7 September 2017

 

HOT ROCKS INVESTMENTS PLC
("Hot Rocks" or the "Company")

AUDITED FINAL RESULTS FOR THE PERIOD ENDED 31 MARCH 2017

CHAIRMAN'S STATEMENT

 

I hereby present the financial results for the Company for the year ended 31 March 2017.  The Company is an active investor primarily in junior natural resources companies and during the year we have seen a recovery across much of our portfolio.

 

The Company made a pre-tax loss of £16,191 for the year, compared to a pre-tax profit of £8,129 in the prior year. The Company will not be paying a dividend at this stage (2016: £Nil).

 

Cash and cash equivalents as at the year end of 31 March 2017 were £12,216 (2016: £13,705).

 

During the year our investee company Goldcrest Resources plc was refinanced and acquired interests in oil and gas opportunities in Georgia. The company name has been changed to Block Energy plc and it will seek admission to AIM in due course.

 

A prior year adjustment was recorded as a result of the late provision of information pertaining to a share consolidation by an investee during the year ended 31 March 2014.

 

Our main recoveries have been in the TSXV-traded Medgold Resources and private coal exploration company Minergy Limited which has floated a company in which it holds a 40% interest on the Botswana Stock Exchange.

 

We hold stakes in the following entities:

 

• Block Energy plc (NEX: BLOK)
• Brazil Tungsten Holdings Limited
• Copper Bay plc
• Elephant Oil Limited
• Impact Oil & Gas Limited
• Mafula Energy Limited
• MedGold Resources Corp (TSXV:MED)
• Minergy Limited
• New Horizon Oil & Gas Limited
• Rift Resources Limited
• Royal Road Minerals (previous Tigris Resources) (TSXV:RYR)
• Upland Resources Limited (AIM:UPL)

The Board of Directors will continue to introduce further equity positions to the Company to enable additional diversification of the portfolio. It is anticipated that these will continue to be primarily within the natural resources sector.

 

Brian Rowbotham

Non-Executive Chairman

6th September 2017

 

 

The Directors of the issuer are responsible for the content of this announcement.

For further information please contact:

Hot Rocks Investments plc
Gavin Burnell: 020 7382 8417

Peterhouse Corporate Finance Limited
Guy Miller: 020 7220 9796

HOT ROCKS INVESTMENTS PLC STATEMENT OF COMPREHENSIVE INCOME

 YEAR ENDED 31 MARCH 2017

 

 

		2017	2016 -restated
Continuing Operations		£	£
Revenue		-	-
Foreign exchange gain/(loss) on available-for-sale financial assets		22,062	(1,115)
Operating expenses		(33,217)	(39,934)
Impairment of available-for-sale financial assets		(15,962)	-
Other gains/ - sale of available-for-sale financial assets		8,689	46,136
		_______	_______
Operating (Loss)/Profit		(18,428)	5,087
Finance income		2,237	3,042
Finance costs		-	-
		_______	_______
(Loss)/Profit before Income Tax		(16,191)	8,129
Income tax expense		-	-
		_______	_______
(Loss)/Profit for the Year attributable to equity holders		(16,191)	8,129
		_______	_______
Other Comprehensive Income
Items that may be Reclassified Subsequently to Profit or Loss
Reclassification of cumulative gains on available-for-sale   financial asset due to disposal		(6,055)	(19,014)
Fair value change in value on available-for-sale financial assets		180,078	(161,714)
		_______	_______
Total Comprehensive Income for the Year attributable to equity holders		174,023	(180,728)
		_______	_______
Earnings Per Share - Basic and Diluted (expressed in pence per share)		(0.00)	(0.00)
		_______	_______

 

 

 

 

 

 

 

 

 

 

 

 

HOT ROCKS INVESTMENTS PLC STATEMENT OF FINANCIAL POSITION

 AT 31 MARCH 2017

 

 

		As at 31 March 2017		As at    31 March 2016 - restated	Restated as at 1 April 2015
		£		£	£
Assets
Non-Current Assets
Available-for-sale financial assets		836,126		648,330	795,888
		_______		_______	_______
		836,126		648,330	795,888
		_______		_______	_______
Current Assets
Other receivables		721		18,617	25,172
Cash and cash equivalents		12,216		13,705	39,984
		_______		_______	_______
		12,937		32,322	65,156
		_______		_______	_______
Total Assets		849,063		680,652	861,044
		_______		_______	_______
Equity and Liabilities
Equity Attributable to Shareholders
Ordinary shares		173,602		173,602	173,602
Share premium account		1,174,631		1,174,631	1,174,631
Share options and warrants reserve		-		29,738	29,738
Other reserves		66,209		(107,814)	72,915
Retained loss		(666,875)		(680,422)	(688,551)
		_______		________	________
		747,567		589,735	762,335
Current Liabilities
Trade and other payables		101,496		90,917	98,709
		_______		_______	_______
Total Equity and Liabilities		849,063		680,652	861,044
			_______	_______	_______

 

These financial statements were approved and authorised for issue by the Board of Directors and were signed on its behalf on 6th September 2017.

