TIDMLMY
RNS Number : 9343Z
Lithic Metals and Energy Limited
30 September 2009
Lithic Metals and Energy Limited ("Lithic Metals" or the "Company")
Final results for the year ended 31 March 2009
Lithic Metals and Energy (AIM:LMY), the African diversified commodity
exploration and development company, today announces its final financial results
for the year ended 31 March 2009.
The following extracts of the audited consolidated financial statements for the
year ended 31 March 2009 are listed below. The full consolidated financial
statements of the Company are available for download at www.lithicme.com
* Chairman's Statement
* Extracts from Directors' Report
* Consolidated Statement of Comprehensive Income
* Consolidated Statement of Cash Flows
* Consolidated Statement of Financial Position
* Consolidated Statement of Changes in Equity
* Accounting policies and notes
Enquiries:
+----------------------------+------------------------+-------------------+
| Lithic Metals and Energy | David Weill, Chairman | T: +44 20 7881 |
| Limited | | 0180 |
+----------------------------+------------------------+-------------------+
| | | |
+----------------------------+------------------------+-------------------+
| Seymour Pierce | Nicola Marrin | T: +44 20 7107 |
| | Catherine Leftley | 8000 |
+----------------------------+------------------------+-------------------+
Chairman's Statement
The Chairman is pleased to present this year's annual report for Lithic Metals
and Energy Limited ("the Company") together with the consolidated financial
statements for the year ended 31 March 2009.
Revenue for the year ended 31 March 2009 was GBP310,082, with finance revenue
totalling GBP122,434. Total expenses amounted to GBP2,912,720. Included within
total expenses was an impairment charge in respect of capitalized exploration
costs of GBP1,982,193. Share options expensed totalled GBP104,525. Retained loss
for the period attributable to members of the parent Company totalled
GBP2,602,638 equating to a loss of 1.8 pence per share.
During the year an impairment charge was taken against previously capitalised
exploration costs in respect of the Mitaba Nickel project in Zambia. This
decision was based on a number of factors, including but not limited to the
isolated location of the project and the amount of Nickel found so far, and on
balance it was felt that the additional cost of the intensive drilling program
necessary to prove feasibility of the site could not be justified in the current
economic climate. For this reason all of the costs to date have been expensed in
the current year resulting in the charge of GBP1,982,000 referred to above.
The past year has been eventful for the Company with the signing of the Joint
Venture Agreement with Zambezi Resources in April 2008 which has introduced the
business to the associated uranium prospects in Zambia. However difficult
decisions have had to be made, both by the former Board through the
restructuring programme earlier in the year which resulted in redundancies
throughout the Group, and also through shareholder pressure for a change of
strategy which resulted in the new Board being appointed at the Special General
Meeting in July this year.
As announced recently your Board is continuing its strategic review of the
business, including an independent assessment of the Company's assets, as well
as considering the acquisition of new complementary projects. The review is
progressing well and a further announcement will be made as soon as it is
appropriate.
We remain positive about the continuing prospects for the Company over the
coming year.
George Greville Roach, on behalf of the Chairman
30 September 2009
Directors' Report
The Directors of Lithic Metals and Energy Limited ("Lithic" or the "Company")
herewith submit their report together with the audited annual financial
statements of the Lithic Group ("Group"), being Lithic and its subsidiaries, as
indicated in Note 9 of the financial statements, for the year ended 31 March
2009.
Principal activities
The Group's principal activity during the financial year was the exploration of
Nickel, Zinc and Uranium resources in Zambia, Togo and Mozambique.
Review of Operations
On 28 April 2008 Lithic signed a joint venture agreement with Zambezi Resources
Limited in the search for uranium resources at its Mpande, Mulungushi, Chumbwe
and Rufunsa projects in Zambia. In terms of the joint venture ("JV"), Lithic is
required to spend equity finance of US$5 million, over 2.5 years, to earn a 51%
interest in Southern African Resources Limited and Oryx Resources Limited, whose
Zambian subsidiaries hold rights to explore the uranium projects. Lithic can
increase its JV interest to 75% by completing a Definitive Feasibility Study
("DFS") over the Chumbwe licence and by completing a DFS over any one of the
other prospects. The JV agreement also has a provision for Lithic to increase
its ownership to 100% by sole funding mine development, assuming that Zambezi
Resources Limited elects not to contribute at any stage. Should Lithic acquire a
100% interest, Zambezi Resources Limited will hold a 2.5% Net Smelter Royalty
right over all uranium produced.
On 22 July 2008 Lithic announced that it had successfully negotiated with BHP
Billiton for 100% unencumbered ownership of the Mavita licences in Mozambique.
The Mavita Project comprises two prospecting licences, 1045L and 1046L, located
in the Manica province of central western Mozambique. Prior to this successful
outcome, BHP Billiton held an option to claw back 100% of the project anytime
after the threshold of 200,000 tons of contained nickel equivalent metal at JORC
inferred level was defined.
On 28 October 2008 Zambezi Resources Limited sold its shareholding of 26,633,621
shares in the Company in volatile market conditions. In order to stabilise the
Company's shareholding and its Zambian investments, 26 million of these shares
were acquired at short notice by Lithic Directors and management. On 31 December
2008 the Company announced a restructuring of the transaction as a buyback of
the shares acquired by the Directors and management following the lapse of the
close period restrictions.
As a consequence of the global economic crisis and the lack of investor
confidence in world markets, the Board implemented a restructuring program to
ensure the long term sustainability of the Company. The restructuring program
unfortunately resulted in staff terminations throughout the Group which whilst
regrettable was necessary for the long term survival of the Company. The cost to
the Group for the restructuring was GBP166,569. The Group is now in a position
whereby it can continue its business for some 1.5 years on current cash
balances.
During the financial year Lithic earned interest income of GBP122,434 and
realised a loss of GBP2,602,638, after an impairment charge of GBP1,982,193 to
the Mitaba project.
No dividends were declared or paid during the financial year.
For further details of all the Company's assets and corporate activity please
see the Company's website at www.lithicme.com.
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2009
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| | Notes | Group | | Company |
+------------------------------------+--------+-------------------------+--+-------------------------+
| | | 31 March | 31 March | | 31 March | 31 |
| | | 2009 | 2008 | | 2009 | March |
| | | | | | | 2008 |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| | | GBP | GBP | | GBP | GBP |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| | | | | | | |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| Total income | 3 | 310,082 | 150,380 | | 307,681 | 150,254 |
| Total expenses | 3 | (2,912,720) | (987,075) | | (1,759,640) | (952,228) |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| Operating deficit | | (2,602,638) | (836,695) | | (1,451,959) | (801,974) |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| Income tax | 4 | - | - | | - | - |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| Deficit after tax for the year | | (2,602,638) | (836,695) | | (1,451,959) | (801,974) |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| | | | | | | |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| Loss per share | | | | | | |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| - Basic and diluted deficit per | 5 | (1.78) | (1.78) | | (0.88) | (0.88) |
| share (pence) | | | | | | |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| Other comprehensive income: | | | | | | |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| Exchange differences on | | 798,969 | (11,856) | | - | - |
| translation of foreign operations | | | | | | |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| Total other comprehensive income | | 798,969 | (11,856) | | - | - |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| | | | | | | |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| TOTAL COMPREHENSIVE DEFICIT | | (1,803,669) | (848,551) | | (1,451,959) | (801,974) |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| | | | | | | |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| Deficit attributable to owners | | (1,803,669) | (848,551) | | (1,451,959) | (801,974) |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| | | | | | | |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
| | | | | | | |
+------------------------------------+--------+-------------+-----------+--+-------------+-----------+
Consolidated Statement of Cash Flows
As at 31 March 2009
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| | Group | | Company |
+-----------------------------------------+-------------------------+--+-------------------------+
| | 31 March | 31 March | | 31 March | 31 |
| | 2009 | 2008 | | 2009 | March |
| | | | | | 2008 |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| | GBP | GBP | | GBP | GBP |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| Cash flows from operating activities | (744,431) | (487,249) | | (577,389) | (516,807) |
| Payments to suppliers and employees | 122,434 | 150,380 | | 122,430 | 150,254 |
| Interest received | | | | | |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| Net cash utilised by operating | (621,997) | (336,869) | | (454,958) | (366,553) |
| activities | | | | | |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| Cash flows from investing activities | (1,126,237) | (325,495) | | (421,583) | (59,702) |
| Payments for mineral exploration | - | (114,318) | | - | (114,318) |
| activities | (1,317,281) | (205,742) | | (1,387,816) | (135,225) |
| Purchase of Regent Resources Capital | (142,988) | (131,149) | | (35,660) | (17,352) |
| Corporation | 4,706 | - | | 1,339 | - |
| less cash acquired | | | | | |
| Payments for investments in other | | | | | |
| entities | | | | | |
| Purchase of property, plant and | | | | | |
| equipment | | | | | |
| Proceeds received from insurers and on | | | | | |
| the sale of assets | | | | | |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| Net cash utilised by investing | (2,581,800) | (776,704) | | (1,843,720) | (326,597) |
| activities | | | | | |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| Cash flows from financing activities | - | 6,000,000 | | - | 6,000,000 |
| Proceeds from the issue of share | (153,100) | - | | (153,100) | - |
| capital | - | (226,524) | | (863,270) | - |
| Payment for share buy-back: | - | - | | | (226,524) |
| -equity holders of the parent | | | | | (474,066) |
| -share issue costs | | | | | |
| Advances to subsidiaries | | | | | |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| Net cash (utilised by)/generated | (153,100) | 5,773,476 | | (1,016,370) | 5,299,410 |
