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Sector
Basic Materials
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Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £488k
Position in Universe th / 1834

ZincOx Resources PLC - Final Results - Part 3

Thu 30th March, 2017 7:00am
- Part 3: For the preceding part double click  ID:nRSd9448Ab 

fluctuations is assessed by the Board and regularly reviewed. The Group does not have a hedging programme in place
at this time. 
 
Foreign currency denominated financial assets and liabilities, translated into US Dollars at the closing rate, are as
follows: 
 
         2016                   2015                        
         Financial Assets$'000  Financial Liabilities$'000  Exposure$'000  Financial Assets$'000  Financial Liabilities$'000  Exposure$'000  
 EURUSD  -6,485                 10-                         (10)6,485      197,080                12-                         77,080         
 
 
The following table illustrates the sensitivity of the net result for the year and equity in regards to the Group's
financial assets and financial liabilities that are held in a currency other than the functional currency of the underlying
Group entity. The main exposure is in ZincOx Resources plc where the functional currency is Pounds Sterling, yet
significant financial assets are held in US Dollars, namely the 8.74% investment in KRP as a financial asset. 
 
It assumes a +/-5% change of the US Dollar-Sterling and US Dollar-Euro for the year ended 31 December 2016 (2015:  5%). The
sensitivity analysis is applied to the Group's foreign currency financial instruments held at balance sheet date. If the US
Dollar had weakened by 5% against Sterling and Euro this would have had the following impact by currency: 
 
         2016                            2015         
         Net result       for year$'000  Equity$'000  Net result     for year$'000  Equity$'000  
 EURUSD  (6)(28)                         -(308)       (37)(1,521)                   -(337)       
 
 
If the US Dollar had strengthened against these respective currencies, there would be an equal and opposite effect on the
net result for the year and equity. 
 
Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the
analysis above is considered to be representative of the Group's exposure to currency risk. 
 
Interest Rate Risk 
 
The Group is exposed to interest rate risk in respect of the cash balances held with banks and other highly rated
counterparties. If the interest rate the Group received had increased/decreased by 0.1 percent during the year, the net
result for the year would have been increased/reduced by US$1k (2015: US$ nil). There would have been no impact on other
equity. 
 
Financial Assets and Liabilities 
 
The Group's financial assets comprise cash and cash equivalents, which include short-term deposits held by the Group
treasury function, trade and other receivables and financial asset investments available for sale. Their fair values are
not considered to be materially different from their carrying values. 
 
The Group's financial liabilities comprise loans and trade and other payables, and are carried at amortised cost, with
their fair values not considered to be materially different from their carrying values. 
 
The following is an analysis of the Group's financial instruments: 
 
 2016                                                                                       Weighted Average Effective Interest Rate  VariableInterest Rate$'000  Fixed Interest Rate$'000  Non-interest bearing$'000  Total$'000        
 AssetsInvestmentsCashRestricted cashTrade and other receivables                            0.00%                                     -16712-                     ----                      6,395--92                  6,3951671292      
 Total Financial Assets                                                                                                               179                         -                         6,487                      6,666             
 LiabilitiesTrade and other payablesBorrowings - non current Other non-current liabilities                                            ---                         -(4,848)-                 (127)-(50)                 (127)(4,848)(50)  
 Total Financial Liabilities                                                                                                          -                           (4,848)                   (177)                      (5,025)           
 Net Financial Assets / (Liabilities)                                                                                                 179                         (4,848)                   6,310                      1,641             
 
 
 2015                                                                                   Weighted Average Effective Interest Rate  VariableInterest Rate$'000  Fixed Interest Rate$'000  Non-interest bearing$'000  Total$'000        
 AssetsInvestmentsCashRestricted cashTrade and other receivables                        1.04%                                     -655389-                    ----                      6,465--508                 6,465655389508    
 Total Financial Assets                                                                                                           1,044                       -                         6,973                      8,017             
 LiabilitiesTrade and other payablesBorrowings - current Other non-current liabilities                                            -(8)-                       (22)(5,603)(46)           (666)-(50)                 (688)(5,611)(96)  
 Total Financial Liabilities                                                                                                      (8)                         (5,671)                   (716)                      (6,395)           
 Net Financial Assets / (Liabilities)                                                                                             1,036                       (5,671)                   6,257                      1,622             
 
 
The following table analyses the Group's financial instruments in accordance with IFRS 7: 
 
 2016                                                                                       Cash $'000  Loans & Receivables$'000  Available for Sale$'000  Amortised Cost$'000  Total$'000        
 AssetsInvestmentsCashRestricted cashTrade and other receivables                            -16712-     ---92                     6,395---                 ----                 6,3951671292      
 Total Financial Assets                                                                     179         92                        6,395                    -                    6,666             
 LiabilitiesTrade and other payablesBorrowings - non current Other non-current liabilities  ---         -(4,848)-                 ---                      (127)-(50)           (127)(4,848)(50)  
 Total Financial Liabilities                                                                -           (4,848)                   -                        (177)                (5,025)           
 Net Financial Assets / (Liabilities)                                                       179         (4,756)                   6,395                    (177)                1,641             
 
