Source - PRN

HOT ROCKS INVESTMENTS PLC
(“Hot Rocks” or the “Company’)

Audited Financial Results for the Year Ended 31 March 2016

CHAIRMAN’S STATEMENT

Dear Shareholders

I hereby present the financial results for the Company for the year ended 31 March 2016.  The Company is an active investor in natural resources companies and, whilst it has been a difficult year generally for the sector, tough times do provide our Company with new opportunities to invest and diversify our portfolio of interests.

The Company made a pre-tax profit of £8,129 for the year, compared to a pre-tax loss of £496,541 in the prior year. The Company will not be paying a dividend at this stage.

Cash and cash equivalents as at the year end of 31 March 2016 were £13,705 (2015 - £39,984).

During the year our investee company Taoudeni Resources Limited, a West African copper and gold explorer, was acquired by another investee company Goldcrest Resources plc, as a result increasing our position in Goldcrest. This was for an initial consideration of 193,496,625 shares in Goldcrest Resources plc at a value of 0.05p per share.  As part of the share purchase agreement, the company is also entitled to a deferred consideration of 320,839,661 shares and 43,220,791 warrants in Goldcrest, which would be valued based on the market value of the Goldcrest shares at the point of issuance. The deferred consideration has currently been recognised in these financial statements at a fair value of £2, as it is currently considered unlikely that the conditions for issuance will be met.

Also, Upland Resources Limited in which we held 3.86million shares was admitted to the main market by way of a Standard Listing raising £1.3m at a 40% premium to our entry level. The shares have since traded at more than 1.5p and we have disposed of some of our holding.

We hold stakes in the following entities:

  • Brazil Tungsten Holdings Limited
  • Copper Bay plc
  • Elephant Oil Limited
  • Goldcrest Resources plc (ISDX:GCRP)
  • Impact Oil & Gas Limited
  • Mafula Energy Limited
  • MedGold Resources Corp (TSXV:MED)
  • Minergy Limited
  • New Horizon Oil & Gas Limited
  • Onzima Ventures plc (AIM:ONZ)
  • Prospex Oil & Gas plc (AIM:PXOG)
  • Rift Resources Limited
  • Royal Road Minerals (previous Tigris Resources) (TSXV:RYR)
  • Upland Resources Limited (AIM:UPL)

The Board of Directors will continue to introduce further equity positions to the Company to enable additional diversification of the portfolio.

Brian Rowbotham

Non-Executive Chairman

31 August 2016

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

For further information please contact:   

Hot Rocks Investments plc  Gavin Burnell: 01732 366561   

Peterhouse Corporate Finance Limited  Guy Miller: 020 7220 9796

HOT ROCKS INVESTMENTS PLC
                                                                          
STRATEGIC REPORT

YEAR ENDED 31 MARCH 2016

The Directors of the Company present their Strategic Report on the Company for the year ended 31 March 2016.

Principal Activities and Review of the Business

The principal activity of the Company is to invest in companies, or assets, in the natural resources sector. The Company has continued in this activity, managing the investments, as detailed in the Chairman’s Statement.

The future developments are discussed in the Chairman’s Statement.

Financial Review

The profit for this year before taxation was £8,129 (2015 loss before taxation - £496,541).

Cash in the bank at the end of March 2016 was £13,705 (2015 - £39,984).

The Directors consider the results for the year to be satisfactory.

Key Performance Indictors (“KPI’s”)

The Directors consider the following to be the KPIs of the business:

2016 2015 %
Increase/
(Decrease)
Valuation of available for sale investments 722,794 780,083 (7%)
Cash 13,705 39,984 (66%)

The company performed in line with expectations. 

Principal Risks and Uncertainties

The principal risks and uncertainties lie in the investments the Company holds. The nature of the natural resource sector means that returns are uncertain and resources may be unviable to extract.  The Directors seek to mitigate this risk by monitoring the performance of the companies in which it holds investments so they can take action accordingly. 

