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Regulatory Story
Company Two Shields Investments PLC
TIDM TSI
Headline Final Results for the Year Ended 31 March 2019
Released 07:00 30-Aug-2019
Number 6306K07

RNS Number : 6306K
Two Shields Investments PLC
30 August 2019
 

Two Shields Investments Plc ("Two Shields" or the "Company")

Final Results for the Year Ended 31 March 2019

Two Shields Investments Plc, the AIM-quoted investment company, is pleased to announce its final results for the year ended 31 March 2019. Extracts from the Annual Report and financial statements for the year ended 31 March 2019 are set out below.

Copies of the Company's Annual Report and financial statements for the year ended 31 March 2019 will shortly be sent to shareholders and will be available at the Company's website: www.twoshields.co.uk/.

The Company also gives notice that its Annual General Meeting ('AGM') will be held at the offices of Hill Dickinson LLP, The Broadgate Tower, 20 Primrose St, London EC2A 2EW on 26 September 2019 at 12 noon.

 

For further information please visit https://twoshields.co.uk/ or contact:

Andrew Lawley

Two Shields Investments plc

+44 (0) 20 7236 1177

 

Neil Baldwin / Andrew Emmott

Spark Advisory Partners Limited

(Nominated Adviser)

 

+44 (0) 20 3368 3554

Andy Thacker

Turner Pope Investments (TPI) Ltd

(Brokers)

+44 (0) 20 3621 4120

Chairman's statement

2018/19 has been a year of transformation for Two Shields Investments plc ("TSI" or "the Company"), laying the foundations to rebuild shareholder value. This included the change of name to Two Shields Investments plc in April 2018 and the transition of its portfolio of assets to reflect the Company's strategic direction.

Strategy

A new and experienced senior team has been assembled in line with the Company's updated strategy. The team will seek to apply its extensive and highly complementary expertise and knowledge to identifying, assessing and executing investment opportunities that have the potential to deliver attractive returns to shareholders.

The Company has undertaken a strategic review of its mining assets and explored the options available to realise those investments as liquidity options emerge. These options may include partnering with operators that the Board feels can extract more optimal value from existing holdings. The Board believes there are currently limited opportunities within the mining sector delivering the level of growth that it is currently seeking to achieve from its investments and therefore, in the short term, the Company is unlikely to complete a cash investment in mining exploration activities.

The Board sees considerable value opportunity in focusing on the existing high growth investments within the portfolio and will seek to increase the Company's exposure to existing investments in BrandShield Limited, an anti-counterfeiting, anti-phishing and online brand protection solution, and WeShop Limited, an innovative social commerce platform offering a new way to shop online and earn rewards.

Where resources allow, the Board will also seek to expand the portfolio, concentrating on the provision of capital to high growth potential digital assets, financial technologies, services, consumer focused businesses and technology enabled businesses. Target businesses will typically have proven customer demand and differentiated proprietary technology. Such businesses will have a clear path to profitability. The TSI Board will take an active role in advising such portfolio companies on growth and on exit or liquidity opportunities.

Board

The appointment of myself and John Taylor to the Board during the year has significantly strengthened the management team of TSI.

John Taylor joined the Board on 1 March 2019 and brings AIM board experience to TSI especially in technology companies. He is a former director of AIM-quoted Bidstack Group plc and currently a director of Sabien Technology Group plc and Pathfinder Minerals plc.

I was appointed to the Board on 20 December 2018 and am a qualified accountant, with extensive experience in both the corporate and private equity sectors with a specialisation in M&A. I have previously held senior operating positions at companies including Dixons Carphone plc, RBS Equity Finance and RBS Debt Ventures. 

 

Together with Sandy Barblett, also serving as a Non-executive Director who has considerable experience in the technology sector, having held leadership positions within former FTSE 250 company Pace Plc, I believe that we now have a team of highly experienced and knowledgeable individuals who will be able to successfully execute our new strategy.

WeShop Ltd

WeShop is an innovative, digital social network platform focused on the rapidly growing and highly valuable social e-commerce sector forecast to become a US$350 billion market over the mid-term. WeShop's digital platform enhances online shopping experiences by combining social media's assets of reviews, likes, and shares with an engaging retail e-commerce offering, specifically tailored to the individual user. Users benefit from gaining access to thousands of brands and millions of products on one platform plus a two-way sharing of ideas with friends to participate in a rewards system; brands/retailers benefit from increased sales and awareness.

Led by highly experienced and proven technology and retail professionals James Sowerby, who previously led Global New Business Development at Avon Cosmetics, the oldest and one of the most successful global social selling networks, and non-executive Chairman, Matthew Hammond who is Group Managing Director and CFO of mail.ru, one of the largest internet companies in the Russian speaking market.

WeShop recently delivered an investor update and the Board feels it is in the interests of TSI shareholders to continue to support this exciting business as it approaches what we believe will be a highly expansive period.

WeShop has also launched phase 1 of its new rewards programme, designed to drive ongoing engagement and retention of users by enabling them to earn WeCoins™ for creation and distribution of quality content, shopping through WeShop verified merchants, and browsing. The WeCoins™ can be redeemed with over 100+ redemption partners, including Uber, Spotify, Just Eat, Amazon, Starbucks and many others. Phase 1 allows users to redeem their WeCoins™ for a digital voucher. Phase 2 will allow users to redeem their live WeCoin™ balance against products on WeShop, in combination with cash. This creates a true ecosystem where WeCoins™ are earned and redeemed within the platform.

 

During the period, TSI invested a total of £350,000 into WeShop. Post year end the Company invested a further £100,000 and completed a share swap for a total consideration of £1,355,468. The Board will look to increase its exposure into WeShop in the near future as the opportunity arises. TSI now has a 6.7% shareholding.

 

BrandShield Ltd

Post year end, on 25 July 2019, TSI announced that BrandShield had upgraded its product offering to position itself clearly in the cyber security and threat intelligence industry in addition to the brand protection space. Therefore, it provides "A Solution from Brand Protection to Online Threat Hunting".

BrandShield continues adding more capabilities across all platforms - websites, marketplaces, social media, paid ads and apps. BrandShield's improved product offering includes capabilities such as strong reporting creation options and constant expansion of monitoring capabilities to new marketplaces and to new social media platforms.

BrandShield covers all of the major marketplaces as well as hundreds of smaller marketplaces and covers social media platforms including the latest addition of WeChat (the Chinese social and IM network). WeChat is a multi-purpose messaging, social media and mobile payment app first released in 2011. WeChat is one of the world's largest standalone mobile apps with over 1 billion monthly active users and has been described as China's "app for everything" and a "super app" because of its wide range of functions.  BrandShield continues to win customers from a variety of sectors including the financial industry, pharmaceuticals, online, sports, entertainment and more.

