REG - MetalNRG PLC - Financial Results - year ended 31 December 2022
03/07/2023 07:00
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RNS Number : 6563E MetalNRG PLC 03 July 2023
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REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET
ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK
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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 £1.02million 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 £1.02 million. The corporate defendants have
paid the Company c.£450,000, 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 £1,631,566 of which £448,893 has
been settled with £55,173 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 £440,582 (2021: £nil) to £nil. 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 £536,975 (2021: £536,975). 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 £315,584 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 £30,309
(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 €700,000 (£605,280) 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
£605,280 (2021: £605,280).
MetalNRG joined a consortium led by EQTEC to repower, own and operate the
biomass-to-energy plant (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 £175,000 (2021: £nil) to £nil.
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: £0.001
· Price Per Share: £1,900 (*)
(*) 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 £87,400, 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 £265,582
(2021: £nil) to £nil.
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 (£255,565) 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 £255,565 (2021: £255,565) at the year end.
RESULTS AND DIVIDENDS
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
£2,218,437 (2021: £1,864,279).
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: £nil).
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 TRENDS 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: £nil) no shares in the Company were un-paid for. The
Board determined that the Company's investments of £175,000 in BritNRG
Limited and £265,582 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:
£nil).
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 GENDER
Category Male Female
Directors 3 0
Other Employees 1 0
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
ATTENDANCE 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 £0.0001 each
Number of Ordinary Shares at 31 Dec 2022 % of issued Share Capital at 31 Dec 2022 Number of Ordinary Shares at 31 Dec 2021 % of issued Share Capital at 31 Dec 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 £0.0001 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.
INDEPENDENT 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 of £0.0001 each Percentage of issued 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
· Accounting policies The Committee reviewed and discussed the significant accounting policies with
management and the external auditor and reached the conclusion that each
policy was appropriate to the Group and Company.
· 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 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
£575,077 (2021: £575,077).
· Carrying value of investments The Directors carried out an impairment 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 £175,000 (2021: £nil) to £nil.
· 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 £265,582
(2021: £nil) to £nil.
The carrying value of the investments at the year end is £860,843 (2021:
£1,265,749).
· Going concern review The Committee considered the 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.
· Review of audit and non-audit services and fees The Committee reviewed the 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 agreement Notice period by Company (months) Notice period by director or officer (months)
Name
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 of appointment Notice period by Company (months) Notice period
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 £ £ £ £
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 £37,625 was paid to ECRG Consulting Ltd and
£37,625 was paid to RCA Associates Ltd.
Pension contributions totalling £1,321 (2021: £1,319) were paid by the
Company into Mr Gerritsen's workplace pension scheme of which £110 remained
unpaid at the end of the year (2021: £110).
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 £ £ £ £
W Callaghan * 45,000 - 2,500 47,500
Total 45,000 - 2,500 47,500
Pension contributions totalling £1,163 (2021: £1,088) were paid by the
Company into Mr Callaghan's workplace pension scheme of which £97 remained
unpaid at the end of the year (2021: £97).
* 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 directors £ £ £ £
C Latilla-Campbell 15,000 - - 15,000
C Schaffalitzky - 12,000 - 12,000
Total 15,000 12,000 - 27,000
Pension contributions totalling £263 (2021: £263) were paid by the Company
into Mr Latilla-Campbell's workplace pension scheme of which £22 remained
unpaid at the end of the year (2021: £22). 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 to shareholders Total Directors pay Group Operational cash inflow
£ £ £
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
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF METALNRG PLC
FOR THE YEAR ENDED 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 December 2022 were investments · Agreeing existence of the investment portfolio holdings to the
of £860,843. Custodian information;
· Reviewing and assessing the valuations made by the directors; and
Given the complexity involved in valuing investments, we consider this to be a · Evaluating the performance of each investment to investigate as
key audit matter. 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 December 2022 was relating · Review correspondence with solicitors to determine whether it is
to the amounts receivable from BritNRG Ltd. This has arisen from a litigation virtually certain that the monies will be received;
case with BritNRG which MetalNRG won during the year.
· Vouch to post year end receipts to determine whether the monies
have been received; and
The debtor was part settled but given the significant judgement involved in · Determine whether there are any additional costs that need to be
whether the remaining balance will be recovered, we consider this to be a key accrued at year end in relation to the case.
audit matter.
Key audit matter How are work addressed the matter
Ongoing litigations Our work included:
The company has various litigations which are linked to the debtor · Enquire with management all the ongoing litigations as well as
recoverability points above. litigations which have been resolved and the outcome;
There may be undisclosed liabilities in relation to the litigations, hence why · Enquire regarding the existence of possible losses arising from
we consider this to be a key audit matter. 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 £30,000.