 
 2015                                                                                       Cash $'000  Loans & Receivables$'000  Available for Sale$'000  Amortised Cost$'000  Total$'000        
 AssetsInvestmentsCashRestricted cashTrade and other receivables                            -655389-    ---508                    6,465---                 ----                 6,465655389508    
 Total Financial Assets                                                                     1,044       508                       6,465                    -                    8,017             
 LiabilitiesTrade and other payablesBorrowings - non current Other non-current liabilities  ---         -(5,611)-                 ---                      (688)-(96)           (688)(5,611)(96)  
 Total Financial Liabilities                                                                -           (5,611)                   -                        (784)                (6,395)           
 Net Financial Assets / (Liabilities)                                                       1,044       (5,103)                   6,465                    (784)                1,622             
 
 
Investments relate to the Group's remaining share in KRP. This asset has been recognised at its initial value and then
subsequently fair valued. The valuation at 31 December 2016 uses the "price of recent investment" guidelines as described
by the International Private Equity and Venture Capital Valuation Guidelines. 
 
20.   Capital Commitments 
 
At 31 December 2016, the Group had no capital commitments (2015: nil). 
 
21.   Post Balance Sheet Events 
 
On 11 January 2017, the Company sold its residual 8.74% interest in Zinc Oxide Corporation (formerly known as ZincOx
(Korea) Ltd), to Korea Zinc Company Ltd for a consideration of US$7.95 million. An amount of US$7 million was paid to the
Company by the end of January 2017 with the balance of US$0.95 million to be paid within nine months of the sale date. 
 
On 19 January 2017, the Company entered into a Joint Venture Agreement ("JVA") with Korea Zinc Company Ltd ("KZC") for the
joint development of a recycling plant in Vietnam, based on the Rotary Hearth Furnace ("RHF") technology developed by the
Company in Korea. Under the JVA, KZC will fund 100% of a Definitive Development Study ("DDS"), expected to cost US$2.5
million, with the Company earning a 49% interest in an incorporated special purpose company. 
 
On 25 January 2017, the Company used the proceeds from the sale of its residual interest in Zinc Oxide Corporation, to
repay £3,970,282 (equivalent to US$4.85 million) of outstanding Loan Notes (see note 16). 
 
22.   Segmental Analysis 
 
Up until the end of 2016, the Group considers that its activities are split into the following segments: its recycling
operations (the KRP in Korea up until 30 December 2015 when it was discontinued) which was the main activity and all other
segments (mainly recycling development). An operating segment is a component of the Group engaged in one of these
activities. In relation to the recycling operations activity, each operating segment is usually signified by a separate
geographical location for the purposes of making economic decisions. 
 
In addition, UK Head Office costs are disclosed separately and added to the sector result in arriving at an operating
(loss) / profit. 
 
The following table analyses the sector revenue and result from continuing operations and reconciles the sector result to
the loss after tax. 
 
                                                   Revenue  Sector result  
                                                   2016     2015           2016       2015      
                                                   $'000    $'000          $'000      $'000     
 Recycling - operationsOther segmentsSector total  -597     -246           18(5,097)  -(6,302)  
 597                                               246      (5,079)        (6,302)    
 UK Head Office                                                            (238)      (2,885)   
 Operating loss                                                            (5,317)    (9,187)   
 Finance income                                                            -          1         
 Finance costs                                                             (521)      (640)     
 Loss before tax                                                           (5,838)    (9,826)   
 Taxation                                                                  -          (35)      
 Loss after tax                                                            (5,838)    (9,861)   
 
 
The activity split of net assets for the Group is as follows: 
 
                                Assets      Liabilities  Net assets / (liabilities)  
                                2016        2015         2016                        2015    2016          2015        
                                $'000       $'000        $'000                       $'000   $'000         $'000       
 Recycling - opsOther segments  6,3951,565  6,4657,076   -4,957                      -5,992  6,395(3,392)  6,4651,084  
 Sector total                   7,960       13,541       4,957                       5,992   3,003         7,549       
 UK Head Office - unallocated   183         805          68                          403     115           402         
 Total                          8,143       14,346       5,025                       6,395   3,118         7,951       
 
 
The activity split of capital additions and amounts depreciated, impaired or amortised, for the Group, including
discontinued operations, is as follows: 
 
                                Capital additions  Depreciation, impairment and amortisation  
                                2016               2015                                       2016   2015        
                                $'000              $'000                                      $'000  $'000       
 Recycling - opsOther segments  -2                 3,430513                                   -101   7,7751,562  
 Sector total                   2                  3,943                                      101    9,337       
 UK Head Office - unallocated   -                  14                                         4,013  2,437       
 Total                          2                  3,957                                      4,114  11,774      
 
 
Geographic information 
 
The Group also has a global geographical presence which is reflected in the segmental analysis. As the Group develops
future recycling facilities then each plant that's subsequently developed will become an operating segment in its own
right. 
 