 

In March 2019, the Company hosted an investor relations roadshow in London for BrandShield and introduced the BrandShield CEO to a large number of existing and new investors on the scale of the opportunity within this portfolio investment. The BrandShield CEO also met with a number of corporate advisors with a view to assessing future options given BrandShield's high growth trajectory. The Board will continue to advise BrandShield closely on its strategic growth plan.

As announced on 4 March 2019, the Company completed its post year end investment of $300,000 in a convertible loan note in BrandShield. In addition, on 24 April 2019 TSI completed a Share Swap and as a result, TSI holds 11.34% of the issued share capital of BrandShield.

Other Investments

Xantus Inc and Nashan Holdings - At the year end TSI held a 40% interest in Xantus Inc and a 30% interest in Nashwan Holdings Ltd, both holding exploration licences in southern Mali, which has high potential for lithium pegmatite deposits.  On 27 August 2019, TSI announced that binding heads of agreement ("Heads of Agreement") have been signed with Leopard Lithium Pty Ltd ("Leopard Lithium"), an Australia registered private company, to sell TSI's interests in Nashwan Holdings Ltd ("Nashwan") and Mansa Lithium Inc ("Mansa"). The two binding Heads of Agreement set out the terms upon which Leopard Lithium agrees to acquire 100% of the issued shares in both Nashwan and Mansa. In addition, the Directors prudently decided to revise the carried value of the assets proportionately downward to reflect the effective dilution to Leopard Lithium and therefore have reduced the carrying value of the Mali based lithium assets to £1,140,000 in total from £1,512,000.

Kalahari Key Mineral Exploration Company (Pty) Ltd - is a special purpose company set up by an experienced team of explorers to search for base metals and platinum group metals in Botswana. TSI has 17.8% of the shares in Kalahari Key.

International Geoscience Services Limited - is a global consulting group which was spun out of the British Geological Survey, the world's oldest national geological survey, founded in 1835. TSI holds 29.9% of the shares in IGS.

Power Metals Resources plc (POW) - is an AIM quoted, Africa focused, resource company exploring for the key metals used in next generation batteries that fuel the new electric vehicle revolution. Led by a management team with a proven track record in mineral exploration and development, POW has a rapid development strategy in place to become a significant explorer, developer and ultimately producer of battery metals. TSI has a 4.13%interest in POW.

Financials

The loss for the Company for the twelve months ended 31 March 2019 was £2,553,673 (2018: loss of £768,851) was in line with expectations. Cash held by the Company as at 31 March 2019 was £561,636 (2018: £512,507).  

Outlook

Following the completion of our strategic review, we continue to implement our strategy of focusing on rapidly growing, disruptive markets including social e-commerce and cyber security. With the changes made throughout the Company in 2018, the Board believes that TSI is now in a position to capitalise on the carefully laid foundations and execute on its investment strategy to recreate value for shareholders. As well as thanking our supportive shareholder base, I would like to express my gratitude to our investee companies and look forward to updating shareholders as our investments develop.

Andrew Lawley - Chairman

30 August 2019

 

                                                                                                               

                                                              STATEMENT OF COMPREHENSIVE INCOME

                                                                   FOR THE YEAR ENDED 31 MARCH 2019

 

 

 

 

 

Year ended

 

Year ended

 

 

31 March 2019

 

31 March 2018

 

Notes

£

 

£

 

 

 

 

 

CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

REVENUE

4

262

 

2,596

 

 

 

 

 

Administrative expenses

5

(582,850)

 

(586,106)

Transaction costs

5

(56,057)

 

(156,494)

Other (losses) - net

8

(1,915,054)

 

(26,969)

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

(2,553,699)

 

(766,973)

 

 

 

 

 

Finance income

9

26

 

39

Finance costs

9

-

 

(1,917)

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAX

 

(2,553,673)

 

(768,851)

 

 

 

 

 

Income tax

10

-

 

-

 

 

 

 

 

 

 

 

 

 

LOSS FOR THE YEAR

 

(2,553,673)

 

(768,851)

 

 

 

 

 

 

 

 

 

 

Other Comprehensive Income

 

-

 

-

 

 

 

 

 

 

 

 

 

 

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

 

(2,553,673)

 

(768,851)

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE

(expressed in pence per share)                             

Basic and diluted

 

 

11

 

 

(0.171)

 

 

 

(0.00)

 

 

 

 

STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2019

 

 

 

 

31 March 2019

 

31 March 2018

 

Notes

£

 

£

 

 

 

 

 

ASSETS

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

Financial assets at fair value through profit or loss

12

3,107,663

 

4,542,686

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

Other receivables and prepayments

 

7,066

 

10,833

Financial assets at fair value through profit or loss

 

13

 

73,411

 

 

176,691

Cash and cash equivalents

14

561,636

 

512,507

 

 

 

 

 

 

 

642,113

 

700,031

 

 

 

 

 

TOTAL ASSETS

 

3,749,776

 

5,242,717

 

 

 

 

 

EQUITY

 

 

 

 

Share capital

15

2,088,219

 

1,326,219

Share premium

 

5,115,750

 

4,855,192

Other reserves

16

1,546,047

 

1,535,605

Retained earnings

 

(5,122,711)

 

(2,569,038)

 

 

 

 

 

TOTAL EQUITY

 

3,627,305

 

5,147,978

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Trade and other payables

17

122,471

 

94,739

 

 

 

 

 

TOTAL LIABILITIES

 

122,471

 

94,739

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

 

3,749,776

 

5,242,717

                                                                                                                                             

 

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2019

 

 

Share
capital

 
Share premium

Other
reserves

Retained
earnings

Total

 

 

£

£

£

£

£

 

 

 

 

 

 

 

Balance at 31 March 2017

 

1,564,331

1,836,406

965,905

(3,042,032)

1,324,610

Loss for the year

 

-

-

-

(768,851)

(768,851)

Total comprehensive income for the year

 

-

-

-

(768,851)

(768,851)

Issue of share capital

 

922,222

3,004,778

-

-

3,927,000

Exercise of warrants

 

5,376

29,566

-

-

34,942

Cancellation of deferred shares

 

(1,165,710)

-

-

1,165,710

-

Grant of share options and warrants

 

-

(15,558)

1,088,335

-

1,072,777

Reversal of equity component of convertible note repaid

 

-

-

(76,135)

76,135

-

Reversal of shares to be issued

 

-

-

(442,500)

-

(442,500)

Total transactions with owners, recognised directly in equity

 

(238,112)

3,018,786

569,700

1,241,845

4,592,219

 

 

 

 

 

 

 

Balance at 31 March 2018

 

 

1,326,219

 

4,855,192

 

1,535,605

 

(2,569,038)

 

5,147,978

 

Loss for the year

 

-

-

-

(2,553,673)

(2,553,673)

Total comprehensive income for the year

 

-

-

-

(2,553,673)

(2,553,673)

Issue of share capital

 

762,000

271,000

-

-

1,033,000

Grant of warrants

 

-

(10,442)

10,442

-

-

Total transactions with owners, recognised directly in equity

 

