REGISTERED NUMBER: |
REPORT OF THE DIRECTOR AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
EUROMAX RESOURCES UK (SERVICES) LIMITED |
REGISTERED NUMBER: |
REPORT OF THE DIRECTOR AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
EUROMAX RESOURCES UK (SERVICES) LIMITED |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Page |
Company Information | 1 |
Report of the Director | 2 |
Statement of Director's Responsibilities | 4 |
Report of the Independent Auditors | 5 |
Statement of Comprehensive Income | 9 |
Balance Sheet | 10 |
Statement of Changes in Equity | 11 |
Notes to the Financial Statements | 12 |
EUROMAX RESOURCES UK (SERVICES) LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
DIRECTOR: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
55 Baker Street |
London |
W1U 7EU |
BANK: |
13 Library Place |
St. Helier |
Jersey |
JE4 8NE |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
REPORT OF THE DIRECTOR |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The director presents his report with the financial statements of the company for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The principal activity of Euromax Resources UK (Services) Limited ("Company") is to provide management services to Euromax Resources Ltd and to Euromax Resources DOO Skopje as outlined in service agreements with each company. |
The Company is a private company limited by shares. |
REVIEW OF BUSINESS |
The Company is a 100% subsidiary undertaking of Euromax Resources Ltd, a company registered in British Columbia, Canada. |
The Company continued providing management services to its ultimate parent company, Euromax Resources Ltd, and providing project-related services to Euromax Resources DOO Skopje for the development of the Ilovica-Shtuka Gold-Copper Project ("Ilovica-Shtuka Project") in the Republic of North Macedonia ("Macedonia"). The Company charges a margin on the services provided. The Company's share-based payment expense is not recharged. |
The Company principal activities has continued through 2024 to date and the directors anticipate that the business will continue with the level of services performed dependent on the level of corporate activity performed in London for the benefit of Euromax Resources Ltd and Euromax Resources DOO Skopje. |
The directors have reviewed the going concern status of the Company and have determined that for these financial statements they should be prepared on a going concern basis, however, there is a material uncertainty with respect to the Company's ability to continue as a going concern as described in Note 1 to the financial statements. |
The functional and presentational currency of the Company is Pounds Sterling. |
POST BALANCE SHEET EVENTS |
Subsequent to 31 December 2023, the following subsequent events have occurred in the Euromax Resources Ltd Group (Euromax Resources Ltd and its controlled entities defined as the "Group") that are relevant for the Company: |
- Fully vested 1,702,651 restricted share unites issued by Euromax Resources Ltd ("RSUs"), granted to the Company's consultant, were converted into Euromax Resources Ltd's common shares. |
- On February 28, 2024 both convertible loans with European Bank for Reconstruction and Development ("EBRD") ("EBRD convertible loan") and with CC Ilovica ("CCI") ("CCI convertible loan") were extended to February 28, 2025. |
- During May 2024 the Group closed a non-brokered private placement (the "2024 Private Placement") for gross proceeds of US$0.913 million. |
- During June 2024 the Group closed a non-brokered private placement for gross proceeds of C$0.066 million. |
DIRECTOR |
The directors who held office during the year were as follows: |
- Timothy Morgan-Wynne |
The director benefited from qualifying third party indemnity provisions in place during the year and at the date of this report. |
POLITICAL AND CHARITABLE CONTRIBUTIONS |
The Company made no political or charitable donations or incurred any political expenditure during the year. |
STRATEGIC REPORT |
The Company has taken the small companies exemption available under s414B of the Companies Act 2006, to not prepare a strategic report for the year ended 31 December 2022. |
RESULTS AND DIVIDENDS |
The Company incurred loss for the year after tax of £166,810 (2022: £5,863). The directors do not recommend the payment of a dividend. |
POLICY AND PRACTICE ON PAYMENT OF CREDITORS |
It is the Company's policy to settle all amounts owing to creditors in accordance with the terms of credit agreed with each supplier. |
At 31 December 2023 there were 24 days purchases in trade creditors (2022: 48 days). |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
REPORT OF THE DIRECTOR |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
The directors who held office at the date of approval of this directors' report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor is unaware; and each director has taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information. |
AUDITORS |
Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and BDO UK LLP will therefore continue in office. |
This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies. |
ON BEHALF OF THE BOARD: |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including Financial Reporting Standard 101 "Reduced Disclosure Framework". 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 of the company for that period. |