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 YEAR ENDED 31 DECEMBER 2022
Notes Year to Year to
31 December 2022 31 December 2021
£ £
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 YEAR ENDED 31 DECEMBER 2022
Year to Year to
31 December 2022 31 December 2021
£ £
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 2022 31 December 2021
£ £
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 2022 31 December 2021
£ £
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 £2,116,716 (2021:
£1,676,741).
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 YEAR ENDED 31 DECEMBER 2022
Share Share Share based Retained Foreign Total
capital premium Payment reserve losses currency
reserve
£ £ £ £ £ £
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 YEAR ENDED 31 DECEMBER 2022
Share Share Share based Retained Total
capital premium Payment reserve losses
£ £ £ £ £
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 YEAR ENDED 31 DECEMBER 2022
Notes Year to Year to
31 December 2022 31 December 2021
£ £
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 YEAR ENDED 31 DECEMBER 2022
Notes Year to Year to
31 December 2022 31 December 2021
£ £
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 £.
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 £575,077 (2021: £575,077). 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 £440,582 (2021: £Nil) (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 £0.0001 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 £0.0049 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 2022 31 December 2021
£ £
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 £Nil net of VAT (2021: £40,000) in relation to work
as reporting accountants on the Company's May 2021 Prospectus.
3. FINANCE INCOME
The The The The
Group Group Company Company
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
£ £ £ £
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 The
Group Group Company Company
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
£ £ £ £
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 2022 31 December 2021
£ £
Fees payable to the Company's auditors for the audit of the Group's annual 60,000 17,200
financial statements
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 2022 31 December 2021
£ £
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
The 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 2022 31 December 2021
£ £
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 £2,747 (2021: £3,946).
7. TAXATION
a) Analysis of charge in the year
Year to Year to
31 December 2022 31 December 2021
£ £
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 2022 31 December 2021
£ £
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 2022 31 December 2021
£ £
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 £1,346,653 (2021: £907,102).
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 £2,116,716 (2021: £1,676,741).
9. EARNINGS/(LOSS) PER SHARE
Basic loss per share is calculated by dividing the loss attributed to ordinary
shareholders of £2,218,437 (2021: £1,864,279) 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
£ £
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
Group Available for sale Investments Total
£ £ £
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 £440,582 (2021: £nil) were impaired during the year.
The investment in IMC of £265,582 and the investment in BritNRG Limited of
£175,000 were fully impaired. See page 5 of the Strategic Report to the
Financial Statements.
The Group's investment comprises its equity investment of £255,566 (2021:
£255,566) in Lake Victoria Gold Ltd and its £605,280 (2021: £605,280)
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.
Company Available for sale Investments Subsidiaries Loans Total
£ £ £ £ £
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.
Name of company Country of incorporation Proportion 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
£255,566 (2021: £255,566) in Lake Victoria Gold Ltd and its £1 (2021: £1)
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 £440,582 (2021: £nil) were impaired during the year.
The investment in IMC of £265,582 and the investment in BritNRG Limited of
£175,000 were fully impaired. See the Strategic Report to the Financial
Statements.
The loan of £346,492 (2021: £241,928) owed from Goldridge Holdings Limited
bears interest at 5% per annum and is repayable on demand. The loan of
£605,371 (2021: £605,331) 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 The
Group Group Company Company
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
Current £ £ £ £
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 The Company 31 Dec 2022 The Company 31 Dec 2021
Group Group
31 Dec 2022 31 Dec 2021
£ £ £ £
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 The
Group Group Company Company
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
Current £ £ £ £
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 £ £ £ £
Loans 25,680 23,263 25,680 23,263
25,680 23,263 25,680 23,263
Trade creditors include an amount of £1,226,232 (2021: £172,511) 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 The
Group Group Company Company
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
Current £ £ £ £
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 £14,000 for the year ended 31 December 2021 is included
in 'accruals and deferred income'.
Non-Current £ £ £ £
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 £3,450 at the year end (2021: £14,000) of which £3,450 (2021:
£14,000) 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
£2,154 at the year end (2021: £nil) of which £2,154 (2021: £nil) 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 £3,216 at the year end (2021: nil) of which £633 (2021: £nil) is
repayable within one year and £1,759 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 £2,239 at the year end (2021: £nil) of which
£2,239 (2021: £nil) is repayable within one year. The CLN matures on 5 May
2023 if no fundraise is concluded by that date.