Revenue for the Group, on continuing operations, is generated by ZincOx Thailand Company Ltd (2016: US$0.4 million, 2015:
nil), ZincOx Resources plc (2016: US$0.2 million, 2015: nil) and USA (2016: nil, 2015: US$0.2 million). 
 
Within Group revenue, 99.7% is generated from Zinc Oxide Corporation (formerly ZincOx (Korea) Ltd) a customer of both
ZincOx Thailand Company Ltd and ZincOx Resources plc and is included within 'other segments'. For 2015, 100% of Group
revenue is generated from a single customer of Big River Zinc and is also included within 'other segments'. 
 
The carrying amount of non-current assets, excluding deferred tax assets, analysed by the geographical area in which the
assets are located is as follows: 
 
                   2016   2015    
                   $'000  $'000   
 United Kingdom    6,397  10,795  
 Rest of Europe *  -      7       
 Other Asia **     -      22      
 Total             6,397  10,824  
 
 
* Rest of Europe includes Turkey and previously Belgium 
 
** Other Asia includes Thailand 
 
23.   Share Based Payments 
 
Employee Related Share Option Plans 
 
Share options to employees and other eligible persons are granted on a discretionary basis. The exercise price of the
granted options is, at least, equal to the market price of the shares on the date of the grant. 
 
On 30 June 2016, all existing options were cancelled and replaced by 24,030,000 granted options as detailed in the tables
below. No options were exercised in either of the years to 31 December 2016 or 31 December 2015. 
 
Movements in the number of employee share options outstanding and their related weighted average exercise prices, as stated
in their nominal currency of GBP, are as follows: 
 
                                          2016                                          2015                            
                                          Weighted Average Exercise Price(£ per share)  Outstanding Options(thousands)  Weighted Average Exercise Price(£ per share)  Outstanding Options(thousands)  
 At 1 January 2016GrantedCancelledLapsed  0.670.020.521.73                              9,17124,030(8,017)(1,154)       0.490.070.021.30                              13,1522,937(6,584)(334)         
 At 31 December 2016                      0.02                                          24,030                          0.67                                          9,171                           
 
 
The weighted average assumptions made in applying the Black-Scholes model to option grants made in the period are set out
below. 
 
 Weighted average fair value of share options and input assumptions                                                                                      2016optionsgranted                                     2015optionsgranted                                 
 Share price at grantExercise priceShares under optionExpected volatilityOption life (years)Risk free interest rateFair value per optionValuation model  £0.008£0.01624,030,00060.56%50.60%£0.003Black-Scholes  £0.084£0.0652,937,50035%51.20%£0.044Black-Scholes  
 
 
The total charge for the period relating to employee share based payment plans was US$22k (2015: US$57k). 
 
The vesting period for the options granted was three years. Other non-market performance conditions that exist are as
follows: 
 
a)   For the 2016 options, there were no non-market performance conditions attached. 
 
b)   For the 2015 options, the award of options is conditional on the Company's share price reaching 20 pence for 20
consecutive business working days during a three year 'Performance Period' ending on 28 January 2018. 
 
The volatility calculation used for the 2015 options was based on the Company's share price performance for the 6 to 12
months preceding the date of grant as this was felt to be more reflective of the current trend in share price performance.
A similar volatility calculation was repeated for the 2016 options granted except that it was based on the Company's share
price performance for the last 100 days. In previous years, the volatility calculation has been based on the Company's
share price performance for the five years preceding the date of grant. 
 
No dividend is assumed in the calculation (2015: nil) of the option fair values. 
 
Share Warrants 
 
In 2015, the Company cancelled the 9,450,000 warrants that were issued in 2013 and granted three year warrants over
17,435,498 new ordinary shares of the Company at an exercise price of 25 pence per share and an interest rate of 10% per
annum. The warrants were fair valued using the Black-Scholes model with the following input assumptions made. 
 
·      Share price at grant was 11.75p, 
 
·      Exercise price of 25p, 
 
·      Expected volatility of 34%, 
 
·      Warrant life of 3 years, 
 
·      Risk free interest rate of 0.88%, and 
 
·      Fair value per warrant of 0.5p 
 
In May 2016, the Company cancelled the 17,435,498 warrants that were re-issued in 2015 and granted new warrants with a
three years and ten months life over 9,450,000 new ordinary shares of the Company at an exercise price of 1.6 pence and an
interest rate of 10% per annum. The warrants were fair valued using the Black-Scholes model with the following input
assumptions made. 
 