In preparing these financial statements, the directors are required to: |
- select suitable accounting policies and then apply them consistently; |
- make judgements and accounting estimates that are reasonable and prudent; |
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
- prepare the financial statements on the 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
EUROMAX RESOURCES UK (SERVICES) LIMITED |
Opinion |
We have audited the financial statements of Euromax Resources UK (Services) Limited (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 'Reduced Disclosure Framework' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Material uncertainty relating to going concern |
We draw attention to Note 1 to the financial statements, which indicates that the Company is reliant on the Euromax Resources Limited ("Group") for financial support. The Group consolidated financial statements included a material uncertainty related to going concern which has a direct impact on the Group's ability to financially support the Company. As stated in Note 1, these events or conditions, along with other matters set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter. |
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Report of the Director and the Statement of Director's Responsibilities, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Report of the Director has been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Director. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit; or |
- | the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Director. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
EUROMAX RESOURCES UK (SERVICES) LIMITED |
Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
EUROMAX RESOURCES UK (SERVICES) LIMITED |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Non-compliance with laws and regulations |
Based on: |
- Our understanding of the Company and the industry in which it operates; |
- Discussion with management and those charged with governance; and |
- Obtaining and understanding of the Company's policies and procedures regarding compliance with laws and regulations. |
we considered the significant laws and regulations to be the Companies Act 2006, the applicable accounting framework, the UK Bribery Act 2010, and the UK tax legislation. |
Our procedures in respect of the above included: |
- Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations; |
- Review of correspondence with tax authorities for any instances of non-compliance with laws and regulations; |
- Review of financial statement disclosures and agreeing to supporting documentation; |
- Involvement of tax specialists in the audit; and |
- Review of legal expenditure accounts to understand the nature of expenditure incurred. |
Fraud |
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included: |
- Enquiry with management and those charged with governance regarding any known or suspected instances of fraud; |
- Obtaining an understanding of the Company's policies and procedures relating to: |
- Detecting and responding to the risks of fraud; and |
- Internal controls established to mitigate risks related to fraud. |
- Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud; |
- Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; |
- Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and |
- Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these. |
Based on our risk assessment, we considered the area's most susceptible to fraud to be management override of controls through inappropriate journal entries, and bias in key estimates and judgements. |
Our procedures in respect of the above included: |
- Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation; |
- Performing a detailed review of the Company's year-end adjusting entries and investigated any that appear unusual as to nature or amount and agreeing to supporting documentation; and |
- Assessing significant judgements and estimates as stated in Note 1 to the financial statements made by management for bias. |
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
EUROMAX RESOURCES UK (SERVICES) LIMITED |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
55 Baker Street |
London |
W1U 7EU |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
STATEMENT OF COMPREHENSIVE |
INCOME |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
REVENUE | 3 |
Administrative expenses |
OPERATING (LOSS)/PROFIT | ( |
) |
Interest payable and similar expenses | 6 |
LOSS BEFORE TAXATION | 7 | ( |
) | ( |
) |
Tax on loss | 8 |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
( |
) |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
BALANCE SHEET |
31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
CURRENT ASSETS |
Debtors | 10 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 11 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 12 |
Capital contribution reserve |
Retained earnings | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the director and authorised for issue on |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Called up | Capital |
share | Retained | contribution | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 January 2022 | ( |
