TIDMTTAU
Tectonic Gold PLC
Company Registration No. 05173250
Annual Report and Financial Statements for the year ended 30 June 2023
CONTENTS
Page
3Company information
4Chairman's Report
5 Chief Executive Officer's Report
6Strategic Report
8Directors' Report
13Corporate Governance Statement
17Report of the independent auditor
23Consolidated Statement of Profit or Loss and Other Comprehensive Income
24Statements of Financial Position
25Consolidated Statement of Changes in Equity
26Company Statement of Changes in Equity
27Consolidated Statement of cash flows
28Company Statement of cash flows
29Notes forming part of the financial statements
COMPANY INFORMATION
DIRECTORS: Bruce Fulton (Non-Executive
Chairman)
Brett Boynton (Chief Executive
Director)
Sam Quinn (Executive Director)
Dennis Edmonds (Non-Executive
Director - Retired 15 August
2023)
Jonathan Robbeson (Executive
Director - Appointed 15 August
2023)
SECRETARY: Sam Quinn
REGISTERED 167-169 Great Portland Street
OFFICE:
Fifth Floor, London, W1W 5PF
COMPANY 05173250
REGISTRATION
NUMBER:
REGISTRAR AND Link Market Services Limited
TRANSFER OFFICE:
6th Floor, 65 Gresham Street
London
EC2V 7NQ
SOLICITORS: Mildwaters Consulting LLP
Walton House, 25 Bilton Road,
Rugby
Warwickshire
CV22 7AG
INDEPENT Moore Kingston Smith LLP
AUDITOR:
6th Floor
9 Appold Street
London
EC2A 2AP
AQUIS CORPORATE VSA Capital Limited
ADVISER AND
BROKER Park House
London
EC2M 7EB
BANKERS: Barclays Bank plc
1 Churchill Place
London
E14 5HP
CHAIRMAN'S REPORT
Dear Shareholders,
The year ended 30 June 2023 saw us return to complete another round of field
work and drilling on our flagship Specimen Hill project in Queensland. This work
enabled us to present to potential development partners a substantial database
of the large-scale mineralised system that we have identified and tested over
the last few field seasons. As per a previous market release, I am pleased to
report that ASX listed White Energy Ltd ("Energy") is continuing to test and
validate the copper gold potential of the mineralised system, under an
exclusivity agreement. White Energy's leadership are very successful
campaigners in Queensland and they have a strong investor base behind them.
Tectonic were invited during the year to advise a leading Ghanaian family office
on strategy for advancing a portfolio of tenements in the Ashanti gold fields in
Ghana. This work includes preparing the portfolio for a listing on the London
Stock Exchange. Extensive technical reviews were conducted in the June 2023
quarter, followed by a site visit and in person strategy planning with the
group. Tectonic is currently evaluating M&A opportunities on behalf of the group
in an effort to accelerate portfolio completion ahead of a listing. We are also
evaluating the potential for a dual listing in Ghana to take advantage of the in
-country investor demand. The working assumption at this stage is that Tectonic
will be the vehicle to take the consolidated portfolio to market in London to
crystalise the value of our input with a carried interest in the portfolio for
Tectonic shareholders.
Our "Deep Blue" and "Whale Head" diamond and heavy minerals investments in South
Africa, managed by Kazera Global Plc ("Kazera"), took a very interesting turn
this year. Elevated radioactivity readings from the presence of highly desirable
monazite in the rare earths component of the ore required special permitting be
obtained. Monazite, a significant source of rare earth metals such as cerium,
lanthanum, and neodymium and is in high demand in high-tech industries such as
electronics, renewable energy, and electric vehicles. While the additional
regulatory hurdles are a minor hindrance, the long-term commercial value of the
project is enhanced with this outcome.
Once again, thank you to all of our shareholders and stakeholders who have
supported us over the last year. We have made significant progress on a number
of fronts with no dilution to shareholders and the year ahead presents excellent
opportunities across our current portfolio and with a number of other
opportunities being presented to us.
Yours sincerely
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Bruce Fulton
Chairman
19 December 2023
CHIEF EXECUTIVE OFFICER'S REPORT
2023 has been a pivotal year for the Company with our multi-year exploration
research program utilising Specimen Hill as a technology testing facility
winding down. This program, funded in partnership with the Australian Federal
Government, has developed a predictive capability for more efficient
identification and delineation of resources and in particular Intrusive Related
Gold Systems. The focus of the Company going forward will be to utilise the
technical capability developed under this R&D program on international gold
projects where we can substantially improve the economics and risk reward
profile of exploration programs.
Looking forward, Tectonic is already in the process of commercialising the IP
produced over the last decade. The Company was recently approached by a leading
Ghanaian family office to bring this expertise to Ghana and assist in building
their extensive exploration tenement holdings on the Ashanti gold belt into a
vertically integrated exploration, development and gold producing company listed
on the London Stock Exchange. At the time of this report Tectonic is engaged
with Optimus Resources Pty Ltd (Ghana) developing the technical and commercial
strategy for the group and evaluating M&A opportunities to complete the
portfolio, in preparation for a dual listing in the London and Ghanaian markets.
We are positioning Tectonic as the vehicle for the London listing of Optimus,
with Tectonic shareholders benefitting from a significant carried interest in
the Ghanaian assets in return for the strategic development effort.
With R&D on exploration technology substantially completed, the Specimen Hill
project area in Queensland has been packaged, along with its extensive digital
testing library, for a farm-in partner to take through further development. The
high copper assay results and resurging gold price has attracted ASX listed
White Energy to the Specimen Hill project and they are evaluating it under a
Heads of Agreement to take over operational control under a collaboration
arrangement. At the time of writing, initial positive exploration validation has
encouraged White Energy to conduct testing over an enlarged area and we expect
this to lead to a binding joint venture under which Tectonic will retain an
ongoing economic interest in Specimen Hill.
Tectonic holds a 10% non-diluting shareholding in Deep Blue Pty Ltd (South
Africa) and a 40% economic interest in Whale Head Pty Ltd (South Africa). Our
partner in these ventures is London (AIM Market) listed Kazera Global
Investments Plc. These companies are mining diamonds and mineral sands within
the South African Government alluvial beach diamond mine at Alexkor on South
Africa's west coast. Deep Blue has a Mining Permit for the extraction of heavy
minerals, which have recently been proven to contain a range of rare earth
elements including monazite. These have historically been inaccessible due to
security restrictions around the diamond mining activities on the site. Tectonic
and Kazera have unlocked the access to these high-grade mineral sands by mining
the ores through Deep Blue for diamond extraction and then taking the waste
stream from that process into Whale Head for heavy mineral recovery. Recent
testing of heavy mineral sands in processing has returned elevated radiation
levels due to the concentration of monazite in the ores. Monazite is a naturally
occurring radioactive mineral that is processed into highly desirable rare
earths used in advanced electronics and magnetics. The presence of thorium in
the monazite makes it radioactive and because of this it requires additional
safety and handling procedures which are regulated by the South African National
Nuclear Regulator. Kazera is currently completing registrations with the NNR in
order to begin processing and selling the heavy mineral concentrates, including
the commercially valuable monazite.
As 2023 comes to a close we can look back on a lot of achievement over the year
which positions Tectonic very well for the years ahead. All of this has been
done without the need for dilutive capital raising and once again in alignment
with shareholder interests, the team has chosen not to take cash salaries or
fees.
Thank you to all the shareholders for your support over the past year and
fingers crossed for an exciting new chapter commercialising our technology in
Ghana and beyond.
[image]
Brett Boynton
Chief Executive Officer
19 December 2023
STRATEGIC REPORT
For the year ended 30 June 2023
The Directors present their strategic report for Tectonic Gold Plc ("Tectonic
Gold" and/or "the Company") and its controlled entities ("the Group") for the
year ended 30 June 2023 ("the reporting period").
REVIEW OF THE BUSINESS
The team advanced the exploration technology and methodology research conducting
further in-field drilling, mapping and sampling at Specimen Hill. The digital
geological library developed through this R&D effort has proven sufficient to
attract farm-in interest and the Company is now working with ASX listed White
Energy Ltd for them to take operational control and develop the project further.
Tectonic is focusing on commercialising the insights from the R&D on
international gold projects.
The Company supported our diamond and heavy minerals investment partner, Kazera
Global Plc in taking diamond production forward at Deep Blue Minerals Pty Ltd
and Whale Head Pty Ltd in South Africa. Tectonic Gold holds a non-diluting 10%
interest in Deep Blue and a 40% economic interest in Whale Head.
For further details see the Chief Executive Officer's Report on page 5.
RESULTS AND COMPARATIVE INFORMATION
The Group reports a loss after tax for the reporting period of £524,316 from
continuing operations (2022: £153,312 loss).
DIVIDS
The Directors do not recommend the payment of a dividend and no amount has been
paid or declared by way of a dividend to the date of this report (2022: £nil).
