Final Results fye 31 December 2013

RNS Number : 3918I

Equatorial Mining & Exploration PLC

30 May 2014

 



Final Results for the year to 31 December 2013

Equatorial Mining and Exploration PLC

The Board is pleased to present the results for the Company for the year ended 31 December 2013.

Chairman's Statement

I have pleasure in reporting our final results and we have posted the Report and Accounts to shareholders today.

In our December year end update we reported on the culmination of an excellent year's progress for the Company. Last February Behre Dolbear sent us the draft Competent Persons Report (CPR) which recommended a continuation of our programme to develop the 600 sq.km tenements (nine exploration licences) under our control in order to establish the existence of, what they and we believe to be, substantial deposits of coal and other hydrocarbon based minerals. 

Indeed, this is our plan but to proceed we require additional funding in order to cover the continuing geological programme. To this end, we are shortly to engage advisers to the outright acquisition of the Nigerian company which owns the nine licences which we have been funding, and a significant fund raising. Shareholders can expect to hear more on this before the end of July.

Until then, we continue to run the company on a shoestring with a monthly cash burn (including board fees) of approximately £11,000. If the forthcoming fund raise is not completed to our satisfaction, the Directors will suspend certain payments to safeguard operating cashflows.

In the financial year to 31 December 2014, the Company will engage the services of a mining geological contractor to conduct exploration studies on part of the Company's tenement in Nigeria.  These studies will be overseen by the Board and will lead to an expert report into the existence and commercial viability of hydrocarbon minerals. 

If this report suggests hydrocarbon minerals do exist in commercial quantities, the Company will endeavour to source additional funding to increase the scale of the exploration leading to the eventual production of a JORC Inferred Resource Estimate.  The Resource Estimate will provide the Company with the means to generate income via an outright sale of the tenement or a move into production.

N C P Nelson

Chairman

30 May 2014

Enquiries:

Walbrook PR

Guy McDougall                                                                                         [phone]

Nick Rome                                                                                               [phone]

ISDX Adviser:

Alfred Henry Corporate Finance Ltd.                                                     [phone]                      

Jon Isaacs                                                                                           

Note:

The financial information contained in this statement has been extracted from the audited full accounts of the Company and is presented using the same accounting policies. The audited full accounts which have not yet been filed with the Registrar of companies and posted to shareholders include an unqualified report 29 May 2014 from the auditors.

The Directors take responsibility for this announcement.

INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

			Year ended 31 Dec 2013	Year ended 31 Dec 2012
	Note		£'000	£'000
Administrative expenses			(198)		(242)
Share based payments			(4)		(161)
Exceptional costs			(305)		(229)
OPERATING LOSS FROM OPERATIONS	4		(507)		(632)
Investment income			2		4
Loss before taxation			(505)		(628)
Taxation			-		-
LOSS FROM CONTINUING OPERATIONS			(505)		(628)
Loss per share
- basic (pence)  - diluted (pence)	7		(0.024) (0.024)		(0.029) (0.029)

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2013

			Year ended 31 Dec 2013	Year ended 31 Dec 2012
			£'000	£'000
Loss for the period			(505)		(628)
Total comprehensive income			(505)		(628)

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2013

	Share capital	Share premium	Share-based compen-sation reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000
Balance as at 1 Jan 2012 Loss for the year	214 -	926 -	161 -	(692) (505)	609 (505)
Share-based compensation	-	-	-	-	-
Balance as at 31 Dec 2013	214	926	161	(1,197)	104

	Share capital	Share premium	Share-based compen-sation reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000
Balance as at 1 Jan 2011 Loss for the year	214 -	926 -	- -	(64) (628)	1076 (628)
Share-based compensation	-	-	161	-	161
Balance as at 31 Dec 2012	214	926	161	(692)	609

STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 31 DECEMBER 2013

			As at 31 Dec 2013	As at 31 Dec 2012
			£'000	£'000
ASSETS	Note
CURRENT ASSETS
Trade and other receivables	8		53		30
Cash and cash equivalents			94		599
TOTAL ASSETS			147		629
EQUITY AND LIABILITIES
Share capital	12		214		214
Share premium account	13		926		926
Share-based compensation reserve	14		161		161
Retained earnings	15		(1,197)		(692)
TOTAL EQUITY			104		609
CURRENT LIABILITIES
Trade and other payables	9		43		20
TOTAL EQUITY AND LIABILITIES			147		629

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2013

			Year ended 31 Dec  2013	Year ended 31 Dec 2012
			£'000	£'000
Loss before income tax			(505)		(628)
Share-based compensation			-		161
Finance income			(2)		(4)
Operating cash flows before movement in working capital and provisions			(507)		(471)
Increase in trade and other receivables			(23)		(18)
Increase in trade and other payables			23		19
NET CASH USED IN OPERATING ACTIVITIES			(507)		(470)
Cash flows from investing activities
Interest received			2		4
NET CASH GENERATED FROM INVESTING ACTIVITIES			2		4
Cash flows from financing activities
Net proceeds from issue of shares			-		-
NET CASH GENERATED FROM FINANCING ACTIVITIES			-		-
Net (decrease)/increase in cash and cash equivalents			(505)		(466)
Net cash and cash equivalents at beginning of period			599		1,065
NET CASH AND CASH EQUIVALENTS AT END OF PERIOD			94		599

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2013

1.         General information

Equatorial Mining and Exploration Plc ("the Company") is an investment vehicle, established to invest in or acquire businesses or assets in the mining sector

The Company is a public limited company which is quoted on ISDX and is incorporated and domiciled in the UK.  The address of its registered office is 10 Orange Street, London, WC2H 7DQ.

The registered number of the company is 07496976.

2.         Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, International Financial Reporting Interpretations Committee ("IFRIC") interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The functional and presentational currency for the financial statements is sterling.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies.

Issued International Financial Reporting Standards (IFRS's) and interpretations (IFRICS) relevant to company operations

There are no IFRS or IFRIC interpretations that are effective for the first time in this financial period that would be expected to have a material impact on the company.

Standards, interpretations and amendments to published standards that are not yet effective

There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the group.

3.         Accounting Policies

Basis of accounting

The financial statements have been prepared under the historical cost convention, as modified by the accounting for financial instruments at fair value.

The Directors are of the opinion that the financial information should be prepared on a going concern basis, in the light of the Company's financial resources.

Share options

When shares, share options and warrants are granted to employees and investors, a charge is made to the profit and loss account and a reserve created in capital and reserves to record the fair value of the awards at the date of grant in accordance with IFRS 2 (share based payments).  This charge is spread over the vesting period.  When shares and share options are granted to employees of subsidiary companies, the fair value of the awards is treated as a capital contribution and spread over the period of performance relating to the grant.  The corresponding entry is made in reserves.

Segment reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments.  A geographic segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments.

In the opinion of the Directors, in year ended 31 December 2013, the Company does not have any separate business or geographical segments.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Share capital

Ordinary shares are classified as equity.  Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Income taxes

Current income tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the balance sheet date.

Deferred income tax is recognised using the balance sheet liability method, providing for temporary differences between the tax bases and the accounting bases of assets and liabilities.  Deferred income tax is calculated on an undiscounted basis at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Deferred income tax liabilities are recognised for all temporary differences, except where the deferred income tax liability from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred income tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.  Deferred income tax assets and liabilities are offset against each other only when the Company has a legally enforceable right to do so.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences can be utilised.

Use of assumptions and estimates

The Company makes judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.  The resulting accounting estimates calculated using these judgements and assumptions will, by definition, seldom equal the related actual results but are based on historical experience and expectations of future events.  The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period, or in the period of revision and future periods if the revision affects both current and future periods.

Given the level of the Company's activities, the Directors do not consider estimates and assumptions to have a material effect on the amounts recognised in the financial statements.

