30 November 2016
Goldcrest Resources plc
("Goldcrest" or the "Company")
Final Results
DIRECTORS’ STATEMENT
In what remains a very difficult time for explorers the Group has continued to evolve through the pivotal acquisition of Taoudeni Resources Ltd and the addition of the flagship Asheba project in Ghana. The project was historically explored by major miner Gold Fields and we have inherited a top quality exploration data set that includes 20,000m of drilling by the former operators and in house non-JORC compliant resources of 176,000 oz gold. The project was also the site of considerable historic production in the 1920s during which time ore was mined to depths of up to 200m via 2 vertical shafts and extensive underground development. Historic mining targeted narrow quartz veins and achieved an average head grade in excess of 25g/t Au.
The Group is in the process of acquiring a set of exploration applications in the Islamic Republic of Mauritania. The project was an exploration concept developed by major copper miner Antofagasta and is considered a prospective for Central African style sedimentary copper. We look forward to developing this exciting project and are proud to be front runners in what is truly frontier exploration.
Corporately - we give thanks to Gavin Burnell, Callum Baxter and Frederick Bell who have retired from the Board during the period to pursue new business interests. They have assisted in managing the Group though a very difficult time for exploration companies. We would also like to welcome new directors Ryan Long and Paul Haywood.
We look forward to reporting continued progress.
Niall Tomlinson
Director
STRATEGIC REPORT
The Directors present their strategic report for the year ended 30 June 2016.
Principal activities and future developments
The principal activity of the Group in the year under review has been to continue to evaluate opportunities for gold exploration in Ghana.
The review of business and future developments are given in the Directors’ Statement.
Principal risks and uncertainties
The management of the business and the execution of the Board’s strategy are subject to a number of risks:
· Exploration is speculative in nature.
· The economic viability of a project is affected by world commodity prices.
· Commodity prices are subject to international economic trends, currency fluctuations and consumption patterns.
· The Group’s activities are undertaken in developing countries rather than the United Kingdom.
Impact of the EU referendum
The implications of the decision to leave the EU cannot be known with any certainty although the entity will continue to monitor the situation closely and act accordingly where future developments occur and market conditions alter. We believe impact to Company will be limited to fluctuations in foreign exchange rates.
Key performance indicators
Given the straightforward nature of the Group’s activities, the Group’s directors are of the opinion that analysis using key performance indicators is not necessary for an understanding of the development, performance or position of the business.
Results and dividends
The results for the period and the financial position of the Group are shown in the following financial statements.
The Group has incurred a pre-tax loss of £110,774 (2015: Loss of £115,300).
The Group has net assets of £148,517 (2015: net liabilities of £40,298).
The Directors cannot recommend the payment of a dividend.
Niall Tomlinson
Director
GROUP DIRECTORS’ REPORT
The Directors present their report, together with the audited financial statements for the year ended 30 June 2016.
The Company is a public listed entity which is listed on the ISDX Growth Market, incorporated and domiciled in England and Wales.
Directors
The Directors who served during the period were as follows:
| Callum Baxter – resigned 8th June 2016 |
| Frederick Bell – resigned 26th February 2016 |
| Gavin Burnell – resigned 13th April 2016 |
| Ryan Long – appointed 19th January 2016 |
| Niall Tomlinson – appointed 19th January 2016 |
| Paul Haywood – appointed 9th June 2016 |
Share capital
During the year, the following shares were issued as part of the consideration for the acquisition of Taoudeni Resources Ltd:
· Issued 18 January 2016: 599,177,916 ordinary shares of £0.005 per share.
Charitable and political donations
During the period there were no charitable or political contributions.
Significant shareholdings
On 30 June 2016 the following were registered as being interested in 3% or more of the Company’s ordinary share capital:
| 30 June 2016 | 30 June 2015 | |||
| Ordinary shares of £0.0005 each | Percentage of issued share capital | Ordinary shares of £0.0005 each | Percentage of issued share capital | |
| SVS (Nominees) Limited Pershing Nominees Limited R Bruce Rowan Plutus Strategies Ltd ** Sunrise Resources plc Centrebind Agency Ltd Hot Rocks Investments plc |
552,719,931 204,314,000 145,000,000 147,363,650 116,618,627 110,026,200 193,496,625 |
26.38% 9.75% 6.92% 7.03% 5.57% 5.25% 9.24% |
585,228,883 204,714,000 145,000,000 - - - - |
39.12% 23.86% 9.69% - - - - |
| Starvest plc Fitel Nominees Limited Banyan Global LLC Caroline Lesley Naylor |
59,400,000 50,000,000 50,000,000 47,500,000 |
2.84% 2.39% 2.39% 2.27% |
59,400,000 50,000,000 50,000,000 47,500,000 |
3.97% 3.34% 3.34% 3.18% |
** Niall Tomlinson and Paul Haywood, directors of the Company, are interested in 73,681,825 shares each of the company held by Plutus Strategies Ltd.