·      Share price at grant was 0.7p, 
 
·      Exercise price of 5p, 
 
·      Expected volatility of 115%, 
 
·      Warrant life of 3.81 years, 
 
·      Risk free interest rate of 0.88%, and 
 
·      Fair value per warrant of 0.307p 
 
There is no vesting period attached to the warrants and none were exercised in the year to 31 December 2016 (2015: none
exercised or cancelled). 
 
The total share based payment charge for the period relating to warrants was US$40k (2015: US$133k). 
 
Independent Auditor's Report 
 
To the members of ZincOx Resources plc 
 
We have audited the parent company financial statements of ZincOx Resources plc for the year ended 31 December 2016 which
comprise the parent balance sheet, parent statement of changes in shareholders' equity and the related notes. The financial
reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice), including FRS 102 the Financial Reporting Standard applicable in
the UK and Republic of Ireland. 
 
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required
to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this
report, or for the opinions we have formed. 
 
Respective responsibilities of directors and auditor 
 
As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of
the parent company financial statements and for being satisfied that they give a true and fair view. Our responsibility is
to audit and express an opinion on the group financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical
Standards for Auditors. 
 
Scope of the audit of the financial statements 
 
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at
www.frc.org.uk/auditscopeukprivate. 
 
Opinion on financial statements 
 
In our opinion the parent company financial statements: 
 
·           give a true and fair view of the state of the Company's affairs as at 31 December 2016; 
 
·           have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and 
 
·           have been prepared in accordance with the requirements of the Companies Act 2006. 
 
Opinion on other matter prescribed by the Companies Act 2006 
 
In our opinion based on the work undertaken in the course of our 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 parent company financial statements; and 
 
·      the Directors' Report and Strategic report have been prepared in accordance with applicable legal requirements. 
 
Matters on which we are required to report by exception 
 
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if,
in our opinion: 
 
·           adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or 
 
·           the parent company financial statements are not in agreement with the accounting records and returns; or 
 
·           certain disclosures of directors' remuneration specified by law are not made; or 
 
·           we have not received all the information and explanations we require for our audit. 
 
Other matter 
 
We have reported separately on the Group financial statements of ZincOx Resources plc for the year ended 31 December 2016. 
 
Richard Baker 
 
Senior Statutory Auditor 
 
for and on behalf of Crowe, Clark, Whitehill LLP 
 
Statutory Auditor 
 
Reading 
 
29 March 2017 
 
COMPANY BALANCE SHEET 
 
AS AT 31 DECEMBER 2016 
 
                                                                                                                          Notes   2016$'000                            2015$'000                        
 Fixed AssetsIntangible assetsTangible assetsInvestments                                                                  282930  -26,477                              4,221156,658                     
                                                                                                                                  6,479                                10,894                           
 Current AssetsDebtors due within one yearDebtors due after one yearRestricted cashCash at bank and in hand               313132  391,85812142                         2063,487389585                   
                                                                                                                                  2,051                                4,667                            
 Creditors - amounts falling due within one year                                                                          33      (69)                                 (6,142)                          
 Net Current Assets / (Liabilities)                                                                                               1,982                                (1,475)                          
 Total Assets less Current Liabilities                                                                                            8,461                                9,419                            
 Creditors - amounts falling due after one year                                                                           33      (4,901)                              (64)                             
 Net Assets                                                                                                                       3,560                                9,355                            
 Capital and ReservesShare capitalShare premiumCapital redemption reserveProfit and loss accountForeign currency reserve  343434  6,883185,56440,526(186,797)(42,616)  46,679185,590-(181,465)(41,449)  
 Equity Shareholders' Funds                                                                                                       3,560                                9,355                            
 
 
6,883185,56440,526(186,797)(42,616) 
 
46,679185,590-(181,465)(41,449) 
 
Equity Shareholders' Funds 
 
3,560 
 
9,355 
 
The Company reports a loss of US$6,602k (2015: US$90,350k) for the financial year. 
 
Approved by the directors on 29 March 2017. 
 
Donald McAlister 
 
Director 
 
Company registration number: 3800208 
 
The notes to the financial statements form an integral part of these financial statements. 
 