KEY PERFORMANCE INDICATORS
The key performance indicators are set out below:
STATISTICS 30 June 2023 30 June 2022
Net asset value £3,161,016 £3,790,493
Net asset value per share 0.0033p 0.0040p
Closing share price at the 0.37p 1.1p
end of the reporting period
Market capitalisation £3.542m £10.421m
PRINCIPAL RISKS AND UNCERTAINTIES
Currently the principal risk lies in securing additional funding as and when
necessary to continue with the core research and exploration business. The
Company's projects are in the exploration phase of development, which is risky
in itself, and do not generate revenue. If the Company is unsuccessful in
monetising its research developments or its exploration projects by attracting
development partners or divesting assets it may need to raise additional capital
as other junior exploration companies do from time to time. This risk is
mitigated through the Company's corporate development efforts and active
engagement with a number of gold mining companies, project funders and other
investors for the purpose of attracting investment in one or more of the
Company's projects or acquisition of one of the assets in line with the business
plan.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Company's financial risk management objectives and policies are
set out in Note 24 to these financial statements.
ENVIRONMENTAL REGULATIONS
The Group conducts a range of activities in the field which require accessing
remote sites with heavy vehicles and equipment and minimally disturbing the land
surface with sample taking to test geological structures. This work is conducted
under very strict regulatory oversight and once completed the test sites are
fully rehabilitated to ensure there is no long-term impact from the Company's
activities on the environment. The Group is subject to environmental regulations
under the laws of the Commonwealth and the State it operates in Australia. The
Board of Directors monitors compliance with environmental regulations and as at
the date of this report the Directors are not aware of any breach of such
regulations during the reporting period.
STRATEGIC REPORT (continued)
For the year ended 30 June 2023
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE
The Director's believe they have acted in the way most likely to promote the
success of the Company for the benefit of its members as a whole, as required by
s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
- Consider the likely consequences of any decision in the long term;
- Act fairly between the members of the Company;
- Maintain a reputation for high standards of business conduct;
- Consider the interests of the Company's employees;
- Foster the Company's relationships with suppliers, customers and
others; and
- Consider the impact of the Company's operations on the community and
the environment.
The Company is quoted on the AQUIS Stock Exchange (formerly NEX) and its members
will be fully aware, through detailed announcements, shareholder meetings and
financial communications, of the Board's broad and specific intentions and the
rationale for its decisions.
When selecting investments, issues such as the impact on the community and the
environment have actively been taken into consideration. For example the
economic uplift in Alexander Bay and surrounds from investment into Whale Head,
and the choice to use gravity separation, a chemical free processing
alternative, for the project.
The Group pays its creditors promptly and keeps its costs to a minimum to
protect shareholders funds. Currently, other than the directors, the Group
engages all staff as contractors and has no employees.
The Group acknowledges the Traditional Owners of the land on which it operates
and participates in supporting Native Title and Cultural Heritage.
The Group has interests in projects around the world and supports the basic
rights of all people. For example the ongoing annual reviews on Native Title in
the Group's Queensland, Australia, projects.
The Group adheres to the strictest anti-corruption protocols and does not trade
in any non-compliant or conflict related resources.
The Group utilises its technology platform and expertise to identify and
delineate natural resource projects which it monetises by selling or partnering
to bring into production.
The Group utilises its technology platform and expertise to identify and
delineate natural resource projects which it monetises by selling or partnering
to bring into production. The Group adheres to the 10 principles set out in the
QCA Code which it has adopted. The outcome of adherence to the QCA Code is the
development of a best practice governance structure in the Group to pursue each
of the 10 principles.
The principal risks identified are a failure to meet stakeholder commitments as
a result of the inappropriate behaviour by members of the Group or the
consultants and contractors which it engages. The Group is aware of its impact
in operating in remote locations and the potential damage it can cause to the
environment and property if its operations are not conducted with the utmost
care. With these risks in mind, all contractors and consultants are vetted for
appropriate expertise and experience prior to engagement and upon engagement are
taken through thorough pre site induction training to ensure all standards are
met in execution of their tasks.
This report was approved by the Board of Directors on 19 December 2023 and
signed on its behalf by:
[A picture containing diagram
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Brett Boynton
Chief Executive Officer
DIRECTORS' REPORT
For the year ended 30 June 2023
The Directors present their report and the audited consolidated financial
statements of Tectonic Gold Plc ("Tectonic Gold" or the "Company") and its
controlled entities ("Consolidated Entity" or "Group") for the year ended 30
June 2023.
DIRECTORS
The Board comprised the following directors who served throughout the year and
up to the date of this report save where disclosed otherwise:
+--------+----------+------------------------------------------------+
|Name |Position |Date Appointed |
+--------+----------+------------------------------------------------+
|Bruce |Non |Appointed 25 June 2018 |
|Fulton |-Executive| |
| |Chairman | |
+--------+----------+------------------------------------------------+
|Brett |Chief |Appointed 26 May 2015 |
|Boynton |Executive | |
| |Officer | |
+--------+----------+------------------------------------------------+
|Sam |Executive |Appointed 20 February 2017 |
|Quinn |Director | |
+--------+----------+------------------------------------------------+
|Dennis |Non |Appointed 28 April 2020 (Retired 15 August 2023)|
|Edmonds |-Executive| |
| |Director | |
+--------+----------+------------------------------------------------+
|Jonathan|Executive |Appointed 15 August 2023 |
|Robbeson|Director | |
+--------+----------+------------------------------------------------+
PRINCIPAL ACTIVITIES
The principal activity of the Company during the reporting period was
development of gold exploration technology and minerals exploration.
DIRECTORS' INTERESTS
The Directors' interests in the share capital of the Company at 30 June 2023,
held either directly or through related parties, were as follows:
Name of Number of % of ordinary share capital and voting rights
director ordinary
shares
Bruce 10,238,844 1.07
Fulton
Brett 125,693,191 13.13
Boynton
Sam 5,350,782 0.56
Quinn
Dennis 1,399,803 0.15
Edmonds
142,682,620 14.91
Details of the options granted to or held by the Directors at 30 June 2023 are
as follows:
Name of Balance Options Options Balance Number
Grant Exercise Date
director 30 June 2022 exercised lapsed 30 June 2023 vested
date price of
or
expiry
former
director
B Fulton
Series 14,550,000 - - 14,550,000 14,550,000
08-Sep 20 £0.00275 08-Sep
(ii)
24
Total 14,550,000 - - 14,550,000 14,550,000
B Boynton
Series 10,550,000 3,636,363 - 6,913,637 6,913,637
08-Sep 20 £0.00275 08-Sep
(ii)
24
Total 10,550,000 3,636,363 6,913,637 6,913,637
S Quinn
Series 14,550,000 - - 14,550,000 14,550,000
08-Sep 20 £0.00275 08-Sep
(ii)
24
Total 14,550,000 - - 14,550,000 14,550,000
J Robbeso
n
Series 7,275,000 - - 7,275,000 7,275,000
08-Sep 20 £0.00275 08-Sep
(ii)
24
Total 7,275,000 - - 7,275,000 7,275,000
D Edmonds
Series 7,275,000 - - 7,275,000 7,275,000
08-Sep 20 £0.00275 08-Sep
(ii)
24
Total 7,275,000 - - 7,275,000 7,275,000
DIRECTORS' REPORT (continued)
For the year ended 30 June 2023
The Company has made qualifying third-party indemnity provisions for the benefit
of the Directors in the form of Directors' and Officers' Liability insurance
during the year which remain in force at the date of this report.
DONATIONS
The Company did not make any political or charitable donations during the
reporting period (30 June 2022: £nil).
EMPLOYEE CONSULTATION
The Company places considerable value on the involvement of its employees and
has continued to keep them informed on matters affecting them as employees and
on various factors affecting the performance of the Company. This is achieved
through formal and informal meetings. Equal opportunity is given to all
employees regardless of their sex, age, religion or ethnic origin.
POST YEAR EVENTS
A list of post year events has been included in Note 28.
GOING CONCERN
The adoption of the going concern basis by the Directors is following a review
of the current position of the Company and Group and of the cash flow forecasts
for the period to 30 June 2025 prepared by the Directors. The cash flow forecast
shows that the opening cash and cash equivalents, together with the funds
expected from the Australian Government R&D Tax Incentive, are sufficient to
enable the Company to meet its obligations as they fall due and continue to
operate for at least twelve months from the date of signing these financial
statements. In the event that these funds become insufficient, the Company may
sell or relinquish some of tenement holdings in Australia in order to reduce the
holding costs and committed expenditures on these tenements. Thus, given the
Company's ability to reduce costs if required, the Directors continue to adopt
the going concern basis in preparing the financial statements. It is beyond the
scope of the Directors to predict any future impact of natural or geopolitical
or natural disasters such as COVID-19 on any of these funding sources. However
if Government funding is not secured, the Company and Group will be required to
raise equity or debt financing. This creates a material uncertainty on the
ability of the Company to meet its obligations and continue to operate as
envisaged. Further details regarding the going concern basis can be found in
Note 2 of these financial statements.
In keeping with other exploration companies, the growth of the Group is
dependent on its ability to invest in current projects and new opportunities.