Financial instruments
The main financial risks arising from the Group’s activities are liquidity risk and currency risk. These are monitored by the Board and were not considered to be significant at the reporting date.
The Company relies upon working capital injected via the issue of shares to support its exploration and administrative activities together with short term borrowings. Budgets are regularly prepared and fund raising initiatives undertaken as and when required. Risk is inherent in the nature of the business and is managed to the best of the Board’s ability.
Funds are primarily maintained in sterling to minimise foreign exchange risk which is inherent in the Group’s activities and accepted as such.
Remuneration
Fees were paid to the directors as detailed at Note 8 to the financial statements.
Corporate governance
It is the opinion of the Board that compliance with the recommendations of the Combined Code on corporate governance at this stage in its development would be unduly onerous bearing in mind the size of the business and limited cash resources. However, the Board has established such procedures as are appropriate for the size of the business and will keep the matter under review. In this context, the Board has established two committees of the Board:
· Remuneration Committee comprising Niall Tomlinson as chairman and Paul Haywood which meets twice a year;
· Audit Committee comprising Niall Tomlinson and Paul Haywood.
Control procedures
The Board has approved financial budgets and cash forecasts; in addition, it has implemented procedures to ensure compliance with accounting standards and effective reporting.
Going concern
Notwithstanding the loss incurred during the year under review and the deficit of Shareholders’ equity at the reporting date, the Directors are of the opinion that preparation of the Group’s and Company’s financial statements on a going concern basis is appropriate. It remains the belief of the Board that a future is possible although uncertainty does exist with regard to the availability of future funding.
Provision of information to the auditor
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company’s auditors are unaware and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company’s auditors are aware of that information.
Auditor
The auditors Fryza Bannister Financials Limited resigned on 6 July 2016 and the directors appointed PKF Littlejohn LLP to fill the vacancy. PKF Littlejohn LLP will be proposed for reappointment in accordance with the Companies Act 2006.
This report was approved by the Board on 30 November 2016 and signed on its behalf.
Niall Tomlinson
Director
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
Directors' responsibilities for the financial statements
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Under the law directors have prepared the financial statements in accordance with the International Financial Reporting Standards (“IFRS”), as adopted by the European Union. Accordingly, these statements reflect the assumptions made by the Board about the standards, interpretations and the policies now applicable.
Company law in the United Kingdom requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that year. In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and estimates that are reasonable and prudent;
· state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company 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 Group and 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 Group and Company 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.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
GOLDCREST RESOURCES PLC
Independent Auditor’s report to the members of Goldcrest Resources plc
We have audited the financial statements of Goldcrest Resources plc for the year ended 30 June 2016 which comprise, the Group and Company Statements of Comprehensive Income the Group and Company’s Statement of Financial Position, the Group and Company Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the Company’s financial statements, as applied in accordance with the provisions of the Companies Act 2006.
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 Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the 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 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
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Groups and Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on Financial Statements
In our opinion:
· the financial statements give a true and fair view of the state of the Groups and of the Parent Company’s affairs as at 30 June 2016 and of the Group’s loss for the year then ended;
· the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
· the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006;; and
· the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
EMPHASIS OF MATTER – GOING CONCERN
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 3.5 to the financial statements concerning the company’s ability to continue as a going concern. The Group and Company incurred a net loss of £110,774 during the year ended 31 June 2016. These conditions, along with the other matters explained in note 3.5 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt on the Group’s and Company’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required 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 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.
Mark Ling (Senior statutory auditor) 1 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory auditor London E14 4HD
30 November 2016
Goldcrest Resources plc
Group and Company Statements of comprehensive income
for the year ended 30 June 2016
Group Company
Notes Year ended Year ended Year ended
2016 2016 2015
£ £
Exploration costs (18,937) (18,937) (25,913)
Administrative expenses 6 (77,287) (77,287) (72,103)
Finance costs 5 (14,550) (14,550) (17,284)
________ ________ ________
Loss before taxation (110,774) (110,774) (115,300)
Taxation 7 - - -
________ ________ ________
Loss for the year (110,774) (110,774) (115,300)
________ ________ ________
Total comprehensive expense for the year (110,774) (110,774) (115,300)
_________ _______ ________
Earnings per share
Basic 9 (0.009) (0.009) (0.009)
________ ________ ________
All amounts relate to continuing operations and are wholly attributable to equity holders of the Group and the Company.
The accompanying notes form part of these financial statements.