Reserves

Reserve	Description and purpose
Share capital	Amount of the contributions made by shareholders in return for the issue of shares.
Share premium	Amount subscribed for share capital in excess of nominal value.
Share-based compensation reserve	Cumulative fair value of share options granted and recognised as an expense in the Income Statement.
Retained earnings	Cumulative net gains and losses recognised in the company's financial statements.

4.         Operating loss

Operating loss is stated after charging:

		Year ended 31 December 2013	Year ended 31 December 2012
		£'000	£'000
Directors' remuneration		103	74
Auditor's remuneration  - Audit  - Non-audit services		5 15	5 15

5.         Employees

The company has no employees other than the three Directors.

6.         Tax on profit on ordinary activities

	2013	2012
	£'000	£'000
Current tax expense	-	-
Deferred tax expense	-	-
	─────	─────
	-	-
	═════	══════
Reconciliation of effective tax rates	£	£
(Loss) before tax	(505)	(628)
	═════	══════

Tax using domestic rates of corporation tax of 20.00% (2012: 20%)	(101)	(127)
Effect of:
Expenses not deductible for tax purposes		79
Losses carried forward		48
	─────	─────
	-	-
	═════	═════

The Company has estimated losses of £745,000 (2012 - £240,000) available to carry forward against future trading profits.

The Company has not recognised a potential deferred tax asset of £149,000 (2012: £48,000) in respect of these losses due to uncertainty over whether they will be utilised in future periods.

7.         Loss per share

The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of ordinary shares in issue during the year. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The company had three classes of dilutive potential shares,  being those share warrants and share options detailed within note 14.

The diluted loss per share is the same as the basic loss per share as the loss for the year has an antidilutive effect.

The calculation of basic and diluted earnings per share is based on the following figures:

			Year ended 31 December 2013		Year ended 31 December 2012
				£'000		£'000
Total loss for the period				(505)		(628)
Weighted average number of shares - basic				2,141,666,667		2,141,666,667
Diluting effect of warrants in issue				-		-
Weighted average number or shares - diluted				2,141,666,667		2,141,666,667
Basic loss per share				(0.024) p		(0.029) p
Diluted loss per share				(0.024) p		(0.029) p

8.         Trade and other receivables

			31 Dec 2013	31   Dec 2012
			£'000	£'000
VAT			47	30
Other debtors			6	-
			53	30

9.         Trade and other payables

			31 Dec 2013	31   Dec 2012
			£'000	£'000
Trade payables Other Creditors			42 1	15 5
			43	20

10.        Financial instruments

The Company's financial instruments comprise cash and various items, such as trade payables that arise directly from its operations. The main risks arising from, and impacted by, the financial assets and liabilities of the Company are interest rate risk and liquidity risk. The Board reviews and agrees policies for managing these risks and they are summarised below.

The Company does not hold any derivative financial instruments. The market value of the Company's financial assets and liabilities does not differ materially from the carrying value.

Financial Assets

The only significant asset of the Company is cash at bank and on deposit. Cash is held in Sterling only.

Cash at bank attracts interest at floating rates that vary with UK bank base rates. Cash on short-term deposits attracts fixed rates which are agreed at the commencement of the term of the deposit.

Financial Liabilities

The Company does not have any financial liabilities other than the trade and other payables arising from its operations. No interest is payable in respect of any of these liabilities.

The Company does not have any undrawn borrowing facilities.

Cash flow interest rate risk

The Company is cash positive and places its balances on short-term deposits with National Westminster Bank plc. Due to the short-term nature of these deposits, the interest receivable by the Company will be affected by changes in the UK bank base rate. No interest is received on any of the Company's other assets or receivables. The Company does not have any loans, bank borrowings or other interest bearing payables.

Liquidity Risk

It is the Company's policy to maintain sufficient cash resources to meet its short-term liabilities.