Given the nature of the business and activity of the Company, the Directors believe that the Company is exposed to the following risks:

Liquidity risk

The Company’s continued future operations depend on the ability to hold sufficient working capital to be able to meet its financial obligations.  The Directors are confident that there is adequate funding to finance future immediate working capital requirements.

Financial Risk Management

The Company’s principal financial instruments comprise available-for-sale financial instruments, other receivables, other payables and cash and cash equivalents. No bank loans or other financing arrangements have been required. No borrowings have been required to finance working capital. Therefore the Company’s exposure to credit risk, liquidity risk and market risk is not deemed significant.

The Directors present their report and the audited Financial Statements for the year ended 31 March 2016.

Results and Dividends

The profit for this year after taxation was £8,129 (2015 loss after taxation – £512,958).

The Directors do not recommend the payment of a dividend (2015 – nil).

Directors and Directors’ Interests

The Directors who held office during the period to the date of approval of these Financial Statements had the following beneficial interests in the ordinary shares of the Company:

Ordinary shares interest at end of period
No.
Warrants interest at end of period
No.
Ordinary shares interest at start of period No. Warrants interest at start of period
No.
Gavin J Burnell 29,290,000 9,027,500 29,290,000 9,027,500
Brian Rowbotham 4,200,000 500,000 4,200,000 500,000
Charles J Vaughan 2,150,000 500,000 2,150,000 500,000

Events after the Reporting Period

The events after the reporting date are set out in Note 18 to the Financial Statements.

Supplier Payment Policy

Whilst there is no formal code or standard, it is Company policy to settle terms of payment with creditors when agreeing the terms of each transaction and to abide by the creditors’ terms of payment.  There are no creditors subject to special arrangements outside of suppliers’ terms and conditions.

Provision of Information to Auditor

The Directors at the time when this Directors’ Report is approved have confirmed that:

  • so far as each Director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
  • each Director has taken all the steps that ought to have been taken as Directors in order to be aware of any information needed by the Company's auditor in connection with preparing its report and to establish that the Company's auditor is aware of that information.

Independent Auditor

PKF Littlejohn LLP has signified their willingness to continue in office as auditor.

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year.  Under that law the Directors have elected to prepare the Financial Statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.  Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for that period.  In preparing these financial statements the Directors are required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgments and accounting estimates that are reasonable and prudent;
  • state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the Financial Statements; and
  • prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006.  They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the company’s website and legislation in the United Kingdom governing the preparation and dissemination of financial statements which may differ from legislation in other jurisdictions.

Approved by the Board on 31 August 2016 and signed on its behalf by:

Gavin J Burnell

Director

HOT ROCKS INVESTMENTS PLC
                                   
STATEMENT OF COMPREHENSIVE INCOME

YEAR ENDED 31 MARCH 2016

2016 2015
Continuing Operations £ £
Revenue - -
Operating expenses (41,049) (98,182)
Impairment of available-for-sale financial assets - (402,651)
Other gains – sale of available-for-sale financial assets 46,136 482
_______ _______
Operating Profit/(Loss) 5,087 (500,351)

Finance income

3,042

4,002
Finance costs - (192)
_______ _______
Profit/(Loss) before Income Tax 8,129 (496,541)
Income tax expense - (16,417)
_______ _______
Profit/(Loss) for the Year 8,129 (512,958)
_______ _______
Other Comprehensive Income
Items that may be Reclassified Subsequently to
 Profit or Loss
Reclassification of cumulative gains on available-for-sale
  financial asset due to disposal
(19,014) (3,021)
Fair value change in value on available-for-sale financial assets (71,445) (154,628)
_______ _______
Total Comprehensive Income for the Year (82,330) (670,607)
_______ _______
Earnings Per Share – Basic and Diluted (Pence) (0.00) (0.00)
_______ _______