) |
Changes in equity |
Share based payment expense | - | - | 40,116 | 40,116 |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2022 | ( |
) |
Changes in equity |
Share based payment expense | - | - | 41,361 | 41,361 |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 December 2023 | ( |
) |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | STATUTORY INFORMATION |
Euromax Resources UK (Services) Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparation |
The Company has chosen the presentation currency of the financial statements as pounds sterling. The functional currency is also pound sterling given it is the currency of the primary economic environment in which the Company operates. |
The Company meets the definition of a qualifying entity under FRS 100 (Financial Reporting Standard 100) issued by the Financial Reporting Council. The financial statements have therefore been prepared in accordance with FRS 101 (Financial Reporting Standard 101) "Reduced Disclosure Framework" as issued by the Financial Reporting Council. |
As permitted by FRS 101, exemptions from applying the following requirements have been adopted: |
a) IFRS 2 'Share based Payment' paragraphs 45(b) and 46-52 |
b) IFRS 7 'Financial Instruments: Disclosures'; |
c) IFRS 13 'Fair Value Measurement' paragraphs 91 to 99; |
d) IAS 1 'Presentation of Financial Statements' paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134 to 136, as well as paragraph 38 for presenting the comparative information in respect of 79(a) of IAS 1 and paragraph 73(e) of IAS 16 'Property, Plant and equipment'; |
e) IAS 7 'Statement of Cash Flows'; |
f) IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' paragraphs 30 and 31; |
g) IAS 24 'Related Party Disclosures' paragraphs 17 and 18A; and |
h) IAS 36'Impairment of Assets' paragraphs 130(f)(ii), 130(f)(iii), 134(d) to 134(f) and 135(c). |
The Company has also taken advantage of the exemption from the requirements of IAS 24 'Related Party Disclosures' to disclose related party transactions entered into between two or more members of the Group where those party to the transaction are wholly owned by a member of the Group. |
The financial statements have been prepared on the historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. The principal accounting policies adopted are set out below. |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Significant judgements and estimates |
In preparing these accounts in accordance with accounting standards, the director's consider there to be no critical accounting judgements that have a significant effect on the amounts recognised in these financial statements. The directors have identified the following key area of estimation as significant to these financial statements. |
Equity-settled share-based payment arrangements |
The Company's parent Euromax Resources Ltd grants share-based payments to employees and consultants of the Company. These share-based payments are valued using the Black-Scholes option pricing model which requires assumption inputs including: the expected life of the share option, volatility, risk free interest rates and dividend yield. Changes in the underlying assumptions can materially affect the fair value estimates. |
Loss allowance for the expected losses on financial assets |
The Company applies IFRS 9 Financial instruments (IFRS 9) which requires recognising a loss allowance for the expected losses on a financial assets. |
At 31 December 2023 the Company had gross trade receivables from Euromax Resources DOO Skopje of £2,347,214 (2022: £2,406,110), and based on the provisions of IFRS 9, the management made assumption that the expected credit losses on a financial asset at 31 December 2023 was still assessed at 20% of the carrying amount of the asset (2022: 20%) and therefore no further expense was recognised for loss allowance for 2023 (2022: no expense was recognised). |
These financial assets will ultimately be recovered through the successful development of the Ilovica-Shtuka Project. The Group has a Feasibility Study for the Ilovica-Shtuka Project, announced on 6 January 2016, which demonstrates a post-tax NPV (5%) of US$440 million which demonstrates a potential economic return which would allow recovery of these financial assets. |
Revenue |
IFRS 15 Revenue from Contracts with Customers ('IFRS 15') covers principles that an entity shall apply to report information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. IFRS 15 uses a control-based approach to recognise revenue. The standard requires entities to apportion revenue earned from contracts to individual performance obligations, on a relative standalone selling price basis. |
The Company's revenue is primarily derived from revenue from the provision of services that is recognised at the fair value received or receivable and is recognised in the period that the services are rendered. Revenue represents management services provided to the Company's related parties. Interest income is recognised on a time proportion basis using the effective interest rate method. |
Tangible fixed assets |
Depreciation is provided to write off the cost less the estimated residual value of tangible fixed assets by equal instalments over their estimated useful economic lives as follows: |