11.        Related Parties

During the period, an amount of £60,250 (2012 - £57,517) was charged to the Company by Shipleys LLP, a partnership in which S. G. Moloney is a member. The charges related to £31,000 (2012 - £11,000) of Director's fees, £29,250 (2012 - £35,350) of provision of accounting services and £nil (2012 - £11,167) of travel expenditure.

During the period, an amount of £nil (2012 - £1,612) was charged to the company for public relations services provided by Hansard Communications Limited, a Company in which N. Nelson was a Director.  Additionally, an amount of £9,720 (2012 - £37,528) was charged to the Company by Cubitt Consulting, a Company in which N. Nelson was an employee. The charges related to £6,720 (2012 - £24,528) of public relation services, £3,000 (2012 - £3,000) of registrar costs and £nil (2012 - £10,000) of project work expenditure.

Furthermore, an amount of £36,923 (2012 - £16,115) was charged to the Company by Nexus Financial Ltd, a Company in which N. Nelson is a Director. The charges related to £27,000 (2012 - £8,500) of Director's fees and £9,923 (2012 - £7,615) of travel expenditure.

During the period, an amount of £49,779 (2012 - £60,155) was charged to the Company by Alyn Evans Consultancy Services Ltd, a Company in which A. Evans is a Director. The charges related to £44,833 (2012 - £54,167) of Director's fees, £1,198 (2012: £nil) of company formation expenses and £3,748 (2012 - £5,988) of travel expenditure.

All the services provided are considered to have been made on an arms length basis.

Other than disclosed above, there were no other related party transactions that require disclosure during the current period.

12.        Share Capital

			31 Dec 2013	31 Dec 2012
			£'000	£'000
Allotted, called up and fully paid: 2,141,666,667 ordinary shares of £0.0001 each			214	214
			214	214

13.        Share Premium

			31 Dec 2013	31   Dec 2012
			£'000	£'000
Balance brought forward			926	926
			926	926

14.        Share Based Payments

Share Warrants

During the year all option and warrant holders waived their rights on the existing options and warrants. At the balance sheet date, none were exercisable.

On 10th February 2014 the company granted 253,240,000 options over the Ordinary shares at a price of £0.0001 per share. The options were granted as follows: 114,490,000 to N Nelson, 88,750,000 to A Evans, 27,500,000 to S Moloney and 22,500,000 to M Nwafor.

Equity settled share-option plan

The Company plan provides for a grant price equal to the average quoted market price of the   Company's shares on the date of grant.  The warrants will not normally be exercisable during a closed period, and furthermore can only be exercisable if the performance conditions are satisfied.

Warrants which have vested immediately before either the death of a participant or his ceasing to be eligible employee by reason of injury, disability, redundancy, retirement or dismissal (otherwise than for a good cause) shall remain, exercisable (to the extent vested) for 12 months after such cessation, and all non-vested options shall lapse.

The details of the warrants are as follows

			Year ended 31 December 2013	Year ended 31 December 2012
Outstanding at beginning of period			2,025,000,000	1,650,000,000
Granted during the period			-	375,000,000
Waived during the period			(2,025,000,000)
Outstanding at end of the period			-	2,025,000,000

All rights to warrants were waived by the warrant holders during the year.

An expense of £nil has been recognised in the year (2012: £161,000) in respect of a share-based payment charge for the outstanding share options issued during the year.

15.        Retained Earnings

			Year ended 31 December 2013 £'000	Year ended 31 December 2012 £'000
Opening balance			(692)	(64)
Loss for the period			(505)	(628)
Closing balance			(1,197)	(692)

16.        Capital Commitments

The Company has no capital commitments at the year end.

17.        Future Operating Lease Commitments

There are no material operating lease commitments at the statement of financial position date.

18.        Control

In the opinion of the directors, there is no one controlling party.

19.        Post Balance Sheet Events

The Directors are not aware of any events which have occurred since the balance sheet date which require either a provision or disclosure in the accounts

 

END

 

 

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