The ability to raise additional finance is critical to the Group's growth
objective. The Directors are confident in their ability to finance future
projects and opportunities by raising funds in the market.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the annual report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have prepared the Group and Company
financial statements in accordance with UK adopted International Accounting
Standards and as regards the Company financial statements, as applied in
accordance with the provisions of the Companies Act 2006. Under company law, the
directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Group and
Company and of the profit or loss of the Group and Company for that period. In
preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them consistently;
· state whether applicable UK adopted International Accounting Standards have
been followed, subject to any material departures disclosed and explained in the
financial statements;
· make judgements and accounting estimates that are reasonable and prudent;
and
· prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group and Company will continue in business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group and Company's transactions and disclose
with reasonable accuracy at any time the financial position of the Group and
Company and enable them to ensure that the financial statements comply with the
Companies Act 2006. The directors 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.
DIRECTORS' REPORT (continued)
For the year ended 30 June 2023
DISCLOSURE OF INFORMATION TO THE AUDITORS
In the case of each of the persons who are directors of the Company at the date
when this report is approved:
· So far as each director is aware, there is no relevant audit information of
which the Company's auditors are unaware; and
· Each of the directors has taken all steps that they ought to have taken as a
director to make themselves aware of any relevant audit information and to
establish that the auditors are aware of the information.
AUDITOR
Moore Kingston Smith LLP have expressed their willingness to continue in office
as auditor and it is expected that a resolution to reappoint them will be
proposed at the next annual general meeting.
The Board as a whole considers the appointment of external auditors, including
their independence, specifically including the nature and scope of non-audit
services provided.
CORPORATE GOVERNANCE
The Company has set out its full Corporate Governance Statement on page 12.
BOARD OF DIRECTORS
The Company supports the concept of an effective Board leading and controlling
the Company. The Board of Directors is responsible for approving Company policy
and strategy. It meets regularly and has a schedule of matters specifically
reserved to it for decision. All Directors have access to advice from
independent professionals at the Company's expense. Training is available for
new and existing Directors, as necessary.
The Board consists of the Non-Executive Chairman, Bruce Fulton, Chief Executive
Officer, Brett Boynton, Executive Director, Sam Quinn and Non-Executive
Director, Dennis Edmonds. Jonathan Robbeson was appointed as an Executive
Director on 15 August 2023 with Dennis Edmonds retiring on the same day.
Since Admission to the AQUIS Stock Exchange on 25 June 2018, the Board has
established properly constituted audit, remuneration and AQUIS Stock Exchange
compliance committees with formally delegated duties and responsibilities, a
summary of which is set out below.
AUDIT COMMITTEE
The Audit Committee comprises Bruce Fulton (Non-Executive Chairman), Sam Quinn
and the Chief Financial Officer, Kelly McRae. The Committee meets at least twice
a year and is responsible for ensuring the financial performance of the Company
is properly reported on and monitored. It liaises with the auditor and reviews
the reports from the auditor relating to the financial statements.
REMUNERATION COMMITTEE
The Remuneration Committee comprises Bruce Fulton (Non-Executive Chairman) and
Sam Quinn. The Committee meets at least twice a year and is responsible for
reviewing the performance of Executive Directors and sets the scale and
structure of their remuneration on the basis of their service agreements, with
due regard to the interests of the shareholders and the performance of the
Company.
AQUIS STOCK EXCHANGE COMPLIANCE COMMITTEE
The role of the AQUIS Stock Exchange compliance committee is to ensure that the
Company has in place sufficient procedures, resources and controls to enable it
to comply with the AQUIS Stock Exchange Rules. The AQUIS Stock Exchange
compliance committee make recommendations to the Board and proactively liaise
with the Company's AQUIS Stock Exchange Corporate Adviser on compliance with the
AQUIS Stock Exchange Rules. The AQUIS Stock Exchange compliance committee also
monitors the Company's procedures to approve any share dealings by directors or
employees in accordance with the Company's share dealing code. The members of
the AQUIS Stock Exchange compliance committee are Brett Boynton (Chairman of
this Committee), Sam Quinn and Dennis Edmonds, who served until his retirement.
SHARE DEALING CODE
The Company has adopted a share dealing code for dealings in securities of the
Company by directors and certain employees which is appropriate for a company
whose shares are traded on the AQUIS Stock Exchange. This will constitute the
Company's
share dealing policy for the purpose of compliance with UK legislation including
the Market Abuse Regulation and the relevant part of the AQUIS Stock Exchange
Rules. It should be noted that the insider dealing legislation set out in the UK
Criminal Justice Act 1993, as well as provisions relating to market abuse, also
apply to the Company and dealings in Ordinary Shares.
DIRECTORS' REPORT (continued)
For the year ended 30 June 2023
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority by the management.
In addition to the publication of an annual report and an interim report, there
is regular dialogue with shareholders and analysts. The Annual General Meeting
is viewed as a forum for communicating with shareholders, particularly private
investors. Shareholders may question the Chief Executive Officer and other
members of the Board at the Annual General Meeting.
SIGNIFICANT SHAREHOLDERS
The following shareholders held over 3% at the end of the year:
Shareholder Name Number of Shares Holding
TICKHILL HOLDINGS PTY LTD 88,212,406 9.2%
THE BANK OF NEW YORK (NOMINEES) 62,063,348 6.5%
INTERACTIVE INVESTOR SERVICES 54,464,245 5.7%
BLACKBROOK NOMINEES PTY LTD 42,057,569 4.4%
AGFUND INVESTMENTS PTY LTD 33,646,055 3.5%
JIM NOMINEES LIMITED 33,643,478 3.5%
CGWL NOMINEES LIMITED 28,804,828 3.0%
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Company's system of
internal control and for reviewing the effectiveness of these systems. The risk
management process and systems of internal control are designed to manage rather
than eliminate the risk of the Company failing to achieve its strategic
objectives. It should be recognised that such systems can only provide
reasonable and not absolute assurance against material misstatement or loss. The
Company has well established procedures which are considered adequate given the
size of the business.
REMUNERATION
The remuneration of the directors has been fixed by the Board as a whole. The
Board seeks to provide appropriate reward for the skill and time commitment
required so as to retain the right calibre of director at a cost to the Company
which reflects current market rates.
Details of directors' fees and of payments made to directors for professional
services rendered are set out in Note 7 to the financial statements and details
of the directors' share options are set out in the Directors' Report.
Likely Developments and Future Results
Likely developments in the operations of the Group and the expected results of
those operations in future financial years have not been included in this report
as the directors believe, on reasonable grounds, that the inclusion of such
information would be likely to result in unreasonable prejudice to the Company.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL FINANCIAL
REPORT
We confirm that to the best of our knowledge:
· the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and the Directors' report
includes a fair review of the development and performance of the business and
the position of the issuer and the undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and
uncertainties that they face.
This information is given and should be interpreted in accordance with the
provisions of Section 418 of the Companies Act 2006.
This report was approved by the Board of Directors on 19 December 2023 and
signed on its behalf by:
[A picture containing diagram
Description automatically generated]
Brett Boynton
Chief Executive Officer
CORPORATE GOVERNANCE STATEMENT
The Company is committed to maintaining the highest standards in corporate
governance throughout its operations and to ensure all of its practices are
conducted transparently, ethically and efficiently. The Company believes
scrutinising all aspects of its business and reflecting, analysing and improving
its procedures will result in the continued success of the Company and deliver
value to shareholders. Therefore, and in accordance with the Aquis Growth
Market Apex Rule Book, (the "AQSE Rules"), the Company has chosen to formalise
its governance policies by complying with the UK's Quoted Companies Alliance
Corporate Governance Code 2018 (the "QCA Code").
The Board consisted of four Directors during the year: a Chief Executive Officer
(Brett Boynton) an Executive Director (Sam Quinn), and two independent Non
-Executive Directors (NEDs) being Bruce Fulton as Non-Executive Chairman and
Dennis Edmonds. Jonathan Robbeson was appointed as an Executive Director on 15
August 2023 and replaces Dennis Edmonds who retired from the board on that same
day. The Board considers that appropriate oversight of the Company is provided
by the currently constituted Board.
QCA Code
The 10 principles set out in the QCA Code are listed below, with an explanation
of how the Company applies each of the principles and the reason for any aspect
of non-compliance.
Principle 1 - Establish a strategy and business model which promotes long-term
value for shareholders.
The strategic vision of the Company is to successfully finance, manage and
develop its large-scale Intrusion Related Gold System assets in Central
Queensland, Australia.
In addition, the Company makes opportunistic investment in projects it believes
can readily be divested or farmed out, as is the case with the holdings in Deep
Blue Minerals Pty Ltd and Whale Head Minerals Pty Ltd, in South Africa.
The Company's business model and strategy is outlined on a yearly basis in the
Chief Executive Officer's Statement in the Annual Report.
Principle 2 - Seek to understand and meet shareholder needs and expectations.
The Board values the importance of interacting with our shareholders, explaining
strategy and developments in the businesses and seeking shareholder views and
opinions. We also value the input of our advisers, including our AQSE Growth
Market Corporate Adviser and broker and auditors. The Board is committed to
maintaining good communications and having constructive dialogue with its
shareholders. Institutional shareholders and analysts have the opportunity to
discuss issues and provide feedback at meetings with the Company. As a policy,
all shareholders are encouraged to attend the Company's Annual General Meeting
and any other General Meetings that are held throughout the year.
