 31 December 2020 273,968 2,483,117 - (2,605,538) (1,358) 150,189
------- --------- --------------- ----------- --------- -------------
Loss for the year - - - (1,864,279) - (1,864,279)
Translation differences - - - - (12,439) (12,439)
------- --------- --------------- ----------- --------- -------------
Comprehensive loss for the year - - - (1,864,279) (12,439) (1,876,718)
------- --------- --------------- ----------- --------- -------------
Share option charge - - 17,999 - - 17,999
Shares issued 76,381 4,227,769 - - - 4,304,150
Share issue costs - (288,850) - - - (288,850)
At 31 December 2021 350,349 6,422,036 17,999 (4,469,817) (13,797) 2,306,770
------- --------- --------------- ----------- --------- -------------
Loss for the year - - - (2,218,437) - (2,218,437)
Translation differences - - - - (2,883) (2,883)
------- --------- --------------- ----------- --------- -------------
Comprehensive loss for the year - - - (2,218,437) (2,883) (2,221,320)
------- --------- --------------- ----------- --------- -------------
Share option charge - - 19,649 - - 19,649
Shares issued 9,648 68,255 - - - 77,903
Share issue costs - 5,250 - - - 5,250
------- --------- --------------- ----------- --------- -------------
At 31 December 2022 359,997 6,495,541 37,648 (6,688,254) (16,680) 188,252
------- --------- --------------- ----------- --------- -------------
The accompanying notes form part of these financial
statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2022
Share Share Share based Retained Total
capital premium Payment reserve losses
GBP GBP GBP GBP GBP
At 31 December 2020 273,968 2,483,117 (2,602,993) 154,092
------- --------- --------------- ----------- -----------
Loss for the year - - - (1,676,741) (1,676,741)
Comprehensive loss for the year - - - (1,676,741) (1,676,741)
------- --------- --------------- ----------- -----------
Share option charge - - 17,999 - 17,999
Shares issued 76,381 4,227,769 - - 4,304,150
Share issue costs - (288,850) - - (288,850)
At 31 December 2021 350,349 6,422,036 17,999 (4,279,734) 2,510,650
------- --------- --------------- ----------- -----------
Loss for the year - - - (2,116,716) (2,116,716)
------- --------- --------------- ----------- -----------
Comprehensive loss for the year - - - (2,116,716) (2,116,716)
------- --------- --------------- ----------- -----------
Share option charge - - 19,649 - 19,649
Shares issued 9,648 68,255 - - 77,903
Share issue costs - 5,250 - - 5,250
------- --------- --------------- ----------- -----------
At 31 December 2022 359,997 6,495,541 37,648 (6,396,450) 496,736
------- --------- --------------- ----------- -----------
The accompanying notes form part of these financial
statements.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 31 DECEMBER 2022
Notes Year to Year to
31 December 2022 31 December 2021
GBP GBP
Cash flows from operating activities
Operating loss (2,218,437) (1,864,279)
Loss on sale of investment - 149,545
Foreign exchange (2,883) (12,439)
Finance income 3 (35,782) -
Finance costs 4 139,029 14,774
Impairment of investments 11 440,582 -
Bonus shares issued - 16,250
Share option charge 17 19,649 17,999
Increase in creditors 1,172,453 25,850
Decrease/(increase) in debtors 543,256 (1,059,291)
Net cash generated/(used) in operating activities 57,867 (2,711,591)
---------------- ----------------
Cash flows from investing activities
Proceeds from sale of investment - 350,455
Purchase of investments 11 (35,676) (1,205,237)
Net cash used in investing activities (35,676) (854,782)
---------------- ----------------
Cash flows from financing activities
Proceeds from the issue of shares and warrants - 4,017,900
Cost of shares issued 5,250 (288,850)
Convertible loan note repayment (327,164) (105,835)
Loan repayment (261,168) (271,137)
Bridging and other loan financing 536,300 200,000
Net cash (used)/generated from financing activities (46,782) 3,552,078
---------------- ----------------
Net (decrease) in cash and cash equivalents (24,592) (14,295)
Cash and cash equivalents at beginning of year 49,316 63,611
Cash and cash equivalents at end of year 13 24,724 49,316
================ ================
The accompanying notes form part of these financial
statements.
COMPANY CASH FLOW STATEMENT
FOR THE YEARED 31 DECEMBER 2022
Notes Year to Year to
31 December 2022 31 December 2021
GBP GBP
Cash flows from operating activities
Operating loss (2,116,716) (1,676,741)
Loss on sale of investment - 149,545
Finance income 3 (50,002) (16,689)
Finance costs 4 139,029 14,774
Impairment of investments 11 440,582 -
Bonus shares issued - 16,250
Share option charge 17 19,649 17,999
Increase in creditors 1,172,453 62,965
Decrease/(increase) in debtors 543,256 (1,059,290)
Net cash generated/(used) in operating activities 148,251 (2,491,187)
---------------------- ----------------
Cash flows from investing activities
Loans to subsidiaries (90,385) (731,812)
Proceeds from sale of investments - 350,455
Purchase of investments 11 (35,676) (693,820)
Net cash used in investing activities (126,061) (1,075,177)
---------------------- ----------------
Cash flows from financing activities
Proceeds from the issue of shares and warrants - 4,017,900
Cost of shares issued 5,250 (288,850)
Convertible loan note repayment (327,164) (105,835)
Bridging loan repayment (261,168) (271,137)
Bridging and other loan financing 536,300 200,000
Net cash (used)/generated from financing activities (46,782) 3,552,078
---------------------- ----------------
Net (decrease) in cash and cash equivalents (24,592) (14,286)
Cash and cash equivalents at beginning of year 49,316 63,602
Cash and cash equivalents at end of year 13 24,724 49,316
====================== ================
The accompanying notes form part of these financial
statements.
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
General information
The Company is a public company limited by shares which is
incorporated in England. The registered office of the Company is 1
Ely Place, London EC1N 6RY, United Kingdom. The registered number
of the Company is 05714562.
The principal activities of the Company are investing in
precious and strategic metals.
Statement of compliance
The consolidated financial statements of the Group are prepared
under IFRS and International Financial Reporting Interpretations
Committee (IFRIC) interpretations in accordance with the
International Accounting Standards Board (IASB) in conformity with
the requirements of the Companies Act 2006 applicable to companies
reporting under IFRS. The standards have been applied
consistently.
The Historical Financial Information is presented in pounds
sterling and the amounts are rounded to the nearest GBP.
Accounting policies
Basis of preparation
The Historical Financial Information has been prepared on a
historical cost basis, as modified by the revaluation of certain
financial assets and liabilities and investment properties measured
at fair value through profit or loss.
The Historical Financial Information is prepared in pounds
sterling, which is the functional currency of the Company.
Changes in accounting policies
(i) New and amended standards adopted by the Group
-- Annual Improvements to IFRS Standards 2018-2020 - effective 1 January 2022
-- Amendments to IFRS 3 - Reference to the Conceptual Framework - effective 1 January 2022
-- Amendments to IAS 16 - Property, Plant and Equipment:
Proceeds before intended use - effective 1 January 2022
-- Amendments to IAS 37 - Onerous Contracts: Cost of Fulfilling
a Contract - effective 1 January 2022
The new and amended Standards and Interpretations which are in
issue are not expected to have a material impact on the financial
statements.
