Hot Rocks Investments plc (HRIP)
Hot Rocks Investments plc: AUDITED FINAL RESULTS TO 31 MARCH 2020
14-Dec-2020 / 16:34 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
14 December 2020
HOT ROCKS INVESTMENTS PLC
(the "Company")
AUDITED FINAL RESULTS TO 31 MARCH 2020
CHAIRMAN'S STATEMENT
I hereby present the financial results for the Company for the year ended 31
March 2020. The Company is an active investor primarily in junior natural
resources companies.
The Company made a profit for the year of GBP75,050 for the year, compared to
a pre-tax loss of GBP35,376 in the prior year. The Company will not be paying
a dividend at this stage (2019: GBPNil).
Cash and cash equivalents as at the year end of 31 March 2020 were GBP19,868
(2019: GBP46,745).
Interest has recently resumed in exploration companies and we are generally
pleased with performance and are working on a number of new projects to
continue to add value to the portfolio. We are particularly excited about a
new Africa-focused copper and gold exploration company where we will be a
founder shareholder and where we plan to float such company on a stock
exchange in 2021.
We hold cash at bank today of GBP84,000 though we will be investing some of
these funds in a further gold exploration company with interests in Brazil.
We currently hold stakes in the following entities:
· Bermele plc (LSE:BERM)
· Block Energy plc (AIM: BLOE)
· Brazil Tungsten Holdings Limited
· Copper Bay Limited
· Elephant Oil Limited
· Impact Oil & Gas Limited
· Mafula Energy Limited
· MedGold Resources Corp (TSXV:MED)
· Minergy Limited
· New Horizon Oil & Gas Limited (trading as T5)
· Predator Oil & Gas Holdings plc (LSE:PRD)
· Rift Resources Limited
· Royal Road Minerals Limited (previously Tigris Resources) (TSXV:RYR)
· TAG Oil (TSX:TAO)
· Trigon Metals Inc (TSXV:TM)
The Board of Directors will continue to introduce further equity positions
to the Company to enable additional diversification of the portfolio. It is
anticipated that these will continue to be primarily within the natural
resources sector.
A General Meeting will be called shortly for which a further announcement
will be made and the notice of GM will be available on the Company's
website, together with the audited report and accounts.
Brian Rowbotham
Non-Executive Chairman
14 December 2020
The Directors of the issuer are responsible for the content of this
announcement.
For further information please contact:
Hot Rocks Investments plc
Gavin Burnell: 0207 264 4444
Peterhouse Capital Limited
Guy Miller: 020 7220 9796
HOT ROCKS INVESTMENTS PLC STRATEGIC REPORT
YEARED 31 MARCH 2020
The Directors of the Company present their Strategic Report on the Company
for the year ended 31 March 2020.
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
Company will continue to seek to make investments primarily within this
sector but the Directors will review other opportunities as they arise.
Financial Review
The profit for this year before taxation was GBP75,050 (2019: loss of
GBP35,376).
Cash in the bank at the end of March 2020 was GBP19,868 (2019: GBP46,745).
**********************************************************************
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:
2020 2019 %
GBP GBP Increase/
(Decrease)
Valuation of financial assets at fair value through profit and loss 913,213
770,235 18.5%
Cash 19,868 46,745 (57.5%)
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 financial assets at
fair value through profit and loss, 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.
HOT ROCKS INVESTMENTS PLC STRATEGIC REPORT
YEARED 31 MARCH 2018
Political and country risk - including EU Referendum
The Company holds investments whose operations are based in a number of
locations worldwide, some of which have a history of political uncertainty.
The Directors routinely monitor political and regulatory developments in its
countries of interest, in particular those developments which may indicate a
movement in fair value to financial assets through profit and loss.
The Company is quoted in the United Kingdom (UK) and operates in the UK and
European Union (EU). As a result of the Referendum, the Company may be
subject to the impact of the UK leaving the European Union. As a result,
given the ongoing uncertainty surrounding the situation the Company is
monitoring matters and seeking advice as to how to mitigate the risks
arising.
Section 172 Statement
Section 172 (1) of the Companies Act obliges the Directors to promote the
success of the Company for the benefit of the Company's members as a whole.
This section specifies that the Directors must act in good faith when
promoting the success of the Company and in doing so have regard (amongst
other things) to:
a) the likely consequences of any decision in the long term,
b) the interests of the Company's employees,
c) the need to foster the Company's business relationship with suppliers,
customers and others,
d) the impact of the Company's operations on the community and
environment,
e) the desirability of the Company maintaining a reputation for high
standards of business conduct, and
f) the need to act fairly as between members of the Company.