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 
 
FOR THE YEAR ENDED 31 DECEMBER 2016 
 
                                                                                                                                                                                           Share capital $'000  Share premium $'000  Capitalredemptionreserve $'000  FXreserve $'000  Retainedlosses $'000  Totalequity $'000         
 Balance at 1 January 2015 Share based paymentsIssue of share capital                                                                                                                      46,310 -369          181,371 -4,219       - --                            (39,492) --      (91,305) 190-         96,884 1904,588           
 Transactions with ownersLoss for the year Other comprehensive income items that willbe subsequently reclassified to profit or lossExchange differences on translating foreign operations  369-    -            4,219-    -          --    -                         --    (1,957)    190(90,350)    -      4,778(90,350)    (1,957)  
 Total comprehensive income for the year                                                                                                                                                   -                    -                    -                               (1,957)          (90,350)              (92,307)                  
 Balance at 31 December 2015                                                                                                                                                               46,679               185,590              -                               (41,449)         (181,465)             9,355                     
 Share based paymentsIssue of share capitalCancellation of deferred shares                                                                                                                 -730(40,526)         -(26)-               --40,526                        ---              62--                  62704-                    
 Transactions with ownersLoss for the year Other comprehensive income items that willbe subsequently reclassified to profit or lossExchange differences on translating foreign operations  (39,796)-    -       (26)-    -           40,526-    -                    --    (1,167)    62(6,602)    1,208    766(6,602)    41          
 Total comprehensive income for the year                                                                                                                                                   -                    -                    -                               (1,167)          (5,394)               (6,561)                   
 Balance at 31 December 2016                                                                                                                                                               6,883                185,564              40,526                          (42,616)         (186,797)             3,560                     
 
 
The share capital and share premium account have been translated at historic US$/£ exchange rates at the point where shares
were issued in the Company. The profit and loss result for the year and share based payment expense have been translated at
the average monthly US$/£ exchange rate for each year. 
 
The notes to the financial statements form an integral part of these financial statements. 
 
 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016 continued        
 
 
24.   Significant Accounting Policies 
 
The individual financial statements of the Company, as required by the Companies Act 2006, have been presented in
accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102, 'The Financial
Reporting Standard applicable in the UK and Republic of Ireland' ("FRS 102"). 
 
The Company meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure
exemptions available to it in respect of its separate financial statements, which are presented alongside the consolidated
financial statements. Exemptions have been taken in relation to share based payments, financial instruments, presentation
of a cash flow statement and remuneration of key management personnel. 
 
The Group financial statements consolidate the financial statements of the Company and all its subsidiary undertakings as
at 31 December each year. 
 
The principal accounting policies which differ to those set out in note 1 to the consolidated financial statements are
noted below. 
 
With the exception of items (iv) and (v) below, which are carried at fair value and amortised cost respectively, the
financial statements have been prepared on the historical cost basis. 
 
(i)         Deferred tax is recognised on all timing differences where the transactions or events that give the Company an
obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred by the balance sheet
date. Deferred tax assets are recognised when it is more likely than not that they will be recovered. Deferred tax is
measured using rates of tax that have been enacted or substantively enacted by the balance sheet date. 
 
(ii)         The Company has taken advantage of the exemption under section 408 of the Companies Act 2006 not to publish
its individual profit and loss and related notes. 
 
(iii)        Investments in subsidiaries, intergroup funding and deferred consideration: 
 
Fixed asset investments in subsidiary undertakings are stated at cost less provision for diminution in value. The cost of
acquisition includes directly attributable professional fees and other expenses incurred in connection with the
acquisition. 

Where the Company has provided funds to a subsidiary in the year these amounts are also stated at cost less provision for a
diminution in value. 
 
(iv)        Investment in financial assets. 
 
(v)         Inter-company loans. 
 
(vi)        In early 2017, the Group sold its remaining interest in KRP for US$7.95 million, generating US$7 million of
cash in January, with US$0.95 million to follow. From this cash, the Group took the opportunity to repay its outstanding
Loan Notes in January, amounting to US$4.9 million (£3.97 million) and thereby completely clearing any indebtedness of the
Group. 
 
As stated in the Strategic Report, the directors have reviewed future forecasts and commitments, which when compared to the
current cash available, lead the directors to have a reasonable expectation that the Group has adequate financial resources
to manage its business risks and continue in operational existence for the next twelve months from the date of this
report. 
 
Presentational Currency 
 
The Company has reported its financial results in US Dollars. Furthermore, it has elected to translate its Profit and Loss
account at average monthly exchange rates for the period and to translate its assets and liabilities at period end exchange
rates. Share capital and share premium reserves have been translated at historic exchange rates with any differences
between the historic rates and the period end rates being charged to the foreign exchange translation reserve. 
 
25.   Impairment Provisions 
 
The impairment provisions that have been made in the Company are calculated from the same underlying assumptions that were
used in calculating the impairment provisions in the consolidated financial statements (see note 2(a) for more details). 
 
26.   Loss for the Financial Year 
 
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own Profit and Loss
account in these financial statements. The loss for the Company was US$6,602k translated at an average monthly rate for the
year of 1.36548 US$/£ (2015: US$90,350k translated at an average monthly rate for the year of 1.53234 US$/£). 
 