Investors also have access to current information on the Company through its
website www.tectonicgold.com and through the Chief Executive Officer who is
available to answer investor relations enquiries at: admin@signaturegold.com.au.
The Company provides regulatory, financial and business news updates through the
Regulatory News Service in accordance with AQSE Rules.
Principle 3 - Take into account wider stakeholder and social responsibilities
and their implications for long term success.
There are a number of key relationships and resources that are fundamental to
the Company's success, which include, amongst other things, relationships with,
advisors, consultant suppliers, contractors, employees, potential investors and
local stakeholders in the areas around the Group's various projects. These
relationships are key components to the successful running of the Company's
investments and are reviewed by the Board and management on a regular basis to
ensure that all potential risks are mitigated. To the extent any issues or
concerns come to light following such review, or upon engagement with such
stakeholders, the Company seeks to address matters in an expeditious manner in
order to preserve and strengthen relationships.
The Board recognises that the long-term success of the Company will be enhanced
by good relations with different internal and external groups and to understand
their needs, interest and expectations, the Board has established a range of
processes and systems to ensure that there is ongoing two-way communication,
control and feedback processes in place with to enable appropriate and timely
response.
Principle 4 - Embed effective risk management, considering both opportunities
and threats, throughout the organisation.
The Board regularly reviews the risks to which the Company is exposed and
ensures through its meetings and regular reporting that these risks are
minimised as far as possible whilst recognising that its business opportunities
carry an inherently high level of risk. The principal risks and uncertainties
facing the Company are detailed in the Risk Factors report of the Company's
Admission Document and updated in the annual report and accounts, which are
available on the Company's website www.tectonicgold.com.
The Board has established an audit committee with formally delegated duties and
responsibilities.
Principle 5 - Maintain the Board as a well-functioning, balanced team led by the
Non-Executive Chairman.
The Board's role is to agree the Company's long-term direction and strategy and
monitor achievement of key milestones against its business objectives. The Board
meets formally at least four times a year for these purposes and holds
additional meetings when necessary to transact other business. The Board
receives reports for consideration on all significant strategic, operational and
financial matters.
The Board as at 30 June 2023 comprised of a Chief Executive Officer, an
Executive Director and two independent Non-Executive Directors (NEDs) of which
one is Non-Executive Chairman. Each Director serves on the Board until the
Annual General Meeting following his election or appointment. Each member of the
Board is committed to spending sufficient time to enable them to carry out their
duties as a Director. The Board meets regularly throughout the year as deemed
appropriate formally and informally using video conferencing technology.
The Company constantly keeps under review the constitution of the Board and may
seek to add more members as required as the Company grows and develops.
The Board as a whole considers the NEDs to be independent of management and free
from any business or other relationship which could materially interfere with
the exercise of their independent judgement.
The Board has implemented an effective committee structure toassist in the
discharge of its responsibilities. All committees of theBoard have written terms
of reference dealing with their authorityand duties. Membership of the Audit and
Remuneration Committees is comprised exclusively of Non-Executive Directors. The
Company Secretary acts as secretary toeach of these committees.
The table below sets out the number of Board and Committee meeting held during
the period and each Director's attendance at those meetings.
BOARD AUDIT REMUNERATION
HELD ATTED HELD ATTED HELD ATTED
B Fulton 6 6 2 2 1 1
B Boynton 6 6 2 2 - -
S Quinn 6 6 - - 1 1
D Edmonds 6 6 2 2 - -
Principle 6 - Ensure that between them the Directors have the necessary up-to
-date experience, skills and capabilities.
The Board considers the current balance of sector, financial and public market
skills and experience which it embodies is appropriate for the size and stage of
development of the Company and that the Board has the skills and requisite
experience necessary to execute the Company's strategy and business plan whilst
also enabling each Director to discharge their fiduciary duties effectively.
Biographies for each member of the Board is provided on the Company's website
www.tectonicgold.com.
All Directors, through their involvement in other listed companies as well as
the Company, including attendance at seminars, forums and industry events and
through their memberships of various professional bodies, keep their skill sets
up to date.
The Board reviews annually, and when required, the appropriateness of its mix of
skills and experience to ensure that it meets the changing needs of the Company.
The Company has a professional Company Secretary in the UK who assists the Chief
Executive Officer in preparing for and running effective Board meetings,
including the timely dissemination of appropriate information. The Company
Secretary provides advice and guidance to the extent required by the Board on
the legal and regulatory environment. In addition, the Board's finance function
is supported by a CFO who is engaged by the Company to provide accounting and
finance services.
Principle 7 - Evaluate Board performance based on clear and relevant objectives,
seeking continuous improvement.
Review of the Company's progress against the long-term strategy and aims of the
business provides a means to measure the effectiveness of the Board. This
progress is reviewed in Board meetings held at least four times a year. The
Chief Executive Officer's performance is reviewed once a year by the rest of the
Board and measured against a definitive list of short, medium and long-term
strategic targets set by the Board.
The Company conducts periodic reviews of its Board succession planning protocols
which includes an assessment of the number of Board members and relative
experience of each Board member vis-a-vis the Company's requirements given its
stage of development, with the goal of having in place an adequate and
sufficiently experienced Board at all times.
Principle 8 - Promote a corporate culture that is based on ethical values and
behaviours.
The corporate culture of the Company is promoted throughout its employees and
contractors and is underpinned by compliance with local regulations and the
implementation and regular review and enforcement of various policies including
a Share Dealing Policy and Code, Anti-Corruption and Anti-Bribery and Media and
Communications Policy so that all aspects of the Company are run in a robust and
responsible way.
The Board recognises that its decisions regarding strategy and risk will impact
the corporate culture of the Company and that this will impact performance. The
Board is very aware that the tone and culture set by the Board will greatly
impact all aspects of the Company and the way that employees behave. The
exploration for, and development of, mineral resources can have a significant
impact in the areas where the Company and its investments are active and it is
important that the communities view its activities positively. Therefore, the
importance of sound ethical values and behaviours is crucial to the ability of
the Company to successfully achieve its corporate objectives. The Board places
great importance on this aspect of corporate life and seeks to ensure that this
is reflected in all the Company does.
Principle 9 - Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board.
The Board is responsible for setting the vision and strategy for the Company to
deliver value to the Company's shareholders by effectively putting in place its
business model.
The roles and responsibility of the Chief Executive Officer, Executive
Directors, Non-Executive Chairman and other Non-Executive Directors are laid out
below:
· The Chief Executive Officer's primary responsibilities are to:
implement the Company's strategy in consultation with the Board; take
responsibility for the Company's projects; run the Company on a day-by-day
basis; implement the decisions of the Board; monitor, review and manage key
risks; act as the Company's primary spokesman; communicate with external
audiences such as investors, analysts and media; and be responsible for the
administration of all aspects of the Company.
· The Executive Director's primary responsibilities are to support the
Chief Executive Officer in implementing the Company's strategy in consultation
with the Board; take responsibility for the Company's projects; run the Company
on a day-by-day basis; implement the decisions of the Board; monitor, review and
manage key risks; and be responsible for the administration of all aspects of
the Company.
· The Non-Executive Chairman's primary responsibilities are to: lead
the Board and to ensure the effective working of the Board; in consultation with
the Board, ensure good corporate governance and set clear expectations with
regards to the Company culture, values and behaviour; set the Board's agenda and
ensures that all Directors are encouraged to participate fully in the decision
-making process of the Board and take responsibility for relationships with the
Company's professional advisers and major shareholders.
· The Company's NED'S participate in all Board level decisions and play
a particular role in the determination and articulation of strategy. The
Company's NED's provide oversight and scrutiny of the performance of the
Executive Directors, whilst both constructively challenging and inspiring them,
thereby ensuring the business develops, communicate and execute the agreed
strategy and operate within the risk management framework.
· The Company Secretary is responsible for ensuring that Board
procedures are followed and applicable rules and regulations are complied with.
The Board is supported by the audit and remuneration committees as described
below.
The Board has not established a Nominations Committee. The Board considers that
a separately established committee is not warranted at this stage of the Group's
development and that the functions of such a committee are being adequately
discharged by the Board as a whole.
Audit Committee
As at 30 June 2023, the Audit Committee comprised two non-executive Directors,
Bruce Fulton and Dennis Edmonds and the Chief Executive Officer, Brett Boynton.
The Audit Committee reviews reports from management and from Moore Kingston
Smith LLP, the Company's statutory auditor, relating to the interim and annual
accounts and to the system of internal financial control.
The Audit Committee is responsible for assisting the Board's oversight of the
integrity of the financial statements and other financial reporting, the
independence and performance of the auditor, the regulation and risk profile of
the Company and the review and approval of any related party transactions. The
Audit Committee may hold private sessions with management and the auditor
without management present. Further, the Audit Committee is responsible for
making recommendations to the Board on the appointment of the auditor and the
audit fee and reviews reports from management and the auditor on the financial
accounts and internal control systems used throughout the Group. The Audit
Committee meets at least two times a year and is responsible for ensuring that
the Company's financial performance is properly monitored, controlled and
reported. The Audit Committee is responsible for the scope and effectiveness of
the external audit and compliance by the Company with statutory and other
regulatory requirements.