The Board of Directors is collectively responsible for formulating the
Company's strategy, which is to invest in businesses where prospects appear
to be exceptional and deliver growth to its shareholders.
Some key decisions were taken by the Board since April 2019 which were aimed
to deliver on this strategy, being the point in time when the Board invests
and disposes in its key investments throughout the year, and which Company's
to invest in.
The Board places equal importance on all shareholders and strives for
transparent and effective external communications, within the regulatory
confines of a listed company. The primary communication tool for regulatory
matters and matters of material substance is through the Regulatory News
Service, ("RNS"). We also provide an environment where shareholders can
interact with the Board and management, ask questions and raise their
concerns.
The Directors believe they have acted in the way they consider most likely
to promote the success of the Company for the benefit of its members as a
whole, as required by Section 172 (1) of the Companies Act 2006.
HOT ROCKS INVESTMENTS PLC REPORT OF THE DIRECTORS
YEARED 31 MARCH 2020
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.
Going concern
Accounting standards require the Directors to consider the appropriateness
of the going concern basis when preparing the financial statements. The
Directors having reviewed the Company's plans, taking into account
reasonably possible changes in the value of investments, including any
impact from the COVID-19 pandemic and Brexit, and have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future and therefore the Directors
confirm that they consider that the going concern basis remains appropriate.
Further details can be found in the accounting policies accompanying the
financial statements.
Independent Auditor
So far as the directors are aware, there is no relevant audit information on
which the Company's auditors are unaware, and they have taken all steps that
they ought to have taken as directors in order to make themselves aware of
any relevant audit information and to establish that the Company's auditors
are aware of that information.
PKF Littlejohn LLP has signified their willingness to continue in office as
auditor and will be proposed for reappointment at the next Annual General
Meeting.
HOT ROCKS INVESTMENTS PLC STATEMENT OF DIRECTORS RESPONSIBILITIES
YEARED 31 MARCH 2020
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.
HOT ROCKS INVESTMENTS PLC STATEMENT OF COMPREHENSIVE INCOME
YEARED 31 MARCH 2020
Note 2020 2019
Continuing Operations GBP GBP
Revenue - -
Foreign exchange gain on financial assets - 20,897
at fair value through profit and loss
Operating expenses (71,886) (50,060)
Share based payments expense - -
Movement in fair value of financial 76,374 (31,796)
assets through profit and loss
Other gains - sale of financial assets at 70,555 35,572
fair value through profit and loss
Impairment - (10,000)
_______ _______
Operating Profit/Loss 75,043 (35,387)
Finance income 7 11
_______ _______
Profit/(Loss) before Income Tax 75,050 (35,376)
Income tax expense - -
_______ _______
Profit/Loss for the Year attributable to 75,050 (35,376)
equity holders
_______ _______
Other Comprehensive Income
Items that may be Reclassified
Subsequently to
Profit or Loss
Fair value change in value on - -
available-for-sale financial assets
_______ _______
Total Comprehensive income/(loss) for the 75,050 (35,376)
Year attributable to equity holders
_______ _______
Earnings Per Share - Basic and Diluted 0.0 (0.0)
(expressed in pence per share)
_______ _______
HOT ROCKS INVESTMENTS PLC STATEMENT OF FINANCIAL POSITION
REGISTERED NUMBER 06163193 AT 31 MARCH 2020
Note As at As at
31 March 31 March
2020 2019
GBP GBP
Assets
Non-Current Assets
Financial assets at fair value through 188,672 421,521
profit and loss
_______ _______
188,672 421,521
_______ _______
Current Assets
Financial assets at fair value through 724,442 348,714
profit and loss
Cash and cash equivalents 19,868 46,745
_______ _______
744,310 395,459
Total Assets 932,982 816,980
_______ _______
Equity and Liabilities
Equity Attributable to Shareholders
Ordinary shares 173,602 173,602
Share premium account 1,174,631 1,174,631
Share options and warrants reserve 115,600 115,600
Retained loss (701,821) (776,871)
_______ _______
762,012 686,962
Current Liabilities
Trade and other payables 170,970 130,018
_______ _______
Total Equity and Liabilities 932,982 816,980
_______ _______
HOT ROCKS INVESTMENTS PLC STATEMENT OF CHANGES IN EQUITY
YEARED 31 MARCH 2020
Attributable to Equity Shareholders
Ordinary Share Share Other Retained Total
shares premium option reserve loss
s and s
warran
ts GBP
GBP GBP reserv GBP
e GBP
GBP
Balance 173,602 1,174,63 115,60 144,678 (886,173 722,338
as at 1 1 0 )
April
2018
______ _______ ________
________ ______ _______
Reclassification on - (144,67 144,678 -
implementation of 8)
IFRS 9
Loss for the - - - (35,376) (35,376)