| from/financing activities | | | | | |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| | | | | | |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| Net (decrease)/increase in cash and | (3,356,897) | 4,659,903 | | (3,315,048) | 4,606,260 |
| cash equivalents | 4,920,809 | 260,906 | | 4,823,489 | 217,229 |
| Cash and cash equivalents at beginning | | | | | |
| of the year | | | | | |
| | | | | | |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
| Cash and cash equivalents at end of the | 1,563,912 | 4,920,809 | | 1,508,441 | 4,823,489 |
| year | | | | | |
+-----------------------------------------+-------------+-----------+--+-------------+-----------+
Consolidated Statement of Financial Position
As at 31 March 2009
+----------+----------------------------------+--------+---------------+---+--
=----------+---+-------------+---+---------------+----------+
|
| Notes | Group | |
Company
|
+---------------------------------------------+--------+-------------------
=-------------+---+--------------------------------------------+
|
| | 2009 | | 2008 |
| 2009 | | 2008 |
|
+---------------------------------------------+--------+---------------+---
=-------------+---+-------------+---+---------------+----------+
|
| | GBP | | GBP |
| GBP | | GBP |
|
+---------------------------------------------+--------+---------------+---
=-------------+---+-------------+---+---------------+----------+
| ASSETS
| | | | |
| | | |
|
+---------------------------------------------+--------+---------------+---
=-------------+---+-------------+---+---------------+----------+
| Non-current
assets | | | | |
| | | | |
| Property, plant and equipment
| 6 | 294,443 | | 124,882 | | 34,481 |
| 17,214 | |
| Mineral properties | 7
| 2,932,009 | | 3,094,160 | | 559,962 | | 1,044,871 |
|
| Other assets | 8 |
1,522,120 | | 205,816 | | 1,522,120 | | 134,304 |
|
| Investment in subsidiaries | 9 | - | |
- | | 1,254,066 | | 1,254,066 | |
|
Inter-company loans | 10 | - | |
- | | 2,010,880 | | 1,147,610 |
|
+---------------------------------------------+--------+---------------+---
--------------+---+-------------+---+---------------+----------+
| Total non
current assets | | 4,748,572 | | 3,424,858 |
| 5,381,509 | | 3,598,065 |
|
+---------------------------------------------+--------+---------------+---
--------------+---+-------------+---+---------------+----------+
| Current
assets | | | |
| | | | | |
| Trade and other
receivables | 11 | 137,997 | | 52,725 | |
19,089 | | 37,667 | |
| Prepayments
| 12 | 50,148 | | 46,681 | | 20,555 | |
26,087 | |
| Cash at bank and in hand | 13
| 1,563,912 | | 4,920,809 | | 1,508,441 | | 4,823,489 |
|
+---------------------------------------------+--------+---------------+---
--------------+---+-------------+---+---------------+----------+
| Total
current assets | | 1,752,057 | |
5,020,215 | | 1,548,085 | | 4,887,243 |
|
+---------------------------------------------+--------+---------------+---
--------------+---+-------------+---+---------------+----------+
| Total
assets | | 6,500,629 | |
8,445,073 | | 6,929,594 | | 8,485,308 |
|
+---------------------------------------------+--------+---------------+---
=-------------+---+-------------+---+---------------+----------+
| EQUITY AND
LIABILITIES | | | | |
| | | |
|
+---------------------------------------------+--------+---------------+---
=-------------+---+-------------+---+---------------+----------+
| |
Current liabilities | | | | |
| | | | |
| | Trade and other
payables | 14 | 169,699 | | 283,934 | | 123,017 |
| 196,015 | |
| | Provisions |
15 | 41,248 | | 19,213 | | 36,575 | | 18,758
|
|
+----------+----------------------------------+--------+---------------+---
=-------------+---+-------------+---+---------------+----------+
| |
Total current liabilities | | 210,947 | | 303,147 |
| 159,592 | | 214,773 |
|
+----------+----------------------------------+--------+---------------+---
=-------------+---+-------------+---+---------------+----------+
| |
Total liabilities | | 210,947 | | 303,147 |
| 159,592 | | 214,773 |
|
+----------+----------------------------------+--------+---------------+---
=-------------+---+-------------+---+---------------+----------+
| |
Equity | | | | |
| | | | |
| | Issued capital
| 16 | 1,392,972 | | 1,522,972 | | 1,392,972 |
| 1,522,972 | |
| | Share premium account |
16 | 7,815,178 | | 7,838,278 | | 7,815,178 | | 7,838,278
| |
| | Options and Warrants reserve | 17 |
285,346 | | 180,821 | | 285,346 | | 180,821 |
|
| | Foreign currency translation | 17 | 758,153 | |
(40,816) | | - | | - | |
| |
reserve | 17 | (3,961,967) | | (1,359,329) |
| (2,723,494) | | (1,271,536) | |
| | Accumulated
deficit | | | | | |
| | |
|
+----------+----------------------------------+--------+---------------+---
=-------------+---+-------------+---+---------------+----------+
| |
Total equity | | 6,289,682 | | 8,141,926 |
| 6,770,002 | | 8,270,535 |
|
+----------+----------------------------------+--------+---------------+---
=-------------+---+-------------+---+---------------+----------+
| |
Total equity and liabilities | | 6,500,629 | | 8,445,073 |
| 6,929,594 | | 8,485,308 |
|
+----------+----------------------------------+--------+---------------+---
--------------+---+-------------+---+---------------+----------+
Consolidated Statement of Changes in Equity
For the year ended 31 March 2009
+--------------------------------------------------+-------------+-------------+
| | Group | Company |
| | GBP | GBP |
+--------------------------------------------------+-------------+-------------+
| Issued Capital | | |
+--------------------------------------------------+-------------+-------------+
| Opening balance as at 1 April 2007 | 353,741 | 353,741 |
+--------------------------------------------------+-------------+-------------+
| Issued during the year | 1,169,231 | 1,169,231 |
+--------------------------------------------------+-------------+-------------+
| Closing balance as at 31 March 2008 | 1,522,972 | 1,522,972 |
+--------------------------------------------------+-------------+-------------+
| Share buy-back during the year | (130,000) | (130,000) |
+--------------------------------------------------+-------------+-------------+
| Closing balance as at 31 March 2009 | 1,392,972 | 1,392,972 |
+--------------------------------------------------+-------------+-------------+
| Share Premium Account | | |
+--------------------------------------------------+-------------+-------------+
| Opening balance as at 1 April 2007 | 2,234,033 | 2,234,033 |
+--------------------------------------------------+-------------+-------------+
| Premium on shares issued during the year | 5,830,769 | 5,830,769 |
+--------------------------------------------------+-------------+-------------+
| Less capital raising costs | (226,524) | (226,524) |
+--------------------------------------------------+-------------+-------------+
| Closing balance as at 31 March 2008 | 7,838,278 | 7,838,278 |
+--------------------------------------------------+-------------+-------------+
| Premium reduced by share buy-back during the | (23,100) | (23,100) |
| year | | |
+--------------------------------------------------+-------------+-------------+
| Closing balance as at 31 March 2009 | 7,815,178 | 7,815,178 |
+--------------------------------------------------+-------------+-------------+
| Options & Warrants Reserve | | |
+--------------------------------------------------+-------------+-------------+
| Opening balance as at 1 April 2007 | 72,003 | 72,003 |
+--------------------------------------------------+-------------+-------------+
| Recognition of share-based payments during the | 108,818 | 108,818 |
| year | | |
+--------------------------------------------------+-------------+-------------+
| Closing balance as at 31 March 2008 | 180,821 | 180,821 |
+--------------------------------------------------+-------------+-------------+
| Recognition of share-based payments during the | 104,525 | 104,525 |
| year | | |
+--------------------------------------------------+-------------+-------------+
| Closing balance as at 31 March 2009 | 285,346 | 285,346 |
+--------------------------------------------------+-------------+-------------+
| Accumulated Deficit | | |
+--------------------------------------------------+-------------+-------------+
| Opening balance as at 1 April 2007 | (522,634) | (469,562) |
+--------------------------------------------------+-------------+-------------+
| Deficit for the year | (836,695) | (801,974) |
+--------------------------------------------------+-------------+-------------+
| Closing balance as at 31 March 2008 | (1,359,329) | (1,271,536) |
+--------------------------------------------------+-------------+-------------+
| Deficit for the year | (2,602,638) | (1,451,959) |
+--------------------------------------------------+-------------+-------------+
| Closing balance as at 31 March 2009 | (3,961,967) | (2,723,494) |
+--------------------------------------------------+-------------+-------------+
| Translation Reserve | | |
+--------------------------------------------------+-------------+-------------+
| Opening balance as at 1 April 2007 | (28,960) | - |
+--------------------------------------------------+-------------+-------------+
| Exchange differences arising on translation of | (11,856) | - |
| foreign operations | | |
+--------------------------------------------------+-------------+-------------+
| Closing balance as at 31 March 2008 | (40,816) | - |
+--------------------------------------------------+-------------+-------------+
| Exchange differences arising on translation of | 798,969 | - |
| foreign operations | | |
+--------------------------------------------------+-------------+-------------+
| Closing balance as at 31 March 2009 | 758,153 | - |
+--------------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------------+-------------+-------------+
| Total of shareholders' equity at 31 March 2009 | 6,289,682 | 6,770,002 |
+--------------------------------------------------+-------------+-------------+
Notes to the Consolidated Financial Statements
For the year ended 31 March 2009
1. Accounting policies
Lithic Metals and Energy Limited (hereafter "Lithic" or the "Company") is a
company registered and domiciled in Bermuda whose principal activities comprise
minerals exploration and development for the benefit of shareholders.
The Company's registered office is:
Canon's Court
22 Victoria Street
Hamilton HM 12
Bermuda
The financial statements incorporate the principal accounting policies set out
below. Accounting policies of the subsidiaries are consistent with those of the
holding company.
1.1 Statement of compliance
The Group financial statements are prepared in accordance with International
Financial Reporting Standards (IFRS) adopted by the International Accounting
Standards Board (IASB) and interpretations issued by the International Financial
Reporting Interpretations Committee of the IASB.
1.2 Basis of preparation
The Group financial statements are prepared on the historical cost basis. Cost
is based on the fair value of the consideration given in exchange for assets.
All amounts are presented in British Pounds, unless otherwise noted.
The preparation of IFRS financial statements requires the use of certain
critical accounting estimates and requires management to exercise a higher
degree of judgement in the process of applying the Group's accounting policies.
Significant estimates used in the preparation of these consolidated financial
statements include, amongst other things, plant and equipment (see Note 6), the
expected economic lives of and the future operating results and net cash flows
expected to result from the utilization of resource properties (see Note 7) and
the estimated values of options (see Note 17). Actual results may differ from
those estimates.