With respect to the auditor, the Audit Committee:
· monitors in discussion with the auditor the integrity of the
financial statements of the Company, any formal announcements relating to the
Company's financial performance and reviews significant financial reporting
judgments contained in them;
· reviews the Company's internal financial controls and reviews the
Company's internal control and risk management systems;
· considers annually whether there is a need for an internal audit
function and makes a recommendation to the Board;
· makes recommendations to the Board for it to put to the shareholders
for their approval in the general meeting, in relation to the appointment, re
-appointment and removal of the auditor and to approve the remuneration and
terms of engagement of the auditor;
· reviews and monitors the auditor's independence and objectivity and
the effectiveness of the audit process, taking into consideration relevant
professional and regulatory requirements;
· develops and implements policy on the engagement of the auditor to
supply non-audit services, taking into account relevant external guidance
regarding the provision of non-audit services by the auditor; and
· reports to the Board, identifying any matters in respect of which it
considers that action or improvement is needed and making recommendations as to
the steps to be taken.
The Audit Committee also reviews arrangements by which the staff of the Company
and the Company may, in confidence, raise concerns about possible improprieties
in matters of financial reporting or other matters and ensure that arrangements
are in place for the proportionate and independent investigation of such matters
with appropriate follow-up action.
Where necessary, the Audit Committee obtains specialist external advice from
appropriate advisers.
Remuneration Committee
As at 30 June 2023, the Remuneration Committee comprised Non-Executive
Directors, Sam Quinn and Bruce Fulton.
The Remuneration Committee is responsible for considering all material elements
of remuneration policy, the remuneration and incentivisation of Executive
Directors and senior management (as appropriate) and to make recommendations to
the Board on the framework for executive remuneration and its cost. The role of
the Remuneration Committee is to keep under review the Company's remuneration
policies to ensure that the Company attracts, retains and motivates the most
qualified talent who will contribute to the long-term success of the Company.
The Remuneration Committee also reviews the performance of the Chief Executive
Officer and sets the scale and structure of his remuneration, including the
implementation of any bonus arrangements, with due regard to the interests of
shareholders.
The Remuneration Committee is also responsible for granting options under the
Company's share option plan and, in particular, the price per share and the
application of the performance standards which may apply to any grant, ensuring
in determining such remuneration packages and arrangements, due regard is given
to any relevant legal requirements, the provisions and recommendations in the
AQSE Rules and The QCA Code.
The Remuneration Committee only met once during the year as the Company did not
have any full time executive employees outside of the Board during that period.
The Remuneration Committee:
· determines and agrees with the Board the framework or broad policy
for the remuneration of the Chief Executive Officer and senior management;
· determines the remuneration of Executive Directors;
· determines targets for any performance-related pay schemes operated
by the Company;
· ensures that contractual terms on termination and any payments made
are fair to the individual, the Company, that failure is not rewarded and that
the duty to mitigate loss is fully recognised;
· determines the total individual remuneration package of the Chief
Executive Officer and senior management, including bonuses, incentive payments
and share options;
· is aware of and advises on any major changes in employees' benefit
structures throughout the Company;
· ensures that provisions regarding disclosure, including pensions, as
set out in the (Directors' Remuneration Policy and Directors' Remuneration
Report) Regulations 2019, are fulfilled; and
· is exclusively responsible for establishing the selection criteria,
selecting, appointing and setting the terms of reference for any remuneration
consultants who advise the Remuneration Committee.
Principle 10 - Communicate how the company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders.
The Board is committed to maintaining good communication and having constructive
dialogue with its shareholders. Institutional shareholders and analysts have the
opportunity to discuss issues and provide feedback at meetings with the Company.
The Company also provides regular updates on the progress of the Company,
detailing recent business and strategy developments, in news releases which is
available on the Company's website www.tectonicgold.com.
The Company's financial reports can be found on its website
www.tectonicgold.com. The Company has elected to preference hosting its AGMs in
London. The Directors believe hosting the AGM in London will enhance engagement
with the Company's shareholders by making the meeting more accessible, however
given the current requirement for Director's to be directly involved in
technical operations on site and in face to face negotiations with potential
Australian based partners, the AGM will be held in Sydney.
The Company also participates in various investor events including conferences
and presentation evenings, at which shareholders can meet with management in
person to answer queries, provide information on current developments and to
take into consideration shareholder views and suggestions.
The Board is always open to receiving feedback from shareholders. The Chief
Executive Officer has been appointed to manage the relationship between the
Company and its shareholders and will review and report to the Board on any
communications received.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF TECTONIC GOLD PLC
For the year ended 30 June 2023
Qualified opinion
We have audited the financial statements of Tectonic Gold Plc (the `parent
company') and its subsidiaries (the `group') for the year ended 30 June 2023
which comprise the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, the Group and Company Statements of Financial Position,
the Consolidated and Company Statements of Changes in Equity, the Consolidated
and Company Statements of Cash Flows and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK adopted
International Accounting Standards and as regards the parent company financial
statements, as applied in accordance with the provision of the Companies Act
2006.
In our opinion, except for the effects of the matter described in the Basis for
qualified opinion section of our report:
· the financial statements give a true and fair view of the state of the
group's and of the parent company's affairs as at 30 June 2023 and of the
group's loss for the year then ended;
· the group financial statements have been properly prepared in accordance
with UK adopted International Accounting Standards;
· the parent company financial statements have been properly prepared in
accordance with UK adopted International Accounting Standards 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.
Basis for qualified opinion on financial statements
Note 28 to the financial statements states that $157,000 (£82,425) was received
from the Australian Government under its R&D Tax Incentive scheme. This receipt,
on 5 July 2023, was in respect of the R&D Tax Incentive claim for the year ended
30 June 2022. The group's accounting policy for the recognition of the R&D tax
incentive claim has been detailed in note 2 and states that such income is
recognised on receipt unless receipt is probable at the year end. In our
opinion, at the year end, the receipt of the R&D tax incentive claim
sufficiently probable as to meet the definition of an asset as defined in UK
-adopted International Accounting Standards and thus it should have been
included as an other receivable in the financial statements as at 30 June 2023.
Accordingly trade and other receivables should have been increased by £82,425
and the loss for the year and accumulated losses should have been reduced by
£82,425.
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards
are further described in the Auditor's responsibilities for the audit of the
financial statements section of our report. We are independent of the group and
parent company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
An overview of the scope of our audit
The scope of our audit was influenced by our evaluation of materiality and our
assessment of the risks of material misstatement in the group and parent company
financial statements. In particular, we assessed the areas involving significant
accounting estimates and judgement by the directors as risks for our audit. This
included the carrying value of exploration assets and investments as well as
future events that are inherently uncertain and could have an impact on the
group and parent company's ability to continue as a going concern. These were
judged to be the most significant assessed risks of material misstatement and
therefore reported as key audit matters below.
The significant component based in Australia was audited by a component auditor.
We had oversight of, and regular communication with, the component auditor who
was operating under our instructions. The component auditor supplied their
working papers for our review. This, along with further discussions with the
component auditor, gave us sufficient appropriate evidence for our audit opinion
on the Group financial statements.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of
most significance in our audit of the financial statements of the current period
and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in
the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF TECTONIC GOLD PLC (CONTINUED)
For the year ended 30 June 2023
Key audit How the scope of our audit responded to the key audit matter
matter
Going concern Our audit work and conclusion in respect of going concern has
(group and been detailed in the Material uncertainty related to going
parent company) concern section of our audit report.
The group has
incurred a
further loss
before income
tax of £524,316
in the year
(2022;
£310,971) and
has cash and
cash
equivalents at
30 June 2023 of
£123,604 (2022:
£403,328).
Note 2 of the
financial
statements sets
out the
directors'
assessment of
the
appropriateness
of the use of
the going
concern basis
of preparation.
This explains
that the group
and parent
company expect
to receive
future funding
and support to
enable their
obligations to
be met and
ensure they
continue to
operate in the
foreseeable
future. The
note also
refers to
receipt of the
R&D tax credit
claim.
There is a risk
that the group
and parent
company are
unable to
access that
further funding
and support.
R&D Tax Our conclusion in respect of the R&D Tax Incentive Scheme
Incentive claim has been detailed in the basis for qualified opinion on
Scheme claim financial statements section of our audit report.
The group
submits
applications to
the Australian
Government
under its R&D
Tax Incentive
Scheme. The
receipt of
these claims
are recognised
in the period
in which it is
received unless
management
assess that at
the year end
the likelihood
of receipt is
probable.
The recognition
of this asset
is judgemental
due to the
uncertainty
over the
acceptance of
the claim by
the Australian
Government and
receipt of the
claim funds.