year
______ ______ ______ _______ _______ _______
- - - - (144,67 109,302 (35,376)
8)
Total
Compreh
ensive
Income
______ ______ ______ _______ _______ _______
Total
Transac
tions
with
Owners - - - - - -
______ ______ ______ _______ _______ ________
Balance 173,602 1,174,63 115,60 - (776,871 686,962
as at 1 0 )
31
March
2019 ______ _______ ________
and 1 ________ ______ _______
April
2019
Profit - - - - 75,050 75,050
for the
year
______ ______ ______ _______ _______ _______
- - - - 75,050 75,050
Total
Comprehensive
Income
______ ______ ______ _______ _______ _______
Total
Transac
tions
with
Owners - - - - - -
______ ______ ______ _______ _______ ________
Balance 173,602 1,174,63 115,60 - (701,821 762,012
as at 1 0 )
31
March
2020 ______ _______ ________
________ ______ _______
HOT ROCKS INVESTMENTS PLC STATEMENT OF CASH FLOWS
YEARED 31 MARCH 2020
2020 2019
GBP GBP
Cash Flows from Operating Activities
Profit / (Loss) before income tax 75,050 (35,376)
Finance income (7) (11)
Unrealised foreign exchange (gain) - (20,897)
Impairment - 10,000
Share based payments - -
Gain on disposal of financial assets (70,555) (35,572)
through profit and loss
Movement in fair value of financial assets (76,374) 31,796
through profit and loss
Decrease in other receivables - -
Increase in trade and other payables 41,219 24,337
_______ _______
Cash Used in Operations (30,667) (25,723)
Interest paid - -
Income tax paid - -
_______ _______
Net Cash Used in Operations (30,667) (25,723)
_______ _______
Cash Flows from Investing Activities
Purchases of financial assets through (173,039) (62,340)
profit and loss
Proceeds from disposal of financial assets 176,829 118,098
through profit and loss
_______ _______
Net Cash Generated from Investing 3,790 55,758
Activities
_______ _______
(Decrease / Increase in Cash and Cash (26,877) 30,035
Equivalents
Cash and cash equivalents at the beginning 46,745 16,710
of the year
_______ _______
Cash and Cash Equivalents at the End of the 19,868 46,745
Year
_______ _______
HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES
YEARED 31 MARCH 2020
General Information
Hot Rocks Investments Plc is a public limited company incorporated and
domiciled in the United Kingdom.
Summary of Significant Accounting Policies
The principal Accounting Policies applied in the preparation of these
Financial Statements are set out below. These Policies have been
consistently applied to all the periods presented, unless otherwise stated.
Basis of Preparation of Financial Statements
The Financial Statements have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union (IFRS as
adopted by the EU), IFRIC interpretations (IFRS IC) and those parts of the
Companies Act 2006 applicable to companies reporting under IFRS. The
Financial Statements have also been prepared under the historical cost
convention, as modified by the revaluation of financial assets at fair value
through profit and loss.
The preparation of Financial Statements in conformity with IFRSs requires
the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the
Company's Accounting Policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are
significant to the Financial Statements, are disclosed later in these
accounting policies.
The Financial Statements are presented in sterling (GBP), rounded to the
nearest pound.
Changes in accounting policies and disclosures
a) New and amended standards and interpretations adopted by the Company
There have been no new standards which were applied for the first time this
year which have had a material impact on these financial statements.
b) New and amended standards and interpretations issued but not yet
effective and not early adopted
There are no IFRSs or IFRIC interpretations that are not yet effective that
the directors expect to have a material impact on the Company.
HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES
YEARED 31 MARCH 2020
Segmental Reporting
The Company has only one operating segment being the investment in
companies, or assets, in the natural resource sector. Operating segments are
reported in a manner consistent with the internal reporting provided to the
Chief Operating Decision-Maker ("CODM"). The CODM, who is responsible for
allocating resources and assessing performance of the operating segments,
has been identified as the Board of Directors that makes strategic
decisions. Therefore, the Financial Statements of the single segment is the
same as that set out in the Statement of Comprehensive Income, the Statement
of Financial Position, the Statement of Change in Equity and the Statement
of Cash Flows.
Foreign Currency Translation
(a) Functional and Presentation Currency
Items included in the Financial Statements of the Company are measured using
the currency of the primary economic environment in which the entity
operates ("functional currency").
The Financial Statements are presented in Pounds Sterling (GBP), which is the
Company's functional and presentation currency.