Going concern
The financial statements have been prepared on the basis that the consolidated
entity is a going concern, which contemplates the continuity of normal business
activity, realisation of assets and the settlement of liabilities in the normal
course of business. If the consolidated entity chooses to maintain its current
high level of expenditure on specific projects, it will have to raise additional
capital. If the consolidated entity does not raise additional capital in the
short term it can continue as a going concern by substantially reducing
exploration expenditure until funding is available, without jeopardising its
commitment base on those specific projects. The consolidated entity always has
the opportunity to enter into joint venture arrangements to fulfil ongoing
exploration expenditure or apply for expenditure exemptions.
The Directors are of the opinion that the basis upon which the financial
statements are prepared is appropriate in the circumstances. However, if an
event were to arise where the consolidated entity could not raise additional
equity capital or reduce its current rate of exploration expenditure by entering
into joint ventures in order to remain as a going concern, there is no certainty
as to whether the consolidated entity could realise assets at the amounts as
shown in the financial statements and extinguish liabilities in the normal
course of business.
1.3 Principles of consolidation
(a) Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of
Lithic and its subsidiaries (hereafter the "Group" or "Consolidated Entity") as
at 31 March 2009, and the results for the year then ended. Subsidiaries are
those entities over which the Group has the power to govern the financial and
operating policies, generally accompanying a shareholding of more than fifty
percent of the voting rights so as to obtain benefits from its activities. The
existing and effect of potential voting rights which are currently exercisable
or convertible are considered when assessing whether the Group controls another
entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control
ceases.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group.
Intercompany transactions, balances and unrealised gains on transactions between
Group companies are eliminated on consolidation. Unrealised losses are also
eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Minority interests (when relevant) in the results are shown separately in the
consolidated statement of comprehensive income and statement of financial
position respectively.
The Group financial statements incorporate the assets, liabilities and results
of operations of the Company and its subsidiaries acquired and disposed of
during a financial period. These assets, liabilities and results are included
from the effective dates of acquisition to the effective dates of disposal.
Where necessary, the accounting policies of subsidiaries are changed to ensure
the consistency with the polices adopted by the Group.
(b) Joint ventures
Joint venture operations, if any, are accounted for using the equity method and
are carried at cost by the parent entity. Under the equity method, the share of
the profits and losses of the joint venture is recognised in the statement of
comprehensive income. Profits or losses on transactions establishing the joint
venture are eliminated to the extent of the Group's ownership interest until
such time as they are realized by the joint venture partnership on consumption
or sale, unless they relate to an unrealized loss that provides evidence of the
impairment of an asset transferred.
1.4 Property, plant and equipment
Property, plant and equipment is stated at historic cost less accumulated
depreciation. Historical cost includes expenditure that is directly attributable
to the acquisition of the asset. Cost may also include transfers from equity of
any gain or loss on qualifying cash flow hedges of foreign currency property,
plant and equipment purchases.
Subsequent costs are included in the asset's carrying amount or recognized as a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the
item can be reliably measured. All other repairs and maintenance costs are
charged to the statement of comprehensive income during the financial period in
which they are incurred.
Depreciation on plant and equipment is calculated on the straight line method to
allocate their cost or re-valued amounts, net of their residual values, over
their estimated useful lives. The depreciation rates used are:
* Plant and field equipment - 3 years
* Field motor vehicles - 3 years
* Office equipment - 3 to 5 years
* Office furniture - 3 to 10 years
The assets' residual values and useful lives are reviewed annually and adjusted
if appropriate.
An asset's carrying amount is written down immediately to its recoverable amount
if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are included in the income statement and
determined by comparing proceeds with the carrying amount.
1.5 Impairment of assets
Assets which have an indefinite useful life are not subject to amortization and
are tested annually for impairment. Assets that are subject to amortization are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying value may not be recoverable. An impairment loss is recognized
for the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair value less costs
to sell and value in use. 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. An impairment loss is recognised immediately in profit or loss, unless
the relevant asset is carried at a revalued amount in which case the impairment
loss is treated as a revaluation decrease. For the purpose of assessing
impairment, assets are grouped at the lowest cash generating unit for which
there are separately identifiable cash flows. In assessing value in use, the
estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset for which the estimate of future
cash flows have not been adjusted.
1.6 Mineral exploration and evaluation expenditure
Exploration and evaluation costs incurred by the Group are accumulated
separately for each area of interest. Such costs comprise net direct costs and
an appropriate portion of related overhead costs, but does not include general
overheads or administrative costs that do not have a specific association with a
particular area of interest. Exploration and evaluation costs are carried
forward to the extent that:
a) such costs are expected to be recouped through the successful development and
utilization of the area of interest, or alternatively by its sale; or
b) exploration and evaluation activities in the area of interest have not
reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves.
In the event that an area of interest is abandoned or if the Directors consider
the costs incurred exceed the area of interest's recoverable amount, accumulated
costs carried forward are written off in the year in which that assessment is
made.
Exploration and evaluation costs are not carried forward in respect of any area
of interest unless the Group's right of tenure to the property is current.
Depletion is not charged on areas of interest under development until commercial
production commences, at which time it will be recorded using a units of
production basis which will be based on the mineral mined at each area of
interest relative to the estimated resource relating of that area of interest.
1.7 Financial instruments
Financial assets and liabilities are recognised on the Group's statement of
financial position when the Group becomes a party to the contractual provisions
of the instrument. Financial instruments include:
a) Trade and other receivables
Trade and other receivables are recognised initially at fair value and are
subsequently measured at amortised cost, less provision for doubtful debts.
Trade receivables are reviewed for collectibility on an ongoing basis. Debts
which are known to be uncollectible are written off. A provision for doubtful
receivables is established when there is objective evidence that the Group will
not be able to collect all amounts due according to the original terms of
receivables. The amount of the provision is the difference between the asset's
carrying amount and the present value of estimated cash flows, discounted at the
effective interest rate. The amount of the provision is recognised in the
statement of comprehensive income.
b) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with
original maturities of three months or less which are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes
in value.
c) Offset
Financial assets and financial liabilities are offset with the net amount
reported in the balance sheet when the Group has a legally enforceable right to
offset the recognised amounts, and intends either to settle on a net basis, or
to realise the asset and settle the liability simultaneously.
d) Trade and other payables
Trade and other payables represent liabilities for goods and services provided
to the Group prior to the end of the financial year and which remain unpaid. The
amounts are recognised at fair value, and are subsequently measured at amortised
cost, using the effective interest rate method. The amounts are unsecured and
are usually settled within the trade terms agreed with suppliers, ranging from 7
to 30 days from initial recognition.
e) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs.
1.8Revenue recognition
Interest revenue is recorded on a time proportion basis, based on the effective
yield of the asset. The effective yield of the asset is the rate of interest
required to discount the stream of future cash receipts, expected over the life
of the financial asset, to equate to its net carrying amount.
1.9Taxation
Current tax is calculated by reference to the amount of income taxes payable or
recoverable in respect of the taxable profit or loss for the period. It is
calculated using tax rates and tax laws that have been enacted or substantially
enacted by reporting date. Current tax for current and prior periods is
recognised as a liability (or asset) to the extent that it is unpaid (or
refundable).
Deferred tax is accounted for using the balance sheet liability method.
Temporary differences are differences between the tax base of an asset or
liability and its carrying amount in the statement of financial position. The
tax base of an asset or liability is the amount attributed to that asset or
liability for tax purposes.
In principle, deferred tax liabilities are recognised for all taxable temporary
differences. Deferred tax assets are recognised to the extent that it is
probable that sufficient taxable amounts will be available against which
deductible temporary differences or unused tax losses and tax offsets can be
utilised. However, deferred tax assets and liabilities are not recognised if the
temporary differences giving rise to them from the initial recognition of assets
and liabilities (other than as a result of a business combination) which affects
neither taxable income nor accounting profit. Furthermore, a deferred tax
liability is not recognised in relation to taxable temporary differences arising
from the initial recognition of goodwill.
Deferred tax liabilities are recognised as taxable temporary differences
associated with investments in subsidiaries, branches and associates, and
interests in joint ventures except where the Group is able to control the
reversal of the temporary differences and it is probable that the temporary
differences will not reverse in the foreseeable future. Deferred tax assets
arising from deductible temporary differences associated with these investments
and interests are only recognised to the extent that it is probable that there
will be sufficient taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the foreseeable
future.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period(s) when the asset and liability giving rise to
them are realised or settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the reporting date. The measurement of
deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Group expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes
levied by the same taxation authority and the Company intends to settle its tax
assets and liabilities on a net basis.
Current and deferred tax is recognised as an expense or income in the statement
of comprehensive income, except when it relates to items credited or debited
directly to equity, in which case the deferred tax is also recognised directly
in equity, or where it arises from the initial accounting for a business
combination, in which case it is taken into account in the determination of
goodwill or excess.
1.10Provisions
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events, for which it is probable that an outflow
of economic benefits will occur, and where a reliable estimate can be made of
the obligation amount.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at reporting date, taking into account
the risks and uncertainties surrounding the obligation. Where a provision is
measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows. When some or all of
the economic benefits required to settle a provision are expected to be
recovered from a third party, the receivable is recognised as an asset if it is
virtually certain that reimbursement will be received and the amount of the
receivable can be measured reliably.
1.11Foreign currency
The individual financial statements of each Group entity are presented in the
currency of the primary economic environment in which the entity operates (its
functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each entity are expressed in British
Pounds, which is both the functional currency of the company and presentation
currency for the consolidated financial statements.
Foreign currency translations 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 year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement, except
when deferred in equity as qualifying cash flow hedges and qualifying net
investment hedges.
Translation differences on non-monetary items, such as equities held at fair
value through the profit and loss, are reported as part of the fair value gain
or loss.
The results and financial position of the Group entities (none of which has the
currency of a hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
* Assets and liabilities for each balance sheet presented are translated at the
closing rate at the date of that balance sheet.;
* Income and expenses for each income statement are translated at average rates
(unless this is not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction date, in which case income and expenses are
translated at the dates of the transactions); and
* All resulting exchange differences are recognised as a separate component of
equity.
On consolidation, exchange differences arising from the translation of any net
investment in foreign entities and borrowings are taken to shareholders equity.
When a foreign operation is sold or borrowings repaid, a proportionate share of
such exchange differences are recognised in the income statement as part of the
gain or loss on sale.