(ii) New standards, amendments and interpretations in issue but not yet effective
At the date of approval of these financial statements, the
following standards and interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
-- Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current and
Amendments to IAS 1: Classification of Liabilities as Current or
Non-current - Deferral of Effective Date - effective 1 January
2023
-- Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting Policies -
effective 1 January 2023
-- Amendments to IAS 8 Accounting policies, Changes in
Accounting Estimates and Errors - Definition of Accounting
Estimates - effective 1 January 2023
-- Amendments to IAS 12 Deferred Tax Related to Assets and
Liabilities arising from a Single Transaction - effective 1 January
2023
The Directors do not expect that the adoption of these standards
will have a material impact on the financial information of the
group or company in future periods.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and companies controlled by the Company,
the Subsidiary Companies, drawn up to 31 December each year.
Control is recognised where the Company has the power to govern
the financial and operating policies of an investee entity so as to
obtain benefits from its activities. The results of subsidiaries
acquired or disposed of during the year are included in the
consolidated statement of profit or loss from the effective date of
acquisition or up to the effective date of disposal, where
appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group. All intra-group
transactions, balances, income and expenses are eliminated on
consolidation. Non-controlling interests in the net assets of
consolidated subsidiaries are identified separately from the
Group's equity therein.
Non-controlling interests consist of the amounts of those
interests at the date of the original business combination and the
minority's share of changes in equity since the date of the
combination.
Segmental reporting
The Group's prime business segment Is investing in natural
resources.
The Board considers that the Group has one operating segment,
its UK sector consisting of the parent company which provides
administrative and management services to the subsidiary
undertakings.
Short term debtors and creditors
Debtors and creditors with no stated interest rate and
receivable or payable within one year are recorded at transaction
price. Any losses arising from impairment are recognised in the
statement of profit or loss in other operating expenses.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements in conformity with
IFRS requires the Directors to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical
experience and opinions or statements received from competent
professional advisors. The assumptions used are considered to be
reasonable under the circumstances and the results of which form
the basis of making judgements about the carrying values of assets
and liabilities that are readily apparent from other sources.
Actual results may differ from these estimates.
Estimates and assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in
which the estimates are revised if the revisions affect only that
period.
Critical estimates and judgements that have the most significant
effect on the amounts recognised in the financial statements and/or
have a significant risk attached to:
-- Carrying value of intangible assets
The Directors carried out an impairment review of the intangible
assets and found that no impairment is necessary. At 31 December
2022, the Group's intangible asset relates to goodwill on
acquisition of Goldridge Holdings Limited. The project is currently
still being developed, for which the most sensitive assumption is
the probability of technical success and, given their nature,
impairment adjustments triggered by future events that have yet to
occur which may be material. In addition, there is a significant
risk that impairments recognised in any one period may be subject
to material adjustments in future periods. The carrying value of
the intangible assets at the year end is GBP575,077 (2021:
GBP575,077). See Note 10.
-- Carrying value of investments
The Directors carry out a review of the carrying value of the
investments each year to determine if any provision for impairment
is necessary. The policy for impairment of investments is based on,
where appropriate, the trading performance of the relevant
investment and on management's judgement. A considerable amount of
judgement is required in assessing the carrying value of these
investments, including the current and estimated future trading
performance of the relevant investment. Management found that the
carrying value of its investments in BritNRG Limited and IMC should
be impaired in full resulting in an impairment charge of GBP440,582
(2021: GBPNil) (as detailed in the Strategic Report).
-- Valuation of share based payments
The fair value of share based-payments recognised in the income
statement is measured by use of the Black Scholes model, which
considers conditions attached to the vesting and exercise of the
equity instruments. The expected life used in the model is
adjusted; based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioral
conditions. The share price volatility percentage factor used in
the calculation is based on management's best estimate of future
share price behavior based on past experience, future expectations
and benchmarked against peer companies in the industry.
Foreign currencies
For the purposes of the consolidated financial statements, the
results and financial position of each Group entity are expressed
in pounds sterling, which is the presentation currency for the
consolidated financial statements.
In preparing the financial statements of the individual
entities, transactions in currencies other than the entity's
functional currency (foreign currencies) are recorded at the rates
of exchange prevailing at the dates of the transactions. At each
reporting date, monetary items denominated in foreign currencies
are retranslated at the rates prevailing at the reporting date.
Exchange differences arising are included in the profit or loss for
the year.
For the purposes of preparing consolidated financial statements,
the assets and liabilities of the Group's foreign operations are
translated at exchange rates prevailing on the reporting date.
Income and expense items are translated at the average exchange
rates for the year. Gains and losses from exchange differences so
arising are shown through the Consolidated Statement of Changes in
Equity.
Investments
Fixed asset investments are initially recorded at cost, and
subsequently stated at cost less any accumulated impairment
losses.
Intangible assets - Goodwill
Goodwill on acquisition is capitalised and shown within fixed
assets. Positive goodwill is subject to annual impairment review
with movements charged in the income statement. Negative goodwill
is reassessed by the Directors and attributed to the relevant
assets to which it relates.
Impairment of fixed assets and investments
A review for indicators of impairment is carried out at each
reporting date, with the recoverable amount being estimated where
such indicators exist. Where the carrying value exceeds the
recoverable amount, the asset is impaired accordingly. Prior
impairments are also reviewed for possible reversal at each
reporting date.
Goodwill and intangible assets that have an indefinite useful
life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired. Other assets
are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less
costs of disposal and value in use.
For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from
other assets or groups of assets (cash-generating units).
Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at
the end of each reporting period.
Financial instruments
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the entity after deducting all
of its financial liabilities.
Where the contractual obligations of financial instruments
(including share capital) are equivalent to a similar debt
instrument, those financial instruments are classed as financial
liabilities. Financial liabilities are presented as such in the
balance sheet. Finance costs and gains or losses relating to
financial liabilities are included in the profit and loss account.
Finance costs are calculated so as to produce a constant rate of
return on the outstanding liability.
Where the contractual terms of share capital do not have any
terms meeting the definition of a financial liability then this is
classed as an equity instrument. Dividends and distributions
relating to equity instruments are debited direct to equity.
Trade and other receivables
Trade and other receivables are held for the collection of
contractual cash flows and are classified as being measured at
amortised cost. They are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method less provision for impairment.
Cash and cash equivalents
The Company considers any cash on short-term deposits and other
short-term investments to be cash equivalents.
Financial liabilities
The directors determine the classification of the Company's
financial liabilities at initial recognition. The financial
liabilities held comprise other payables and accrued liabilities
and these are classified as loans and receivables.
Loans and borrowings
Loans and borrowings are initially recognised at fair value net
of any transaction costs directly attributable to the issue of the
instrument. Such interest-bearing liabilities are then subsequently
measured at amortised cost using the effective interest rate
method. Interest expense includes initial transaction costs and any
premium payable on redemption, as well as any interest or coupon
payable while the liability is outstanding. Interest charges are
recognized as an expense within finance costs in the profit or loss
statement.