(b) Transactions and Balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions, or
valuation where items are re-measured. 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 profit or loss.
HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES
YEARED 31 MARCH 2020
Financial Instruments
Financial assets and financial liabilities are recognised when the Company
becomes a party to the contractual provisions of the instruments and on a
trade date basis. A financial asset is derecognised when the Company's
contractual rights to future cash flows from the financial asset expire or
when the Company transfers the contractual rights to future cash flows to a
third party. A financial liability is derecognised only when the liability
is extinguished.
a) Financial Assets at fair value through profit and loss
Financial assets at fair value through profit or loss are financial assets
held for trading and include both listed and unlisted equity investments.
Details of these assets and their fair value is included in critical
accounting estimates Note i.
b) Trade and other receivables
Trade and other receivables are measured at initial recognition at fair
value, and are subsequently measured at amortised cost using the effective
interest rate method. Appropriate allowances for estimated irrecoverable
amounts are recognised in the statement of comprehensive income when there
is objective evidence that the asset is impaired.
c) Cash and cash equivalents
The Company considers all highly liquid investments which are readily
convertible into known amounts of cash and have a maturity of three months
or less when acquired to be cash equivalents. At the reporting date
management believes that the carrying amount of cash and cash equivalents
approximates fair value because of the short maturity of these financial
instruments.
Cash and cash equivalents comprise cash at bank and in hand and short term
deposits with an original maturity of three months or less, all of which are
available for use by the company unless otherwise stated. Cash and cash
equivalents are measured at fair value, based on the relevant exchange rates
at the reporting date.
HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES
YEARED 31 MARCH 2020
d) Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument
is any contract that evidences a residual interest in the assets of the
Company after deducting all of its liabilities.
The Company's financial liabilities include trade and other payables. All
financial liabilities, except for derivatives, are recognised initially at
their fair value plus transaction costs that are directly attributable to
the acquisition or issue of the financial liability and subsequently
measured at amortised cost.
e) Share Capital
Ordinary shares are recorded at nominal value and proceeds received in
excess of nominal value of shares issued, if any, are accounted for as share
premium. Both ordinary shares and share premium are classified as equity.
Costs incurred directly to the issue of shares are accounted for as a
deduction from share premium, otherwise they are charged to the Income
Statement.
f) Share Based Payments
The Company operates a number of equity-settled, share-based schemes, under
which it receives services from employees or third party suppliers as
consideration for equity instruments (options and warrants) of the Company.
The Company may also issue warrants to share subscribers as part of a share
placing. The fair value of the equity-settled share based payments is
recognised, if material, as an expense in the income statement or charged to
equity depending on the nature of the service provided or instrument issued.
The total amount to be expensed or charged is determined by reference to the
fair value of the options granted:
· including any market performance conditions;
· excluding the impact of any service and non-market performance vesting
conditions (for example, profitability or sales growth targets, or
remaining an employee of the entity over a specified time period); and
· including the impact of any non-vesting conditions (for example, the
requirement for employees to save).
In the case of warrants the amount charged to the share premium account is
determined by reference to the fair value of the services received if
available. If the fair value of the services received is not determinable,
the warrants are valued by reference to the fair value of the warrants
granted as described previously.
Non-market vesting conditions are included in assumptions about the number
of options or warrants that are expected to vest. The total expense or
charge is recognised over the vesting period, which is the period over which
all of the specified vesting conditions are to be satisfied. At the end of
each reporting period, the Company revises its estimates of the number of
options that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to original estimates,
if any, in the income statement or equity as appropriate, with a
corresponding adjustment to a separate reserve in equity.
When the options are exercised, the Company issues new shares. The proceeds
received, net of any directly attributable transaction costs, are credited
to share capital (nominal value) and share premium.
HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES
YEAR ENDED 31 MARCH 2020
g) Income tax
Income tax is recognised in the Statement of Comprehensive Income, except to
the extent that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
Current income tax is calculated on the results shown in the Financial
Statements and according to local tax rules, using tax rates enacted or
substantially enacted by the Statement of Financial Position date.
Tax losses available to be carried forward as well as other income tax
credits due to the Company are assessed for recognition as deferred tax
assets. Deferred tax assets are only recognised to the extent that it is
probable that future taxable profits will be available against which the
asset can be recognised and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
h) Going Concern
The financial statements have been prepared under the going concern
assumption. Under the going concern assumption an entity is ordinarily
viewed as continuing in business for the foreseeable future with neither the
intention nor necessity of liquidation, ceasing trading or seeking
protection from creditors.
In making their assessment the Directors have considered their net annual
cash spend and the ability of the company to service such payments through
its cash resources and liquid, tier 1 investments.