Goldcrest Resources plc
Group and Company Statements of financial position
as at 30 June 2016
Notes Group Company
2016 2016 2015
£ £ £
Non- current assets
Investment 10 - 328,896 -
Intangible assets 10 328,896 -
Current assets
Trade and other receivables 12 2,331 2,331 7,534
Cash and cash equivalents 11 11,738 11,738 178,620
________ ________ ________
Total current assets 14,069 14,069 186,154
________ ________ ________
Total assets 342,965 342,965 186,154
________ ________ ________
Equity and liabilities
Capital and reserves attributable to
Equity holders of the Company
Called-up share capital 13 1,047,582 1,047,582 747,993
Share premium 14 1,627,610 1,627,610 1,627,610
Retained deficit 14 (2,526,675) (2,568,675) (2,415,901)
________ ________ ________
Total equity 148,517 148,517 (40,298)
________ ________ ________
Liabilities
Current liabilities
Trade and other payables 16 121,698 121,698 153,702
Borrowings 17 72,750 72,750 72,750
Provisions for other liabilities and charges 18 - - -
________ ________ ________
Total current liabilities 194,448 194,448 226,452
________ ________ ________
Total equity and liabilities 342,965 342,965 186,154
________ ________ ________
The financial statements were approved by the Board of Directors and authorised for issue on 30 November 2016 and signed on its behalf by:
Niall Tomlinson Ryan Long
Director Director
The accompanying notes form an integral part of these financial statements.
Goldcrest Resources plc
Group Statement of changes in equity
for the year ended 30 June 2016
Attributable to Equity Holders
Called up Share Retained Total
Share premium deficit equity
Capital
£ £ £ £
As at 30 June 2015 747,993 1,627,610 (2,415,901) (40,298)
________ ________ ________ ________
Loss and total comprehensive income
for the year - - (110,774) (110,774) ________
Transactions with owners
Issue of shares 13 299,589 - - 299,589
________ ________ ________ ________
Total transactions with owners and
recognised directly as equity 299,589 - (110,774) 188,815
________ ________ ________ ________
As at 30 June 2016 1,047,582 1,627,610 (2,526,675) 148,517
________ ________ ________ ________
See note 14 for a description of each reserve included above.
The accompanying notes form an integral part of these financial statements.
Goldcrest Resources plc
Company Statement of changes in equity
for the year ended 30 June 2016
Attributable to Equity Holders
Called up Share Retained Total
Share premium deficit equity
Capital
£ £ £ £
As at 1 July 2014 Note 429,037 1,626,068 (2,300,601) (245,496)
________ _______ _______ _______
Loss and total comprehensive income
for the year - - (115,300) (115,300)
_______ _______ _______ _______
Transactions with owners
Issue of shares 318,956 34,142 - 353,098
Expense of issue - (32,600) - (32,600)
________ ________ ________ ________
Total transactions with owners,
recognised directly in equity 318,956 1,542 - 320,498
________ ________ ________ ________
As at 30 June 2015 747,993 1,627,610 (2,415,901) (40,298)
________ ________ ________ ________
Loss and total comprehensive income
for the year - - (110,774) (110,774)
Transactions with owners
Issue of shares 13 299,589 - - 299,589
________ ________ ________ ________
Total transactions with owners,
recognised directly in equity 299,589 - (110,774) 188,815
________ ________ ________ ________
As at 30 June 2016 1,047,582 1,627,610 (2,526,675) 148,517
________ ________ ________ ________
See note 14 for a description of each reserve included above.
The accompanying notes form an integral part of these financial statements.
Group Company
Notes Year ended Year ended Year ended
2016 2016 2015
£ £ £
Cash flows from operating activities
Loss before taxation (110,774) (110,774) (115,300)
Adjustment for:
Finance costs 14,550 14,550 17,284
________ _______ ________
(96,224) (96,224) (98,016)
Decrease in trade and other receivables 5,203 5,203 276
(Decrease)/Increase in trade and other payables (32,004) (32,004) 1,778
Decrease in provisions - - (7,219)
_______ ________ ________
(26,801) (26,801) (5,165)
________ _______ ________
Net Cash outflow from operating activities (123,025) (123,025) (103,181)
_______ ________ ________
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired 24 (29,307) (29,307) -
________ _______ ________
Net Cash outflow from investing activities (29,307) (29,307) -
_______ ________ ________
Cash flows from financing activities
Proceeds from issue of shares - - 350,000
Expenses of share issue - - (35,000)
Interest paid (14,550) (14,550) (16,784)
Proceeds from borrowings - - 15,000
Repayment of borrowings - - (31,750)
_______ ________ ________
Net cash (outflows)/inflows from financing activities (14,550) (14,550) 281,466
_______ _______ ________
Net increase/(decrease) in cash and cash
equivalents (166,882) (166,882) 178,285
Cash and cash equivalents at the beginning
of year 178,620 178,620 335
_______ ________ ________
Cash and cash equivalents at end of year 11 11,738 11,738 178,620
_______ ________ ________
Non-cash transactions
On 18 January 2016, 599,177,916 ordinary shares of £0.0005 were issued as part of the acquisition cost of the subsidiary Taoudeni Resources Limited. On 25 May 2016 Taoudeni Resources Limited was put into liquidation.
Notes to the Accounts
The accompanying notes form an integral part of these financial statements.
1. General information
The principal activity of the Goldcrest Resources Plc (“the Company”) and its subsidiaries (“the Group”) is to engage in mineral exploration. This may be done through local subsidiaries or in partnership with other public and private companies. The Groups’s focus, as described in the Director’s Statement, is on gold projects in Ghana. As Africa’s second largest gold-producer, Ghana has an experienced mining industry and established mining code that facilitate mineral exploration in the country.