762,000

260,558

  10,442

-

1,033,000

 

 

 

 

 

 

 

Balance at 31 March 2019

 

2,088,219

5,115,750

1,546,047

(5,122,711)

3,627,305

 

 

 

 

 

 

 

 

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2019

 

 

Year ended

 

Year ended

 

31 March 2019

 

31 March 2018

 

£

 

£

 

 

 

 

Cash flows from operating activities

 

 

 

Loss before income tax

(2,553,673)

 

(768,851)

Adjustment for:

 

 

 

Finance costs

-

 

1,917

Finance income

(26)

 

(39)

Loss on disposal of financial assets

1,915,054

 

26,969

Shares issued for professional services

33,000

 

-

Share based payments

-

 

32,277

Decrease in trade and other receivables

3,767

 

21,947

(Decrease)/increase in trade and other payables

27,732

 

(216,064)

 

 

 

 

Net cash used in operating activities

(574,146)

 

(901,844)

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of financial assets at fair value through profit or loss

(544,713)

 

(1,601,423)

Proceeds from disposal of financial assets at fair value through profit or loss

 

167,962

 

 

182,266

 

 

 

 

Net cash used in investing activities

(376,751)

 

(1,419,157)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from the issue of share capital

1,000,000

 

2,700,000

Share issue expenses paid

-

 

(223,000)

Proceeds from exercise of warrants

-

 

34,942

Repayment of borrowings

-

 

(275,000)

Interest paid

-

 

(1,917)

Interest received

26

 

39

 

 

 

 

Net cash generated from financing activities

1,000,026

 

2,235,063

 

 

 

 

Net increase/ (decrease) in cash and cash equivalents

49,129

 

(85,938)

 

 

 

 

Cash and cash equivalents at the beginning of the year

512,507

 

 

598,445

 

 

 

 

 

Cash and cash equivalents at the end of the year (note 14)

561,636

 

512,507

 

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2019

 

Significant non-cash transactions in the year include shares and warrants issued in relation to the following:

 

4,500,000 Ordinary shares were issued to Align Research as payment for research services. The value of the shares issued is £18,000.

 

7,500,000 Ordinary shares were issued to Turner Pope Investments (TPI) Limited who, as corporate broker, agreed to take 50% of their annual £30,000 broking fee in stock. The value of the shares issued is £15,000.

 

The Company sold its position of 980 shares in Cobalt Blue Holdings Inc for consideration of 15,195,826 shares in African Battery Metals plc (now renamed as Power Metal Resources plc), with a deemed value based on the share price on the date of purchase of £509,060.

 

33,000,000 warrants were issued to Turner Pope Investments (TPI) Limited in part settlement of their fees for raising funds on the share placements during the year.

 

                                                                  NOTES TO THE FINANCIAL STATEMENTS

                                                                   FOR THE YEAR ENDED 31 MARCH 2019

 

1.          ACCOUNTING POLICIES

 

             General information

 

Two Shields Investments plc is a public limited company incorporated in England and Wales under the Companies Act (registered number 02956279). The Company is domiciled in the United Kingdom and its registered address is Hyde Park House, 5 Manfred Road, London, SW15 2RS.

 

The principal activity of the Company in the year under review was to establish strategic and portfolio investments in listed and unlisted entities; the ongoing focus in high growth potential digital assets, financial technologies, services, consumer focused businesses and technology enabled businesses as well as monitoring historic projects in the natural resource sector.  

 

Summary of significant accounting policies

 

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

 

             Basis of preparation

 

These Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations (IFRS IC) as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets and financial assets at fair value through profit or loss. The Company is an investment entity and has therefore prepared its financial statements on this basis.

 

The preparation of Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.

 

Going concern

 

The Financial Statements have been prepared under the going concern assumption. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations.

                                                                                                         

As referred to in note 15 of these Financial Statements, the Company raised gross proceeds of £500,000 by way of a share placing and issue of shares on 8 March 2019. These funds complement the Company's existing cash resources and has been used in part to fund further investment opportunities (see note 21). Where required, the Directors will limit expenditure on investments to ensure adequate resources remain available for the day to day running of the business.  As is common for an early stage investment business it is unusual to receive material cash distributions from investee businesses where any surplus cash is usually reinvested in growth. Therefore, it is considered part of the normal course of business to access further funding from time to time to fund ongoing operations.   

The Company expects to raise further funds during the next twelve months through the issue of new equity or equity like instruments and through the exercise of outstanding warrants expiring within twelve months. The Directors are confident that this funding will continue and consider that the Company will have access to adequate resources, as set out below, to meet operational requirements for at least 12 months from the date of approval of these financial statements.

 

On this basis, the Directors have formed a judgement, at the time of approving the Financial Statements, that there is a reasonable expectation that the Company has access to adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors have adopted the going concern basis in preparing the Financial Statements.

 

Changes in accounting policy and disclosures

 

(a) New standards, amendments and interpretations adopted by the Company

 

As of 1 April 2018 the Company has adopted IFRS 9 and IFRS 15.

 

IFRS 15 requires an expected quantitative impact of the application of IFRS 15 to be included within the financial statements. Dividend income recognition is not considered to change as a result of the transition to IFRS 15 as it is not contractual and therefore does not fall within the scope of this. The Company has no other revenue sources.

 

IFRS 9 became effective for all periods beginning on or after 1 January 2018 and as such is relevant for the year ended 31 March 2019. IFRS 9 impacts the recognition, classification, measurement and disclosures of financial instruments. The Company reviewed the financial assets and liabilities reported on its Statement of Financial Position and completed an assessment between IAS 39 and IFRS 9 to identify any accounting changes. The significant financial instruments held in the Company are Financial assets at fair value through profit or loss (non-current and current) and trade and other payables.

 

Financial assets at fair value through profit or loss

The Company holds a number of investments at the year ended 31 March 2019, which are classified as both current and non-current. Under the standard, non-current financial assets were classified as available for sale and measured at fair value through profit or loss. As such the only change on transition to IFRS 9 is to the title of the non-current financial assets. Under IFRS 9 current financial assets are held at fair value through profit or loss which is unchanged from the previous standard.

 

Under IFRS 9 financial assets measured at fair value through profit or loss are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through the profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 

Trade and other payables 

Under IFRS 9 trade payables continue to be measured at amortised cost using the effective interest rate method.

 

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

 

(b) New standards, amendments and interpretations not yet adopted by the Company

 

The standards and interpretations that are relevant to the Company, issued but not yet effective, up to the date of issuance of the Financial Statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

 

Standard                                                                                                                                            Effective Date

IFRS 9 (Amendments)      Financial Instruments                                                                         1 January 2019

IFRS 16                                Leases                                                                                                    1 January 2019

Annual Improvements     2015 - 2017 Cycle                                                                                1 January 2019

IAS 28 (Amendments)      Long term interests in associates and joint ventures                    1 January 2019

IFRIC 23                               Uncertainty over Income Tax Treatments                                       1 January 2019

IFRS 3 (Amendments)       Business Combinations                                                                      *1 January 2020

*Subject to EU endorsement

 

             Foreign currency translation

 

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the Statement of Financial Position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within 'finance income or costs. All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within 'Other (losses)/gains - net'.