The average monthly number of employees of the Company (including directors) during the year was 6 (2015: 7) and their
aggregate remuneration comprised: 
 
                                                             2016$'000  2015$'000   
 Wages and salariesSocial security costsOther pension costs  3393211    1,08512944  
                                                             382        1,258       
 
 
27.   Operating Loss 
 
The auditors' remuneration for audit services to the Company was US$10,000 translated at an average monthly rate for the
year of 1.36548 US$/£ (2015: US$30,000 translated at an average monthly rate for the year of 1.53234 US$/£). 
 
28.   Intangible Assets 
 
                                                                                        DevelopmentCosts$'000  CompanyTotal$'000     
 CostAt 1 January 2015AdditionsForeign exchange                                         8,909439(384)          8,909439(384)         
 At 1 January 2016Foreign exchange                                                      8,964(808)             8,964(808)            
 At 31 December 2016                                                                    8,156                  8,156                 
 AmortisationAt 1 January 2015Charge for the yearImpairment provisionsForeign exchange  1,4031,4662,011(137)   1,4031,4662,011(137)  
 At 1 January 2016Charge for the yearImpairment provisionsForeign exchange              4,7432743,613(474)     4,7432743,613(474)    
 At 31 December 2016                                                                    8,156                  8,156                 
 Net Book ValueAt 31 December 2016At 31 December 2015                                   -4,221                 -4,221                
 
 
29.  Tangible Assets 
 
                                                                                        Land & Buildings$'000  Plant & Machinery$'000  Fixtures & Fittings$'000  Computer Equipment$'000  Total$'000          
 CostAt 1 January 2015AdditionsDisposalsForeign exchange                                169--(8)               811-(151)(39)           100--(5)                  68614-(33)               1,76614(151)(85)    
 At 1 January 2016AdditionsDisposalsForeign exchange                                    161-(133)(28)          621-(516)(105)          95-(79)(16)               6673(554)(113)           1,5443(1,282)(262)  
 At 31 December 2016                                                                    -                      -                       -                         3                        3                   
 DepreciationAt 1 January 2015Charge for the yearReleased on disposalsForeign exchange  169--(8)               811-(151)(39)           100--(5)                  6787-(33)                1,7587(151)(85)     
 At 1 January 2016Charge for the yearReleased on disposalsForeign exchange              161-(133)(28)          621-(516)(105)          95-(79)(16)               6524(544)(111)           1,5294(1,272)(260)  
 At 31 December 2016                                                                    -                      -                       -                         1                        1                   
 Net Book ValueAt 31 December 2016At 31 December 2015                                   --                     --                      --                        215                      215                 
 
 
30.   Investments 
 
                                                                                                                      FinancialAssets$'000  Subsidiaries$'000                   Joint Operation$'000  Total$'000                     
 CostAt 1 January 2015AdditionsDisposalsReclassify to 'Financial Assets'Foreign exchange                              ---6,465-             80,07816,739(86,298)(6,395)(3,853)  100---(5)             80,17816,739(86,298)70(3,858)  
 At 1 January 2016DisposalsForeign exchange                                                                           6,465(58)(12)         271(144)(45)                        95-(16)               6,831(202)(73)                 
 At 31 December 2016                                                                                                  6,395                 82                                  79                    6,556                          
 Impairment ProvisionsAt 1 January 2015Impairment provisions (net of reversals)Released on disposalsForeign exchange  ----                  5,59176,202(78,866)(2,754)          ----                  5,59176,202(78,866)(2,754)     
 At 1 January 2016Impairment provisions (net of reversals)Released on disposalsForeign exchange                       ----                  173-(144)(29)                       -88-(9)               17388(144)(38)                 
 At 31 December 2016                                                                                                  -                     -                                   79                    79                             
 Net Book ValueAt 31 December 2016At 31 December 2015                                                                 6,3956,465            8298                                -95                   6,4776,658                     
 
 
Disposals in the year of US$202k (2015: US$86,298k) comprise amounts of US$58k recovered from Zinc Oxide Corporation
(formerly ZincOx (Korea) Ltd) thus reducing the Company's overall financial asset investment in KRP and US$144k resulting
from the loss of control and subsequent de-consolidation of ZincOx Belgium Sprl., a wholly owned subsidiary. 
 
The investment in the Belgian subsidiary had been previously impaired to nil at the end of 2015 thus giving rise to a
reversal of impairment provision in the year of US$144k when de-consolidated. 
 
The Company revalued its investment with Ural Recycling Ltd, an unincorporated joint operation, to US$ nil as no
significant progress was being made on this project. An amount of US$88k was charged to profit and loss in the year. 
 