The Company is a public limited Company which is listed on ISDX Growth Market and is incorporated and domiciled in the UK. The address of its registered office is 55 Gower Street, London WC1E 6HQ.
During the year, the Company acquired Tauodeni Resources Limited whise assets were sold to Goldcrest Resources Plc. Taoudeni Resources was liquidated on 25 May 2016.
2. Application of new and amended standards and interpretations
The Group has not adopted any standards early in either the current or previous periods.
New and amended standards adopted by the Group
All new standards and amendments to the standards and interpretations effective for annual periods on or after 1 July 2015 are not material to the Group and Company and therefore not applied in preparing the financial statements.
New and amended standards issued but not yet effective for the financial year beginning 1 July 2015 and not early adopted
Standard Effective Date
IAS 1 (Amendments) Presentation of Financial Statements: Disclosure Initiative 1 January 2016
IAS 7 (Amendments) Disclosure Initiative *1 January 2017
IAS 12 (Amendments) Recognition of Deferred Tax *1 January 2017
IAS 16 (Amendments) Clarification of Acceptable Methods of Depreciation 1 January 2016
IAS 27 (Amendments) Separate Financial Statements 1 January 2016
IAS 38 (Amendments) Clarification of Acceptable Methods of Amortisation 1 January 2016
IFRS 9 Financial Instruments *1 January 2018
IFRS 11 (Amendments) Joint Arrangements: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016
IFRS 14 Regulatory Deferral Accounts *1 January 2016
IFRS 15 Revenue from Contracts with Customers *1 January 2018
IFRS 16 Leases *1 January 2019
Annual Improvements 2012 – 2014 Cycle 1 January 2016
*Subject to EU endorsement
The directors do not anticipate that the adoption of these standards and interpretations in future periods will have a material impact on the financial position or performance of the Group or the Company.
3.
Principal accounting policies
3.1. Introduction
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied throughout the period presented in these financial statements unless otherwise stated.
3.2 Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations as endorsed by the European Union (“IFRS”) and the requirements of the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared on the historical cost basis, except for the measurement to fair value of assets and financial instruments as described in the accounting policies below, and on a going concern basis.
Fair value is the price that would be received for an asset or paid to transfer a liability between knowledgeable willing parties in an arm’s length transaction.
Fair value measurements are categorised by level 1, 2 and 3 based on the degree to which the inputs to the fair value measurements are observable.
3.3 Basis of Consolidation
The Group Financial Statements consolidate the Financial Statements of Goldcrest Resources Plc and the Financial Statements of all of its subsidiary undertakings made up to 30 June 2016.
Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where an entity does not have returns, the Group’s power over the investee is assessed as to whether control is held. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated. Profits and losses resulting from intercompany transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.
As at year ended 30 June 2015, the financial statements include the Company only, as Company did not own or control any subsidiary undertakings at that date.
3.4 Significant accounting judgements, estimates and assumptions
The preparation of the financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on management’s best knowledge of current events and actions, actual results may ultimately differ from those estimates. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the next financial year are discussed below.
Fair value of exploration assets acquired
On 25 May 2016, the Group acquired 100% of the share capital of Taoudeni Resources Limited and 100% share capital of Taudeni Sarl for £328,896. Taudeni Sarl is registered in Isle of Man and currently does not hold any exploration licenses. Ensign Resources Limited is registered in the Isle of Man and, via its 100% owned subsidiary Antubia Resources Limited, Goldcrest Plc holds 24.28 sq. km of gold exploration licences in Ghana. On acquisition the Group was required to assess the fair value of the exploration assets acquired. This has been considered as an intangible asset in the financial statements of the Group and an Investment in the financial statements of the Company as per Note 10.
The fair value of the exploration assets of £328,966 was estimated by applying a number of valuation metrics which include; geological upside potential, mineralogy, market benchmarks and the application of local market factors. In the Directors’ opinion, the value of the consideration paid to effect the acquisition related primarily to the value of the exploration licences and upside potential representing a price agreed between willing and knowledgeable parties on an arm’s length basis. Therefore, the fair value of the consideration transferred, after consideration of tax implications and the removal of the fair value of other identifiable assets acquired, has been used as a basis for valuing the exploration assets acquired.
3.5 Going concern
Following the Company’s unsuccessful attempt in the previous financial period to gain admission to the AIM Market of the London Stock Exchange, the Company was left with significant debts to various advisers for services rendered.
The Company has negotiated with key suppliers to defer payment until such time as the Company gains admission to AIM or there is a general distribution to creditors. These measures have been sufficient to meet the short term funding requirement of the Company. Despite these measures, the Company has insufficient funds for the foreseeable future; additional funds will be required to safeguard the Company’s position.
The Board are looking at various strategies to secure the future of the Company and believe it to be appropriate to prepare these financial statements on a going concern basis.
3.6 Foreign currencies
a) Functional and Presentation Currency
Items included in the financial statements of the Group and Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”).