 

 

 

 

HOT ROCKS INVESTMENTS PLC STATEMENT OF CHANGES IN EQUITY

 YEAR ENDED 31 MARCH 2017

 

 

		Attributable to Equity Shareholders
		Ordinary  shares  £	Share  premium  £	Share options and warrants reserve  £	Other  reserves  £	Retained  loss  £	Total  £
Balance as at 1 April 2015		173,602 ________	1,174,631 ________	29,738      ______	57,110     _______	(688,551)     ________	746,530  ________
Prior year adjustment (note 17)		-	-	-	15,805	-	15,805
Balance as at 1 April 2015 - restated		173,602 ________	1,174,631 ________	29,738      ______	72,915     _______	(688,551)     ________	762,335  ________
Profit for the year		-	-	-	-	8,129	8,129
Reclassifications of cumulative gains on available-for-sale financial assets - restated		-	-	-	(19,015)	-	(19,015)
Fair value change in value on available-for-sale financial assets - restated		-   ______	-   ______	-   ______	(161,714)   _______	-   _______	(161,714)   _______
Total Comprehensive Income		-	-	-	(180,729)	8,129	(172,600)
		______	______	______	_______	_______	_______
Total Transactions with
Owners		-	-	-	-	-	-
		______	______	______	_______	_______	________
Balance as at 31 March 2016 and 1 April 2016		173,602 ______	1,174,631 ________	29,738 ______	(107,814) _______	(680,422) _______	589,735 ________
Loss for the year		-	-	-	-	(16,191)	(16,191)
Reclassifications of cumulative gains on available-for-sale financial assets		-	-	-	(6,055)	-	(6,055)
Fair value change in value on available-for-sale financial assets		-	-	-	180,078	-	180,078
Warrants expired or lapsed in the year		-   ______	-   ______	(29,738)   ______	-   _______	29,738   _______	-   _______
Total Comprehensive Income		-	-	(29,738)	174,023	13,547	157,832
		______	______	______	_______	_______	_______
Total Transactions with
Owners		-	-	-	-	-	-
		______	______	______	_______	_______	________
Balance as at 31 March 2017		173,602 ______	1,174,631 ________	- ______	66,209 _______	(666,875) _______	747,567 ________

 

 

 

 

HOT ROCKS INVESTMENTS PLC STATEMENT OF CASH FLOWS

 YEAR ENDED 31 MARCH 2017

 

 

		2017	2016
		£	£
Cash Flows from Operating Activities
(Loss)/Profit before income tax		(16,191)	8,129
Finance income		(2,237)	(3,042)
Unrealised foreign exchange (gain)		(22,062)	-
Bad debts		2,997	-
Gain on disposal of available-for-sale financial assets		(8,689)	(46,134)
Impairment of available-for-sale financial asset		15,962	-
Decrease in other receivables		2,130	2,253
Increase in trade and other payables		10,425	8,828
		_______	_______
Cash Used in Operations		(17,665)	(29,966)
Interest paid		-	-
Income tax paid		(82)	(16,620)
		_______	_______
Net Cash Used in Operations		(17,747)	(46,586)
		_______	_______
Cash Flows from Investing Activities
Purchases of available-for-sale financial assets		(33,984)	(224,535)
Proceeds from disposal of available-for-sale financial assets		50,242	244,842
		_______	_______
Net Cash Generated from Investing Activities		16,258 _______	20,307 _______
Decrease in Cash and Cash Equivalents		(1,489)	(26,279)
Cash and cash equivalents at the beginning of the year		13,705	39,984
		_______	_______
Cash and Cash Equivalents at the End of the Year		12,216	13,705
		_______	_______

 

 

 

 

 

 

 

HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES

 YEAR ENDED 31 MARCH 2017

 

 

General Information

 

Hot Rocks Investments Plc is a limited company incorporated and domiciled in the United Kingdom. Its registered office is disclosed on page 2 and details of its principal activities on page 4.

 

The company has classified itself as an investment entity. 

 

Summary of Significant Accounting Policies

 

The principal Accounting Policies applied in the preparation of these Financial Statements are set out below.  These Policies have been consistently applied to all the periods presented, unless otherwise stated.

 

Basis of Preparation of Financial Statements

 

The Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS as adopted by the EU), IFRIC interpretations and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.  The Financial Statements have also been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets.

 

The preparation of Financial Statements in conformity with IFRSs 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.  The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements, are disclosed later in these accounting policies.

 

The Financial Statements are presented in sterling (£), rounded to the nearest pound.

 

Changes in accounting policies and disclosures

a) New and amended standards and interpretations adopted by the Company

 

There have been no new standards and amendments to standards and interpretations effective for the financial year beginning on 1 April 2016 that are material to the Company and therefore applied in preparing these Financial Statements.