Financial Assets 
 
The Company holds an 8.74% interest in Zinc Oxide Corporation (formerly ZincOx (Korea) Ltd). 
 
The Company sold its interest in KRP to Korea Zinc on 11 January 2017 for a total consideration of US$7.95 million (see
note 37 'Post Balance Sheet Events'). 
 
Interest in Subsidiary Undertakings 
 
On 29 April 2016, the Company liquidated its subsidiary undertaking, ZincOx Belgium Sprl. 
 
On 29 April 2016, the Company dissolved its subsidiary undertaking, Zinc and Iron Recycling Inc. 
 
The Company had an interest in the following subsidiary undertakings during the year ending 31 December 2016, all of which
are included in the consolidated financial statements. With the exception of those holdings marked with an asterisk, all
shareholdings were held directly by the Company. 
 
 Name of Undertaking                                                                                                                                                                                                                                               Country of Incorporation / Registration and Operation      Principal Activities                                                                                                      Proportion of, and Voting Rights held by the Company and the Group  
 ZincOx Belgium Sprl.Zinc Corporation of Kazakhstan LtdZincOx Anadolu Cinko SVTASZincOx Resources (USA) LtdBig River Zinc Corporation*Zinc and Iron Recycling of Ohio, Inc.*Zinc and Iron Recycling Inc.*ZincOx (USA) Recycling, Inc.*ZincOx Thailand Company Ltd  BelgiumBritish Virgin IslandsTurkeyUKUSAUSAUSAUSAThailand  Metallurgical Research Holding Zinc ProcessingHoldingZinc ProcessingZinc ProcessingZinc ProcessingHoldingZinc Processing  99.99%100%100%100%100% 100%100%100%100%                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
 
 
The Company tests the carrying value of its investments in its subsidiary undertakings which are carried at historical cost
less any impairment. This test is carried out on an annual basis or more frequently if market conditions indicate a
potential impairment. 
 
31.   Debtors 
 
                                                           2016$'000  2015$'000  
 Due within one yearTrade debtorsOther debtorsPrepayments  -2415      596483     
                                                           39         206        
 Due after one yearAmounts owed by Group undertakings      1,858      3,487      
                                                           1,858      3,487      
 
 
The Company tests the carrying value of its loans to its undertakings of the Group and this test is carried out on an
annual basis or more frequently if market conditions indicate a potential impairment. 
 
Amounts owed by Group undertakings due after one year are stated after allowing for any impairment provision. 
 
Following the sale in 2015 of the recycling assets at BRZ and generally in the USA, the Company formally waived its'
inter-company loans with ZincOx Resources (USA) Ltd in the year. At the same time, impairment provisions previously made in
respect of these loans, were reversed through profit and loss, leaving a zero impact on the Company's result for the year. 
 
With no significant assets in the Company's subsidiary, ZincOx Thailand Company Ltd, and no clear project currently being
undertaken in Thailand, the directors took the decision to fully impair the inter-company loan balance amounting to
US$906k. 
 
At 31 December 2016 impairment provisions stood at US$1.8m (2015: US$35.8m) 
 
32.   Restricted Cash 
 
Restricted cash of £10k, equivalent to US$12k, existed at 31 December 2016 (2015: £262k, equivalent to US$389k). It
represents cash generated from land sales at Aliaga in Turkey offset by interest paid to holders of secured loan notes (see
note 16). These funds are restricted under the terms of the loan. 
 
33.   Creditors 
 
                                                                                                                                    2016$'000  2015$'000         
 Amounts falling due within one yearTrade creditorsTaxation and social securityAccrualsAmounts owed to Group undertakingLoan Notes  21741--    239641011355,603  
                                                                                                                                    69         6,142             
 Amounts falling due after one yearAmounts owed to Group undertakingLoan Notes                                                      534,848    64-               
                                                                                                                                    4,901      64                
 
 
34.  Share Capital 
 
The shares of the Company are denominated in Pounds Sterling but are retranslated for the Group financial statements at
their historic rate. 
 
                                                                                Number  shares          Share capital$'000  Share premium$'000  Capitalredemption reserve$'000  Total$'000     
 Ordinary shares in issue 1 January 2015                                        166,305,778             46,310              181,371             -                               227,681        
 103,466,716 deferred shares at 24 pence103,466,716 ordinary shares at 1 penny  103,466,716166,305,778  40,5265,784         -181,371            --                              40,526187,155  
 Ordinary shares issued                                                         23,607,641              369                 4,219               -                               4,588          
 Ordinary shares in issue 31 December 2015Ordinary shares issued                189,913,41950,500,000   46,679730           185,590(26)         --                              232,269704     
 Deferred shares at 24 pence cancelled                                          (103,466,716)           (40,526)            -                   40,526                          -              
                                                                                                                                                                                               
 Ordinary shares in issue 31 December 2016                                      240,413,419             6,883               185,564             40,526                          232,973        
 
 
The share capital reserve at 31 December 2016 stated at its historical value in its nominal currency of GBP, is £2,404k
(period to 31 December 2015: £26,731k). 
 