Share capital
The Company's ordinary shares of nominal value GBP0.0001 each
("Ordinary Shares") are recorded at such nominal value and proceeds
received in excess of the nominal value of Ordinary Shares issued,
if any, are accounted for as share premium. Both share capital and
share premium are classified as equity. Costs incurred directly to
the issue of Ordinary Shares are accounted for as a deduction from
share premium, otherwise they are charged to the statement of
profit or loss.
The Company's deferred shares of nominal value GBP0.0049 each
("Deferred Shares") are recorded at such nominal value and proceeds
received in excess of the nominal value of Deferred Shares issued,
if any, are accounted for as share premium. Both share capital and
share premium are classified as equity. Costs incurred directly to
the issue of Ordinary Shares are accounted for as a deduction from
share premium, otherwise they are charged to the statement of
profit or loss.
Current and deferred income tax
The tax charge represents tax payable less a credit for deferred
tax. The tax payable is based on profit for the year. Taxable
profit differs from the loss for the year as reported in the
Consolidated Statement of Comprehensive Income because it excludes
items of income or expense that are taxable or deductible in other
years and it further excludes items of income or expense that are
never taxable or deductible. The Company's liability for current
tax is calculated using tax rates that have been enacted or
substantively enacted by the Statement of Financial Position
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the Historical Financial Information and the corresponding tax
bases used in the computation of taxable profit and is accounted
for using the liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised.
Deferred tax assets and liabilities are offset where there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Company intends to settle
its current tax assets and liabilities on a net basis.
Going concern
The Historical Financial Information has been prepared on the
assumption that the Group will continue as a going concern. Under
the going concern assumption, an entity is ordinarily viewed as
continuing in business for the foreseeable future with neither the
intention nor the necessity of liquidation, ceasing trading or
seeking protection from creditors pursuant to laws or regulations.
In assessing whether the going concern assumption is appropriate,
the directors take into account all available information for the
foreseeable future, in particular for the twelve months from the
date of approval of the Historical Financial Information.
The directors have undertaken this review and consider that
there are material uncertainties as outlined below, which may cast
significant doubt on the group's ability to continue as a going
concern and therefore as a result may be unable to realise its
assets and settle its liabilities in the normal course of
business.
The material uncertainties relate to the level of costs which
the company expects to recover from the defendants following its
successful litigation outcome announced earlier in the year.
Relating to this there are material uncertainties relating to the
timing of these cash receipts, and the ability of defendants to pay
the outstanding legal costs in full. A contingent asset in respect
of this claim is disclosed in Note 21 of the financial
statements.
The Board considers that is has sufficient short term funding to
meets its operational overheads and other costs for the next twelve
months, but currently does not have the funds available to settle
its outstanding legal costs on the legal case until these costs
have been recovered from the defendants. The Board continues to
manage outstanding creditors in respect of the legal case so that
its cash flows stay within available facilities, and expects to be
able to defer settlement of these liabilities until the costs have
been recovered. As a result of this the directors have adopted the
going concern basis for the preparation of these financial
statements. However, due to the positive outcome of the litigation
process, the Directors are confident that a significant portion of
the funds, as determined by the Courts, will be received in the
short term.
Following the review of ongoing performance and cash flows, the
directors have a reasonable expectation that the Group has adequate
resources to continue operational existence for the foreseeable
future.
Share-based payments
The fair value of options and warrants granted to directors and
others in respect of services provided is recognised as an expense
in the profit and loss account with a corresponding increase in
equity reserves - the share- based payment reserve.
On exercise or cancellation of share options, the proportion of
the share-based payment reserve relevant to those options is
transferred to the profit and loss account reserve. On exercise,
equity is also increased by the amount of the proceeds
received.
The fair value is measured at grant date and the charge is
spread over the relevant vesting period.
The fair value of options is calculated using the Black-Scholes
model taking into account the terms and conditions upon which the
options were granted. Vesting conditions are non-market and there
are no market vesting conditions. The exercise price is fixed at
the date of grant and no compensation is due at the date of
grant.
Finance costs
Finance costs are recognised as interest accrues, using the
applicable interest rate.
Pension contributions
The Group operates a defined contribution pension plan, which
requires contributions to be made to a separately administered
fund. Contributions to the defined contribution scheme are charged
to profit or loss as they become payable.
Exploration for and evaluation of mineral resources
Rights acquired with subsidiaries are recognised at fair value
at the date of acquisition. Other rights acquired and development
expenditure are recognised at cost.
Exploration and evaluation costs arising following the
application for the legal right, are capitalised on a
project-by-project basis, pending determination of the technical
feasibility and commercial viability of the project. When a project
is deemed not feasible, related costs are expensed as incurred.
Costs incurred include any costs pertaining to technical and
administrative overheads. Administration costs that are not
directly attributable to a specific exploration area are expensed
as incurred, and subsequently capitalised if it is reasonably
certain that a resource will be defined.
Capitalised development expenditure will be measured at cost
less accumulated amortisation and impairment losses.
Until such time, and only after an extensive assessment of the
project is carried out, will management be in a position to
determine the value of the project and ultimately the return to
shareholders.
Impairment of tangible fixed assets
A review for indicators of impairment is carried out at each
reporting date, with the recoverable amount being estimated where
such indicators exist. Where the carrying value exceeds the
recoverable amount, the asset is impaired accordingly. Prior
impairments are also reviewed for possible reversal at each
reporting date. For the purposes of impairment testing, when it is
not possible to estimate the recoverable amount of an individual
asset, an estimate is made of the recoverable amount of the
cash-generating unit to which the asset belongs. The
cash-generating unit is the smallest identifiable group of assets
that includes the asset and generates cash inflows that largely
independent of the cash inflows from other assets or groups of
assets.
Provisions and contingent assets and liabilities
A provision can only be recognised when it meets the definition
of a liability, which is a present obligation resulting from past
events. Provisions are made where an event has taken place that
gives the Company a legal or constructive obligation that probably
requires settlement by a transfer of economic benefit, and a
reliable estimate can be made of the amount of the obligation.
A contingent liability is disclosed where there is a possible
obligation depending on whether an uncertain future event occurs,
and when there is a present obligation but payment is not
probable.
A contingent asset is disclosed in the notes to the financial
statements where a possible asset arises from past events, and
whose existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly
within the control of the Group. A determination of costs to be
recovered from the ongoing legal proceedings is yet to be
decided.
2. OPERATING LOSS
Year to Year to
31 December 31 December
2022 2021
GBP GBP
This is stated after charging/(crediting):
(Loss) on foreign exchange (2,883) (12,439)
(Loss)/profit on disposal of investments - (149,545)
Impairment of investments 440,582 -
Auditor's remuneration:
- audit services 60,000 17,200
- non-audit services* - 48,000
============= ===========
* Amounts payable to Edwards Veeder (UK) Limited by the Company
in respect of non-audit services was GBPNil net of VAT (2021:
GBP40,000) in relation to work as reporting accountants on the
Company's May 2021 Prospectus.