1.12Employee benefits
The cost of short-term employee benefits are recognised in the period in which
services are rendered and when such cost can be reliably measured. Liabilities
for salaries and wages, including non-monetary benefits and annual leave
expected to be settled within twelve months of the reporting date are recognised
in current liabilities in respect of employees services up to the reporting date
and are measured at the amounts expected to be paid when the liabilities are
settled. Liabilities for non-cumulative sick leave are recognised when the leave
is taken and measured at the rates paid or payable.
The Group does not have any, nor is it a party to, any long-term employee
benefits such as defined benefit schemes.
1.13Share-based employee remuneration
Share-based compensation relating to equity options are measured at the grant
date, based on the Black Scholes option pricing model that takes into account
the exercise price, the term of the option, the vesting period, the share price
at the grant date, the volatility of the underlying share price, the risk free
rate and the expected dividends receivable over the option term. The fair value
measured at the grant date is expensed over the option vesting period during
which the option holders have become unconditionally entitled to the options,
with the corresponding increase in equity classified as Options and Warrants
reserve based on the Group's estimate of the number of equity instruments
expected to vest.
At each balance sheet date, the Group reviews its estimate of the number of
equity instruments expected to vest. The impact of the revision of the original
estimates, if any, is recognised in profit or loss over the remaining vesting
period, with a corresponding adjustment to the options and warrants reserve.
1.14Leasing
Lease payments are apportioned between finance charges and the reduction of the
lease obligation so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged against income, unless
they are directly attributable to qualifying assets, in which case they are
capitalised. Contingent rentals are recognised as expenses in the periods in
which they are incurred.
Operating lease payments are recognised as an expense on a straight line basis
over the lease term, except where another systematic basis is more
representative of the time pattern in which the economic benefits from the
leased asset are consumed. Contingent rentals arising under operating leases are
recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases,
such incentives are recognised as a liability. The aggregate benefits of
incentives are recognised as a reduction of rental expense on a straight line
basis, except where another systematic basis is more representative of the time
pattern the economic benefits from the leased asset are consumed.
1.15 Earnings per share and dilutive earnings per share
Basic earnings per share is calculated by dividing the profit/(loss)
attributable to equity holders of the Company, excluding any costs of servicing
equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the year.
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account the after tax effect of interest
and other finance charges associated with diluted potential ordinary shares and
the weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
1.16Early adoption of accounting standards
The Company has elected to early adopt IFRS 8 'Operating Segments' and the
amendment to IAS 1 'Presentation of Financial Statements'. These standards are
not required to be applied until annual reporting periods beginning on or after
1 January 2009.
IFRS 8 'Operating Segments' is a disclosure standard which has resulted in a
re-designation of the Group's reportable segments (see Note 2), but has no
impact on the reportable results or financial position of the Group. The
operating segments are identified on the basis of internal reports about
components of the Group that are reviewed by the chief operating decision maker
in order to allocate resources to the segment and to assess its performance. The
disclosure note for the prior period has also been amended to comply with the
early adoption of IFRS 8 'Operating Segments'.
The amendment to IAS 1 'Presentation of Financial Statements' requires all
entities to disclose a Statement of Comprehensive Income for annual reporting
periods beginning on or after 1 January 2009. The Statement of Comprehensive
Income includes the profit and loss and other comprehensive income. Other
comprehensive income items are those items of income and expenses which are not
recognised in profit and loss but reflect those that were previously reflected
in the Statement of Changes in Equity for:
* Changes in revaluation surpluses;
* Gains or losses arising from translating the financial statements of foreign
operations;
* Gains or losses on remeasuring available-for-sale financial assets; and
* The effective portion of gains and losses on hedging instruments in a cash flow
hedge.
The early adoption of the amendment to IAS 1 'Presentation of Financial
Statements' has no impact on the reportable results or financial position of the
Group. The prior period disclosure has also been amended to comply with the
early adoption of the amendment to IAS 1 'Presentation of Financial Statements'.
1.17Standards in issue not yet effective
At the date of authorisation of the financial report there are certain standards
and interpretations which were in issue but not yet effective. The Directors do
not expect the application of these standards and interpretations to have a
material impact on the amounts recognised in the financial report or the
disclosures thereof.
2. Segmental information
Lithic operates in three reporting geological areas and reports to management on
a project by project basis. During the financial year Lithic operated in:
* Zambia - exploring for Nickel and Uranium.
* Togo - exploring for Uranium, Nickel, Zinc and Chromite.
* Mozambique - exploring for Nickel
Lithic has early adopted IFRS 8 'Operating Segments' and the comparative
disclosures have accordingly been amended to reflect IFRS 8 'Operating Segments'
disclosure.
On 13 December 2007 Lithic completed the acquisition of RRCC Limited and Regent
Resources Capital Corporation SAU (hereafter "RRCC") incorporated in the British
Virgin Islands and Togo respectively. These wholly owned subsidiaries were
acquired for GBP1,246,566 and settled by the issuing of 15,384,615 Lithic shares
at 6.5 pence per share and cash of GBP246,566, of which GBP131,327 (US$262,182)
was paid in three equal tranches every four months, with the final tranche paid
on 12 December 2008. RRCC holds 19 prospective licences in aggregate over the
Haito, Pagala, Niamtougou and Kara projects. The Togo government has a 10% free
carry in these projects and has rights to acquire a further 10% at market value.
As the projects are all in exploration phase no segmental revenue or segment
results are disclosed. Lithic's policy is to capitalise all exploration
expenditure where it has legal tenure to the exploration licences and such
expenditures are expected to be recouped through the successful development and
utilization of the area of interest, or alternatively by its sale or the
exploration and evaluation activities at each area of interest have not reached
a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves. All exploration expenditure is accumulated on
an area of interest basis and reflected in the balance sheet under "Mineral
Properties".
Each project is a reportable segment where it comprises at least 10% of the
capitalised exploration costs. Where the aggregate of reportable segments are
not within 75% of total exploration costs capitalised, additional segments are
sought and disclosed so that all reportable segments comprise at least 75% of
total capitalised exploration costs. No reportable segment has been merged or
aggregated together to meet the 10% rule mentioned above.
+----------------+------------+-----------------+-------------+-------------+-----------+
| | | | Capitalised | |
| | | | exploration | |
| | | | costs | |
+----------------+------------+-----------------+---------------------------+-----------+
| | Country | Mineral/Metals | Acquisition | Exploration | Total |
| | | | costs | costs | |
| | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| | | | GBP | GBP | GBP |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Asset | | | | | |
| reconciliation | | | | | |
| - March 2009 | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Togo | Nickel/Chromite | 309,093 | 571,627 | 880,720 |
| Haito | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Togo | Zinc | 309,093 | 215,445 | 524,538 |
| Pagala | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Togo | Uranium | 309,093 | 184,448 | 493,541 |
| Niamtougou | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Togo | Uranium | 309,092 | 64,916 | 374,008 |
| Kara | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Mozambique | Nickel | - | 659,202 | 659,202 |
| Mavita | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Segmental | | | 1,236,372 | 1,695,638 | 2,932,009 |
| exploration | | | | | |
| assets | | | | | |
| | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Segmental | | | | | |
| property, | | | | | |
| plant and | | | | | |
| equipment | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | | | | | 109,285 |
| Zambia | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | | | | | 150,114 |
| Togo | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | | | | | 563 |
| Mozambique | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Other | | | | | 1,522,120 |
| assets | | | | | |
| in | | | | | |
| Bermuda | | | | | |
| (see | | | | | |
| Note 8) | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Unallocated | | | | | 1,786,538 |
| assets | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Total assets | | | 6,500,629 |
+----------------+------------+-----------------+-------------+-------------+-----------+
During the year Lithic impaired the Mitaba project in Zambia, and capitalised
exploration costs associated with this project amounting to GBP1,982,193 were
expensed as an impairment cost.