The financial statements are presented in Pounds Sterling (£), which is the Group’s and Company’s functional and presentation currency.
b) Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within ‘finance income or costs’. All other foreign exchange gains and losses are presented in the income statement within ‘Other (losses)/gains – net’.
Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income.
Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets measure at fair value, such as equities classified as available for sale, are included in other comprehensive income.
3.7 Exploration and development expenditure
Exploration and development costs comprise expenditure on prospects at an exploratory stage. These costs include the cost of acquisition (including exploration licences), exploration, determination of recoverable reserves, economic feasibility studies and all technical and administrative overheads directly associated with those projects. These costs incurred by the Company are written off to profit or loss as ‘exploration costs’.
3.8 Taxation
Current taxation
Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowed and is calculated using tax rates that have been enacted by the reporting date.
Corporation tax is charged or credited to the income statement, except when the tax relates to items credited or charged directly to equity, in which case the tax is also dealt with in equity.
Deferred taxation
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantially enacted by the reporting date and are expected to apply when deferred tax liabilities/(assets) are settled/(recovered). Deferred tax balances are not discounted.
3.9 Investments
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.
3.10 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 statement of comprehensive income with a corresponding increase in equity reserves – ‘the share option reserve’.
On exercise or cancellation of share options and warrants, the proportion of the share based payment reserve relevant to those options and warrants is transferred to the retained earnings reserve. On exercise, equity is also increased by the amount of the proceeds received.
The fair value is measured at grant date charged in the accounting period during which the option and warrants becomes unconditional.
The fair value of options and warrants is calculated using the Black-Scholes model taking into account the terms and conditions upon which the options and warrants were granted. Vesting conditions are non-market and there are no market vesting conditions. These vesting conditions are included in the assumptions about the number of options and warrants that are expected to vest. At the end of each reporting period, the Company revises its estimate of the number of options and warrants that are expected to vest. The exercise price is fixed at the date of grant and no compensation is due at the date of grant.
Where equity instruments are granted to persons other than employees, the statement of comprehensive income is charged with the fair value of goods and services received.
3.11 Provisions for liabilities and charges
The Group has recognised provisions for liabilities of uncertain timing or amount. The provisions are measured at the best estimate of the expenditure required to settle the obligation at the reporting date, discounted if material at a pre-tax rate reflecting current market assessments of the time, value for money and risk specific to the liability. Note 18 provides detail on the movement in the provisions.
3.12 Finance costs
Borrowing costs carried at amortised cost using the effective interest method.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.
3.13 Intangible Fixed assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets, relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.
Exploration and evaluation assets are assessed for impairment annually or when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. The assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas.
Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement.
3.14 Financial instruments
Financial assets and financial liabilities are recognised where the Group and the Company has become party to the contractual provisions of the instrument.
Financial assets
Trade and other receivables
After initial recognition these assets are measured at amortised cost using the effective interest method less any provision for impairment.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and short term deposits with an original maturity of three months or less.
Financial liabilities and equity
Trade and other payables
Trade and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group or Company prior to the end of the financial period that are unpaid and arise when the Group or Company becomes obliged to make future payments in respect of the purchase of these goods and services.
Borrowings
Borrowings are recorded initially at fair value, plus directly attributable transaction costs. Such instruments are subsequently carried at their amortised cost and finance charges, including premium payable on settlement or redemption, are recognised in the profit or loss over the term of the instrument using the effective rate of interest.
Equity instruments
Equity instruments issued by the Company are recorded at fair value at initial recognition net of transaction costs.
4. Segmental Reporting
IFRS 8 requires segmental information for the Group on the basis of information reported to the chief operating decision-maker for decision-making purposes. The Group considers this role as being performed by the Board of Directors. The Board identifies two reported segments, that of mineral exploration and that of its corporate function, including unallocated costs.
The segmental results are as follows:
Group Company
Mineral Corporate Total Mineral Corporate Total
exploration and other exploration and other
£ £ £ £ £ £
Year ended 30 June 2016
Exploration costs (18,937) - (18,937) (18,937) - (18,937)
Administrative costs - (77,287) (77,287) - (77,287) (77,287)
Finance costs - (14,550) (14,550) - (14,550) (14,550)
________ ________ ________ ________ ________ ________
Loss from operating activities (18,937) (91,837) (110,774) (18,937) (91,837) (110,774)
________ ________ ________ ________ ________ ________
Year ended 30 June 2015
Exploration costs (25,913) - (25,913)
Administrative expenses (72,103) (72,103)
Finance costs (17,284) (17,284)
________ ________ ________
Loss from operating activities (25,913) (89,387) (115,300)
________ ________ ________
Group Company
Segmental assets 30 June 2016 30 June 2016 30 June 2015
£ £ £
Mineral exploration 328,896 - 328,896 -
Corporate and other 14,069 14,069 186,514
________ ________ __________
342,965 342,965 186,154
________ ________ __________
30 June 2016 30 June 2016 30 June 2015
Segmental liabilities £ £ £
Mineral exploration - - -
Corporate and other 236,448 236,448 226,452
________ ________ __________
236,448 236,448 226,452
________ ________ __________
In terms of geographical area, the mineral exploration activities were undertaken in Ghana and the corporate and other activities were undertaken in the United Kingdom.