3. FINANCE INCOME
The The The
Group The Company Company
31 Dec Group 31 Dec 31 Dec
2022 31 Dec 2021 2022 2021
GBP GBP GBP GBP
Other interest 35,782 - 35,782 -
Interest from group undertakings - - 14,220 16,689
------- ------------ -------- ----------
35,782 - 50,002 16,689
======= ============ ======== ==========
4. FINANCE COSTS
The The The
Group The Company Company
31 Dec Group 31 Dec 31 Dec
2022 31 Dec 2021 2022 2021
GBP GBP GBP GBP
Interest on loans 118,949 14,654 118,949 14,654
Interest on convertible loan notes 19,402 - 19,402 -
Credit facility charges 678 120 678 120
------- ------------ -------- ----------
139,029 14,774 139,029 14,774
======= ============ ======== ==========
5. AUDITOR'S REMUNERATION
Year to Year to
31 December 31 December
2022 2021
GBP GBP
Fees payable to the Company's auditors
for the audit of the Group's annual financial
statements 60,000 17,200
Fees payable to the Company's auditors
for other services - 48,000
------------- -----------
Total auditor's remuneration 60,000 65,200
============= ===========
6. DIRECTORS' AND OFFICER'S REMUNERATION
There were no employees during the year apart from the directors
and the chief financial officer, who are the key management
personnel. None of the directors had benefits accruing under money
purchase pension schemes.
Group and Company Year to Year to
31 December 31 December
2022 2021
GBP GBP
Directors' Remuneration
Fees 87,250 34,500
Salaries 115,158 234,475
Benefits 10,710 6,310
Bonus 10,000 85,500
Pension contributions * 1,584 2,858
--------------- -----------
Total Directors' Remuneration 224,702 404,610
=============== ===========
The number of directors who accrued benefits under
company pension plans was as follows:
--------------- -----------
Defined contribution
plans 3 4
--------------- -----------
T he highest paid director is R Gerritsen who is the only Executive
Director. Details can be found in the Remuneration Report.
Group and Company Year to Year to
31 December 31 December
2022 2021
GBP GBP
Officer's Remuneration
Salary 45,000 42,500
Bonus 2,500 13,000
Social security 5,570 6,448
Pension contributions * 1,163 1,088
--------------- -----------
Total Officer's Remuneration 54,233 63,036
=============== ===========
Total Directors' and Officer's Remuneration 278,935 467,646
=============== ===========
Average number of employees 4 5
--------------- -----------
* Pension contributions made by the Company are calculated at 3%
of the employees' qualifying earnings. Total pension contributions
made by the Company for the year was GBP2,747 (2021: GBP3,946).
7. TAXATION
a) Analysis of charge in the year
Year to Year to
31 December 31 December
2022 2021
GBP GBP
United Kingdom corporation tax at 19% (2021:
19%) - -
Deferred taxation - -
- -
========= ============
b) Factors affecting tax charge for the year
The tax assessed on the loss on ordinary activities for the year
differs from the standard rate of corporation tax in the UK of 19%
(2021: 19%). The differences are explained below:
Year to Year to
31 December 31 December
2022 2021
GBP GBP
Loss on ordinary activities before tax (2,218,437) (1,864,279)
=========== ===========
Loss multiplied by standard rate of tax (421,503) (354,213)
Effects of:
Expenses not deductible for tax 87,444 52,250
Losses carried forward not recognised as deferred
tax assets 334,059 301,963
- -
=========== ===========
No deferred tax asset has been recognised because there is
insufficient evidence of the timing of suitable future profits
against which they can be recovered.
Year to Year to
31 December 31 December
2022 2021
GBP GBP
Losses carried forward:
Brought forward losses 31 December 2021 3,628,407 2,039,129
Current year allowable losses 1,758,205 1,589,278
----------- -----------
Losses carried forward for 31 December 2022 5,386,612 3,628,407
=========== ===========
In May 2021, the UK Government enacted a budget that increased
the corporation tax rate to 25% from the current rate of 19%. If
the losses carried forward were calculated at the increased rate of
25% the total losses carried forward not recognised as a deferred
tax asset would be GBP1,346,653 (2021: GBP907,102).
8. COMPANY LOSS FOR THE YEAR
The Company has taken advantage of the exemption allowed under
section 408 of the Companies Act 2006 and has not included its own
statement of profit or loss and statement of comprehensive income
in these financial statements. The Company's loss for the year
amounted to GBP2,116,716 (2021: GBP1,676,741).
9. EARNINGS/(LOSS) PER SHARE
Basic loss per share is calculated by dividing the loss
attributed to ordinary shareholders of GBP2,218,437 (2021:
GBP1,864,279) by the weighted average number of shares of
1,180,022,761 (2021: 849,236,645) in issue during the year.
The diluted loss per share is the same as the basic loss per
share as warrants and options are not dilutive due to the Company's
loss for the year.
10. INTANGIBLE FIXED ASSETS
Group Goodwill Total
GBP GBP
Cost
At 1 January 2022 and at 31 December
2022 575,077 575,077
-------- -------
Amortisation
At 1 January 2022 and 31 December
2022 - -
-------- -------
Net book value
-------- -------
At 31 December 2022 575,077 575,077
======== =======
At 31 December 2021 575,077 575,077
-------- -------
The Group's intangible assets comprises goodwill arising on its
investment in Gold Ridge Holdings Limited, including its subsidiary
Gold Ridge Holdings USA Limited, its gold asset in Arizona, USA.
The project is currently still being developed and a recent
sampling campaign is currently being analysed. Until there is a
full understanding of the asset, by determining the potential yield
and the subsequent potential future medium to long term value, the
Directors have determined that a more detailed scope of sampling
work should be undertaken to support both historic and recent
encouraging sampling data.
In accordance with the accounting policy, the Directors
undertook an assessment of the following areas and circumstances
that could indicate the existence of impairment:
-- The Group's right to explore in an area has expired, or will
expire in the near future without renewal;
-- Local, on-site knowledge of the location;
-- No further exploration or evaluation is planned or budgeted
for;
-- A decision has been taken by the Board to discontinue
exploration and evaluation in an area due to the absence of a
commercial level of reserves; or
-- Sufficient data exists to indicate that the book value will
not be fully recovered from future development and production.
Following their assessment, the Directors concluded that no
impairment charge was necessary for the year ended 31 December
2022.
11. INVESTMENTS
Available for
Group sale Investments Total
GBP GBP GBP
At 31 December 2020 - 466,652 466,652
Additions 500,000 799,097 1,299,097
Disposals (500,000) - (500,000)
At 31 December 2021 - 1,265,749 1,265,749
------------- ----------- ---------
Additions - 35,676 35,676
Impairments - (440,582) (440,582)
------------- ----------- ---------
At 31 December 2022 - 860,843 860,843
------------- ----------- ---------
Investments totalling GBP440,582 (2021: GBPnil) were impaired
during the year. The investment in IMC of GBP265,582 and the
investment in BritNRG Limited of GBP175,000 were fully impaired.
See page 5 of the Strategic Report to the Financial Statements.