+----------------+------------+-----------------+-------------+-------------+-----------+
| | | | Capitalised | |
| | | | exploration | |
| | | | costs | |
+----------------+------------+-----------------+---------------------------+-----------+
| | Country | Mineral/Metals |Acquisition |Exploration | Total |
| | | | costs | costs | |
| | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| | | | GBP | GBP | GBP |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Asset | | | | | |
| reconciliation | | | | | |
| - March 2008 | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Zambia | Nickel | 688,700 | 810,427 | 1,499,127 |
| Mitaba | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Togo | Nickel/Chromite | 309,093 | 75,352 | 384,445 |
| Haito | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Togo | Zinc | 309,093 | 30,293 | 339,386 |
| Pagala | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Togo | Uranium | 309,093 | 19,330 | 328,423 |
| Niamtougou | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Togo | Uranium | 309,092 | 8,577 | 317,669 |
| Kara | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | Mozambique | Nickel | - | 225,110 | 225,110 |
| Mavita | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Segmental | | | 1,925,071 | 1,169,089 | 3,094,160 |
| exploration | | | | | |
| assets | | | | | |
| | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Segmental | | | | | |
| property, | | | | | |
| plant and | | | | | |
| equipment | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | | | | | 19,451 |
| Zambia | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - Togo | | | | | 87,548 |
+----------------+------------+-----------------+-------------+-------------+-----------+
| - | | | | | 668 |
| Mozambique | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Other | | | | | 205,816 |
| assets | | | | | |
| in | | | | | |
| Bermuda | | | | | |
| (see | | | | | |
| Note 8) | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Unallocated | | | | | 5,037,430 |
| assets | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| | | | | | |
+----------------+------------+-----------------+-------------+-------------+-----------+
| Total assets | | | 8,445,073 |
+----------------+------------+-----------------+-------------+-------------+-----------+
+----------------+-------------+-------------+
| Liabilities | Total | Total |
| Reconciliation | Liabilities | Liabilities |
+----------------+-------------+-------------+
| | 2009 | 2008 |
+----------------+-------------+-------------+
| | GBP | GBP |
+----------------+-------------+-------------+
| | | |
+----------------+-------------+-------------+
| Zambia | 14,562 | 73,041 |
+----------------+-------------+-------------+
| Togo | 34,681 | 14,652 |
+----------------+-------------+-------------+
| Mozambique | 2,111 | 2,997 |
+----------------+-------------+-------------+
| Total | 51,354 | 90,690 |
| segmental | | |
| liabilities | | |
+----------------+-------------+-------------+
| Unallocated | 159,593 | 212,457 |
| liabilities | | |
+----------------+-------------+-------------+
| Total | 210,947 | 303,147 |
| liabilities | | |
+----------------+-------------+-------------+
3. Reconciliation of deficit
The deficit for the year (before and after tax) was after charging expenses and
receiving income as follows:
+--------------+-------------+----------+----------+------------+--------+-------------+-----------+----------+
| | Group | | Company |
+ +------------------------+-----------------------+---------------------------------------------+
| | 31 | 31 March | | 31 | 31 |
| | March | 2008 | | March | March |
| | 2009 | | | 2009 | 2008 |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| | GBP | GBP | | GBP | GBP |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Interest | 122,434 | 150,380 | | 122,430 | 150,254 |
| income | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Management | 183,947 | - | | 183,947 | - |
| fees | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Gain | 73 | - | | 1 | - |
| on | | | | | |
| disposal | | | | | |
| of | | | | | |
| property | | | | | |
| plant | | | | | |
| and | | | | | |
| equipment | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Foreign | 3,628 | - | | 1,303 | - |
| exchange | | | | | |
| gains | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Total | 310,082 | 150,380 | | 307,681 | 150,254 |
| income | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Auditors' | | | | | |
| remuneration | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| - | (35,725) | (18,313) | | (17,599) | (12,758) |
| audit | | | | | |
| services | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Business | (4,050) | - | | (4,050) | - |
| development | | | | | |
| expenditure | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Depreciation | (17,053) | (3,434) | | (17,053) | (3,434) |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Directors' | (77,976) | (43,908) | | (61,250) | (42,083) |
| fees | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Exploration | - | (352,753) | | - | (335,410) |
| expenditure | | | | | |
| written off | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Exploration | (1,982,193) | - | | (902,442) | - |
| expenditure | | | | | |
| impaired | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Foreign | (120,675) | (16,016) | | (91,580) | (9,800) |
| exchange | | | | | |
| losses | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Interest | (5,767) | (4,035) | | (5,675) | (4,005) |
| expense | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Other | (286,847) | (228,185) | | (277,557) | (224,307) |
| costs | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Personnel | (25,278) | (1,967) | | (25,278) | (1,967) |
| costs - | | | | | |
| defined | | | | | |
| contribution | | | | | |
| plan | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Personnel | (252,631) | (209,646) | | (252,631) | (209,646) |
| costs - | | | | | |
| salaries | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Share-based | (104,525) | (108,818) | | (104,525) | (108,818) |
| payments | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Total | (2,912,720) | (987,075) | | (1,759,640) | (952,228) |
| expenses | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| | | | | | |
+--------------+-------------+---------------------+---------------------+-------------+-----------+
| Deficit | (2,602,638) | (836,695) | | (1,451,959) | (801,974) |
| for the | | | | | |
| year | | | | | |
+--------------+-------------+----------+----------+------------+--------+-------------+-----------+----------+
4. Taxes
The provision for income tax differs from the effective tax charge reflected in
the statement of comprehensive income and can be reconciled as follows:
+---------------+-------------+-----------+--------+-------------+-----------+
| | Group | | Company |
+---------------+-------------------------+--------+-------------------------+
| | 31 | 31 | | 31 | 31 |
| | March | March | | March | March |
| | 2009 | 2008 | | 2009 | 2008 |
+---------------+-------------+-----------+--------+-------------+-----------+
| | GBP | GBP | | GBP | GBP |
+---------------+-------------+-----------+--------+-------------+-----------+
| | | | | | |
+---------------+-------------+-----------+--------+-------------+-----------+
| Deficit | (2,602,638) | (836,695) | | (1,451,959) | (801,974) |
| disclosed | | | | | |
| in the | | | | | |
| Statement | | | | | |
| of | | | | | |
| Comprehensive | | | | | |
| Income | | | | | |
+---------------+-------------+-----------+--------+-------------+-----------+
| Tax | - | - | | - | - |
| thereon | | | | | |
| at the | | | | | |
| statutory | | | | | |
| rate | | | | | |
+---------------+-------------+-----------+--------+-------------+-----------+
| Rate | (18,758) | (7,534) | | - | - |
| difference | | | | | |
| in Zambia | | | | | |
+---------------+-------------+-----------+--------+-------------+-----------+
| Rate | - | - | | - | - |
| difference | | | | | |
| in Togo | | | | | |
+---------------+-------------+-----------+--------+-------------+-----------+
| Rate | - | (1,145) | | - | - |
| difference | | | | | |
| in | | | | | |
| Mozambique | | | | | |
+---------------+-------------+-----------+--------+-------------+-----------+
| Tax | - | 113 | | - | - |
| effect | | | | | |
| of | | | | | |
| expenses | | | | | |
| not | | | | | |
| deductible | | | | | |
| in | | | | | |
| determining | | | | | |
| taxable | | | | | |
| profit | | | | | |
+---------------+-------------+-----------+--------+-------------+-----------+
| Tax | 18,758 | 8,566 | | - | - |
| effect | | | | | |
| on | | | | | |
| deferred | | | | | |
| tax | | | | | |
| assets | | | | | |
| not | | | | | |
| brought | | | | | |
| into | | | | | |
| account | | | | | |
+---------------+-------------+-----------+--------+-------------+-----------+
| Effective | - | - | | - | - |
| tax | | | | | |
| charge | | | | | |
+---------------+-------------+-----------+--------+-------------+-----------+
| | | | | | |
+---------------+-------------+-----------+--------+-------------+-----------+
At year-end Lithic had estimated carried forward tax losses of GBP217,461 (2008:
GBP101,358) in Zambia and GBP7,457(2008: GBP5,313) in Mozambique. Tax losses, in
both Zambia and Mozambique, can be carried forward for 5 years and are reset to
zero if not utilised within the 5 year period. The following losses reset to
zero in years:
+--------+------------+------------+
| | Zambia |Mozambique |
+--------+------------+------------+
| 2014 | GBP75,214 | - |
+--------+------------+------------+
| 2013 | GBP30,209 | GBP5,020 |
+--------+------------+------------+
| 2012 | GBP105,954 | GBP2,437 |
+--------+------------+------------+
| 2011 | GBP6,084 | - |
+--------+------------+------------+
At year end Lithic had the following deferred tax assets not recognised which
can be offset against future taxable income:
* Zambia - GBP219,134 (2008: GBP40,151)
* Mozambique - GBP33,145 (2008: GBP2,262)
5. Loss per share
The calculation of the loss and diluted loss per share is based on the deficit
for the financial period of GBP2,602,638 (2008 -GBP836,695) and on a weighted
average of ordinary shares of 145,832,716 (2008 - 95,550,665 ordinary shares).
Options of 10,900,000 (2008 - 10,900,000 options) have not been taken into
account for calculating the diluted loss per share as the impact of these
instruments are non-dilutive.
6. Property, plant and equipment
a) Group assets
+---------------------------+-----------+----------+-------------+-----------+
| | Plant | Motor | Office | Total |
| | and | vehicles | furniture | |
| | equipment | | and | |
| | | | equipment | |
+---------------------------+-----------+----------+-------------+-----------+
| | GBP | GBP | GBP | GBP |
+---------------------------+-----------+----------+-------------+-----------+
| Cost | | | | |
+---------------------------+-----------+----------+-------------+-----------+
| As at 1 April 2007 | 28,386 | - | 1,344 | 29,730 |
+---------------------------+-----------+----------+-------------+-----------+
| Foreign exchange on | (327) | - | - | (327) |
| opening balance | | | | |
+---------------------------+-----------+----------+-------------+-----------+
| Additions | 37,567 | 34,484 | 57,902 | 129,953 |
+---------------------------+-----------+----------+-------------+-----------+
| As at 31 March 2008 | 65,626 | 34,484 | 59,246 | 159,356 |
+---------------------------+-----------+----------+-------------+-----------+
| Foreign exchange on | 22,927 | 13,910 | 18,765 | 55,602 |
| opening balance | | | | |
+---------------------------+-----------+----------+-------------+-----------+
| Additions | 38,783 | 85,504 | 114,785 | 239,072 |
+---------------------------+-----------+----------+-------------+-----------+
| Disposals | (2,848) | - | (10,235) | (13,083) |
+---------------------------+-----------+----------+-------------+-----------+
| As at 31 March 2009 | 124,488 | 133,898 | 182,561 | 440,947 |
+---------------------------+-----------+----------+-------------+-----------+
| | | | | |
+---------------------------+-----------+----------+-------------+-----------+
| Accumulated depreciation | | | | |
+---------------------------+-----------+----------+-------------+-----------+
| As at 1 April 2007 | (12,152) | - | (68) | (12,220) |
| Foreign exchange on | 145 | - | - | 145 |
| opening balance | | | | |
+---------------------------+-----------+----------+-------------+-----------+
| Current depreciation | (15,799) | (2,414) | (4,186) | (22,399) |
+---------------------------+-----------+----------+-------------+-----------+
| As at 31 March 2008 | (27,806) | (2,414) | (4,254) | (34,474) |
+---------------------------+-----------+----------+-------------+-----------+
| Foreign exchange on | (10,263) | (973) | (933) | (12,169) |
| opening balance | | | | |
+---------------------------+-----------+----------+-------------+-----------+
| Current depreciation | (20,796) | (33,675) | (53,694) | (108,165) |
+---------------------------+-----------+----------+-------------+-----------+
| Disposals | 1,776 | - | 6,528 | 8,304 |
+---------------------------+-----------+----------+-------------+-----------+
| As at 31 March 2009 | (57,089) | (37,062) | (52,353) | (146,504) |
+---------------------------+-----------+----------+-------------+-----------+
| | | | | |
+---------------------------+-----------+----------+-------------+-----------+
| Net book value at 31 | 67,399 | 96,836 | 130,208 | 294,443 |
| March 2009 | | | | |
+---------------------------+-----------+----------+-------------+-----------+
| Net book value at 31 | 37,820 | 32,070 | 54,992 | 124,882 |
| March 2008 | | | | |
+---------------------------+-----------+----------+-------------+-----------+
The Company is required by IAS 16 'Property, plant & equipment' to estimate the
useful lives and the expected residual values of property, plant and equipment
it utilises for its business activities. This estimate is required so that
depreciation can be calculated and allocated to the profit and loss account over
the assets useful life. Significant judgement is exercised in determining the
useful lives and residual values of these assets, especially when these assets
are used in the field and exposed to the elements; which may increase the wear
and tear of normal usage. Additionally, as the field assets are used in remote
areas in foreign jurisdictions, a readily available market for the estimation of
residual values for these assets may not be available. Consequently actual
results may differ from those estimated.