 

The financial statements are presented in Pounds Sterling (£), which is the Company's functional and presentation currency.

 

Segmental reporting

 

An operating segment is a component of the Company that engages in business from which it may earn revenues and incur expenses. The Company has only one operating segment, being the investment in companies or assets in high growth potential digital assets, financial technologies, services, consumer focused businesses and technology enabled businesses as well as monitoring historic projects in the natural resource sector. Therefore, the financial information of the single segment is the same as that set out in the statement of comprehensive income, the statement of financial position, the statement of changes in equity and the statement of cash flows.

 

Financial assets

 

(a)  Classification

 

The Company classifies its financial assets in the following categories: at fair value through profit or loss and amortised cost including loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

 

             Financial assets at fair value through profit or loss

 

Financial assets at fair value through profit or loss are financial assets held for trading and include investments in listed and unlisted equities. Details of these assets and their fair value is included in note 2.

 

Loans and receivables

 

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Company's loans and receivables comprise other receivables and prepayments' and 'cash and cash equivalents' in the Statement of Financial Position. Loans and receivables are initially measured at the transaction cost and subsequently held at amortised cost.

 

The Company applies the IFRS 9 simplified model of recognising lifetime expected credit losses for other receivables which principally comprise of sundry debtors and prepayments. The recoverability of these amounts is reviewed on an ongoing basis. In measuring the expected credit losses, the receivables have been assessed on a collective basis as they possess shared credit risk characteristics.

 

(b)  Recognition and measurement

 

Regular purchases and sales of financial assets are recognised on the trade-date, being the date on which the Company commits to purchase or sell the asset. Investments are initially recognised at fair value with transaction costs expensed for all financial assets.

Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the Income Statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

 

Financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

 

Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the Statement of Comprehensive Income within 'Other (losses)/gains - net' in the period in which they arise.

 

Dividends on available-for-sale equity instruments are recognised in the Statement of Comprehensive Income as part of income when the Company's right to receive payments is established, which is in line with the Company's revenue recognition policy.

 

(c)   Impairment of financial assets

The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. A significant or prolonged decline in the fair value of equity investments and securities below its cost is evidence that the assets are impaired. If any such evidence exists the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is recognised in profit or loss.

 

Derecognition of financial assets and liabilities

                                Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:

 

-     the rights to receive cash flows from the asset have expired;

-  the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a 'pass through' arrangement; or

-  the Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

 

Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

 

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

 

Cash and cash equivalents

 

Cash and cash equivalents comprise cash in hand and bank balances.

 

Share capital and share premium

 

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

 

Other reserves

 

Other reserves consist of:

 

The share option reserve consists of the fair value of warrants and options in issue.

 

The merger reserve arose in the period ended 31 December 1995 relating to a previous share for share issue. The shares to be issued reserve was in relation to deferred share consideration which has subsequently been reversed.

 

The shares to be issued reserve consisted of shares authorised and paid but not yet issued.

 

Trade and other payables

 

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

 

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

 

Revenue

 

Revenue comprise of dividends from the Company's investments in financial assets and are recognised when the Company's right to receive payment is established, when it is probable that the economic benefits associated with the dividend will flow to the entity and when the amount of the dividend can be measured reliably.

 

             Income tax

 

Income tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

 

Current income tax is calculated on the results shown in the Financial Statements and according to local tax rules, using tax rates enacted or substantially enacted by the Statement of Financial Position date.

                               

Tax losses available to be carried forward as well as other income tax credits due to the Company are assessed for recognition as deferred tax assets. Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the asset can be recognised and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

 

             Share based payments

 

The Company operates equity-settled, share-based compensation plans, under which the entity receives services from directors and employees as consideration for equity instruments (options) of the Company. The fair value of the services received in exchange for the grant of the options is recognised as an expense.

 

The total amount to be expensed is determined by reference to the fair value of the options granted:

 

·     including any market performance conditions (for example, the Company's share price);

·     excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period); and

·     including the impact of any non-vesting conditions (for example, the requirement for employees to save or hold shares for a specific period of time). The share options issued by the Company do not have any vesting conditions and all vested on issue.

 

At the end of each reporting period, the Company revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions and service conditions. It recognises the impact of the revision to original estimates, if any, in the Statement of Comprehensive Income, with a corresponding adjustment to equity.

 

When options and warrants are issued as part of the consideration of an investment purchase, they are fair valued in accordance with recognition methodology.

 

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

 

 

2.          FINANCIAL RISK MANAGEMENT

 

(a)  Financial Risk Factors

 

The Company's principal financial instruments comprise both listed and unlisted investments, other receivables, other payables and cash, which arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Company's operations.

 

The Company's activities expose it to a variety of financial risks. The Company's Board monitors and manages the financial risks relating to the operations of the Company. The Board provides written policies for overall risk management, as well as written policies covering specific areas including: market risks (including foreign exchange risk and price risk) and to a very limited amount, interest rate risk and liquidity risk.

 

Market risk- Price risk

 

The Company is exposed to equity securities price risk because of the level 1 current asset investments held by the Company, classified at fair value through profit or loss. The Company is not directly exposed to commodity price risk but is indirectly exposed to this through its equity investments. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio across investments holding different commodities.

 

Diversification of the portfolio is done in accordance with the limits set by the Board.

 

The Company's investments in equity of other entities are publicly traded on the London Stock Exchange (LSE).

 

Post-tax profit for the year would increase or decrease by £4,385 as a result of a 5% gain or loss on equity securities classified as at fair value through profit or loss. Other components of equity would not change as a result of gains or losses on equity securities classified as non-current.

 

Credit Risk

 

Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company's receivables from customers and cash and cash equivalents held at banks. The Company's maximum exposure to credit risk by class of financial asset is as follows:

 

 

As at 31 March 2019

 

As at 31 March 2018

 

 

£

 

£

 

 

 

 

 

Cash and cash equivalents

 

561,636

 

512,507

Other receivables

 

7,066

 

10,833

 

 

 

 

Total

568,702

 

523,340

 

 

 

 

           

 

The Company applies the IFRS 9 simplified model of recognising lifetime expected credit losses for other receivables which principally comprise of sundry debtors and prepayments. The recoverability of these amounts is reviewed on an ongoing basis. In measuring the expected credit losses, the receivables have been assessed on a collective basis as they possess shared credit risk characteristics.

 

The fair value of cash and cash equivalents at 31 March 2019 approximates the carrying value. Credit risk relating to cash and cash equivalents is mitigated as cash and cash equivalents are held with reputable institutions. Further details regarding cash and cash equivalents can be found in note 14.

 

Interest risk

 

The Company is not exposed to interest rate risk on financial liabilities. As at the reporting date, the Company had no debt outstanding.