The Group's investment comprises its equity investment of
GBP255,566 (2021: GBP255,566) in Lake Victoria Gold Ltd and its
GBP605,280 (2021: GBP605,280) investment in EQTEC Italia via a loan
to its wholly owned subsidiary, MetalNRG Eco Limited. The Directors
carried out an impairment review and are satisfied that the
carrying value of the investment at the year end is reasonable and
that no impairment is necessary. See the Strategic Report to the
Financial Statements.
Available
Company for sale Investments Subsidiaries Loans Total
GBP GBP GBP GBP GBP
At 31 December 2020 - 466,652 583,049 52,684 1,102,385
Additions 500,000 193,821 - 748,500 1,442,321
Disposals (500,000) - - - (500,000)
Transfers - - (46,074) 46,074 -
At 31 December 2021 - 660,473 536,975 847,258 2,044,706
--------- ----------- ------------ --------- ---------
Additions - 35,676 - 104,605 140,281
Impairments - (440,582) - - (440,582)
Transfers - - - (605,371) (605,371)
--------- ----------- ------------ --------- ---------
At 31 December 2022 - 255,567 536,975 346,492 1,139,034
--------- ----------- ------------ --------- ---------
At 31 December 2022, the Company held the following interests in
subsidiary undertakings, which are included in the consolidated
financial statements and are unlisted.
Proportion
Name of company Country of incorporation held Business
------------------------- -----------
Gold Ridge Holdings Limited * United States 100% Mining
MetalNRG Eco Limited England & Wales 100% Green Energy
------------------------------ ------------------------- ----------- -------------
* The consolidated financial statements of Gold Ridge Holdings
Limited includes its wholly owned subsidiary, Gold Ridge Holdings
USA Ltd, incorporated in USA.
At the year end the Company's investments comprise its equity
investment of GBP255,566 (2021: GBP255,566) in Lake Victoria Gold
Ltd and its GBP1 (2021: GBP1) equity investment in MetalNRG Eco
Limited (at incorporation). The Directors carried out an impairment
review and are satisfied that the carrying value of these
investments at the year end is reasonable and that no impairment is
necessary. See the Strategic Report to the Financial
Statements.
Investments totalling GBP440,582 (2021: GBPnil) were impaired
during the year. The investment in IMC of GBP265,582 and the
investment in BritNRG Limited of GBP175,000 were fully impaired.
See the Strategic Report to the Financial Statements.
The loan of GBP346,492 (2021: GBP241,928) owed from Goldridge
Holdings Limited bears interest at 5% per annum and is repayable on
demand. The loan of GBP605,371 (2021: GBP605,331) owed from
MetalNRG Eco Ltd has been transferred to current assets and is
non-interest bearing and repayable on demand (see Note 12).
12. TRADE AND OTHER RECEIVABLES
The The The
Group The Company Company
31 Dec Group 31 Dec 31 Dec
2022 31 Dec 2021 2022 2021
Current GBP GBP GBP GBP
Prepayments and accrued income 10,854 52,157 10,854 52,157
Amounts owed by group undertakings - - 605,371 -
Other debtors 570,699 1,036,869 570,699 1,036,869
------- ------------ --------- ----------
581,553 1,089,026 1,186,924 1,089,026
======= ============ ========= ==========
The fair value of trade and other receivables approximates to
their book value.
13. CASH AND CASH EQUIVALENTS
The The
Group Group
31 Dec 31 Dec The Company The Company
2022 2021 31 Dec 2022 31 Dec 2021
GBP GBP GBP GBP
Cash at bank and in hand 24,724 49,316 24,724 49,316
24,724 49,316 24,724 49,316
======= ======= ============= ================
The fair value of cash at bank is the same as its carrying
value.
14. TRADE AND OTHER PAYABLES
The The The
Group The Company Company
31 Dec Group 31 Dec 31 Dec
2022 31 Dec 2021 2022 2021
Current GBP GBP GBP GBP
Trade creditors 1,289,191 207,005 1,289,191 207,005
Social Security 5,390 23,151 5,390 23,151
Accruals and deferred income 109,138 102,879 109,138 102,879
Convertible loan notes 132,239 - 132,239 -
Loans 292,307 316,100 292,307 316,100
--------- ------- --------- -------
1,828,265 649,135 1,828,265 649,135
========= ======= ========= =======
Non-Current GBP GBP GBP GBP
Loans 25,680 23,263 25,680 23,263
------ ------ ------ ------
25,680 23,263 25,680 23,263
====== ====== ====== ======
Trade creditors include an amount of GBP1,226,232 (2021:
GBP172,511) payable to Orrick (UK) LLP in relation to the ongoing
legal dispute with BritNRG et al. Orrick (UK) LLP has agreed to
defer settlement of this debt until the legal process has
concluded.
The fair value of trade and other payables approximates to their
book value.
15. LOANS AND BORROWINGS
The The The
Group The Company Company
31 Dec Group 31 Dec 31 Dec
2022 31 Dec 2021 2022 2021
Current GBP GBP GBP GBP
Convertible loan notes 132,239 - 132,239 -
Loans 292,307 330,100 292,307 330,100
424,546 330,100 424,546 330,100
======= ======= ======= =======
Accrued interest of GBP14,000 for the year ended 31 December
2021 is included in 'accruals and deferred income'.
Non-Current GBP GBP GBP GBP
Loans 25,680 23,263 25,680 23,263
25,680 23,263 25,680 23,263
====== ====== ====== ======
Interest accrued at a rate of 12% per annum on the Riverfort
bridging loan amounts to GBP3,450 at the year end (2021: GBP14,000)
of which GBP3,450 (2021: GBP14,000) is repayable within one year.
This loan matures on 15 November 2023.
Interest accrued at a rate of 8% per annum on Director loans
amounts to GBP2,154 at the year end (2021: GBPnil) of which
GBP2,154 (2021: GBPnil) is repayable within one year. These loans
have no fixed term.
Interest accrued at a rate of 2.5% per annum on the Lloyds
Bounce Back Loan amounts to GBP3,216 at the year end (2021: nil) of
which GBP633 (2021: GBPnil) is repayable within one year and
GBP1,759 is repayable withing 2-5 years. This loan matures on 27
July 2032.
Interest accrued at a rate of 6% per annum on the Level 27 Ltd
Convertible Loan Note ("CLN") amounts to GBP2,239 at the year end
(2021: GBPnil) of which GBP2,239 (2021: GBPnil) is repayable within
one year. The CLN matures on 5 May 2023 if no fundraise is
concluded by that date.
The GBP100,000 Convertible Loan Note ("CLN) issued to EQTEC plc
is non-interest bearing and repayable when the Company has
available headroom and/or when a Prospectus is issued. The
resultant GBP100,000 worth in Ordinary Shares in the Company will
convert at the then prevailing market price or at a price that any
funds are raised in connection with the issue of a Prospectus.