On this basis, the Directors have formed a judgement, at the time of
approving the financial statements that there is a reasonable expectation
that the Company has adequate resources to continue in operational existence
for at least 12 months from the date of signing the financial statements.
For this reason they have prepared the financial statements on the going
concern basis.
i) Critical Accounting Estimates and Assumptions
The Company makes estimates and assumptions concerning the future. The
resulting estimates will by definition, seldom equal the actual results.
The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year are addressed below.
Fair value of financial assets - level 3
The Company reviews the fair value of its unquoted equity instruments at
each Statement of Financial Position date. This requires management to make
an estimate of the value of the unquoted securities in the absence of an
active market.
HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES
YEAR ENDED 31 MARCH 2020
a) Critical judgements in applying the entity's accounting policies
Many of the amounts included in the financial statements involve the use of
judgement and/or estimation. These judgements and estimates are based on
management's best knowledge of the relevant facts and circumstances, having
regard to prior experience, but actual results may differ from the amounts
included in the financial statements. The most critical judgements as
applied to these financial statements are as follows:
Financial assets held at fair value through profit or loss
Level 3 financial assets held at fair value through profit or loss have a
carrying value of GBP188,672 at 31 March 2020. An impairment charge of GBPNil
(2019: GBP10,000) has been recognised in the year.
The Company follows the guidance of IFRS 9 to determine when an investment
at fair value through profit or loss is impaired. This determination
requires significant judgement. In making this judgement, the Company
evaluates, among other factors, the duration and extent to which the fair
value of an investment is less than its cost; and the financial health of
the short-term business outlook for the investee, including factors such as
industry and sector performance and operational and financing cash flow.
Management also consider external indicators such as commodity prices,
investment performance and demand for the underlying commodity. As per note
2, financial assets held at fair value through profit or loss are assessed
individually. Details of the assessment of each investment is included in
note J.
j) Fair Value Estimation
The table below analyses financial instruments carried at fair value, by
valuation method. The different levels are defined as follows:
· quoted prices (unadjusted) in active markets for identical assets or
liabilities (Level 1);
· inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (Level 2); and
· inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (Level 3).
The following table presents the Company's assets that were measured at fair
value as at 31 March 2020 and 31 March 2019. The Company does not have any
liabilities measured at fair value.
Level 1 Level 2 Level 3 Total
31 March 2020:
Financial assets through profit and loss GBP GBP GBP GBP
- Equity holdings 679,442 45,000 188,672 913,114
_______ _______ _______ _______
31 March 2019:
Financial assets through profit and loss
- Equity holdings 348,714 67,500 354,022 770,235
_______ _______ _______ ________
The fair value of financial instruments traded in active markets is based on
quoted market prices at the date of the Statement of Financial Position. A
market is regarded as active if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service
or regulatory agency, and those prices represent actual and regularly
occurring market transactions on an arm's length basis. The quoted market
price used for financial assets held by the Company is the current bid
price. These instruments are included in Level 1. Instruments included in
Level 1 comprise primarily of equity investments quoted on the AIM, London
Stock Exchange, TSX, Toronto Stock Exchange, and TSXV, TSX Venture Exchange,
Botswana stock exchange and classified as trading securities or
available-for-sale.
HOT ROCKS INVESTMENTS PLC ACCOUNTING POLICIES
YEAR ENDED 31 MARCH 2020
The fair value of financial instruments that are not traded in an active
market (for example, over-the-counter derivatives) is determined by using
valuation techniques. These valuation techniques maximise the use of
observable market data where it is available, and rely as little possible on
entity-specific estimates. If all significant inputs required to fair value
an instrument are observable, the instrument is included in Level 2.
If one or more of the significant inputs is not based on observable market
data, the instrument is included in Level 3. The Company has valued all
level 3 financial instruments at cost. The Directors perform an annual
impairment assessment in for all level three inputs and recognise any
impairment charge due.
The following table presents the changes in Level 3 instruments for the year
ended 31 March 2020 and 31 March 2019:
2020 2019
GBP GBP
Opening balance 354,021 526,428
Transfers into level 2 - (25,000)
Transfers into level 1 (165,349) (139,595))
Gains (and losses) recognised in profit or loss - 2,186
Impairment - (10,000)
_______ _______
Closing Balance 188,672 354,021
_______ _______
ISIN: GB00B1WV3198
Category Code: MSCM
TIDM: HRIP
Sequence No.: 89690
EQS News ID: 1155077
End of Announcement EQS News Service
(END) Dow Jones Newswires
December 14, 2020 11:34 ET (16:34 GMT)
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