The £100,000 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 £100,000 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 The
Group Group Company Company
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
Amounts payable £ £ £ £
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 2022 31 Dec 2022 31 Dec 2021 31 Dec 2021
Number Number
of shares £ of shares £
Authorised share capital
Ordinary shares of £0.0001 5,131,730,000 513,173 5,131,730,000 513,173
Deferred shares of £0.0049 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 2022 31 Dec 2022 31 Dec 2021 31 Dec 2021
Number Number
of shares £ of shares £
Issued, called up and fully paid
Ordinary shares of £0.0001 1,231,704,269 123,170 1,135,219,460 113,522
Deferred shares of £0.0049 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 shares Proceeds of issue
£
25 August 2022 - loan conversion at £0.00082 71,484,809 58,903
47 October 2022 - loan conversion at £0.00076 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 £0.0001 each exercisable at a
price of £0.0067 per share and expiring on 1 February 2024.
Outstanding share warrants:
8,744,939 share warrants on ordinary shares of £0.0001 each exercisable at a
price of £0.006175 per share and expiring on 6 July 2023.
5,834,873 share warrants on ordinary shares of £0.0001 each exercisable at a
price of £0.010283 per share and expiring on 15 October 2023.
6,837,607 share warrants on ordinary shares of £0.0001 each exercisable at a
price of £0.008775 per share and expiring on 3 March 2024.
390,999,999 share warrants on ordinary shares of £0.0001 each exercisable at
a price of £0.01 per share and expiring on 11 May 2023.
50,000,000 share warrants on ordinary shares of £0.0001 each exercisable at a
price of £0.0045 per share and expiring on 13 December 2023.
71,484,809 share warrants on ordinary shares of £0.0001 each exercisable at a
price of £0.000824 per share and expiring on 25 August 2024.
25,000,000 share warrants on ordinary shares of £0.0001 each exercisable at a
price of £0.00076 per share and expiring on 6 October 2024.
200,000,000 share warrants on ordinary shares of £0.0001 each exercisable at
a price of £0.001 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 £1 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
£0.0067.
Granted during the year Unexercised at 31 December 2021 Share options exercised/ lapsed Unexercised at 31 December 2022 Exercise price (pence) Date from which exercisable Expiry date
R Gerritsen - 5,977,612 - 5,977,612 0.67 1 Aug 2021 1 Feb 2024
W Callaghan - 2,238,806 - 2,238,806 0.67 1 Aug 2021 1 Feb 2024
C Latilla-Campbell - 1,500,000 - 1,500,000 0.67 1 Aug 2021 1 Feb 2024
C Schaffalitzky - 1,500,000 - 1,500,000 0.67 1 Aug 2021 1 Feb 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 £0.0053
Share price at grant date £0.0067
Exercise price £0.0067
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 £58,948
The fair value of these share options expensed during the year was £19,649,
being the value of the options attributable to the vesting period to 31
December 2022 (2021: £17,999). £19,649 and £1,651 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 £2,746 (2021: £3,945). Outstanding contributions at the
balance sheet date amounted to £534 (2021: £705).
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
£125,000 which has not been included in creditors at the year end (2021:
£nil).
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 £37,625 (2021: £nil) and £37,625
(2021: £nil) respectively.
R Gerritsen is a director and shareholder of Pearman Investments LLP
("Pearman"). During the year Pearman made a loan to the Company of £5,500
(2021: £nil). The loan is accruing interest at a rate of 8% per annum. Total
interest accrued at the year end was £191 (2021: £nil) and the total loan
including interest of £5,691 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 £20,000 (2021:
£nil). The loan is accruing interest at a rate of 8% per annum. Total
interest accrued at the year end was £811 (2021: £nil) and the total loan
including interest of £20,811 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 £20,000
(2021: £nil). The loan is accruing interest at a rate of 8% per annum. Total
interest accrued at the year end was £785 (2021: £nil) and the total loan
including interest of £20,785 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 £nil
(2021: £22,500) 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 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
Carrying amounts £ £ £ £
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 than one year Due between two and five years Due over five years
Financial liabilities £ £ £
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 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
Net foreign currency financial assets/(liabilities) £ £ £ £
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 The
Group Group Company Company
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
Financial Assets £ £ £ £
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
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 £1.02million 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 £1.02 million. The corporate defendants had paid the Company
c.£450k, 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 £20,000 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 £1.02 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 £574,000 was to be paid to the Company;
· The Corporate Defendants were ordered to pay interest of £37,385.78;
· The Corporate Defendants were ordered to pay £23,805.61 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 £50,000, 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 £545,000 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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