Carrying value Our work in this area included, but was not limited to:
of mining
exploration and · Confirmation that the group has valid title to the
evaluation applicable exploration licences, and has fulfilled any
expenditure specific conditions therein particularly having regard to
(group) minimum expenditure requirements;
· Reviewing and substantively testing capitalised
As disclosed in exploration and evaluation expenditure including
note 14 of the consideration of its appropriateness for capitalisation under
financial IFRS 6;
statements, · Critical assessment of progress of the individual
exploration and projects during the year and post year-end; and
evaluation · Consideration of management's impairment reviews in light
expenditure of any impairment indicators identified in accordance with
capitalised as IFRS 6, including corroboration and challenge thereof.
an asset in the
statement of Based on the work performed we have gained reasonable
financial assurance that the carrying value of exploration and
position as at evaluation assets are not materially misstated and that
30 June 2023 management's assertion that no further impairment eas
was £3,219,562. required was appropriate.
The
recoverability
of this asset
is highly
judgemental due
to the early
stage of the
projects and
the contingent
nature of
obtaining a
mining permit.
For the year ended 30 June 2023
+--------------+------------------------------------------------------------+
|Recoverability|We performed the following procedures to address this risk: |
|of investments| |
|and subsidiary| · We critically assessed the loan agreement and repayment |
|loans (parent |terms; |
|company) | · We critically assessed the net assets of the underlying |
| |subsidiaries and the exploration projects therein; |
|The parent | · We reviewed and challenged the impairment considerations|
|company has |made by management; and |
|significant | · We critically assessed the net realisable value of the |
|investments in|underlying assets of the subsidiary undertakings. |
|its subsidiary| |
|entities which|Based on the work performed we consider that management's |
|is supported |assessment in respect of the recoverability of the parent |
|by the |company investments and loan to one of its subsidiaries are |
|underlying |appropriate and that the balances in question are not |
|projects. As |materially misstated. |
|at 30 June | |
|2023, and as | |
|shown in note | |
|15, this | |
|investment was| |
|£3,605,254. | |
|Note 11 also | |
|discloses a | |
|loan of | |
|£2,247,898 | |
|provided by | |
|the parent | |
|company to its| |
|subsidiary, | |
|Signature Gold| |
|Pty Ltd, as at| |
|30 June 2023. | |
| | |
|There is a | |
|risk that the | |
|investment in | |
|the | |
|subsidiaries, | |
|along with the| |
|loan, are | |
|impaired as | |
|the | |
|subsidiaries | |
|are not | |
|currently | |
|generating | |
|significant | |
|revenues. | |
|Therefore, it | |
|is necessary | |
|to assess the | |
|realisable | |
|value of the | |
|holdings at | |
|year end. | |
|There is also | |
|a risk of | |
|material | |
|misstatement | |
|around the | |
|recoverability| |
|of the | |
|significant | |
|loan balance | |
|with Signature| |
|Gold Pty Ltd. | |
+--------------+------------------------------------------------------------+
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which
help us to determine the nature, timing and extent of our audit procedures. When
evaluating whether the effects of misstatements, both individually and on the
financial statements as a whole, could reasonably influence the economic
decisions of the users of the financial statements we take into account the
qualitative nature and the size of the misstatements.
Our overall Group materiality is £73,900 and the Company materiality is £69,000.
Materiality for the significant component, Signature Gold Pty Ltd, was set at
£25,000 based on 0.7% of gross assets.
Our materiality for the Group and Company is based upon 2% of gross assets. The
rationale for our materiality calculation is that the Group and Company are
still in the exploration stage and therefore no significant revenues are
currently being generated. Current and potential investors will thus be most
interested in the level and recoverability of the gross assets, in particular
the exploration and evaluation assets. Gross assets is thus considered to be the
most appropriate benchmark for determining overall materiality.
Our Group, Company and significant component performance materiality figures
have been calculated as £36,950, £34,500 and £12,500 respectively which have
been calculated as 50% of overall materiality.
We agreed with the Audit Committee that we would report all individual audit
differences in excess of £3,695 and £3,450 in respect of the Group and Company
respectively. We also agreed to report differences below that threshold that, in
our view, warranted reporting on qualitative grounds.
Material uncertainty related to going concern
We draw attention to note 2 to the financial statements which indicates that the
group requires future funds expected from the Australian Government R&D Tax
Incentive scheme in order to meet its ongoing liabilities as they fall due. In
the event that the expected future funds from the Australian Government R&D Tax
Incentive scheme are not forthcoming the group may need to raise equity or debt
financing to continue in business and therefore meet its liabilities as they
fall due.
Although the directors are confident that the expected future funds from the
Australian Government R&D Tax Incentive scheme will be received and that the
group will be able to raise equity or debt financing if required there can be no
certainty in this respect and a failure to obtain future funds from the
Australian Government R&D Tax Incentive scheme and failure to raise equity or
debt financing would be material to the group.
These events or conditions indicate that a material uncertainty exists that may
cast doubt on the group's and parent company's ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
For the year ended 30 June 2023
In auditing the financial statements we have concluded that the use of the going
concern basis of accounting in the preparation of the financial statements is
appropriate. Our evaluation of the directors' assessment of the entity's ability
to continue to adopt the going concern basis of accounting included a critical
assessment of the cash flow projections prepared to 30 June 2025 by the
directors, which are based on their current expectations, and critically
assessing the cash flow forecast assumptions including obtaining an
understanding of all relevant uncertainties including the likelihood of receipt
of future funds from the Australian Government R&D Tax Incentive scheme.
Our responsibilities and those of the directors with respect to going concern
are described in the relevant sections of this report.
Emphasis of matter
We draw attention to the disclosures in note 17(i) to the financial statements
in respect of the Titeline Drilling Pty Ltd ACN prepayment of £332,602 (2022:
£354,656) and note 28 to the financial statements in respect of the finalisation
of the terms of the post year end farm-in. The finalisation of the farm-in
agreement indicates that the Titeline Drilling Pty Ltd ACN prepayment may not be
fully utilised by the group in the future and that the use of the prepayment
asset cannot be predicted with any certainty at the current time. Our opinion is
not modified in respect of this matter.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information. Our opinion on the group
and parent company financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express
any form of assurance conclusion thereon. In connection with our audit of the
financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements or a
material misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
As described in the basis for qualified opinion section of our report, our audit
opinion is qualified because a material amount receivable in respect of R&D tax
credits has not been included in the financial statements at 30 June 2023. We
have concluded that where the other information refers to trade and other
receivables, the loss for the year and accumulated losses, it is also materially
misstated for the same reason.
Opinions on other matters prescribed by the Companies Act 2006
Except for the matter referred to in the basis for qualified opinion section of
our report , in our opinion, based on the work undertaken in the course of the
audit:
· the information given in the strategic report and the directors' report for
the financial year for which the financial statements are prepared is consistent
with the financial statements; and
· the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
Except for the matter referred to in the basis for qualified opinion section of
our report In the light of the knowledge and understanding of the group and the
parent company and their environment obtained in the course of the audit, we
have not identified material misstatements in the strategic report or the
directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not visited
by us; or
· the parent company financial statements are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not
made; or
· we have not received all the information and explanations we require for our
audit.
For the year ended 30 June 2023
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group's and the parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of
these financial statements.
A further description of our responsibilities is located on the Financial
Reporting Council's website at: https://www.frc.org.uk/auditors/auditor
-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the
-auditor's-responsibilities-for (https://www.frc.org.uk/auditors/auditor
-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the
-auditor's-responsibilities-for).
This description forms part of our auditor's report.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the
risks of material misstatement of the financial statements due to fraud; to
obtain sufficient appropriate audit evidence regarding the assessed risks of
material misstatement due to fraud, through designing and implementing
appropriate responses to those assessed risks; and to respond appropriately to
instances of fraud or suspected fraud identified during the audit. However, the
primary responsibility for the prevention and detection of fraud rests with both
management and those charged with governance of the company.
Our approach was as follows:
· We obtained an understanding of the legal and regulatory requirements
applicable to the company and considered that the most significant are the
Companies Act 2006, UK adopted International Accounting Standards, the rules of
the Aquis Exchange and UK and Australian taxation legislation.
· We obtained an understanding of how the company complies with these
requirements by discussions with management and those charged with governance.
· We assessed the risk of material misstatement of the financial statements,
including the risk of material misstatement due to fraud and how it might occur,
by holding discussions with management and those charged with governance.
· We inquired of management and those charged with governance as to any known
instances of non-compliance or suspected non-compliance with laws and
regulations.
· Based on this understanding, we designed specific appropriate audit
procedures to identify instances of non-compliance with laws and regulations.
This included making enquiries of management and those charged with governance
and obtaining additional corroborative evidence as required.
For the year ended 30 June 2023
There are inherent limitations in the audit procedures described above. We are
less likely to become aware of instances of non-compliance with laws and
regulations that are not closely related to events and transactions reflected in
the financial statements.
Also, the risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Use of our report
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.
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Matthew Banton (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP, Statutory
Auditor
20 December 2023
6th Floor
9 Appold Street
London
EC2A 2AP
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2023
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The accompanying notes form part of these financial statements.
STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2023
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As permitted by s408 Companies Act 2006, the Company has not presented its own
profit and loss account and related notes. The Company's loss for the year was
£355,734 (2022: Loss of £229,312).