 

Liquidity risk

 

Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability but can also increase the risk of losses. The Company's continued future operations depend on its ability to raise sufficient working capital through the issue of share capital, generate a return on its investments to meet its future obligations.

 

The Company manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Company seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

 

31 March 2019

Carrying amounts

Contractual cash flows

3 months or less

3-12 months

1-2 years

2-5 years

 

£

£

£

£

£

£

Trade and other payables

122,471

122,471

122,471

-

-

-

Total

122,471

122,471

122,471

-

-

-

 

31 March 2018

Carrying amounts

Contractual cash flows

3 months or less

3-12 months

1-2 years

2-5 years

 

£

£

£

£

£

£

Trade and other payables

94,739

94,739

94,739

-

-

-

Total

94,739

94,739

94,739

-

-

-

 

 

(b)  Capital Risk Management

 

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders. The Company's capital structure consists of equity attributable to the owners, comprising issued capital, reserves and retained losses. The Company has no commitments under its current investments and as such, the capital risk management is ensuring that adequate capital is available to meet the working capital demands of the Company.

 

(c)   Fair Value Estimation

 

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

 

·     Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

·     Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

·     Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

 

The fair values for the Company's assets and liabilities are not materially different from their carrying values in the financial statements.

 

The following table presents the Company's financial assets that are measured at fair value:

 

31 March 2019:

Level 1

Level 2

Level 3

Total

 

 

 

 

 

Financial assets at fair value through profit or loss

 

 

 

Trading securities

69,731

-

3,680

73,411

 

 

 

 

 

Financial assets at fair value through profit or loss

 

 

 

Equity securities

-

-

3,107,663

3,107,663

 

31 March 2018:

Level 1

Level 2

Level 3

Total

 

 

 

 

 

Financial assets at fair value through profit or loss

 

 

 

Trading securities

173,011

-

3,680

176,691

 

 

 

 

 

 

Financial assets at fair value through profit or loss

 

 

 

Equity securities

-

-

4,542,686

4,542,686

 

The Company does not have any liabilities measured at fair value. There have been no transfers in to or transfers out of fair value hierarchy levels in the period.

 

 

(i)           Financial instruments in level 1

 

The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the Company is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily LSE investments classified as trading securities.

 

A reconciliation of the Level 1 investments is included in note 13.

                                        

(ii)          Financial instruments in level 2

 

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. No investments are valued using level 2 inputs in the period. 

 

(iii)         Financial instruments in level 3

 

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. Following the guidance of IFRS 9, these financial instruments have been assessed to determine the fair value of the instrument. In their assessment, the Directors have considered both external and internal indicators to decide whether an impairment charge must be made or whether there needs to be a fair value uplift on the instrument. Details of the assessments of these instruments can be found in note 12.

 

The following table presents the changes in level 3 instruments for the years ended 31 March 2019 and 31 March 2018:

 

 

2019

 

2018

 

 

£

 

£

 

 

 

 

 

Opening balance

 

4,542,686

 

1,022,963

Additions into level 3

 

544,713

 

3,519,723

Disposals from level 3

(509,060)

 

-

Loss on disposal

(687,691)

 

-

Impairment charge

(820,503)

 

-

Fair value uplift on investment

37,518

 

-

 

 

 

 

Closing balance

3,107,663

 

4,542,686

 

 

 

 

 

            3.            CRITICAL ACCOUNTING ESTIMATE AND JUDGEMENTS

 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

(a)  Critical accounting estimates and assumptions

 

The Company makes estimates and assumptions concerning the future. The resulting estimates will by definition, seldom equal the actual results.

 

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

 

Fair value of financial assets - level 3

The Company reviews the fair value of its unquoted equity instruments at each Statement of Financial Position date. This requires management to make an estimate of the value of the unquoted securities in the absence of an active market. See note 3b and note 12 for detail on the Level 3 valuation process.

 

(b)  Critical judgements in applying the entity's accounting policies

 

Many of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and estimates are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience, but actual results may differ from the amounts included in the financial statements. The most critical judgements as applied to these financial statements are as follows:

 

Financial assets held at fair value through profit or loss

 

Level 3 financial assets held at fair value through profit or loss have a carrying value of £3,107,663 at 31 March 2019. An impairment charge of £820,503 (2018: £Nil) has been recognised in the year.

 

The Company follows the guidance of IFRS 9 to determine when an investment at fair value through profit or loss is impaired. This determination requires significant judgement. In making this judgement, the Company evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of the short-term business outlook for the investee, including factors such as industry and sector performance and operational and financing cash flow. Management also consider external indicators such as commodity prices, investment performance and demand for the underlying commodity. As per note 2, financial assets held at fair value through profit or loss are assessed individually. Details of the assessment of each investment is included in note 12.

 

4.          REVENUE

 

Year ended

 

 

Year ended

 

31 March

 

 

31 March

 

2019

 

 

2018

 

£

 

 

£

 

 

 

 

 

Dividend income on financial assets at fair value through profit and loss

262

 

 

2,596

 

 

5.          EXPENSES BY NATURE

 

Year ended

 

 

Year ended

 

31 March

 

 

31 March

 

2019

 

 

2018

 

£

 

 

£

 

 

 

 

 

Exchange differences

        300

 

 

-

Directors' remuneration (Note 6)

191,201

 

 

277,042

Legal and professional fees

214,739

 

 

145,461

Investment transaction costs

56,057

 

 

156,494

Auditors' remuneration (Note 7)

30,000

 

 

21,250

 

6.          EMPLOYEES AND DIRECTORS

 

Year ended

 

 

Year ended

 

31 March

 

 

31 March

 

2019

 

 

2018

 

£

 

 

£

 

 

 

 

 

Directors' remuneration

191,201

 

 

277,042

 

The Company has no employees other than the Directors.

 

The average monthly number of employees (including Directors) during the year was as follows:          

 

 

Year ended

 

 

Year ended

 

31 March

 

 

31 March

 

2019

 

 

2018

 

£

 

 

£

 

 

 

 

 

Directors

3

 

 

3

 

             Directors remuneration - detail

 

 

Directors

 Termination

Total

Total

 

 

fees

payments

2019

2018

Director

 

£

£

£

£

£

 

 

 

 

 

 

 

A Lawley

 

8,423

-

8,423

-

J Taylor

 

2,500

-

2,500

-

C Schaffalitzky

 

19,500

-

19,500

16,333

S Barblett

 

37,342

-

37,342

-

C Wood - resigned 20 December 2018

 

61,333

44,103

123,436

27,000

C J Ells - resigned 12 March 2018

 

-

-

-

172,177

M E Parker - resigned 19 Oct 2017

 

-

-

-

61,532

 

 

129,098

18,000

44,103

191,201

277,042

 

 

 

 

 

 

               

 

 

7.    AUDITOR'S REMUNERATION

 

During the year the Company obtained the following services from the auditor:

 

 

Year ended

 

 

Year ended

 

31 March

 

 

31 March

 

2019

 

 

2018

 

£

 

 

£

 

 

 

 

 

Fees payable to the Company's auditor in relation to the audit of the Company:

 

22,500

 

 

 

19,500

Fees payable to the Company's auditor for other services:

 

 

 

 

-Tax services

2,700

 

 

1,750

- Other assurance services

4,800

 

 

-

 

30,000

 

 

21,250

 

8.          OTHER (LOSSES)/GAINS - NET

 

 

Year ended

 

 

Year ended

 

31 March

 

 

31 March

 

2019

 

 

2018

 

£

 

 

£

 

 

 

 

 

Unrealised fair value losses on current financial assets at fair value through profit or loss

 

(440,641)

 

 

 

(48,774)

Loss on disposal of financial assets at fair value through profit or loss

(691,428)

 

 

-

Impairment charge

(820,503)

 

 

-

Fair vale uplift on investment

37,518

 

 

-

Other Gains - Net

-

 

 

21,805

 

(1,915,054)

 

 

(26,969)

 

The unrealised losses relate to the year-end revaluation of the traded securities classified as financial assets at fair value through profit or loss. More detail is included in note 13.

 

The loss on disposal relates to the sale of the Company's holding in Cobalt Blue Holdings Inc, as discussed in note 12.

 

 

9.          FINANCE INCOME AND COSTS

 

 

Year ended

 

 

Year ended

 

31 March

 

 

31 March

 

2019

 

 

2018

 

£

 

 

£

Finance income:

 

 

 

 

Bank deposit interest

26

 

 

39

 

 

 

 

 

Finance costs:

 

 

 

 

Loan interest

-

 

 

1,917

 

 

10.       INCOME TAX

 

             Tax charge/(credit) for the year

 

No liability to UK corporation tax arose on ordinary activities for the years ended 31 March 2019 and 31 March 2018.

 

 

Year ended

 

 

Year ended

 

31 March

 

 

31 March

 

2019

 

 

2018

 

£

 

 

£

 

 

 

 

 

Current tax

-

 

 

-

Deferred tax

-

 

 

-

 

-

 

 

-

 

             Factors affecting the tax charge/(credit) for the year

 

Loss on ordinary activities before income tax

(2,553,673)

 

 

(768,851)

 

 

 

 

 

Loss on ordinary activities before tax multiplied by the standard rate of corporation tax in the UK of 19% (2018: 19%)

 

(485,198)

 

 

 

(146,082)

 

 

 

 

 

Effect of:

 

 

 

 

Tax losses for which no deferred tax asset was recognised

371,994

 

 

134,653

Expenses not deductible

113,204

 

 

11,429

 

 

 

 

 

 

 

 

 

 

Tax charge for the year

-

 

 

-

                                                                                                                                                                          

            

As at the end of the reporting year the Company held approximately £4,143,000 (2018: £4,140,000) in respect of capital losses and approximately £1,375,000 (2018: £1,372,000) in relation to operating losses. Both are available to be offset against future gains and profits.

 

A deferred tax asset has not been recognised in respect of these losses in view of the uncertainty as to the level and timing of future taxable profits and gains.

 

11.          EARNINGS PER SHARE

 

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

 

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

 

In accordance with IAS 33 the share options and warrants in issue do not have a dilutive impact on the earnings per share for the year ended 31 March 2019 and the year ended 31 March 2018. The total number of potentially dilutive securities are 1,309,825,397 (2018: 853,735,450).

 

Reconciliations are set out below.

 

 

 

 

 

31 March 2019

 

 

 

 

 

Weighted

 

 

 

 

 

average

 

Per-share

 

Earnings

 

number of

 

amount

 

£

 

shares

 

pence

 

 

 

 

 

 

Basic and Diluted EPS

(2,553,673)

 

1,489,536,141

 

(0.171)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 March 2018

 

 

 

 

 

Weighted

 

 

 

 

 

average

 

Per-share

 

Earnings

 

number of

 

amount

 

£

 

shares

 

pence

 

 

 

 

 

 

Basic and Diluted EPS

(768,851)

 

843,102,213

 

(0.00)

                            

12.       FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - NON CURRENT ASSETS

                                                                                                                                                                          

 

2019

 

 

2018

 

£

 

 

£

Opening balance

4,542,686

 

 

1,022,963

Additions

544,713

 

 

3,519,723

Disposals

(509,060)

 

 

-

Loss on disposal

(687,691)

 

 

-

Impairment charge

(820,503)

 

 

-

Fair value uplift on investment

37,518

 

 

-

 

 

 

 

 

Closing balance

3,107,663

 

 

4,542,686

 

Financial assets include the following:

 

Unlisted securities

2019

 

 

2018

 

£

 

 

£

UK

588,726

 

 

380,463

Africa

1,583,750

 

 

3,227,036

Israel

935,187

 

 

935,187

 

3,107,663

 

 

4,542,686

 

The impairment of £820,503 is broken down between the specific assets as follows:

 

 

 

 

2019

 

 

 

 

£

IGS

 

 

 

141,738

Nashwan Holdings

 

 

 

138,125

Mansa Lithium

 

 

 

234,375

IMC

 

 

 

37,515

Xantus

 

 

 

268,750

 

 

 

 

820,503

 

A brief description of the strategic holdings and their fair value assessment is as follows:

 

As at 31 March 2019, the Directors consider the fair value of the Company's 29.9 per cent investment in International Geoscience Services Limited ("IGS") to be based on its pro rata share of net assets being £238,725. The Directors consider this to equate to the fair value of this investment as fluidity in both IGS's geoconsultancy and technology businesses are historically difficult to forecast accurately. Revenues fell year on year due to deferrals in expected new contract wins which are now expected to be realised in 2019. Costs fell in 2018 reducing the loss incurred in the period. Based on the above, the Directors have taken the decision to reduce fair value from cost of £380,463 to the pro rata share of net assets being £238,725.

 

As at 31 March, 2019 the Company holds a 40% interest in Xantus Inc and a 30% interest in Nashwan Holdings Ltd, both holding exploration licences in southern Mali, which has high potential for lithium pegmatite deposits. As at 31 March 2019, the Directors consider the fair value of their 30% holding in Nashwan Holdings Ltd and their 40% holding in Mansa Lithium Inc to be £1,140,000 in aggregate, representing an impairment of £372,000 against the 31 March 2018 comparative of £1,512,000 in aggregate. At 31 March 2019 there had been no material developments which suggest any significant change in outlook of prospects for the licences, however the board of TSI believe that it is appropriate to fair value the assets with a c25% impairment to reflect the change of stated investment strategy away from active investment in legacy exploration assets and the possible terms of any deal to bring in new operating partners to take the opportunities forward.