b) Company assets
+------------------------------------+--------------+--------------+-----------+
| | Plant and | Office | Total |
| | equipment | furniture | |
| | | and | |
| | | equipment | |
+------------------------------------+--------------+--------------+-----------+
| | | | |
+------------------------------------+--------------+--------------+-----------+
| | GBP | GBP | GBP |
+------------------------------------+--------------+--------------+-----------+
| Cost | | | |
+------------------------------------+--------------+--------------+-----------+
| As at 1 April 2007 | 2,818 | 1,344 | 4,162 |
+------------------------------------+--------------+--------------+-----------+
| Additions | 5,972 | 11,383 | 17,355 |
+------------------------------------+--------------+--------------+-----------+
| As at 31 March 2008 | 8,790 | 12,727 | 21,517 |
+------------------------------------+--------------+--------------+-----------+
| Additions | - | 35,660 | 35,660 |
+------------------------------------+--------------+--------------+-----------+
| Disposals | (2,534) | - | (2,534) |
+------------------------------------+--------------+--------------+-----------+
| As at 31 March 2009 | 6,256 | 48,387 | 54,643 |
+------------------------------------+--------------+--------------+-----------+
| | | | |
+------------------------------------+--------------+--------------+-----------+
| Accumulated depreciation | | | |
+------------------------------------+--------------+--------------+-----------+
| As at 1 April 2007 | (801) | (68) | (869) |
+------------------------------------+--------------+--------------+-----------+
| Current period charge | (1,563) | (1,871) | (3,434) |
+------------------------------------+--------------+--------------+-----------+
| As at 31 March 2008 | (2,364) | (1,939) | (4,303) |
+------------------------------------+--------------+--------------+-----------+
| Current period charge | (2,415) | (14,638) | (17,053) |
+------------------------------------+--------------+--------------+-----------+
| Disposals | 1,194 | - | 1,194 |
+------------------------------------+--------------+--------------+-----------+
| As at 31 March 2009 | (3,585) | (16,577) | (20,162) |
+------------------------------------+--------------+--------------+-----------+
| | | | |
+------------------------------------+--------------+--------------+-----------+
| Net book value at 31 March 2009 | 2,671 | 31,810 | 34,481 |
+------------------------------------+--------------+--------------+-----------+
| Net book value at 31 March 2008 | 6,426 | 10,788 | 17,214 |
+------------------------------------+--------------+--------------+-----------+
7. Mineral interests
a) Reconciliation
+----------------------------+-------------+-----------+--+------------+-----------+
| | Group | | Company |
+----------------------------+-------------------------+--+------------------------+
| | 31 March | 31 March | | 31 March | 31 March |
| | 2009 | 2008 | | 2009 | 2008 |
+----------------------------+-------------+-----------+--+------------+-----------+
| | GBP | GBP | | GBP | GBP |
+----------------------------+-------------+-----------+--+------------+-----------+
| | | | | | |
+----------------------------+-------------+-----------+--+------------+-----------+
| Opening balance | 3,094,160 | 1,867,079 | | 1,044,871 | 1,320,579 |
+----------------------------+-------------+-----------+--+------------+-----------+
| Exploration costs | 1,334,658 | 350,271 | | 417,533 | 59,702 |
| capitalised for the period | | | | | |
+----------------------------+-------------+-----------+--+------------+-----------+
| Purchase of exploration | - | 1,236,371 | | - | - |
| licences | | | | | |
+----------------------------+-------------+-----------+--+------------+-----------+
| Exploration projects | (1,982,193) | (352,753) | | (902,442) | (335,410) |
| impaired | | | | | |
+----------------------------+-------------+-----------+--+------------+-----------+
| Foreign exchange movements | 485,384 | (6,808) | | - | - |
+----------------------------+-------------+-----------+--+------------+-----------+
| As at 31 March 2009 | 2,932,009 | 3,094,160 | | 559,962 | 1,044,871 |
+----------------------------+-------------+-----------+--+------------+-----------+
The Group's policy is to capitalise exploration expenditure, for each area of
interest, in terms of IFRS 6 'Exploration for and evaluation of mineral
resources'. These costs are expensed to the statement of comprehensive income
when it is expected that the area of interest will not generate future economic
benefits or alternatively where the amount of expected future economic benefits
to be generated is less than the area of interests carrying value, the
difference is treated as an impairment and expensed to the statement of
comprehensive income. Significant judgement is applied by the Company in
determining whether an area of interest will generate future economic benefits
or future economic benefits in excess of its carrying value. Such judgement is
based upon various technical criteria which include, amongst others, the
geology; air-borne and ground survey results; soil, rock chip and drill sample
assay results and metallurgical test work results.
b) Exploration expenditure per project
+----------------------------+------------+-----------+--+------------+-----------+
| | Group | | Company |
+----------------------------+------------------------+--+------------------------+
| | 31 March | 31 March | | 31 March | 31 March |
| | 2009 | 2008 | | 2009 | 2008 |
+----------------------------+------------+-----------+--+------------+-----------+
| | GBP | GBP | | GBP | GBP |
+----------------------------+------------+-----------+--+------------+-----------+
| Group exploration projects | | | | | |
+----------------------------+------------+-----------+--+------------+-----------+
| Mavita | 659,202 | 225,110 | | 120,723 | 120,723 |
+----------------------------+------------+-----------+--+------------+-----------+
| Haito | 880,720 | 384,445 | | 219,835 | 8,700 |
+----------------------------+------------+-----------+--+------------+-----------+
| Pagala | 524,538 | 339,386 | | 64,494 | 1,978 |
+----------------------------+------------+-----------+--+------------+-----------+
| Niamtougou | 493,541 | 328,423 | | 123,729 | 10,360 |
+----------------------------+------------+-----------+--+------------+-----------+
| Kara | 374,008 | 317,669 | | 31,181 | 1,400 |
+----------------------------+------------+-----------+--+------------+-----------+
| Mitaba | - | 1,499,127 | | - | 901,710 |
+----------------------------+------------+-----------+--+------------+-----------+
| | 2,932,009 | 3,094,160 | | 559,962 | 1,044,871 |
+----------------------------+------------+-----------+--+------------+-----------+
8. Other assets
+-------------+-----------+---------+--------+-----------+---------+
| | Group | | Company |
+-------------+---------------------+--------+---------------------+
| | 31 | 31 | | 31 | 31 |
| | March | March | | March | March |
| | 2009 | 2008 | | 2009 | 2008 |
+-------------+-----------+---------+--------+-----------+---------+
| | GBP | GBP | | GBP | GBP |
+-------------+-----------+---------+--------+-----------+---------+
| | | | | | |
+-------------+-----------+---------+--------+-----------+---------+
| Business | 1,522,120 | 205,816 | | 1,522,120 | 134,304 |
| development | | | | | |
| projects | | | | | |
+-------------+-----------+---------+--------+-----------+---------+
Lithic is farming into a uranium joint venture with Zambezi Resources Limited.
The costs associated with this farm-in are capitalised to business development
projects and forms part of acquisition costs once the farm-in is earned. In the
event that Lithic decides not to proceed with the joint venture, all costs
capitalised to the joint venture will be expensed. As Lithic has not yet reached
the minimum expenditure commitments, it does not have a legal interest in the
joint venture entities and therefore the investment is not yet equity accounted
for under IAS 31 - Interests in Joint Ventures.
9. Investment in subsidiaries
At 31 March 2009, the Company had interests in the following subsidiaries:
+--------------+---------------+--------------+----------+--------+-------------+------------+
| Company | Country | Holding | Class |% Held | Nature |Investment |
| | of | Company | of | | of | Cost |
| |Incorporation | | Share | | Business | |
| | | | Capital | | | |
| | | | Held | | | |
+--------------+---------------+--------------+----------+--------+-------------+------------+
| | | | | | | GBP |
+--------------+---------------+--------------+----------+--------+-------------+------------+
| | | | | | | |
+--------------+---------------+--------------+----------+--------+-------------+------------+
| MR Nickel | Bermuda | Lithic | Ordinary | 100 | Exploration | 7,500 |
| (Bermuda) | | Metals and | | | | |
| Limited | | Energy | | | | |
| | | Limited | | | | |
+--------------+---------------+--------------+----------+--------+-------------+------------+
| MR Nickel | Zambia | MR Nickel | Ordinary | 100 | Exploration | 12 |
| Limited | | (Bermuda) | | | | |
| | | Limited | | | | |
+--------------+---------------+--------------+----------+--------+-------------+------------+
| Zambezi | Mozambique | MR Nickel | Ordinary | 100 | Exploration | 420 |
| Niquel | | (Bermuda) | | | | |
| Mozambique | | Limited | | | | |
| Limitada | | | | | | |
+--------------+---------------+--------------+----------+--------+-------------+------------+
| RRCC Limited | British | Lithic | Ordinary | 100 | Exploration | 1,246,566 |
| (BVI) | Virgin | Metals and | | | | |
| | Islands | Energy | | | | |
| | | Limited | | | | |
+--------------+---------------+--------------+----------+--------+-------------+------------+
| Regent | Togo | RRCC Limited | Ordinary | 100 | Exploration | 10,195 |
| Resources | | (BVI) | | | | |
| Capital | | | | | | |
| Corporation | | | | | | |
| SAU | | | | | | |
+--------------+---------------+--------------+----------+--------+-------------+------------+
10. Inter-company loans
+---------------------------------------------------+--+------------+-----------+
| | | Company |
+---------------------------------------------------+--+------------------------+
| | | 31 March | 31 March |
| | | 2009 | 2008 |
+---------------------------------------------------+--+------------+-----------+
| | | GBP | GBP |
+---------------------------------------------------+--+------------+-----------+
| | | | |
+---------------------------------------------------+--+------------+-----------+
| Loans to subsidiaries | | 2,010,880 | 1,147,610 |
+---------------------------------------------------+--+------------+-----------+
Loans by the company to its subsidiaries are unsecured, at call and non-interest
bearing. The Company has no immediate plan, nor is it considering recalling the
loans in the foreseeable future. The recoverability of these funds is subject to
the successful development and exploitation of mineral properties or
alternatively, the sale of the tenements. Repayment of the funds will not be
called by the Company until this has taken place. The net asset position of the
Group is lower than that of the Company. This position is a result of fees
being charged to the subsidiary in prior periods through the inter-company
account which are expensed within the subsidiary. Management believe that it
would be misleading to impair the inter-company receivable and believe that the
recovery of these amounts will satisfactorily be made through the exploitation
of the project in due course.
