REG - Reabold Resources - Annual Financial Report <Origin Href="QuoteRef">RBDR.L</Origin> - Part 2
30/06/2016 07:08
- Part 2: For the preceding part double click ID:nRSd7181Ca
value.
The directors are the key management of the Company (refer to note 7).
19. Financial risk management
The Company's operations expose it to a limited level of credit, foreign
currency and liquidity risk. There is little financial risk arising from the
effects of changes in market prices of commodities based on its current
activities. Interest rate risk exists on bank and third party borrowings.
The Company does not use derivative financial instruments to manage interest
rate costs, and no hedge accounting is thus applied. Given the size of the
Company, the Directors have not delegated the responsibility of monitoring
financial risk management to a sub-committee of the Board.
Price risk
Price risk arises from uncertainty about the future prices of financial
instruments held within the Company's portfolio. It represents the potential
loss that the Company might suffer through holding market positions in the
face of market movements. The investments in equity and fixed interest stocks
of unquoted companies are not traded and as such the prices are more uncertain
than those of more widely traded securities. The Board's strategy in managing
the market price risk inherent in the Company's portfolio of equity
investments is determined by the requirement to meet the Company's investment
objective. The directors manage these risks by regular reviews of the
portfolio within the context of current market conditions. Unquoted
investments are valued as per accounting policy in these financial statements.
Regular reviews of the financial results, combined with close contact with the
management of these investments, provide sufficient information to support
these valuations.
Liquidity risk
The Company actively maintains a treasury system that maintains a net credit
position and is designed to ensure the Company have sufficient available funds
for operations and planned expansions.
19. Financial risk management (continued)
Maturity of financial liabilities
The following table shows details the Company's remaining contractual maturity
for its non-derivative financial liabilities. The maturity of the financial
liabilities table has been drawn up based on the undisclosed cash flows based
on the earliest date on which the Company can be required to pay.
2015 2014
£'000 £'000
Within one year 58 70
Interest rate risk
The Company's exposure to changes in interest rate risk relates primarily to
interest-earning financial assets and interest-bearing financial liabilities.
Interest rate risk is managed by the Company on an ongoing basis with the
primary objective of limiting the extent to which net interest expense could
be affected by an adverse movement in interest rates. Variable interest rates
are based on LIBOR plus a margin. The Company has assessed the impact of
changes in interest rate risks as being immaterial, as all borrowings have a
fixed rate of interest.
Foreign currency risk
The Company incurs foreign currency risk on investments that are denominated
in currencies other than Sterling. At present, the Company does not have any
formal policy for hedging against exchange exposure. The Company may, when
necessary, enter into foreign currency forward contracts to hedge against
exposure from foreign currencies fluctuations. As at both 31st December 2014
and 31st December 2015 the Company has investments denominated in Canadian
Dollar. Any movement in the Canadian Dollar against Sterling will create a
fair value gain or loss. The Company has assessed the impact of changes in
exchange rates as not being significant to the Company.
Capital risk management
The Company manages its capital to ensure the Company will be able to continue
on a going concern on a long term basis while ensuring the optimal return to
shareholders and other stakeholders through an effective debt and equity
balance.
The capital structure of the Company consists of equity attributable to equity
holders of the Company, less cash and bank balances. The Management reviews
the capital structure and makes adjustment to it in the light of changes in
economic conditions.
The Company's capital employed is funded by equity attributable to equity
shareholders of the Company and net debt as follows:
2015 2014
£'000 £'000
Bank borrowings - -
Less: cash and bank balances (481) (196)
Net cash (481) (196)
Total equity 624 328
Capital Employed 143 131
19. Financial risk management (continued)
Other financial assets and liabilities
The notional amounts of financial assets and liabilities with a maturity of
less than one year (including trade and other receivables, cash and cash
equivalents and trade and other payables) are assumed to approximate their
fair value.
Categories of financial instruments
Available for sale investments Loans and receivables/ other financial liabilities Total Available for sale investments Loans and receivables/ other financial liabilities Total
2015 2015 2015 2014 2014 2014
£'000 £'000 £'000 £'000 £'000 £'000
Financial assets:
Cash and cash equivalents - 481 481 - 196 196
Loans and other receivables - 1 1 - 2 2
Available for sale investments 200 - 200 200 - 200
__
Financial assets 200 482 682 200 198 398
Financial liabilities:
Other financial liabilities - 58 58 - 70 70
20. Post balance sheet events
On 8 January 2016, the Company announced the placement of 40,000,000 ordinary
shares at 0.5 pence per share to raise gross proceeds of £200,000 to provide
additional working capital for the Company.
On 29 April 2016, Knowlton announced the termination of the Arrangement
Agreement with Mogul to pursue another reverse take-over transaction.
Notwithstanding the termination of the transaction with Knowlton, the
management and key stakeholders in Mogul remain positive towards Mogul's
future in the public markets under improved market conditions.
21. Ultimate controlling party
Jeremy Edelman is the ultimate controlling party.
This information is provided by RNS
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