Analysis of maturity of loans and borrowings
The The The
Group The Company Company
31 Dec Group 31 Dec 31 Dec
2022 31 Dec 2021 2022 2021
Amounts payable GBP GBP GBP GBP
Within one year 424,546 330,100 424,546 330,100
In two to five years 14,472 14,525 14,472 14,525
In more than five years 11,208 8,738 11,208 8,738
------- ------- ------- -------
450,226 353,363 450,226 353,363
======= ======= ======= =======
16. CALLED UP SHARE CAPITAL
31 Dec 31 Dec
31 Dec 2022 2022 31 Dec 2021 2021
Number Number
of shares GBP of shares GBP
Authorised share capital
Ordinary shares of GBP0.0001 5,131,730,000 513,173 5,131,730,000 513,173
Deferred shares of GBP0.0049 48,332,003 236,827 48,332,003 236,827
------------- ------- ------------- -------
Total 5,180,062,003 750,000 5,180,062,003 750,000
============= ======= ============= =======
31 Dec 31 Dec
31 Dec 2022 2022 31 Dec 2021 2021
Number Number
of shares GBP of shares GBP
Issued, called up and fully
paid
Ordinary shares of GBP0.0001 1,231,704,269 123,170 1,135,219,460 113,522
Deferred shares of GBP0.0049 48,332,003 236,827 48,332,003 236,827
------------- ------- ------------- -------
Total 1,280,036,272 359,997 1,183,551,463 350,349
============= ======= ============= =======
During the year the Company issued ordinary shares as
follows:
Number of Proceeds
shares of issue
GBP
25 August 2022 - loan conversion at GBP0.00082 71,484,809 58,903
47 October 2022 - loan conversion at GBP0.00076 25,000,000 19,000
Total 96,484,809 77,903
========== =========
As at 31 December 2022, the Company had 770,118,645 warrants and
options outstanding (2021: 473,633,836).
Outstanding share options:
11,216,418 share options on ordinary shares of GBP0.0001 each
exercisable at a price of GBP0.0067 per share and expiring on 1
February 2024.
Outstanding share warrants:
8,744,939 share warrants on ordinary shares of GBP0.0001 each
exercisable at a price of GBP0.006175 per share and expiring on 6
July 2023.
5,834,873 share warrants on ordinary shares of GBP0.0001 each
exercisable at a price of GBP0.010283 per share and expiring on 15
October 2023.
6,837,607 share warrants on ordinary shares of GBP0.0001 each
exercisable at a price of GBP0.008775 per share and expiring on 3
March 2024.
390,999,999 share warrants on ordinary shares of GBP0.0001 each
exercisable at a price of GBP0.01 per share and expiring on 11 May
2023.
50,000,000 share warrants on ordinary shares of GBP0.0001 each
exercisable at a price of GBP0.0045 per share and expiring on 13
December 2023.
71,484,809 share warrants on ordinary shares of GBP0.0001 each
exercisable at a price of GBP0.000824 per share and expiring on 25
August 2024.
25,000,000 share warrants on ordinary shares of GBP0.0001 each
exercisable at a price of GBP0.00076 per share and expiring on 6
October 2024.
200,000,000 share warrants on ordinary shares of GBP0.0001 each
exercisable at a price of GBP0.001 per share and expiring on 20
August 2025.
Each ordinary share is entitled to one vote in any
circumstances. Each ordinary share is entitled pari passu to
dividend payments or any other distribution and to participate in a
distribution arising from a winding up of the Company.
Each deferred share has no voting rights and is not entitled to
receive a dividend or other distribution. Deferred shares are only
entitled to receive the amount paid up after the holders of
ordinary shares have received the sum of GBP1 million for each
ordinary share, and the deferred shares have no other rights to
participate in the assets of the Company.
17. SHARE-BASED PAYMENTS
The Company grants share options to employees as part of the
remuneration of key management personnel and directors to enable
them to purchase ordinary shares in the Company. Under the plan,
17,194,030 options were granted for no cash consideration on 1
February 2021 for a period of 3 years expiring on 1 February 2024.
The share options outstanding at 31 December 2022 had a weighted
average remaining contractual life of 1 year (2021: 2 years).
Maximum term of new options granted was 3 years from the grant
date. The weighted average exercise price of share options as at
the date of exercise is GBP0.0067.
Granted Unexercised Share options Unexercised Exercise Date from Expiry
during at 31 December exercised/ at 31 December price which date
the year 2021 lapsed 2022 (pence) exercisable
1 Aug 1 Feb
R Gerritsen - 5,977,612 - 5,977,612 0.67 2021 2024
----------- ---------------- -------------- ---------------- --------- ------------- -------
1 Aug 1 Feb
W Callaghan - 2,238,806 - 2,238,806 0.67 2021 2024
----------- ---------------- -------------- ---------------- --------- ------------- -------
C 1 Aug 1 Feb
Latilla-Campbell - 1,500,000 - 1,500,000 0.67 2021 2024
----------- ---------------- -------------- ---------------- --------- ------------- -------
1 Aug 1 Feb
C Schaffalitzky - 1,500,000 - 1,500,000 0.67 2021 2024
----------- ---------------- -------------- ---------------- --------- ------------- -------
- 11,216,418 - 11,216,418
------------------------------ ---------------- -------------- ---------------- --------- ------------- -------
The fair value of the 11,216,418 options granted on 1 February
2021 using an adjusted Black-Scholes method and assumptions were as
follows:
Options issued 11,216,418 share options
Grant date 1 February 2021
Fair value at measurement date GBP0.0053
Share price at grant date GBP0.0067
Exercise price GBP0.0067
Expected volatility 140%
Vesting period: 3 years after grant 1 February 2024
Option life 36 months
Expected dividends 0.00%
Risk free interest rate 0.50%
Fair value of options granted GBP58,948
-------------------------
The fair value of these share options expensed during the year
was GBP19,649, being the value of the options attributable to the
vesting period to 31 December 2022 (2021: GBP17,999). GBP19,649 and
GBP1,651 will be expensed in the following years, being the value
of these options attributable to the end of their vesting
dates.
The volatility is set by reference to the historic volatility of
the share price of the Company.
During the year no options were exercised (2021: nil).
18. RESERVES
The following describes the nature and purpose of certain
reserves within owners' equity:
Share capital: Nominal value of shares issued.
Share premium: Amounts subscribed for share capital in excess of
nominal value less costs of issue.
Retained earnings/losses: This reserve records retained earnings
and accumulated losses.
Share based payment reserve: Cumulative fair value of options
granted.
Foreign currency reserve: Gains/losses arising on retranslating
the net assets of the Group into pounds sterling.
19. CAPITAL COMMITMENTS
As at 31 December 2022, the Group / Company had no capital
commitments.
20. PENSION COMMITMENTS
The Group makes contributions to individual pension schemes. The
amount paid during the year was GBP2,746 (2021: GBP3,945).
Outstanding contributions at the balance sheet date amounted to
GBP534 (2021: GBP705).
21. CONTINGENT ASSETS & LIABILITIES
Due to the ongoing litigation process with BritNRG et el. and
following the Court Order against the Defendant on costs, the
Company now awaits the hearing for a judgement on costs to be
awarded to the Company. The contingent asset will not be determined
until the conclusion of the litigation process. As part of the
BritNRG transaction MetalNRG became guarantor to Mr Lycett Green of
payments due to him by BritNRG. Since the transaction a dispute
between BritNRG and Lycett Green has arisen with BritNRG claiming
certain breaches of warranty under the sale agreement, the quantum
of which allegedly exceed the aggregate sums of deferred
consideration due. If this dispute is settled in favour of Mr
Lycett Green and BritNRG refuses (or is unable) to pay what is
adjudged to be due, then the Company could be liable to Mr Lycett
Green, however any money disbursed under the guarantee would give
MetalNRG rights to recover from BritNRG by way of subrogation. The
potential liability is GBP125,000 which has not been included in
creditors at the year end (2021: GBPnil).