These financial statements were approved by the Board of Directors on 19
December 2023 and signed on their behalf by:
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Brett Boynton
Chief Executive Officer
Company number: 05173250
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2023
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The accompanying notes form part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2023
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The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2023
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The accompanying notes form part of these financial statements.
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The accompanying notes form part of these financial statements.
1. GENERAL INFORMATION
Tectonic Gold Plc is a company incorporated in England and Wales under the
Companies Act 2006. The nature of the Company's operations and its principal
activities are set out in the Strategic Report and the Directors' Report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The consolidated and parent company financial statements have been prepared in
accordance with UK adopted International Accounting Standards applied in
accordance with the provisions of the Companies Act 2006.
The consolidated and parent company financial statements have been prepared
under the historical cost convention, as modified by the revaluation of certain
financial assets and financial liabilities at fair value through profit or loss.
UK adopted International Accounting Standards are subject to amendment and
interpretation by the International Accounting Standards Board ("IASB") and the
International Financial Standards Interpretations Committee ("IFRS IC"). The
accounts have been prepared on the basis of the recognition and measurement
principles of UK adopted International Accounting Standards that were applicable
at 30 June 2023.
This financial report includes the consolidated financial statement and notes of
Tectonic Gold Plc and its controlled entities.
The principal accounting policies adopted and applied in the preparation of the
Group's financial statements are set out below. These have been consistently
applied to all the years presented unless otherwise stated.
GOING CONCERN
The adoption of the going concern basis by the Directors is following a review
of the current position of the Company and Group and of the cash flow forecasts
for the period to 30 June 2025 prepared by the Directors. The cash flow forecast
shows that the opening cash and cash equivalents, together with the funds
expected from the Australian Government R&D Tax Incentive, are sufficient to
enable the Company to meet its obligations as they fall due and continue to
operate for at least twelve months from the date of signing these financial
statements. In the event that these funds become insufficient, the Company may
sell or relinquish some of tenement holdings in Australia in order to reduce the
holding costs and committed expenditures on these tenements. Thus, given the
Company's ability to reduce costs if required, the Directors continue to adopt
the going concern basis in preparing the financial statements. It is beyond the
scope of the Directors to predict any future impact of natural or geopolitical
or natural disasters such as COVID-19 on any of these funding sources. However
if Government funding is not secured, the Company and Group will be required to
raise equity or debt financing. This creates a material uncertainty on the
ability of the Company to meet its obligations and continue to operate as
envisaged. Further details regarding the going concern basis can be found in
Note 2 of these financial statements.
In keeping with other exploration companies, the growth of the Group is
dependent on its ability to invest in current projects and new opportunities.
The ability to raise additional finance is critical to the Group's growth
objective. The Directors are confident in their ability to finance future
projects and opportunities by raising funds in the market.
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
New standards, amendments and interpretations adopted by the Group and Company
During the reporting period, the Group adopted the following new and amended
relevant IFRS in the year:
· Annual Improvements to IFRS Standards 2018-2020;
· IAS 16 Property, Plant and Equipment: Proceeds before Intended Use;
· IAS 37 Onerous Contracts - Cost of Fulfilling a Contract; and
· IFRS 3 Reference to the Conceptual Framework.
The adoption of these accounting standards did not have any effect on the
Group's Statement of Comprehensive Income, Statement of Financial Position or
equity.
Accounting standards issued but not yet effective
The International Accounting Standards Board ("IASB") has issued/revised a
number of relevant standards with an effective date after the date of these
financial statements. Any standards that are not deemed relevant to the
operations of the Group have been excluded. The Directors have chosen not to
early adopt these standards and interpretations and they do not anticipate that
they would have a material impact on the Group's financial statements in the
period of initial application.
Effective date
IAS 1 and IFRS Presentation of Financial Statements - 1 January 2023
Practice amendments regarding the disclosure of
Statement 2 accounting policies
IAS 8 Accounting Policies, Changes in Accounting 1 January 2023
Estimates - amendments regarding the
definition of accounting estimates
IAS 12 Income Taxes - amendments regarding 1 January 2023
deferred tax related to assets and
liabilities arising from a single
transaction
IAS 12 International Tax Reform - Pillar Two Model 1 January 2024
Rules
IFRS 16 Leases - amendments regarding Lease 1 January 2024
Liability in a Sale and Leaseback
IAS 1 Presentation of Financial Statements - 1 January 2024
amendments regarding the classification of
liabilities as current or non-current and
Non-current Liabilities with Covenants
BASIS OF CONSOLIDATION
Where the Group has control over an investee, it is classified as a subsidiary.
The Group controls an investee if all three of the following elements are
present: power over the investee, exposure to variable returns from the
investee, and the ability of the investor to use its power to affect those
variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries as at the end of the reporting period. The
financial statements of the subsidiaries used in the preparation of the
consolidated financial statements are prepared for the same reporting date as
for the Company. Consistent accounting policies are applied to like transactions
and events in similar circumstances. All intra-group balances, balances and
unrealised gains and losses resulting from intra-group transactions and
dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on
which the Group obtains control, and continue to be consolidated until the date
that such control ceases.
On 25 June 2018, Tectonic Gold (the legal parent) acquired Signature Gold Pty
Ltd (Signature Gold). Although the transaction was not a business combination,
the acquisition has been accounted for as an asset acquisition with reference to
the guidance for reverse acquisition in IFRS 3 Business Combinations and IFRS 2
Share-based Payment.
On 17 April 2019, the Company established Deep Blue Minerals Pty Ltd and 90% of
the Company's interest in Deep Blue Minerals Pty Ltd was sold on 17 June 2020.
For reporting purposes, Deep Blue was held as an investment for the period.
On 14 February 2020, the Company established Whale Head Minerals Pty Ltd. This
Company has remained dormant since the date of incorporation to the end of the
reporting period. On 30 September 2021, the Company's joint venture partner
Kazera Global Investments Plc ("Kazera") (AIM:KZG) acquired a 60% interest in
Whale Head Minerals Pty Ltd.
The financial information for the reporting period includes that of Tectonic
Gold Plc and its controlled entities for the whole reporting period.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
Investments are initially measured at fair value plus directly attributable
incidental acquisition costs. Subsequently, they are measured at fair value in
accordance with IFRS 9. This is either the bid price or the last traded price,
depending on the convention of the exchange on which the investment is quoted.
Investments are recognised as financial assets at fair value through the profit
or loss. Gains and losses on measurement are recognised in other comprehensive
income except for impairment losses and foreign exchange gains and losses on
monetary items denominated in a foreign currency, until the assets are
derecognised, at which time the cumulative gains and losses previously
recognised in other comprehensive income are recognised in the income statement.
The Company assesses at each year-end date whether there is any objective
evidence that a financial asset or group of financial assets classified as
available-for-sale has been impaired. An impairment loss is recognised if there
is objective evidence that an event or events since initial recognition of the
asset have adversely affected the amount or timing of future cash flows from the
asset. A significant or prolonged decline in the fair value of a security below
its cost shall be considered in determining whether the asset is impaired.
INVESTMENTS
In the Company's separate financial statements, investments in subsidiaries are
accounted for at cost less impairment losses.
JOINT VENTURE
A joint venture is an arrangement that the Group controls jointly with one or
more other investors, and over which the Group has rights to a share of the
arrangement's net assets rather than direct rights to underlying assets and
obligations for underlying liabilities. A joint arrangement in which the Group
has direct rights to underlying assets and obligations for underlying
liabilities is classified as a joint operation.
FOREIGN CURRENCIES
The Group and Company's financial statements are presented in the currency of
the primary economic environment in which it operates (its functional currency).
For the purpose of these financial statements, the results and financial
position are expressed in Pounds Sterling, which is the presentation currency of
the Group and Company.
Each entity in the Group determines its own functional currency and items
included in the financial statements of each entity are measured using that
functional currency.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in the income statement. Exchange
differences arising on the retranslation of non-monetary items carried at fair
value are included in profit or loss for the period, except for differences
arising on the retranslation of non-monetary items in respect of which gains and
losses are recognised directly in equity. For such non-monetary items, any
exchange component of that gain or loss is also recognised directly in equity.
The Group and Company's financial statements are presented in the currency of
the primary economic environment in which it operates (its functional currency).
For the purpose of these financial statements, the results and financial
position are expressed in Pounds Sterling, which is the presentation currency of
the Group and Company.
Each entity in the Group determines its own functional currency and items
included in the financial statements of each entity are measured using that
functional currency.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in the income statement. Exchange
differences arising on the retranslation of non-monetary items carried at fair
value are included in profit or loss for the period, except for differences
arising on the retranslation of non-monetary items in respect of which gains and
losses are recognised directly in equity. For such non-monetary items, any
exchange component of that gain or loss is also recognised directly in equity.
When a decline in the fair value of a financial asset has been previously
recognised in other comprehensive income and there is objective evidence that
the asset is impaired, the cumulative loss is removed from other comprehensive
income and recognised in the income statement. The loss is measured as the
difference between the cost of the financial asset and its current fair value
less any previous impairment.