On 30 June 2016, following the cancellation of all existing options and the grant of new options, there were options
available over 24,030,000 ordinary shares in the Company, 13,930,000 available to directors and 10,100,000 to eligible
persons. The exercise price of each option is 1.6 pence, exercisable from 30 June 2019, with an expiry date of 30 June
2026. 
 
At 31 December 2016, there were warrants available over 9,450,000 ordinary shares in the Company, 3,318,750 available to
directors and 6,131,250 to other subscribers of the Loan Notes. The life of the warrants, which were extended in the period
to expire on 20 February 2020, can be exercised immediately at a price of 5p. 
 
The highest and lowest prices of the Company's shares during the period were 1.23p and 0.3p respectively, and the share
price at the end of the period was 0.45p, having been suspended from trading on AIM as at 31 October 2016. 
 
The number of shares which would have been in issue at the end of the period, had all options and warrants been exercised,
was 273,893,419. There were no share options or warrants exercised in the period. 
 
Capital Redemption Reserve 
 
On 1 February 2016, the Company cancelled 103,466,716 Deferred Shares with a nominal value of 24 pence and carrying no
voting rights, resulting in the creation of a Capital Redemption Reserve. 
 
Company Share Options 
 
The Company has a total of 24,030,000 options in issue, all being granted on 30 June 2016 with a 10 year life expiring on
30 June 2026, exercisable after three years from 30 June 2019, at an exercise price of 1.6 pence. 
 
35.  Financial Commitments 
 
At 31 December 2016 there were no financial commitments from the Company (2015: US$32k). 
 
36.  Related Party Transactions 
 
Remuneration in respect of key management personnel, defined as directors for this purpose, is disclosed in note 3(c)
above. 
 
Related party transactions in respect of Loan Notes are disclosed in note 3(c) above. 
 
37.   Post Balance Sheet Events 
 
On 11 January 2017, the Company sold its residual 8.74% interest in Zinc Oxide Corporation (formerly known as ZincOx
(Korea) Ltd), to Korea Zinc Company Ltd for a consideration of US$7.95 million. An amount of US$7 million was paid to the
Company by the end of January 2017 with the balance of US$0.95 million to be paid within nine months of the sale date. 
 
On 19 January 2017, the Company entered into a Joint Venture Agreement ("JVA") with Korea Zinc Company Ltd ("KZC") for the
joint development of a recycling plant in Vietnam, based on the Rotary Hearth Furnace ("RHF") technology developed by the
Company in Korea. Under the JVA, KZC will fund 100% of a Definitive Development Study ("DDS"), expected to cost US$2.5
million, with the Company earning a 49% interest in an incorporated special purpose company. 
 
On 25 January 2017, the Company used the proceeds from the sale of its residual interest in Zinc Oxide Corporation, to
repay £3,970,282 (equivalent to US$4.85 million) of outstanding Loan Notes (see note 16). 
 
38.   General Information 
 
ZincOx Resources plc, a company limited by shares, is incorporated in England and Wales (registration number 3800208) and
has its registered office and principal place of business at Knightway House, Park Street, Bagshot, Surrey, GU19 5AQ. 
 
The principal activity of the Company is to identify zinc projects where the knowledge and expertise built up over many
years can be used to evaluate, and where applicable, develop projects or work with others in joint ventures or sell on such
projects with a view to building cash reserves to return to shareholders. The Company acts as a recycling, processing,
development and holding company. 
 
Forward Looking Statements 
 
The Chairman's Statement, Chief Executive's Review and the Strategic Report contain discussion of future operations and
financial performance by use of various forward looking words such as "anticipates," "estimates," "expects," "projects,"
"intends," "plans," "believes" and terms of similar substance. These forward looking statements are based on management's
current expectations and beliefs about future events but as with any projection or forecast, they are inherently
susceptible to uncertainty and changes in circumstances which could cause the Group's actual activities and results to
differ materially from those contained in the forward looking statements. 
 
Annual General Meeting 
 
The Annual Report and Notice of Annual General Meeting will be available to view on the Company's website at www.zincox.com
by 18 April 2017, or from the Company at Knightway House, Park Street, Bagshot, Surrey, GU19 5AQ. It should be noted that
online voting will be available by 18 April 2017. 
 
The Annual General Meeting of the Company will be held at 12.30pm on 16 June 2017 at the offices of Eversheds Sutherland
(International) LLP, One Wood Street, London EC2V 7WS. 
 
This information is provided by RNS
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