22. RELATED PARTY TRANSACTIONS
R Gerritsen is a director and shareholder of the Company. During
the year he provided consultancy services in respect of his fees as
a director of the Company through his consulting businesses, ECRG
Consulting Ltd and RCA Associates Ltd. These services amounted to
GBP37,625 (2021: GBPnil) and GBP37,625 (2021: GBPnil)
respectively.
R Gerritsen is a director and shareholder of Pearman Investments
LLP ("Pearman"). During the year Pearman made a loan to the Company
of GBP5,500 (2021: GBPnil). The loan is accruing interest at a rate
of 8% per annum. Total interest accrued at the year end was GBP191
(2021: GBPnil) and the total loan including interest of GBP5,691
remains unpaid at the year end.
Christopher Latilla-Campbell is a director and shareholder of
the Company. During the year he made a personal loan to the Company
of GBP20,000 (2021: GBPnil). The loan is accruing interest at a
rate of 8% per annum. Total interest accrued at the year end was
GBP811 (2021: GBPnil) and the total loan including interest of
GBP20,811 remains unpaid at the year end.
Christian Schaffalitzky de Muckadell is a director and
shareholder of the Company. During the year he made a personal loan
to the Company of GBP20,000 (2021: GBPnil). The loan is accruing
interest at a rate of 8% per annum. Total interest accrued at the
year end was GBP785 (2021: GBPnil) and the total loan including
interest of GBP20,785 remains unpaid at the year end.
P Rocco was a director until 19 October 2021 and is a
shareholder of the Company. During the year he provided consultancy
services totalling GBPnil (2021: GBP22,500) in respect of his fees
as a director of the Company.
23. FINANCIAL RISK MANAGEMENT
Financial risk factors
The Group's activities expose it to a variety of financial
risks: market risk, credit risk and liquidity risk. The Group's
overall risk management programme focuses on the unpredictability
of financial markets and seeks to minimise potential adverse
effects on the Group's financial performance.
Risk management is carried out by the Board.
Market risk
The Group is exposed to market risk, primarily relating to
foreign exchange and commodity prices. The Group does not hedge
against market risks as the exposure is not deemed sufficient to
enter into forward contracts. The Company has not sensitised the
figures for fluctuations in foreign exchange or commodity prices as
the Directors are of the opinion that these fluctuations would not
have a significant impact on the Financial Statements at the
present time. The Directors will continue to assess the effect of
movements in market risks on the Group's financial operations and
initiate suitable risk management measures where necessary.
Credit risk
Credit risk arises from cash and cash equivalents as well as
outstanding receivables. To manage this risk, the Group
periodically assesses the financial reliability of customers and
counterparties. The amount of exposure to any individual counter
party is subject to a limit, which is assessed by the Board. The
Group considers the credit ratings of banks in which it holds funds
in order to reduce exposure to credit risk. The Company will only
keep its holdings of cash with institutions which have a minimum
credit rating of 'A'.
Exposure to credit risk
The carrying amount of financial assets represents the maximum
credit exposure. As at 31 December 2022 the maximum exposure to
credit risk was as follows:
The The The The
Group Group Company Company
31 Dec 31 Dec 31 Dec 31 Dec
2022 2021 2022 2021
Carrying amounts GBP GBP GBP GBP
Trade and other receivables 517,402 1,036,775 517,402 1,036,775
Cash and cash equivalents 24,724 49,316 24,724 49,316
-------- --------- -------- ----------
542,126 1,086,091 542,126 1,086,091
======== ========= ======== ==========
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
The Group's continued future operations depend on the ability to
raise sufficient working capital through the issue of equity share
capital or debt. The Directors are reasonably confident that
adequate funding will be forthcoming with which to finance
operations. Controls over expenditure are carefully managed.
The following table analyses the Group's financial liabilities
into relevant maturity groups based on the remaining period at the
balance sheet date to the contractual maturity date. The maturity
of the liabilities is disclosed below:
Due in less Due between
than one two and Due over
year five years five years
Financial liabilities GBP GBP GBP
Trade and other payables 1,398,330 - -
Loans 292,306 14,472 11,208
Convertible loan notes 132,239 - -
Total 1,822,875 14,472 11,208
============= ============== =============
Interest rate risk
The Company's interest rate exposure arises mainly from the
interest-bearing borrowings. All of the Company's facilities are at
fixed interest rates and a provision for interest has been made in
the accounts at the year end. See Note 15.
Foreign currency risk
The Group operates internationally and is exposed to foreign
currency risk arising on cash and cash equivalents and receivables
denominated in a currency other than the respective functional
currencies of Group entities. The currencies in which these
transactions primarily are denominated are US Dollar (USD),
Canadian Dollar (CAD) and Euros (EUR).
As of 31 December 2022, the Group's net monetary assets by
functional currency of the Group's entities were as follows:
The The The The
Group Group Company Company
31 Dec 31 Dec 31 Dec 31 Dec
2022 2021 2022 2021
Net foreign currency financial assets/(liabilities) GBP GBP GBP GBP
USD 1,325 1,325 1,325 1,325
CAD - - - -
EUR - - - -
-------- ------ --------- ----------
1,325 1,325 1,325 1,325
======== ====== ========= ==========
The Group's exposure to foreign currency risk is low as it holds
minimal foreign currency and foreign currency is only acquired at
the time when a purchase or acquisition is made. The directors
therefore do not consider the impact of foreign exchange risk to be
material therefore no sensitivity analysis is presented.
Financial instruments
The The The
Group The Company Company
31 Dec Group 31 Dec 31 Dec
2022 31 Dec 2021 2022 2021
Financial Assets GBP GBP GBP GBP
Trade and other receivables excluding
prepayments 18,006 16,871 18,006 16,871
Other debtors 499,490 1,019,999 499,490 1,019,999
Amounts owed by group undertakings - - 605,371 -
Cash and cash equivalents 24,724 49,316 24,724 49,316
----------- ------------ --------- ------------
542,220 1,086,186 1,147,591 1,086,186
=========== ============ ========= ============
Financial Liabilities GBP GBP GBP GBP
Trade and other payables 1,398,330 309,884 1,398,330 309,884
Loans 317,987 339,363 317,987 339,363
Convertible loan notes 132,239 - 132,239 -
----------- ------------ --------- ----------
1,848,556 649,247 1,848,556 649,247
=========== ============ ========= ==========
24. EVENTS AFTER THE REPORTING PERIOD
BritNRG Limited, et el.
On 3 January 2023, the Company announced that immediately prior
to the deadline for him to file evidence in support of his unfair
prejudice petition, Mr Rocco instead, on 23 December 2022,
discontinued his claim against the Company and its Directors.
On 27 February 2023, the Company provided an update on the
various legal cases it is involved in, and the expected timing
associated with the cases.