For the purpose of presenting the Group and Company financial statements, the
assets and liabilities of any of the Group and Company's operations that are
overseas are translated at exchange rates prevailing on the year-end date.
Income and expense items are translated at the average exchange rates for the
period.
Any translation differences on consolidation are recognised in Other
Comprehensive Income.
TAXATION
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the year end date.
The research and development tax incentive claim is recognised as income tax
revenue in the period in which it is received unless management assess that at
the year end the likelihood of receipt is probable.
Deferred tax is the tax expected to be payable or recoverable 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 and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business combination)
of other assets and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and where they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net
basis.
EXPLORATION AND EVALUATION EXPITURE
Exploration expenditure incurred is accumulated in respect of each identifiable
area of interest, net of any related grant income received. These costs are only
carried forward to the extent that they are expected to be recovered through the
successful development or sale of the area or where activities in the area have
not yet reached a stage which permits reasonable assessment of the existence of
economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full
against profit or loss in the year in which the decision to abandon the area is
made. When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves. A regular review is
undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to the area of interest.
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 in accordance with IFRS 6.
PROPERTY, PLANT AND EQUIPMENT
Items of property, plant and equipment are recorded at cost and depreciated as
outlined below:
Depreciation of Property, Plant and Equipment
Depreciation is calculated on a straight-line basis to write off the net cost of
each item of property, plant and equipment over its expected useful life for the
entity. Estimates of remaining useful lives are made on a regular basis for all
assets with annual reassessments for major items. The expected useful lives are
as follows: Plant and equipment - 5 years.
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT
At each financial year end date, the Company reviews the carrying amounts of its
Property, Plant and Equipment to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss, if any. Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
If the recoverable amount of an asset or cash-generating unit is estimated to be
less than its carrying amount, the carrying amount of the asset or cash
-generating unit is reduced to its recoverable amount and the impairment loss is
recognised as an expense immediately.
When an impairment loss subsequently reverses, the carrying amount of the asset
or cash-generating unit is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset or cash-generating unit in prior years. A reversal of an
impairment loss is recognised as income immediately, unless the relevant asset
is carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
NON-CURRENT ASSETS (OR DISPOSAL GROUPS) HELD-FOR-SALE AND DISCONTINUED
OPERATIONS
Non-current assets (or disposal groups) are classified as assets held for sale
when their carrying amount is to be recovered principally through a sale
transaction and a sale is considered highly probable. They are stated at the
lower of carrying amount and fair value less costs to sell. A discontinued
operation is a component of the Group that is classified as held for sale and
that represents a separate line of business or geographical area of operations.
The results of discontinued operations are presented separately in the
Consolidated Statement of Profit and Loss and Other Comprehensive Income.
REVENUE RECOGNITION
Revenue is measured at the fair value of the consideration received or
receivable and represents the amount receivable for goods supplied or services
rendered, net of returns, discounts and rebates allowed by the group and value
added taxes.
The Company's primary activities are exploration, research and development and
as such it does not have, nor expect to have, regular revenue. The Company and
its subsidiaries may make application for certain grants or other funding
available to support exploration, research and development in the jurisdiction
in which it operates.
It may not be possible to estimate either the likelihood of success in any
funding applications submitted or whether a successful application will be
supported by full or partial funding. As such the Company does not recognise any
grant or other funding until the funds have been received.
The Company may from time to time divest partially or fully a subsidiary and any
gains made on the sale of a subsidiary are recognised as revenue when they are
received.
The Company may from time to time divest fully or partially an investment in
another company and any gains made on the sale of the investment are recognised
as other gains or losses when they are received.
TRADE RECEIVABLES, LOANS AND OTHER RECEIVABLES
Trade receivables, loans and other receivables that have fixed or determinable
payments that are not quoted in an active market are classified under `loans and
receivables. Loans and receivables are measured at amortised cost using the
effective interest method, less any impairment. Interest income is recognised by
applying the effective interest rate, except for short term receivables when the
recognition of interest would be immaterial.
Other receivables, that do not carry any interest, are measured at their nominal
value as reduced by any appropriate allowances for irrecoverable amounts.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and other short-term bank
deposits.
FINANCIAL LIABILITIES
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. Financial liabilities
are classified as either financial liabilities `at FVTPL' or `other financial
liabilities'.
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable
transaction costs. Subsequent measurement is at amortised cost using the
effective interest method. The Group's financial liabilities include trade and
other payables.
A financial liability isheld for tradingif it meetsoneof the following
conditions:
· It is incurred principally for the purpose of repurchasing it in the
near term;
· On initial recognition it is part of a portfolio of identified
financial instruments that are managed together and for which there is evidence
of a recent actual pattern of short-term profit-taking; or
· It is a derivative (except for a derivative that is a financial
guarantee contract or a designated and effective hedging instrument).
There were no financial liabilities `at FVTPL' during the current, or preceding,
period.
OTHER FINANCIAL LIABILTIES AND SHORT-TERM BORROWINGS
Interest-bearing loans and overdrafts are recorded at the proceeds received, net
of direct issue costs. Finance charges are accounted for on an accruals basis
in profit or loss using the effective interest rate method and are added to the
carrying amount of the instrument to the extent that they are not settled in the
period in which they arise. Other short-term borrowings being intercompany loans
and unsecured convertible loan notes issued in the year are recognised at
amortised cost net of any financing or arrangement fees.
TRADE PAYABLES
Trade payables are initially measured at fair value and subsequently measured at
amortised cost using the effective interest method, less provision for
impairment.
SHARE-BASED PAYMENTS
The Company has applied the requirements of IFRS 2 Share-based Payment.
The Company operates an equity-settled share-based payment scheme under which
share options are issued to certain employees. Equity-settled share-based
payments are measured at fair value (excluding the effect of non-market-based
vesting conditions) at the date of grant. The fair value determined at the
grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based on
the Company's estimate of shares that will eventually vest and adjusted for the
effect of non-market-based vesting conditions.
Fair value is measured by use of the Black Scholes model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural
considerations.
EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL
Equity instruments issued by the Company are recorded at the proceeds received,
net of incremental costs attributable to the issue of new shares.
An equity instrument is any contract that evidences a residual interest in the
assets of a company after deducting all of its liabilities. Equity instruments
issued by the Company are recorded at the proceeds received net of direct issue
costs.
Share capital represents the amount subscribed for shares at nominal value.
The share premium account represents premiums received on the initial issuing of
the share capital. Any transaction costs associated with the issuing of shares
are deducted from share premium, net of any related income tax benefits. Any
bonus issues are also deducted from share premium.
The reverse takeover reserve represents the adjustment to reflect the reverse
takeover of Signature Gold Pty Ltd.
The foreign currency translation reserve is used to record exchange differences
arising from the translation of the financial statements of foreign subsidiaries
on consolidation.
The warrant reserve represents the fair value of warrants granted to employees
and suppliers for services provided to the Group. The fair value of warrants is
expensed over the vesting period or during the period in which the services are
received.
Accumulated losses include all current and prior period results as disclosed in
the Statement of Profit and Loss and Other Comprehensive Income.
CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
In the application of the Company's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period. Judgements and
estimates that may affect future periods are as follows:
SHARE BASED PAYMENTS
The calculation of the fair value of equity-settled share-based awards and the
resulting charge to the Statement of Profit and Loss and Other Comprehensive
Income requires assumptions to be made regarding future events and market
conditions. These assumptions include the future volatility of the Company's
share price. These assumptions are then applied to a recognised valuation model
in order to calculate the fair value of the awards. The charge to the Statement
of Profit and Loss and Other Comprehensive Income for the reporting period is
£Nil (2022: £Nil).
TREATMENT OF EXPLORATION AND EVALUATION COSTS
Exploration expenditure incurred is accumulated in respect of each identifiable
area of interest, net of any related grant income received. These costs are only
carried forward to the extent that they are expected to be recovered through the
successful development or sale of the area or where activities in the area have
not yet reached a stage which permits reasonable assessment of the existence of
economically recoverable reserves. The carrying value carried forward at 30 June
2023 is £3,219,562 (2022: £3,379,113).
Accumulated costs in relation to an abandoned area are written off in full
against profit in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves. A regular review is
undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to the area of interest.
The value of the Group's exploration and evaluation expenditure will be
dependent upon the success of the Group in discovering economic and recoverable
mineral resources. It is also dependent on the Group successfully renewing its
licences.
The future revenue flows relating to these assets is uncertain and will also be
affected by competition, relative exchange rates and potential new legislation
and related environmental requirements.
TREATMENT OF DRILLING PREPAYMENT
The continued recognition of the prepayment of £332,602 (2022: £354,656) in
respect of future drilling services, as detailed in note 17, requires
assumptions to be made in respect of the timing of the use of the drilling
services. The Directors are required to assess the factors influencing the
continued recognition of the prepayment asset, including the impact of the farm
-in agreement, as detailed in note 28, and external factors such as success of
future drilling programs.
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https://news.cision.com/tectonic-gold-plc/r/tectonic-gold-financial-report-for-the-year-ended-30-june-2023,c3897725
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END
(END) Dow Jones Newswires
December 21, 2023 05:57 ET (10:57 GMT)
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