Plant and equipment 3 years |
Calculation of recoverable amount |
The recoverable amount of property, plant and equipment is the greater of their net realisable value and value in use. In assessing value in use, the expected future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the rate of return expected on an equally risky investment. For an asset that does not generate largely independent income streams, the recoverable amount is determined for the income-generating unit to which the asset belongs. |
Reversals of impairment |
An impairment loss is reversed on property, plant and equipment where the recoverable amount increases as a result of a change in economic conditions or in the expected use of the asset then the resultant reversal of the impairment loss should be recognised in the current period. |
An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognised. |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Non-derivative financial instruments |
Non-derivative financial instruments are initially measured at fair value adjusted by any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method less any provision for impairment. |
Taxation |
The charge for taxation is based on the loss for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. |
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 101. |
Receivables |
The Company applies IFRS 9 Financial instruments (IFRS 9), whereby IFRS 9 provides a revised model for recognition, measurement and impairment of financial instruments. |
Foreign currencies |
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the contracted rate or the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit and loss account. |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Going concern |
These financial statements have been prepared on a going concern basis which assumes the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business. |
As at 31 December 2023, the Company had net assets of £93,320 (2022: £218,769) net current liabilities of £1,776,446 (2022: £1,695,863) and cash at bank and in hand of £15,512 (2022: £618). The Company incurred a loss of £166,810 (2022: £5,863). |
The Company is reliant on the continued financial support of its ultimate parent undertaking, Euromax Resources Ltd. The Directors therefore considered the going concern assessment prepared in respect of its ultimate parent, which included a material uncertainty related to going concern as explained below, has a direct impact on the Group's ability to financially support the Company. |
As at December 31, 2023, the Group had net liabilities of C$5.3 million (2022: C$8.9 million) and a net working capital deficiency of C$43.5 million (2022: C$46.5 million). The Group's C$43.5 million working capital deficiency as at December 31, 2023 largely results from: |
- Convertible loans of C$27.7 million (2022: C$26.2 million) with EBRD and with CCI, which are classified as current; and |
- Gold purchase advance payments of C$14.9 million (2022: C$15.2 million) received from Royal Gold, AG ("Royal Gold") which are repayable within 60 days of receiving a termination notice to the Gold Purchase and Sale Agreement. |
These two items were classified as at December 31, 2023 as current liabilities, however, subsequent to the year end, the convertible loans' maturity date was extended to February 28, 2025. Both convertible loans are convertible into Euromax Resources Ltd's common shares at the election of EBRD and CCI on or before their maturity. As at the date of these financial statements no termination or repayment notice has been received from Royal Gold. |
On January 24, 2023 the Group closed a non-brokered private placement for gross proceeds of US$3 million, and following that, both convertible notes of US$1.25 million, issued in the year ended December 31, 2022, were converted into Euromax Resources Ltd's common shares on January 26, 2023. |
Subsequent to December 31, 2023, during May, 2024 the Group closed the 2024 Private Placement for gross proceeds of US$0.913 million. |
The Group's board of directors has reviewed the Group's forecasts for the period ended December 31, 2025, in which are included all committed costs for maintaining the Ilovica-Shtuka Project in Macedonia, and are prepared based on the following major assumptions: |
- the convertible loans which have potential contractual cash outflows at February 28, 2025 of C$30.2 million will either be converted into Euromax Resources Ltd's common shares or further extended to mature beyond the forecast period; and |
- neither termination nor repayment notices will be received from Royal Gold for the period ended December 31, 2025. |
Based on these forecasts, the Group's directors have identified that further funding will be required to: |
- cover the committed costs for maintaining the Ilovica-Shtuka Project from September 2024 and going forward, including covering the local legal costs for the ongoing and potential administrative processes until the final approval of the request for the merger of the Group's two exploitation concessions ("Merger"); |
- repay the gold purchase advance payments, if termination or repayment notice is received from Royal Gold; |