11.Trade and other receivables
+--------------------------------+------------+----------+--+-----------+-----------+
| | Group | | Company |
+--------------------------------+-----------------------+--+-----------------------+
| | 31 March | 31 March | | 31 March | 31 March |
| | 2009 | 2008 | | 2009 | 2008 |
+--------------------------------+------------+----------+--+-----------+-----------+
| | GBP | GBP | | GBP | GBP |
+--------------------------------+------------+----------+--+-----------+-----------+
| | | | | | |
+--------------------------------+------------+----------+--+-----------+-----------+
| Debtors | 137,547 | 51,671 | | 19,089 | 36,083 |
+--------------------------------+------------+----------+--+-----------+-----------+
| Other | 450 | 1,054 | | - | 1,584 |
+--------------------------------+------------+----------+--+-----------+-----------+
| Total trade and other | 137,997 | 52,725 | | 19,089 | 37,667 |
| receivables | | | | | |
+--------------------------------+------------+----------+--+-----------+-----------+
12. Prepayments
+-------------------------------+------------+----------+--+-----------+-----------+
| | Group | | Company |
+-------------------------------+-----------------------+--+-----------------------+
| | 31 March | 31 March | | 31 March | 31 March |
| | 2009 | 2008 | | 2009 | 2008 |
+-------------------------------+------------+----------+--+-----------+-----------+
| | GBP | GBP | | GBP | GBP |
+-------------------------------+------------+----------+--+-----------+-----------+
| | | | | | |
+-------------------------------+------------+----------+--+-----------+-----------+
| Prepayments | 50,148 | 46,681 | | 20,555 | 26,087 |
+-------------------------------+------------+----------+--+-----------+-----------+
Prepayments are general in nature and relate to items such as office rent,
insurance and subscriptions.
13.Cash and cash equivalents
+--------------------------------+------------+-----------+--+-----------+-----------+
| | Group | | Company |
+--------------------------------+------------------------+--+-----------------------+
| | 31 March | 31 March | | 31 March | 31 March |
| | 2009 | 2008 | | 2009 | 2008 |
+--------------------------------+------------+-----------+--+-----------+-----------+
| | GBP | GBP | | GBP | GBP |
+--------------------------------+------------+-----------+--+-----------+-----------+
| | | | | | |
+--------------------------------+------------+-----------+--+-----------+-----------+
| Cash on hand and at bank | 207,810 | 239,909 | | 152,339 | 142,589 |
+--------------------------------+------------+-----------+--+-----------+-----------+
| Cash on term deposits | 1,356,102 | 4,680,900 | | 1,356,102 | 4,680,900 |
+--------------------------------+------------+-----------+--+-----------+-----------+
| Total cash and cash | 1,563,912 | 4,920,809 | | 1,508,441 | 4,823,489 |
| equivalents | | | | | |
+--------------------------------+------------+-----------+--+-----------+-----------+
14. Trade and other payables
+--------------------------------+------------+----------+--+-----------+-----------+
| | Group | | Company |
+--------------------------------+-----------------------+--+-----------------------+
| | 31 March | 31 March | | 31 March | 31 March |
| | 2009 | 2008 | | 2009 | 2008 |
+--------------------------------+------------+----------+--+-----------+-----------+
| | GBP | GBP | | GBP | GBP |
+--------------------------------+------------+----------+--+-----------+-----------+
| | | | | | |
+--------------------------------+------------+----------+--+-----------+-----------+
| Creditors | 86,098 | 271,345 | | 50,677 | 195,139 |
+--------------------------------+------------+----------+--+-----------+-----------+
| Accruals | 83,601 | 12,589 | | 72,340 | 876 |
+--------------------------------+------------+----------+--+-----------+-----------+
| Total trade and other payables | 169,699 | 283,934 | | 123,017 | 196,015 |
+--------------------------------+------------+----------+--+-----------+-----------+
Trade creditors are at normal terms and are payable within a range of 7 to 30
days. No interest is included in respect of overdue payments on the basis that
this would not be material.
15. Provisions
+------------+--------+--------+--------+--------+--------+
| | Group | | Company |
+------------+-----------------+--------+-----------------+
| | 31 | 31 | | 31 | 31 |
| | March | March | | March | March |
| | 2009 | 2008 | | 2009 | 2008 |
+------------+--------+--------+--------+--------+--------+
| | GBP | GBP | | GBP | GBP |
+------------+--------+--------+--------+--------+--------+
| | | | | | |
+------------+--------+--------+--------+--------+--------+
| Leave | 41,248 | 19,213 | | 36,575 | 18,758 |
| provisions | | | | | |
+------------+--------+--------+--------+--------+--------+
The leave provisions reflect the expected amounts to be paid in aggregate to
employees for accrued annual leave at the balance sheet date as well as
associated employee benefit costs including superannuation and workers
compensation. The timing of the expected payments depends on the timing of
employees utilising their leave benefits. A reconciliation reflecting the
movement between the opening and closing balances is shown below:
Reconciliation of leave provisions
+------------------------------------------------------+-----------+--+-----------+
| | Group | | Company |
+------------------------------------------------------+-----------+--+-----------+
| | GBP | | GBP |
+------------------------------------------------------+-----------+--+-----------+
| | | | |
+------------------------------------------------------+-----------+--+-----------+
| Opening balance | 19,213 | | 18,758 |
+------------------------------------------------------+-----------+--+-----------+
| Additions for the year | 22,035 | | 17,817 |
+------------------------------------------------------+-----------+--+-----------+
| Closing balance | 41,248 | | 36,575 |
+------------------------------------------------------+-----------+--+-----------+
16. Issued capital
+-----------------------------------------------+--------------+-----------+--------------------------+
| | Number | Issued | Share |
| | of | Capital | Premium |
| | Shares | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
| | # | GBP | GBP |
+-----------------------------------------------+--------------+-----------+--------------------------+
| Issued | | | |
| and | | | |
| fully | | | |
| paid | | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
| As | 35,374,120 | 353,741 | 2,234,033 |
| at | | | |
| 1 | | | |
| April | | | |
| 2007 | | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
| May | 40,000,000 | 400,000 | 1,600,000 |
| 2007 | | | |
| Issue | | | |
| placement | | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
| November | 61,538,462 | 615,385 | 3,384,615 |
| 2007 | | | |
| Issue | | | |
| placement | | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
| Issued | 15,384,615 | 153,846 | 846,154 |
| for | | | |
| Regent | | | |
| Resources | | | |
| Capital Corporation | | | |
| acquisition | | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
| Capital | - | - | (226,524) |
| raising | | | |
| costs | | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
| Balance | 152,297,197 | 1,522,972 | 7,838,278 |
| at 31 | | | |
| March | | | |
| 2008 | | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
| December | (26,000,000) | (260,000) | (23,100) |
| 2008 | | | |
| share | | | |
| buy-back | | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
| Balance | 126,297,197 | 1,262,972 | 7,815,178 |
| as at | | | |
| 31 | | | |
| March | | | |
| 2009 | | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
| | | | |
+-----------------------------------------------+--------------+-----------+--------------------------+
a. The Company has an authorised share capital of GBP3,020,000
comprising 300 million ordinary par value shares at GBP0.01 each and
2,000,000 preferred shares of GBP0.01 each.
b. The ordinary shares are
fully paid ordinary shares. Each share carries the right to voting and to
receive dividends.
c. The preferred shares, none of which have been
issued carry the right to vote and to receive an 8 per cent. preferential
dividend.
b. The share premium account reflects the amounts
received for the issuance of shares over and above the par value of the
shares.
17. Reserves
+---------------------------------+-----------+-------------+--------------+----------+
| | Share | Accumulated | Foreign | Options |
| | Premium | deficit | currency | and |
| | Account | | translation | Warrants |
| | | | reserve | reserve |
+---------------------------------+-----------+-------------+--------------+----------+
| | GBP | GBP | GBP | GBP |
+---------------------------------+-----------+-------------+--------------+----------+
| | | | | |
+---------------------------------+-----------+-------------+--------------+----------+
| As at 1 April 2007 | 2,234,033 | (522,634) | (28,960) | 72,003 |
+---------------------------------+-----------+-------------+--------------+----------+
| Movement for the year | 5,604,245 | (836,695) | (11,856) | 108,818 |
+---------------------------------+-----------+-------------+--------------+----------+
| As at 1 April 2008 | 7,838,278 | (1,359,329) | (40,816) | 180,821 |
+---------------------------------+-----------+-------------+--------------+----------+
| Movement for the year | (23,100) | (2,602,638) | 798,969 | 104,525 |
+---------------------------------+-----------+-------------+--------------+----------+
| As at 31 March 2009 | 7,815,178 | (3,961,967) | 758,153 | 285,346 |
+---------------------------------+-----------+-------------+--------------+----------+
* The share premium account records the amounts paid by shareholders for shares in
excess of their nominal value, less any costs incurred in issuing shares.
* The accumulated deficit represents the Group's operational losses since
incorporation.
* The Foreign currency translation reserve represents the foreign exchange
movements on the translation of all foreign controlled entities.
* The Options and Warrants reserve represents the value of all share based
payments made to Directors, staff and other vendors. The respective amounts are
transferred out of the reserve and into the share capital and share premium
accounts upon exercise of the options and warrants.
* All options issued to Directors are subject to shareholder approval, whilst
options issued to key employees are issued in terms of the Company's staff
option plan that was approved at the Annual General Meeting of the Company held
on the 7 September 2007.
* There were 10,900,000 share options outstanding at the beginning of the year.
* 2,000,000 share options were issued during the year.
* No options were exercised during the year.
* 2,000,000 options lapsed during the year.
* The total of share options issued and outstanding at the end of the year was
10,900,000.
* The weighted average price of the share options outstanding at the end of the
year was GBP0.12.