5. Finance Costs
Group Company
Year ended Year ended Year ended
30 June 2016 30 June 2016 30 June 2015
£ £ £
Interest expense 14,550 14,550 17,284
________ ________ ________
6. Administrative expenses Group Company
Year ended Year ended
30 June 2016 30 June 2016 30 June 2015
£ £ £
Operating loss is stated after charging:
Employee benefit expense – note 8 41,516 41,516 44,629
Auditors’ remuneration – audit services-
-Group 11,000 11,000 -
-Company - - 6,500
Fees to auditor for other services 3,100 3,100 660
ISDX fee 7,800 7,800 7,800
Corporate adviser fees 12,000 12,000 12,000
Other regulatory fees 3,137 3,137 3,242
Travel and subsistence 401 401 20
Legal and professional fees (29,793) (29,793) 400
Other expenses 28,126 28,126 (1,333)
VAT adjustment - - (1,815)
________ ________ _______
77,287 77,287 72,103
________ ________ _______
7. Income taxes relating to continuing activities
Based on the results for the period, there is no charge to UK or foreign tax. This is reconciled to the accounting loss as follows:
Year ended Year ended
30 June 2016 30 June 2015
£ £
Loss on ordinary activities (110,774) (115,300)
________ ________
Loss before taxation at the average UK standard
rate of 20% (2015: 20%) (22,154) (23,060)
Effect of:
Tax losses for which no deferred income tax asset was recognised 22,154 23,060
________ _______
Current tax - -
________ _______
The Company has corporation tax losses available to carry forward against future profits of approximately
£937,000 (2015: £784,000). A deferred tax asset has not been recognised in the financial statements as recovery cannot be foreseen with reasonable probability.
8. Employee benefit expense – including directors
The Group and Company had no employees during the year other than the directors, each of whom provided professional services as required on a part time basis.
The salary and fee costs during the current and previous financials year were as follows:
Year ended Year ended
30 June 2016 30 June 2015
£ £
Directors fees
Frederick Bell 16,000 24,000
Callum Baxter - 5,000
Gavin Burnell - 5,000
Shaun Dowling - 5,000
John Watkins - 5,000
Niall Tomlinson 24,236 -
________ ________
40,236 44,000
Social security costs 1,280 629
________ ________
41,516 44,629
________ ________
As at year ended 30 June 2016 and as at year ended 30 June 2015 the fees to Frederick Bell had been paid.
The average number of employees, including directors, during the year was 3 (2015: 5).
9. Earnings per share
Year ended Year ended
30 June 2016 30 June 2015
£ £
Loss per share –basic (0.006) (0.009)
________ _______
The basic loss per share is derived by dividing the loss for the period attributable to ordinary shareholders by the weighted average number of shares in issue.
Year ended Year ended
30 June 2016 30 June 2015
£ £
Loss for the year (used in calculation of
total basic loss per share) (110,774) (115,300)
____________ ____________
Weighted average number of Ordinary shares
of £0.0005 in issue 1,766,108,630 1,199,309,943
____________ ____________
In view of the loss for the year, diluted share earnings per share has not been calculated; the options and warrants have no dilutive effect.
As detailed in note 15, there are warrants outstanding at the year end which have the potential to dilute basic earnings per share in the future and reduce the basic loss per share.
10. Investments and Intangible fixed asset
The amounts recognised in the Statement of Financial Position are as follows:
Group Company
Year ended Year ended Year ended
30 June 2016 30 June 2016 30 June 2015
Addition in the year 328,896 328,896 -
______ ______ ______
At 30 June 2016 328,896 328,896 -
______ ______ ______
Group and Company
11. Cash and cash equivalents
30 June 2016 30 June 2015
£ £
Cash in hand and at bank 11,738 178,620
________ _______
Group Company
12. Trade and other receivables 30 June 2016 30 June 2016 30 June 2015
£ £ £
Prepayments 2,331 2,331 7,534
________ _________ _______
13. Share capital
Called up, allotted, issued and fully paid Number Nominal £
As at 30 June 2015 1,495,987,439 747,993
Issued 18 January 2016 at 0.05p per share 599,177,916 299,589
____________ ________
As at 30 June 2016 2,095,165,355 1,047,582
____________ ________
Ordinary shares entitle holders to vote and receive dividends and on liquidation, to be paid a share of any surplus.
14. Reserves
The following describes the nature and purpose of each reserve within owners’ equity.
Reserve Description and purpose
Called up share capital Amount subscribed for share capital at nominal value.
Share premium account Amount subscribed for share capital in excess of nominal value, less attributable costs.
Retained earnings Cumulative net gains and losses recognised in the income statement.