HOT ROCKS INVESTMENTS PLC 
                                             
STATEMENT OF FINANCIAL POSITION
AT 31 MARCH 2016

As at 31 March
2016
As at
31 March 2015
£ £
Assets
Non-Current Assets
Available-for-sale financial assets 722,794 780,083
_______ _______
722,794 780,083
_______ _______
Current Assets
Other receivables 18,617 25,172
Cash and cash equivalents 13,705 39,984
_______ _______
32,322 65,156
_______ _______
Total Assets 755,116 845,239
_______ _______
Equity and Liabilities
Equity Attributable to Shareholders
Ordinary shares 173,602 173,602
Share premium account 1,174,631 1,174,631
Share to be issued under warrants 29,738 29,738
Other reserves (33,350) 57,110
Retained loss (680,422) (688,551)
_______ ________
664,199 746,530
Current Liabilities
Trade and other payables 90,917 98,709
_______ _______
Total Equity and Liabilities 755,116 845,239
_______ _______

These financial statements were approved and authorised for issue by the Board of Directors and were signed on its behalf on 31 August 2016.

Gavin J Burnell

Director

HOT ROCKS INVESTMENTS PLC              
                                
STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 MARCH 2016

Attributable to Equity Shareholders
Ordinary
shares
£
Share
premium
£
Shares to
be issued
under
warrants
£
Other
reserves
£
Retained
loss
£
Total
£
Balance as at 1 April 2014 173,602
______
1,174,631
________
29,738
______
214,759
_______
(175,593)
_______
1,147,137
________
Loss for the year - - - - (512,958) (512,958)
Reclassifications of cumulative gains on available-for-sale financial assets - - - (3,021) - (3,021)
Fair value change in value on available-for-sale financial assets

______


______


______

(154,628)
_______


_______

(154,628)
_______
Total Comprehensive Income - - - (157,649) (512,958) (670,607)
______ ______ ______ _______ _______ _______
Total Transactions with
 Owners - - - - - -
______ ______ ______ _______ _______ ________
Balance as at 31 March 2015 173,602
______
1,174,631
________
29,738
______
57,110
_______
(688,551)
_______
746,530
________
Balance as at 1 April 2015 173,602
______
1,174,631
________
29,738
______
57,110
_______
(688,551)
_______
746,530
________
Profit for the year - - - - 8,129 8,129
Reclassifications of cumulative gains on available-for-sale financial assets - - - (19,015) - (19,015)
Fair value change in value on available-for-sale financial assets

______


______


______

(71,445)
_______


_______

(71,445)
_______
Total Comprehensive Income - - - (33,350) (680,422) 664,199
______ ______ ______ _______ _______ _______
Total Transactions with
 Owners - - - - - -
______ ______ ______ _______ _______ ________
Balance as at 31 March 2016 173,602
______
1,174,631
________
29,738
______
(33,350)
_______
(680,422)
_______
664,199
________

HOT ROCKS INVESTMENTS PLC
                                                          
STATEMENT OF CASH FLOWS
YEAR ENDED 31 MARCH 2016

2016 2015
£ £
Cash Flows from Operating Activities
Profit/(Loss) before income tax 8,129 (496,541)
Finance income (3,042) (4,002)
Finance costs - 192
Gain on disposal of available-for-sale financial assets (46,134) (482)
Impairment of available-for-sale financial asset - 402,651
Decrease in other receivables 2,253 33,935
(Decrease) / Increase in trade and other payables 8,828 37,930
_______ _______
Cash Used in Operations (29,966) (26,317)
Interest paid - (71)
Income tax paid (16,620) -
_______ _______
Net Cash Used in Operations (46,586) (26,388)
_______ _______
Cash Flows from Investing Activities
Purchases of available-for-sale financial assets (224,535) (231,421)
Proceeds from disposal of available-for-sale financial
 assets
244,842 106,148
Loans issued to related party - (5,000)
Repayment of loans issued to related party - 9,195
Interest received - 8
_______ _______
Net Cash Generated from Investing Activities 20,307
_______
(121,070)
_______
Decrease in Cash and Cash Equivalents (26,279) (147,458)
Cash and cash equivalents at the beginning of the year 39,984 187,442
_______ _______
Cash and Cash Equivalents at the End of the Year 13,705 39,984
_______ _______