In determining the value of the options, the company uses the Black Scholes
model. This model requires an estimate of possible future dividend payments and
the expected future share price volatility over the period the options are
granted. As the criteria are based upon future events, significant judgement is
required to estimate these parameters. In determining the parameters to be used,
the Company assesses the possible payment of future dividends based upon
expected cash flow results; it also determines the existing share price
volatility of the Company and estimates whether the result is relevant for the
period of the options granted. Where necessary the volatility is adjusted to
take into account the impact of extraneous causes of volatility, changes
expected due to changes in the Company's activities and perceived projects
values. The volatility used may differ from actual outcomes.
The parameters used to value the options issued during the year were:
* Number of options granted - 2,000,000
* Average option period - 4 years
* Average price volatility - 67.32%
* Average exercise price - GBP0.155
* Average share price at option grant date - GBP0.05
* Risk free rate - 5%
* Average expected dividends - nil
Based on the parameters used, the issued options had an aggregate fair value
of GBP21,107.
18. Financial instruments
Exposure to currency, credit, capital, interest rate risk and liquidity risk
arise in the normal course of the Company's business. The Group may from time to
time use financial instruments to help manage these risks. The Directors
regularly review the Company's financial instruments profile risk and determine
policies for managing these said risks.
Currency risk
The Group's activities expose it primarily to the financial risks of changes in
foreign currency exchange rates. Notwithstanding the possible risk of foreign
currency fluctuations, the Group has at present decided not to hedge its
exposure to exchange rate fluctuations.
The Group has overseas subsidiaries operating in Africa, whose expenses are
denominated in US dollars, Australian Dollars, Zambian Kwacha and Mozambique
Meticais. Foreign exchange differences on the translation of these assets and
liabilities and inter-company loans are charged to the Foreign currency
translation reserve account. A one percent fluctuation in each of the applicable
exchange rates would result in an aggregate change of GBP4,536 (2008: GBP1,186)
to the Foreign currency translation reserve account.
At the end of the year the Group had GBP31,031 of cash assets held in US
dollars, GBP20,733 in Australian Dollars, GBP6,103 in Zambian Kwacha, GBP18,102
in Togolese CFA and GBP1 in Mozambique Metical, the remainder being held by the
Company in British Pounds. For every one percent fluctuation in the foreign
exchange rate, the respective aggregate adjustment to the foreign exchange
gain/(loss) in the statement of comprehensive income would be GBP552 (2008:
GBP763)
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual arrangements resulting in a financial loss to the Group. As the
Group is currently in the exploration phase, credit risk exposure primarily
relates to non receipt of VAT input credits, rental security deposits and
interest income. The Company believes that these transactions are with reputable
counterparties and as the amounts involved are insignificant the Group has opted
to self-insure the risks. Credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by International
credit-rating agencies.
The carrying value of financial assets recorded in the financial statements net
of any allowances for losses, represents the Group's maximum exposure to credit
risk.
Capital risk
The Group manages its capital to ensure that entities in the Group will be able
to continue as a going concern whilst maximising returns to shareholders.
The Group's overall strategy has remained unchanged since 2008 although a
strategic review is currently being undertaken by the new board. Due to the high
risk nature of exploration, the Group relies solely on shareholder finance. This
reliance is unlikely to change in the near future unless the Group discovers and
develops payable resources.
The Group operates globally, primarily through subsidiary companies established
in the markets where the Group operates. None of the Group entities are subject
to externally imposed capital requirements.
Capital risk is considered to be low as the majority of the Company's movable
assets are held in cash within reputable financial institutions. Additionally
all assets acquired are fully paid with title vesting in the Group.
The Company does not have sovereign risk insurance; however it has
comprehensively insured its tangible assets with reputable underwriters.
Interest rate risk
As the Group does not have any debt bearing liabilities, it does not have any
interest rate derivatives.
The Company has GBP207,810 in various current accounts and GBP1,356,102 cash
invested in term deposit accounts, ranging between 7 to 30 days. Interest
received on the term deposit accounts is at market rates, approximately 0.3% per
annum. A one per cent variation in the interest rate would result in a
respective increase or decrease of interest income amounting to GBP41 (2008:
GBP2,340).
Liquidity risk
Liquidity risk refers to the risk that the Group will not have sufficient liquid
funds to meet its forecasted obligations as and when they fall due. The Group's
liquidity position is reviewed on a monthly basis and includes the monitoring of
future expenses to ensure that sufficient funds are released from its term
deposits to effect timeous payment of debts. The Group has sufficient funds to
meet its forecasted obligations for at least the next 12 months.
Categories of financial instruments
+---------------+--------+--------+--------------+--+--------+--+--------+--------------+
| | Group | | Company |
+---------------+--------------------------------+--+-----------------------------------+
| | 2009 | 2008 | | 2009 | 2008 |
+---------------+-----------------+--------------+--+--------------------+--------------+
| | GBP | GBP | | GBP | GBP |
+---------------+-----------------+--------------+--+--------------------+--------------+
| Financial | | | | | |
| assets | | | | | |
+---------------+-----------------+--------------+--+--------------------+--------------+
| Cash and cash | 1,563,912 | 4,920,809 | | 1,508,441 | 4,823,489 |
| equivalents | | | | | |
+---------------+-----------------+--------------+--+--------------------+--------------+
| Loans and | 137,997 | 52,725 | | 2,029,969 | 1,185,277 |
| receivables | | | | | |
+---------------+-----------------+--------------+--+--------------------+--------------+
| Other assets | 1,522,120 | 205,816 | | 1,522,120 | 134,304 |
+---------------+-----------------+--------------+--+--------------------+--------------+
| | | | | | |
+---------------+-----------------+--------------+--+--------------------+--------------+
| Total assets | 3,224,029 | 5,179,350 | | 5,060,530 | 6,143,070 |
| at fair value | | | | | |
+---------------+-----------------+--------------+--+--------------------+--------------+
| | | | | | |
+---------------+-----------------+--------------+--+--------------------+--------------+
| Financial | | | | | |
| liabilities | | | | | |
+---------------+-----------------+--------------+--+--------------------+--------------+
| Amortised | (169,699) | (283,934) | | (123,017) | (196,015) |
| cost | | | | | |
+---------------+-----------------+--------------+--+--------------------+--------------+
| | | | | | |
+---------------+-----------------+--------------+--+--------------------+--------------+
| Net fair | 1,691,819 | 4,895,416 | | 4,937,513 | 5,947,055 |
| value of | | | | | |
| financial | | | | | |
| instruments | | | | | |
+---------------+-----------------+--------------+--+--------------------+--------------+
| | | | |
+---------------+--------+--------+--------------+--+--------+--+--------+--------------+
The fair value of financial instruments equates to the balance sheet carrying
value as stated above.
19.Commitments
a) Joint venture agreement
On 28 April 2008 the Group signed a joint venture agreement with Zambezi
Resources Limited (hereafter "ZRL") in which Lithic has the right to explore for
Uranium on certain of ZRL's mining licences. In terms of the agreement Lithic is
required to contribute in aggregate US$5 million, over a period of 2.5 years,
for a 51% equity participation in both Oryx Resources Limited and Southern
African Resources Limited. The joint venture will be managed by Lithic and the
funds contributed to the equity participation will be used to fund joint venture
exploration costs.
b) Operating leases
At the end of the financial year the Group had the following operating lease
commitments which have not been capitalised in the financial statements:
+----------------------------------+---------+----------+--+---------+---------+
| | Group | | Company |
+----------------------------------+--------------------+--+-------------------+
| | 2009 | 2008 | | 2009 | 2008 |
+----------------------------------+---------+----------+--+---------+---------+
| | GBP | GBP | | GBP | GBP |
+----------------------------------+---------+----------+--+---------+---------+
| | | | | | |
+----------------------------------+---------+----------+--+---------+---------+
| Payable within one year | 76,146 | - | | 69,812 | - |
+----------------------------------+---------+----------+--+---------+---------+
| Payable between one and five | 77,955 | - | | 77,955 | - |
| years | | | | | |
+----------------------------------+---------+----------+--+---------+---------+
| Total | 154,101 | - | | 147,767 | - |
+----------------------------------+---------+----------+--+---------+---------+
The above operating leases refer to the lease of business premises and office
equipment. The business premises are leased for a fixed term of three years and
include an option to renew. The lease is subject to an increase price
adjustments being the maximum of 5% or current rental prices at that time.
Office equipment operating leases are on fixed pricing terms with the
outstanding lease periods ranging between 3 and 4 years.
20. Post-balance sheet events
At a special General Meeting convened on 1 July 2009, David Rawlinson, Julian
Ford, James Kerr and David Lunt were replaced as directors by David de Jong
Weill, George Greville Roach and Ozge Erdem. The new board is currently
undertaking a strategic review of the business and further updates will be
provided in due course.
21. Related party transactions
On 28 October 2008 Zambezi Resources Limited sold its shareholding of 26,633,621
shares in the Company in volatile market conditions. In order to stabilise the
Company's shareholding and its Zambian investments, 26 million of these shares
were acquired at short notice by Lithic Directors and management. On 31 December
2008 the Company announced a restructuring of the transaction as a buyback of
the shares acquired by the Directors and management following the lapse of the
close period restrictions.
Payments to Key Management Personnel
+---------------------------------+----------+---------+--+----------+---------+
| | Group | | Company |
+---------------------------------+--------------------+--+--------------------+
| | 2009 | 2008 | | 2009 | 2008 |
+---------------------------------+----------+---------+--+----------+---------+
| | GBP | GBP | | GBP | GBP |
+---------------------------------+----------+---------+--+----------+---------+
| | | | | | |
+---------------------------------+----------+---------+--+----------+---------+
| Short-term benefits | 439,881 | 220,617 | | 405,270 | 174,393 |
+---------------------------------+----------+---------+--+----------+---------+
| Share-based payments | 45,258 | 36,484 | | 45,258 | 36,484 |
+---------------------------------+----------+---------+--+----------+---------+
| Termination benefits | 52,813 | - | | 21,650 | - |
+---------------------------------+----------+---------+--+----------+---------+
| Total payments to key | 537,952 | 257,101 | | 472,178 | 210,877 |
| management personnel | | | | | |
+---------------------------------+----------+---------+--+----------+---------+
22. Approval of Financial Statements
The financial statements were approved by the board of directors and
authorised for issue on 29 September 2009.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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