- repay both convertible loans, if neither are further extended in 2025 or converted into Euromax Resources Ltd's common shares; and |
- ultimately construct and bring the Ilovica-Shtuka Project into commercial production. |
The Group's directors note that the level of funding required is dependent on both the outcome and duration of the administrative process for getting approval of the Merger. |
Given the above factors, the Group will need to raise additional funds from September 2024 either through equity (supported by existing shareholders or new shareholders) or by further debt. |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
These events are outside of the Group's control, and as such, a material uncertainty exists which may cast significant doubt about the Group's continued ability to operate as a going concern and its ability to realise its assets and discharge its liabilities in the normal course of business. |
The uncertainty regarding the Group's ability to operate as a going concern directly impacts the Group's ability to financially support to the Company and therefore affects the Company's ability to continue as a going concern. This represents a material uncertainty to the Company which may cast significant doubt over the Company's ability to continue as a going concern and its ability to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would arise if the Company were unable to continue as a going concern. |
Share based payments |
The share option programme allows employees to acquire shares of the parent company. The grant date fair value of share-based payment awards granted is recognised as an employee expense with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The fair value of the options granted is measured using an option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. |
Where the Company's parent grants rights to its equity instruments to the Company's employees, which are accounted for as equity-settled in the consolidated accounts of the parent, the Company accounts for these share-based payments as equity-settled. |
In addition in respect of the cash settled DPU scheme operated by the Company's parent, in which the Company's directors participate, these also qualify for equity-settled accounting in the Company's financial statements in accordance with IFRS 2 Share-based Payment, as the Company has no obligation in relation to their settlement. |
Cash at bank and in hand |
Cash comprises cash in hand and deposits repayable on demand, less overdrafts payable on demand. Liquid resources are current asset investments which are disposable without curtailing or disrupting the business and are either readily convertible into known amounts of cash at or close to their carrying values or traded in an active market. |
Share capital |
Share capital is the amount subscribed for share capital at the nominal value. |
Capital contribution reserve |
The capital contribution reserve represents amounts where the entity recognises the increases and decreases in equity for equity-settled share-based payment transactions. |
Accumulated losses/ retained earnings |
This reserve shows accumulated profit/loss and net gains and losses. |
3. | REVENUE |
The revenue and loss before taxation are attributable to the one principal activity of the company. |
An analysis of revenue by geographical market is given below: |
2023 | 2022 |
£ | £ |
North America |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
4. | EMPLOYEES AND DIRECTORS |
The average number of persons employed by the Company (including directors during the period, analysed by category, was as follows: |
2023 | 2022 |
Number | Number |
United Kingdom | 1 | 2 |
The aggregate payroll costs of these persons were as follows: |
2023 | 2022 |
£ | £ |
Wages and salaries | 122,304 | 112,304 |
Shared based payments | 680 | 116 |
Social security costs | 16,500 | 16,435 |
Other pension costs | - | - |
139,484 | 138,855 |
5. | REMUNERATION OF DIRECTORS |
2023 | 2022 |
£ | £ |
Directors' emoluments (including social security costs) | 138,804 | 138,739 |
Amounts receivable under long-term incentive scheme | 680 | 116 |
Company contributions to money purchase pension scheme | - | - |
Total remuneration of directors | 139,484 | 138,855 |
During 2023, a director received director emoluments (including social security costs) and long-term incentive schemes amounted in total of £138,804 (2022: £138,739). . |
During years ended 31 December 2023 and 2022, no directors exercised any share options.. |
2023 | 2022 |
Number of directors | No. of directors | No of directors |
Retirement benefits are accruing to the following number of directors under: |
Money purchase schemes | 1 | 2 |
Defined benefit schemes | - | - |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Interest expense | 60,842 | 52,702 |
Bank charges | 500 | 478 |
61,342 | 53,180 |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
7. | LOSS BEFORE TAXATION |
The loss before taxation is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Auditors' remuneration |
Foreign exchange differences | ( |
) |
Share based payments expense | 41,360 | 40,116 |
Audit fees stated above are fees charged to the Company, as well as fees borne on behalf of Euromax Resources (Macedonia) UK Limited and Euromax Resources (Bulgaria) UK Limited, both UK entities that are part of the Group. |