15. Fundraising incentives and share based payments
In order to attract new equity investment, the Company in the prior year issued the following warrants:
· a warrant to subscribe for up to 50,000,000 shares issued to each of four subscribers to the placing of new shares on 8 April 2013 vesting on successful admission of the Company’s shares to the AIM market of the London Stock Exchange and then expiring after ten years; exercisable at a price of £0.0005; the placees were: Mr Gavin Burnell, a director of the Company; Hot Rocks Investments plc, a company of which Mr Gavin Burnell is both a director and shareholder; Woodland Capital Limited, a company of which Mr Gavin Burnell is both a director and shareholder; Banyan Global LLC.
· a warrant to subscribe for 50,000,000 shares issued to Mr Frederick Bell on the same terms as those warrants noted immediately above.
Warrants issued to Mr Frederick Bell and Mr Gavin Burnell of 50,000,000 each constitute equity settled share based payments in settlement of their services to secure a listing of the Company’s shares on AIM. Following an unsuccessful bid to gain AIM admission, these warrants have not vested. Consequently no fair value for services have been attributed and accounted for in the income statement. No calculation of fair value has been undertaken in connection with these warrants.
No warrants were issued in the current financial year.
30 June 2016 30 June 2015
Number of Weighted Number of Weighted
warrants average warrants average
exercise exercise
price price
Outstanding at the beginning of the year 250,000,000 0.05p 250,000,000 0.05p
__________ ________ __________ ________
Outstanding at the end of the year 250,000,000 0.05p 250,000,000 0.05p
__________ ________ __________ ________
As at 30 June 2016, no warrants were available to exercise. All outstanding warrants have an exercise price of 0.05p.
16. Trade and other payables Group Company
30 June 2016 30 June 2016 30 June 2015
£ £ £
Current trade and other payables:
Trade payables 54,936 54,936 59,241
Social security and other taxes - - 1,148
Accruals 66,762 66,762 93,313
________ ________ ________
121,698 121,689 153,702
________ ________ ________
17. Borrowings
30 June 2016 30 June 2016 30 June 2015
£ £ £
Short term loans – unsecured 72,750 72,750 72,750
________ ________ _______
All loans are denominated in GBP (£) sterling.
Interest on these loans accrues at the rate of 20% per annum, carry no terms of repayment and are repayable on demand. The Directors consider it appropriate to classify these loans as current.
18. Provision for liabilities and charges
Group Company
30 June 2016 30 June 2016 30 June 2015
£ £ £
Provision for employee settlement
Balance at 1 July - - 10,317
Utilised in year - - (5,674)
Released in year - - (4,643)
________ ________ ________
Balance at 30 June - - -
________ ________ ________
The provision related to a claim by two employees of the Company’s former subsidiary, Lisungwe Mineral Resources Limited, for monies owed which has now been settled.
19. Financial Instruments
19.1 Categories of financial instruments
The Company and Group has no category of financial assets which require separate disclosure.
In terms of financial liabilities, these solely comprise of those measured at amortised cost and are as follows:
30 June 2016 30 June 2015
£ £
Liabilities at amortised cost 54,936 59,241
Loans and receivables 72,750 72,750
________ ________
127,686 131,991
________ ________
No collateral has been pledged in relation thereto.
19.2 Fair values
The fair values of the Company’s and Group’s financial assets and liabilities approximates the carrying values disclosed in the financial statements. This assumes an orderly transaction not undertaken on a forced basis.
19.3 Financial instruments – risk management
The Company’s and Group’s financial instruments comprise cash and items arising directly from its operations such as trade receivables and trade payables. The Group and Company is exposed to the following financial risks.
Credit risk
Financial assets which potentially subject the holder to concentrations of credit risk consist principally of cash balances. These balances are all held at a recognised financial institution. The maximum exposure to credit risk is £11,738 (2015: £178,620). The Company and Group does not hold any collateral as security.
Interest rate risk
The Company and Group is not exposed to any material interest rate risk. All borrowings are at a fixed rate of interest.
Liquidity risk
Liquidity risk arises from the possibility that the Group and its subsidiaries might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. In addition to equity funding, additional borrowings have been secured to finance operations. The Company manages this risk by monitoring its financial resources and carefully plans its expenditure programmes.
The Company incurred significant debts in the previous accounting period to various advisers for services rendered in connection with its unsuccessful attempt to gain admission to the AIM Market of the London Stock Exchange. To manage its liquidity risk, the Company negotiated with key suppliers to defer payment until such time as the Company gains admission to AIM or there is a general distribution to creditors.
Capital management
The Group’s and Company’s principal objective when managing capital is to protect returns to shareholders by ensuring that it will continue to trade in the foreseeable future.
20. Significant agreements and transactions
The following significant agreements impact in the period under review:
· Loans: As set out in Note 17, various loans were granted to the Company in the previous period by Mr Gavin Burnell, Starvest plc, Hot Rocks Investments plc and Woodland Capital Limited which, inclusive of interest accrued at the rate of 20% per annum, at 30 June 2016 amounted to £83,663 or £72,750 exclusive of accrued interest.