 

As at 31 March 2019, the fair value of the Company's 2% investment in International Mining Company Invest Inc. ("IMC") has been reduced to nil from its acquisition cost of £37,515. The business specialises in the extraction of uranium from surface soils in Kyrgystan. The local government has recently passed legislation forcing uranium extraction to cease in the country. To be prudent the Directors feel the investment should be fully impaired. The directors believe that the situation is likely to reverse at some point in the future and that companies like IMC (which do not undertake disruptive mining and excavation but rather cleanse uranium from surface materials) will likely be permitted to recommence operations.

 

As at 31 March 2019, the fair value of the Company's 17.8% investment in Kalahari Key Mineral Exploration (Pty) Ltd has been increased to reflect the most recent placing on 13 May 2019 which was completed at US$55 a share, compared to TSI's shares which were acquired at US$52. The placing included US$210,000 from Power Metal Resources ("POW"), formerly African Battery Metals plc). Subsequently a joint venture was agreed with POW whereby POW can earn 40% of the project by investing US$500,000 in to the exploration work. This values the project at US$1,250,000 and TSI's current shareholding of 17.8% values it at US$222,500 (£175,000 equivalent). 

 

As at 31 March 2019, the fair value of the Company's 40% investment in Xantus Inc. has been reduced from its acquisition cost of £537,500 to £268,750. The Directors consider this adjustment appropriate to reflect the political instability in Niger which is affecting activity in the country. Initial test results and prospects for the development remain consistent with the position at 31 March 2018 and therefore the Directors remain confident of the inherent value in the project.

 

As at 31 March 2019, the carrying value of the Company's 7.22% investment in BrandShield is based on its acquisition cost of £935,187. The Directors consider this carrying value to equate to the fair value of this investment given the proximity of the transaction to the reporting date.

 

At 31 March 2019, the carrying value of the Company's investment in WeShop is £350,000 based on the aggregate cost of investment which is in line with the latest share valuation. There has been a number of positive developments at the business regarding the appointment of a quality senior team, further developments to the technology platform, important partnerships being established and a clear plan to launch.  However, while the business remains in fund raising process the Directors consider it prudent to continue to carry the investment at cost.

                                                                                                                          

               13.        FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT ASSETS

 

Equity securities - held for trading

2019

 

 

2018

 

£

 

 

£

Opening balance

176,691

 

 

231,225

Additions

509,060

 

 

154,700

Disposals

(171,699)

 

 

(160,460)

Revaluation losses

(440,641)

 

 

(48,774)

Closing balance

73,411

 

 

176,691

 

Financial assets at fair value through profit or loss are presented within 'operating activities' as part of changes in working capital in the Statement of Cash Flows. Changes in fair values of financial assets at fair value through profit or loss, and gains or losses on disposal are recorded in 'other (losses)/gains - net' in the Statement of Comprehensive Income (note 8). The fair value of all equity securities is based on their observable current bid prices in an active market, being a level 1 hierarchy. These markets are the LSE and ASX as stated in note 2.

 

                14.          CASH AND CASH EQUIVALENTS

 

2019

 

 

2018

 

£

 

 

£

Bank accounts

547,343

 

 

510,272

Cash held in investment portfolio

14,293

 

 

2,235

 

 

 

 

 

 

561,636

 

 

512,507

 

15. SHARE CAPITAL

 

 

 

Number of

 

Ordinary

 

Deferred

 

Share

 

 

 

 

shares

 

shares

 

shares

 

premium

 

Total

 

 

No.

 

£

 

£

 

£

 

£

At 31 March 2017

 

398,576,614

 

398,621

 

1,165,710

 

1,836,406

 

3,400,737

 

 

 

 

 

 

 

 

 

 

 

Issue of shares

 

922,222,222

 

922,222

 

-

 

3,227,778

 

4,150,000

Share issue costs

 

-

 

-

 

-

 

(223,000)

 

(223,000)

Cancellation of shares

 

 

 

-

 

(1,165,710)

 

-

 

(1,165,710)

Grant of warrants

 

-

 

-

 

-

 

(15,558)

 

(15,558)

Exercise of warrants

 

5,375,661

 

5,376

 

-

 

29,566

 

34,942

 

 

 

 

 

 

 

 

 

 

 

At 31 March 2018

 

1,326,174,497

 

1,326,219

 

-

 

4,855,192

 

6,181,411

Issue of shares

 

762,000,000

 

762,000

 

-

 

271,000

 

1,033,000

Grant of warrants

 

-

 

-

 

-

 

(10,442)

 

(10,442)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 March 2019

 

2,088,174,497

 

2,088,219

 

-

 

5,115,750

 

7,203,969

 

 

 

 

 

 

 

 

 

 

 

 

On 8 March 2019, 500,000,000 Ordinary shares of 0.10 pence were issued fully paid without a premium pursuant to a private placement.

 

On 4 October 2018, 250,000,000 Ordinary shares of 0.10 pence were issued fully paid at a premium of 0.20 pence per share pursuant to a private placement.

 

On 4 October 2018, 7,500,000 Ordinary shares of 0.10 pence were issued at a premium of 0.20 pence per share pursuant to an agreement with Turner Pope Investments (TPI) Limited as payment for 50% of their annual broking fee.

 

On 1 May 2018, 4,500,000 Ordinary shares of 0.10 pence were issued at a premium of 0.40 pence per share pursuant to an agreement with Align Research as payment for a consultancy fee.

 

 

16.       OTHER RESERVES

            

 

 

Shares to

 

Share option

 

Merger

 

 

 

 

be issued

 

reserve

 

reserve

 

Total

 

 

 

 

 

 

 

 

 

 

518,635

 

29,986

 

417,284

 

965,905

 

-

 

15,558

 

-

 

15,558

 

-

 

1,040,500

 

-

 

1,040,500

 

-

 

32,277

 

-

 

32,277

 

(442,500)

 

-

 

-

 

(442,500)

 

(76,135)

 

-

 

-

 

(76,135)

 

 

 

 

 

 

 

 

 

-

 

1,118,321

 

417,284

 

1,535,605

 

 

 

 

 

 

 

 

 

-

 

10,442

 

-

 

10,442

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

1,128,763

 

417,284

 

1,546,047

                                                                                                                                                                                  

            

Merger relief reserve of £417,284 arose in the period ended 31 December 1995 and relates to shares that were issued on a share for share basis in relation to the Langdon (Coffee & Tea) Limited transaction.

 

Share option reserve comprises the cumulative fair value of share options and warrants - See note 19.