During the years ended 31 December 2023 and 2022 no non-audit services were provided. |
8. | TAXATION |
Analysis of tax expense |
No liability to UK corporation tax arose for the year ended 31 December 2023 nor for the year ended 31 December 2022. |
Factors affecting the tax expense |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Loss before income tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of |
(31,694 |
) |
(1,114 |
) |
Effects of: |
Expenses not deductible for tax purposes | 10,293 | 8,060 |
Loss carried forward | 21,401 | (6,946 | ) |
Tax expense |
As at 31 December 2023 the unused tax losses that could be carried forward were £298,781 (2022: £186,145). |
9. | PROPERTY, PLANT AND EQUIPMENT |
Plant and |
machinery |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
and 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
10. | DEBTORS |
2023 | 2022 |
£ | £ |
Amounts falling due within one year: |
Other debtors |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
10. | DEBTORS - continued |
2023 | 2022 |
£ | £ |
Amounts falling due after more than one year: |
Amounts owed by group undertakings |
Aggregate amounts |
At 31 December 2023, the amount owed to other group companies is related to gross trade receivables from Euromax Resources DOO Skopje of £2,347,214 (2022: £2,406,109) reduced by accumulated assessed allowance for expected credit loss of £491,477 (2022: £491,477). Based on the provisions of IFRS 9, the management made assumption that the expected credit losses on a financial asset at 31 December 2023 was still assessed at 20% of the carrying amount of the asset (2022: 20%), therefore no additional expense was recognised for loss allowance for 2023 (2022: no expense was recognised). |
For the loan receivable, the Company has contractual right to call on demand such that the asset has not been discounted to reflect the interest fee nature. Given the intent to hold the loan until term and likely inability of the counterparty to pay the loan on demand, the receivable is presented as a non-current asset. |
Additionally, at 31 December 2023, the Company had trade receivables from Euromax Resources Ltd of £14,029 for the provided management services (2022: advance received of £3,483 as reported in Note 10), no loss allowance was recognised on this financial asset due to the fact the Company has loan payable balance owned to Euromax Resources Ltd, as disclosed in Note 10, that covers the full amount of this trade receivable balance at 31 December 2023. |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Other creditors |
Accrued expenses |
At 31 December 2023, the amount owed to other group companies is composed by the following items: |
- Loan payable balance of £1,281,918 (2022: £1,158,159) provided by Euromax Resources Ltd, based on the signed loan facility of £2 million, with an interest paid and calculated at a rate of 5.00% per annum and which is repayable in full by 8 October 2025. |
- Loan payable balance of £461,313 (2022: £472,094) based on the Co-Debtor Agreement with Euromax Resources (Bulgaria) UK Ltd, another group company, resulting from the disposal of the Bulgarian entity from the Group, during 2017. Based on the Co-Debtor Agreement, the new loan has a maximum facility of €0.550 million, which is non-interest bearing and is repayable in full on 26 June 2024, however the Company has contractual right to call on demand such that the asset has not been discounted to reflect to the interest free nature. |
- Loan payable balance of £13,630 (2022: £12,370) provided by Euromax Resources (Macedonia) UK Ltd, based on the signed loan facility of €2 million, and it is non-interest bearing fully repayable on 30 September 2024. |
12. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 650,000 | 650,000 |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
13. | ULTIMATE PARENT COMPANY AND PARENT UNDERTAKING OF LARGER GROUP |
The Company is a subsidiary undertaking of Euromax Resources Ltd which is the ultimate parent company incorporated in British Columbia, Canada. |
The results of the Company are consolidated by Euromax Resources Ltd, incorporated in British Columbia, Canada. |
The consolidated financial statements of these Euromax Resources Ltd. are available to the public and may be obtained from its website (www.euromaxresources.com). |
14. | COMMITMENTS |
As at 31 December 2022 and 2023 the Company had no commitments other than those already presented in these financial statements. |
15. | POST BALANCE SHEET EVENTS |
Subsequent to 31 December 2023, the following subsequent events have occurred in the Group that are relevant for the Company: |
- Fully vested 1,702,651 RSUs, granted to the Company's consultant, were converted into Euromax Resources Ltd's common shares. |
- On February 28, 2024 both EBRD convertible loan and CCI convertible loan were extended to February 28, 2025. |
- During May 2024 the Group closed the 2024 Private Placement for gross proceeds of US$0.913 million. |
- During June 2024 the Group closed a non-brokered private placement for gross proceeds of C$0.066 million. |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
16. | EMPLOYEE SHARE SCHEMES |
Share based payments |