· The agreements for Zamsa, Fumbis and Akoko licences that were in existence at year ended 30 June 2015 have expired during the current financial year.
· The Company has agreed to settle the loans made by Gavin Burnell, Hot Rocks plc and Woodland Capital totalling £57,500 by issuing equity at a future date.
· Key supplier deferred payment terms
In connection with the company’s unsuccessful attempt to gain admission to the AIM market of the London Stock Exchange, the company incurred significant debts to various advisers for services rendered.
The Company has negotiated with key suppliers to defer payment until such time as the Company gains admission to AIM or there is a general distribution to creditors.
Written and verbal agreements have been obtained with regard to deferred payment terms in relation to trade payables of £21,092 and £24,030 respectively, totalling £45,122.
Certain key suppliers have also not invoiced for their services in relation to the initial application, deferring this until successful admission to AIM. These costs were recognised in a previous financial period and are included within accruals under the heading trade and other payables in the sum of £54,520.
21. Related party transactions
Gavin Burnell, former non-executive director and shareholder:
· Loans granted to the Company with no fixed repayment term and with interest at the rate of 20% per annum as follows:
£
Balance at 1 July 2015 21,000
________
Balance at 30 June 2016 21,000
________
Interest paid in year 4,200
________
Interest accrued and unpaid 4,200
________
· Taoudeni Resources Limited was acquired during the period when Gavin Burnell ( a former director and shareholder) was a significant shareholder in Taoudeni Resources Limited
Starvest plc, a company of which John Watkins is a director and shareholder:
· Loans granted to the Company with no fixed repayment term and with interest at the rate of 20% per annum as follows:
£
Balance at 1 July 2015 27,500
________
Balance at 30 June 2016 27,500
________
Interest paid in year 5,500
________
Interest accrued and unpaid 5,500
_______
Hot Rocks Investments plc, a company of which Gavin Burnell is a director and shareholder:
· Loans granted to the company with no fixed repayment term and with interest at 20% per annum as follows:
£
Balance at 1 July 2015 13,750
________
Balance at 30 June 2016 13,750
________
Interest paid in year 2,750
________
Interest accrued and unpaid 2,750
________
Woodland Capital Limited, a company of which Gavin Burnell is a director and shareholder:
· Loan granted to the company with no fixed repayment term and with interest at 20% per annum.
£
Balance at 1 July 2015 10,500
________
Balance at 30 June 2016 10,500
________
Interest paid in year 2,100
________
Interest accrued and unpaid 2,100
________
Directors’ fees
Directors fees of £7,000 per person are due to be settled at some future date by shares in the company to Niall Tomlinson and Paul Haywood.
22. Controlling party
The directors consider there to be no controlling party.
23. Business Combinations
On 25 May 2016, the Company acquired 100% of the share capital of Taoudeni Resources Limited which owned 100% Ensign Resources Limited, and 100% share capital of Taoudeni Sarl for £328,896. Ensign Resources Limited is registered in the Isle of Man and, via its 100% owned subsidiary Antubia Resources Limited holds 24.28 sq. km of gold exploration licences in Ghana. As a result of this acquisition the Group is expected to increase its presence in this market and commodity.
The following table summarises the consideration paid for Ensign Resources Limited and the amounts of the assets acquired and liabilities assumed recognised at the acquisition date.
£
Consideration at 25 May 2016
Cash 29,307
Equity instruments (599,177,916 ordinary shares at 0.05 pence per share) 299,589
________
Total consideration 328,896
________
Recognised amounts of identifiable assets acquired and liabilities
assumed Book value FV adj. Total
Cash and cash equivalents - - -
Exploration assets (included within Intangible Assets) (Note 11) - 328,896 328,896
______ _________ _________
Total identifiable net assets - 328,896 328,896
______ _________ _________
Goodwill -
_________
Total consideration 328,896
_________
The fair value of the 599,177,916 Ordinary Shares issued as consideration for Taoudeni Resources Limited was based on the agreed price of 0.05 pence per Ordinary Share.
The fair value of the exploration assets of £328,896 was estimated by applying a number of valuation metrics which include; geological upside potential, mineralogy, market benchmarks and the application of local market factors. In the Directors’ opinion, the value of the consideration paid to effect the acquisition related primarily to the value of the exploration licences and upside potential representing a price agreed between willing and knowledgeable parties on an arm’s length basis. Therefore, the fair value of the consideration transferred, after consideration of tax implications and the removal of the fair value of other identifiable assets acquired, has been used as a basis for valuing the exploration assets acquired.
The Directors of the Issuer accept responsibility for this announcement.
Enquiries
| Goldcrest Resources plc Niall Tomlinson, Executive Director niall@goldcrestresourcesplc.com |
Tel: 020 3053 3631 |
| Cairn Financial Advisers LLP Jo Turner / Liam Murray |
Tel: 020 7213 0880 |
| St Brides Partners Ltd Susie Geliher / Lottie Brocklehurst |
Tel: 020 7236 1177 |
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