 

 

17. TRADE AND OTHER PAYABLES

 

 

 

2019

 

2018

 

 

£

 

£

 

 

 

 

 

 

20,428

 

68,906

 

102,043

 

25,833

 

 

 

 

 

122,471

 

94,739

 

 

 

 

18.       RELATED PARTY DISCLOSURES

 

The following transactions were undertaken with related parties:

 

2019

 

2018

Transactions

 

 

          £

 

 

     £

 

               

 

                               



The Main Group Ltd

 

Entity under common Directorship: C J Ells

 


Administration costs

 



 



-



 



11,883

 

The Main Group Ltd

 

Entity under common Directorship: C J Ells

 

Termination fee

 

 

-

 

60,000

 

Orana Corporate LLP

Entity under common Directorship: C Wood

 

Accounting and Company Secretary Fees

 

 

32,331

 

4,000

Ainslie Capital Limited

Entity under common Directorship: C Wood

 

Directors Fees

 

 

8,000

 

-

Ugly Panda LLP

Entity under common Directorship: J Taylor

 

Directors Fees

 

 

2,500

 

-

                               

                  

19.       SHARE-BASED PAYMENT TRANSACTIONS

 

The measurement requirements of IFRS 2 have been implemented in respect of share options and warrants granted. The expense recognised for share based payments during the year is £43,422 (2018: £32,277), this has been charged to the profit or loss account and £10,442 (2018: £Nil) to share premium.

 

658,000,000 options or warrants were issued during the financial year ended 31 March 2019 with an average exercise price of 0.16 pence (2018: 0.43 pence).

 

Movement in issued share options and warrants during the period

 

The table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options and warrants during the year as follows:

 

No of options and warrants

WAEP

 

Outstanding at the beginning of the year

 

 

853,735,450

0.49p

Granted during the year

 

 

658,000,000

0.16p

Exercised during the year

 

 

-

-

Expired/ forfeited in the year

 

 

(211,910,053)

0.65p

Outstanding at the end of the year

 

 

1,299,825,397

0.27p

 

 

 

 

 

Exercisable at the end of the year

 

 

1,299,825,397

0.27p

 

The fair value of the options and warrants granted in the year and comparative year have been calculated using the Black Scholes model assuming the inputs shown below:

 

 

Grant date         

4 October 2018

8 March 2019

8 March 2019

 

- No. of options/warrants granted

15,000,000

500,000,000

18,000,000

 

- Share price at grant date

0.18p

0.10p

0.10p

 

- Exercise price at grant date

0.20p

0.12p

0.10p

 

- Risk free rate

0.89%

0.75%

0.75%

 

- Option life

2 years

1 year

2 years

 

- Expected volatility

48.1%

56.4%

56.4%

 

- Expected dividend yield

0%

0%

0%

 

- Fair value of option/ warrant

£0.0004

£0.0001

£0.0003

 

 

19.       SHARE-BASED PAYMENT TRANSACTIONS - continued

 

For detail on the prior year options in issue, see the 2018 financial report.

Share options and warrants outstanding at the end of the year have the following expiry dates:

 

Grant date

Exercise date

Number of shares

7 February 2017

18 January 2020

 10,714,286

23 March 2017

7 February 2020

 10,000,000

26 April 2017

26 April 2019

 11,111,111

24 September 2017

24 September 2019

 10,000,000

21 February 2018

28 March 2021

300,000,000

12 March 2018

12 March 2021

50,000,000

28 March 2018

28 March 2021

250,000,000

4 October 2018

4 October 2020

125,000,000

4 October 2018

4 October 2020

15,000,000

8 March 2019

8 March 2020

500,000,000

8 March 2019

8 March 2021

18,000,000

 

 

 

20.       ULTIMATE CONTROLLING PARTY

 

                                The Directors consider that there is no ultimate controlling party.

                                                               

21.       EVENTS AFTER THE REPORTING PERIOD

 

On 1 April 2019 the Company invested a further US$300,000 in BrandShield by way of a convertible loan. BrandShield is currently seeking to raise an aggregate amount of US $1 million into this convertible loan instrument. The loan will convert into equity on the maturity date, being the second anniversary of the closing date unless an accelerated conversion event occurs on an earlier date and has a 2.5% coupon. The Company has the right to make a further investment of up to US$500,000 in BrandShield within a period of 180 days from the Closing date under the same terms of the convertible loan.

 

On 1 April 2019, the Company invested a further £100,000 in to WeShop by way of an equity investment.  This further investment will take the holding in WeShop from 1.2% to 1.71%.

 

On 1 April 2019 Mr Christian Schaffalitzky decided to step down as non-executive director of the Company with immediate effect to focus on other business opportunities. Mr Schaffalitzky has agreed to provide consultant services to the Company, as and when required by the Company, primarily in relation to Two Shield Investments' investee companies Kalahari Key Mineral Exploration Company (Pty) Ltd and International Geoscience Services Limited.

 

On 1 April 2019 the Company issued 100,000,000 options to each of the three directors totalling 300,000,000 options. These options only vest, in equal proportion, once the 90-day volume weighted average price of the Shares exceeds 0.18p and 0.24p respectively. The exercise period ends 3 years from the date of issue. 50% of these options vested on 12 July 2019.

 

On 24 April 2019, the Company completed a share swap with certain holders of equity in BrandShield Limited. The share swap transaction has been completed with settlement made effective through the issuance of 258,422,061 shares in TSI for a total consideration of £258,422. The Company now holds 11.34% of the issued share capital of BrandShield. The BrandShield vendors participating in the share swap have agreed that their consideration shares will be subject to a six-month lock-in.

 

On 22 May 2019, the Company announced that it had cancelled 250,000,000 warrants issued to Cobalt Blue Associates Inc (CBA). This cancellation has been formally agreed by CBA. These warrants, which carried the right to subscribe for one share in TSI at a price of 0.65p, would become exercisable once a total of five cobalt exploration licences in Cameroon had been granted to Cobalt Blue Holding (CBH) and its subsidiaries.  Due to the acquisition of CBH by Power Metal Resources plc (formerly African Battery Metals plc), which was announced on 3 September 2018, there is no circumstance under which the condition can be met for these warrants to become exercisable.

 

On 24 May 2019, the Company completed a share swap with certain holders of equity in WeShop Limited. The share swap transaction has been completed with settlement made effective through the issuance of 1,000,000,000 shares in TSI for a total consideration of £1,355,468. The Company now holds 6.7% of the issued share capital of WeShop.

 

On 17 June 2019, the Company held a General Meeting of the shareholders to propose two resolutions. Firstly, an ordinary resolution to authorise the allotment of equity securities or rights to subscribe or to convert securities into ordinary shares up to an aggregate nominal amount of £3,750,000 and secondly to authorise the allotment of equity securities on a non-pre-emptive basis. Both resolutions were passed unanimously.

 

On 27 August 2019 the Company announced that it had signed heads of terms with Leopard Lithium Pty Ltd ("Leopard Lithium) regarding a possible acquisition of the interests of the Company in both Nashwan Holdings Ltd ("Nashwan") and Mansa Lithium Inc ("Mansa"). Leopard Lithium is run by a team with expertise in such exploration projects and, consistent with the stated strategy, it is the opinion of the Directors that Leopard Lithium is better placed than the Company to optimise a return to the investors.  Under the terms of the proposed transaction, the Company will hold 26.5% of Leopard Lithium which will in turn own 100% of the interests in both Nashwan and Mansa.

 


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