 

HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES

 YEAR ENDED 31 MARCH 2017

 

 

Changes in accounting policies and disclosures (continued)

b) New and amended standards and interpretations issued but not yet effective and not early adopted

 

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Financial Statements, that could potentially impact the Financial Statements, are disclosed below. The Directors are assessing the possible impact of the following standards on the Company's Financial Statements:

 

Standard  Effective Date

IAS 7 (Amendments) Results of the Disclosure Initiative *1 January 2017

IAS 12 (Amendments)  Recognition of Deferred tax assets for Unrealised Losses *1 January 2017

IFRS 2 (Amendments) Measurement of Share Based *1 January 2018

   Payment Transactions

IFRS 9 (Amendments) Financial Instruments *1 January 2018

IFRS 15 Revenue from Contracts with Customers 1 January 2018

IFRS 16 Leases 1 January 2019

Annual Improvements 2014 - 2016 Cycle *1 January 2017/

  1 January 2018

 

*Subject to EU endorsement

 

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

 

Segmental Reporting

 

The Company has only one operating segment being the investment in companies, or assets, in the natural resource sector. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker ("CODM"). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions. Therefore the Financial Statements of the single segment is the same as that set out in the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Change in Equity and the Statement of Cash Flows.

 

Foreign Currency Translation

 

(a) Functional and Presentation Currency

 

Items included in the Financial Statements of the 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 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 profit or loss.

 

 

HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES

 YEAR ENDED 31 MARCH 2017

 

 

Financial Instruments

 

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments and on a trade date basis. A financial asset is derecognised when the Company's contractual rights to future cash flows from the financial asset expire or when the Company transfers the contractual rights to future cash flows to a third party. A financial liability is derecognised only when the liability is extinguished.

 

(a)   Available for Sale Investments

Available-for-sale investments are those non-derivative financial assets that are designated as available for sale or are not classified as loans and receivables.  After initial recognition, available for sale financial assets are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired at which time the cumulative gain or loss previously reported in equity is included in the statement of comprehensive income.

 

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the closure of business on the statement of financial position date. For investments where there is no active market, fair value is determined using valuation techniques.

 

(b)   Trade and other receivables

Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in the statement of comprehensive income when there is objective evidence that the asset is impaired.

 

(c)   Cash and cash equivalents

The Company considers all highly liquid investments which are readily convertible into known amounts of cash and have a maturity of three months or less when acquired to be cash equivalents. At the reporting date management believes that the carrying amount of cash and cash equivalents approximates fair value because of the short maturity of these financial instruments.

 

Cash and cash equivalents comprise cash at bank and in hand and short term deposits with an original maturity of three months or less, all of which are available for use by the company unless otherwise stated. Cash and cash equivalents are measured at fair value, based on the relevant exchange rates at the reporting date.

 

(d)    Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

 

The Company's financial liabilities include trade and other payables. All financial liabilities, except for derivatives, are recognised initially at their fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial liability and subsequently measured at amortised cost.

 

 

 

HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES

 YEAR ENDED 31 MARCH 2017

 

 

Share Capital

 

Ordinary shares are recorded at nominal value and proceeds received in excess of nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Costs incurred directly to the issue of shares are accounted for as a deduction from share premium, otherwise they are charged to the Income Statement.

 

Share Based Payments

 

The Company operates a number of equity-settled, share-based schemes, under which it receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Company.  The Company may also issue warrants to share subscribers as part of a share placing. The fair value of the equity-settled share based payments is recognised, if material, as an expense in the income statement or charged to equity depending on the nature of the service provided or instrument issued.  The total amount to be expensed or charged is determined by reference to the fair value of the options granted:

 

•             including any market performance conditions;
•             excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and
•             including the impact of any non-vesting conditions (for example, the requirement for employees to save).

In the case of warrants the amount charged to the share premium account is determined by reference to the fair value of the services received if available. If the fair value of the services received is not determinable, the warrants are valued by reference to the fair value of the warrants granted as described previously.

 

Non-market vesting conditions are included in assumptions about the number of options or warrants that are expected to vest.  The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.  At the end of each reporting period, the Company revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions.  It recognises the impact of the revision to original estimates, if any, in the income statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.

 

When the options are exercised, the Company issues new shares.  The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium.

 

 

 

HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES

 YEAR ENDED 31 MARCH 2017

 

 

Critical Accounting Estimates and Assumptions

 

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are:

 

(i)                  Available For Sale Investments

Available for sale financial assets have a carrying value of £836,126 at 31 March 2017 following an impairment charge of £15,962 (2016: £Nil) and additional equity share acquisitions and disposals in the period.

 

The Company follows the guidance of IAS 39 to determine when an available-for-sale equity investment is impaired. This involves a review of the fair value of its equity investments at each statement of financial position date. This requires management to make an estimate of the fair value of the securities in the absence of an active market.  Uncertainty also exists due to the early stage of development of certain of the investments.  Further details are given in Note 6.

 

This determination requires significant judgement. In making this judgement, the Company evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of the short-term business outlook for the investee, including factors such as industry and sector performance and operational and financing cash flow.

 

Management has concluded that an impairment charge should be recognised in respect of the carrying value of available for sale financial assets based on its valuation of the equity instruments held. The impairment review carried out in the previous year concluded that no impairment was necessary.