The table below illustrates the composition of the share-based payment expense incurred by the Company in 2023 and 2022. |
2023 | 2022 |
Share Options | RSU's | DPU | Total Expense | Share Options | RUS's | DPU | Total Expense |
£ | £ | £ | £ | £ | £ | £ | £ |
Directors | 680 | - | - | 680 | 116 | - | - | 116 |
Consultants | 680 | - | 40,000 | 40,680 | - | - | 40,000 | 40,000 |
Total Expense | 1,360 | - | 40,000 | 40,680 | 116 | - | 40,000 | 40,116 |
The Company's ultimate parent entity, Euromax Resources Ltd has an incentive share option plan ("Plan") under which directors, officers, employees and consultants of the Company are eligible to receive share options over the Euromax Resources Ltd's shares. |
The maximum number of shares reserved for issuance upon exercise of all options granted under the Plan is equal to 15% of the then issued and outstanding Euromax Resources Ltd's common shares. The Euromax Resources Ltd's board of directors determines the terms and provisions of the options at the time of grant. Options under the Plan generally have a term of five years. |
Share options issued to consultants were vested equally over a two year period, while those granted to the Company's directors, officers and employees were vested over a three year period. The exercise price of each option equals the closing share price of the Euromax Resources Ltd's shares on the day preceding the date of grant. If a director, officer, employee or consultant ceases employment or engagement with the Company, any unvested share options are forfeited and the expiry date on their vested options is reduced to 90 days from the date they cease employment or engagement. |
The number and weighted-average exercise price of the share options under the Plan as at December 31, 2023 and 2022, were as follows: |
2023 | 2022 |
Number of Options | Weighted-average exercise price | Number of Options | Weighted-average exercise price |
Directors | 1,500,000 | 0.03 | 1,500,000 | 0.03 |
Consultants | 2,025,000 | 0.04 | 2,025,000 | 0.04 |
Total share options | 3,525,000 | 0.04 | 3,875,000 | 0.04 |
At 31 December 2023, outstanding options were 3,525,000 (2022: 3,525,000) with exercise prices ranging from C$0.03 to C$0.08 (2022: from C$0.03 to C$0.08) per Euromax Resources Ltd's common share |
No further share options over the Euromax Resources Ltd's shares were granted nor expired during 2023 and 2022. |
During 2022 350,000 options expired, granted to consultant and with exercise price of C$0.35 per Euromax Resources Ltd's common share. |
On 11 March 2013, Euromax Resources Ltd also established a Restricted Share Unit Plan ("RSU Plan") under which directors, officers and employees of the Company are eligible to receive RSUs of Euromax Resources Ltd. |
The maximum number of RSUs reserved for issuance under the RSU Plan is equal to 8,534,734 common shares at the time of grant, provided that the combined number of share options and RSUs in issue does not exceed 15% of the outstanding common shares at the time of grant. The Euromax Resources Ltd's Compensation Committee determines the terms and provisions of the RSUs at the time of grant. For RSUs granted in lieu of cash bonuses a service condition of up to one year is generally applied. For RSUs granted as long-term incentives these vested over a service period of up to three years and are also subject to a market performance condition whereby the number of RSU's granted can increase or reduce depending on Euromax Resources Ltd's relative share price performance compared to the Market Vectors Junior Gold Miners ETF ("GDXJ"). Upon vesting each RSU held is settled by the issue of one common share in Euromax Resources Ltd. |
EUROMAX RESOURCES UK (SERVICES) LIMITED (REGISTERED NUMBER: 08047410) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
If a director, officer or employee ceases employment any unvested RSUs are forfeited on the date they cease employment. |
The number and weighted-average exercise price of the RSUs as at December 31, 2023 and 2022, were as follows: |
2023 | 2022 |
Number of RSUs | Weighted-average exercise price | Number of RSUs | Weighted-average exercise price |
Directors | - | - | - | - |
Consultants | 1,702,651 | 0.26 | 1,702,651 | 0.26 |
Total RSUs | 1,702,651 | 0.26 | 1,702,651 | 0.26 |
In 2022, 515,000 RSUs granted to a consultant were converted into Euromax Resources Ltd's common shares. |
The fair value of RSUs outstanding at 31 December 2023 to the Company's directors and employees was C$59,593 (£35,339) (2022: C$153,239 or £93,834). |
Subsequent to 31 December 2023, fully vested 1,702,651 RSUs, granted to the Company's consultant, were converted into Euromax Resources Ltd's common shares. |
DPUs plans |
In March 2013, Euromax Resources Ltd introduced a DPU Plan for the Euromax Resources Ltd's directors, officers and employees. |
All vested DPUs issued only become payable in the event that a director, officer or employee ceases to hold any position within Euromax Resources Ltd and can only be settled in cash. |
During 2023, 1,061,276 DPUs were issued to the Company's consultant (2022: 1,084,216 DPUs. |
The fair value of the 4,455,984 DPUs outstanding at 31 December 2023 was C$155,959 (£92,484) (2022: 3,394,708 DPUs with fair value of C$305,524 or £187,083) and is payable by the Company's ultimate parent company, Euromax Resources Ltd. |