The Company's claim for (i) the return of the GBP1.02million it
paid and (ii) damages from Mr Rocco for breach of director's duties
has already been successful by way of summary judgment on the first
point, with judgment given for the GBP1.02 million. The corporate
defendants had paid the Company c.GBP450k, and the remainder had
been paid into Court, pending the resolution of Mr Rocco's
application for permission to appeal (which has been denied once on
the papers).
The case proceeds on the director's duties claim in which the
Company sought damages from the previous incumbent Director (Mr
Rocco). The oral permission to appeal application was to be heard
for a half day between 15 and 17 March. While a case management and
cost hearing was held on 8 February to set a timetable for the
remainder of the claims, this was adjourned on Mr Rocco's
application on a technical matter, and whilst a new date was then
set for this case on 6 July 2023, the Company was trying to find an
earlier date, the Court schedule permitting.
As to the s994 Prejudice Petition brought by the former
Director, Mr Rocco, against the Company and Directors personally,
Mr Rocco withdrew the claim in December 2022, accepting to pay the
Company and the Directors their legal costs incurred to date. Mr
Rocco had paid GBP20,000 on account but had failed to engage in
negotiation on the final amount, requiring detailed assessment
proceedings to be commenced for the remainder by the Company and
the Directors.
Mr Rocco filed a claim in Scotland under his employment
agreement to be indemnified for his legal costs by the Company. The
defendant lost the claim at first instance and was ordered to pay
legal costs to the Company.
Mr Rocco had also taken the Company to the Employment Tribunal
in Scotland. The case was on hold until the resolution of the
proceedings in the English High Court, for damages from Mr Rocco
for breach of director's duties.
On 21 March 2023, the Company announced the outcome of the High
Court oral renewed permission to appeal hearing held on 17th March
2023 concerning the Company's claim for the return of the GBP1.02
million it paid to the corporate defendants, Brit Energy Holdings
LLP and BritNRG Limited (the "Corporate Defendants").
In Summary:
-- The Corporate Defendants appeal was rejected and the
outstanding GBP574,000 was to be paid to the Company;
-- The Corporate Defendants were ordered to pay interest of GBP37,385.78;
-- The Corporate Defendants were ordered to pay GBP23,805.61 to
cover the Company's appeal costs for the summary judgement;
-- The Corporate Defendants were ordered to pay the Company's
legal fees for the summary judgement proceedings with agreement to
be reached on the final amount due.
On 6 April 2023, announced the outcome of the appeal brought by
Mr Rocco against the Company in Scotland.
In summary:
-- Mr Rocco advanced claims that he was entitled to be
indemnified by the Company, in full, and on a continuing basis, in
respect of any legal expenses incurred by him in circumstances
where he chose to take legal advice in relation to any actual or
possible legal dispute relating to his employment or directorship
with the Company.
-- In addition, Mr Rocco sought reimbursement of legal expenses
incurred by him to date, specifically in respect of the High Court
and Employment Tribunal proceedings between, inter alia, himself
and the Company.
-- Finally, Mr Rocco sought payment of GBP50,000, expressed to
be an "exit" bonus which he claimed was due to him regardless of
the circumstances in which he left the Company.
The Sheriff in Scotland had denied Mr Rocco's application in the
first instance and he subsequently appealed this decision. The
Sheriff Appeal Court denied the appeal.
Additionally, the Sheriff Appeal Court ordered further
submissions on costs if an agreed position could not be reached.
The Company will seek its costs of defending this appeal, as well
as the costs it has already been granted in respect of the first
instance decision.
On 3 May 2023, the Company announced that funds of GBP545,000
had been received from court in settlement of the principal amount
due back from BritNRG Ltd and Brit Energy Holdings LLP.
Corporate
On 3 January 2023, the Company announced that, on 29 December
2022, it received an email from Mr Edward Spencer entitled "open
letter" (the "Open Letter"). The Open Letter was published on
social media later that day. The Company was also made aware of a
further document and comments, published on social media, outlining
the backgrounds of the requisitioning shareholders (the
"Requisitioners"), the proposed directors nominated by the
Requisitioners ("proposed Directors"), along with an outline "plan
of action" which is intended to be implemented should Shareholders
resolve to remove existing Directors and appoint the proposed
Directors at the General Meeting to be held on 11 January 2023.
On 9 January 2023, the Company announced that, following the
unfortunate passing of Mr McKillen, both Mr Edward Spencer and the
Company had agreed to remove Resolution 5 from the General Meeting
scheduled for 11 January 2023.
-- Resolution 5; THAT, Mr Paul Anthony McKillen, having
consented to act, be and is hereby appointed a director of the
Company with immediate effect.
On 12 January 2023, the Company announced that at the General
Meeting of the Company, requisitioned by shareholders, held on 11
January 2023 at 12.00 midday, the Resolutions set out in the Notice
of General Meeting (other than Resolution 5 which was removed from
the business of the Meeting) were not passed by shareholders.
On 28 April 2023, the Company announced, following its
announcement on 5 April that due to the restricted time from RPG
Crouch Chapman's appointment to the deadline of 30 April 2023 to
file year end accounts for the year ended 31 December 2022, the new
auditor has had insufficient time to complete the audit of the
Company.
Accordingly, there will be a delay in publishing audited results
for 2022 and, as a result, the Company made a request pursuant to
the Listing Rules for a temporary suspension of the listing of the
Company's shares with effect from 07:30 Tuesday 2 May 2023.
On 2 May 2023, the Company announced that the Financial Conduct
Authority ("the FCA") had temporarily suspended the securities of
the Company from the Official List effective from 07:30 Tuesday 2
May 2023, at the request of the Company.
EQTEC Italia
On 14 March 2023, the Company announced that EQTEC Italia, our
joint investment with EQTEC and two family offices in a waste to
energy plant in Italy was operational. EQTEC's technical
commissioning team had commenced handover protocols for
transferring plant operations to EQTEC Italia MDC srl ("Italia
MDC").
On 23 June 2023, the Company confirmed that EQTEC Italia had
completed handover protocols and had transferred plant operations
to EQTEC Italia MDC srl (Italia MDC").
Goldridge
On 4 May 2023, the Company announced that its consultants,
Burges Mining Consultants, would be on site for the Phase 2
geochemical campaign at its Gold Ridge Gold mine property in
Arizona, following the very encouraging results from phase 1 that
paved a pathway to further exploration work which is now
progressing.
The results from phase 1 showed the largest gold anomalies were
found in historical areas mined for gold; however, a secondary zone
of gold anomalies was found in an area previously unexplored and a
new linear zone of gold mineralization was delineated in the
Southern Precambrian block. The Company will now complete further
Soil Geochemistry sampling on the remaining untested areas.
The Company's strategy, following results from phase 1 which
confirmed the Company's belief that there is a real possibility of
a larger un-discovered gold/base metal system at Gold Ridge; is to
more fully understand the interconnectivity of the geological
system which is likely to control the previously producing gold
mines in the area and progress work towards a drilling program.
25. ULTIMATE CONTROLLING PARTY
There is no individual with ultimate overall control of the
Company.
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END
FR RTMBTMTTMTMJ
(END) Dow Jones Newswires
July 03, 2023 02:00 ET (06:00 GMT)
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