2.          Summary of significant accounting policies

Basis of accounting

The 2016 financial statements are prepared under International Financial Reporting Standards, as adopted for use by the European Union.

The financial statements have been prepared on the going concern basis and historical cost basis, except that the following assets and liabilities are stated at their fair value: financial instruments classified as fair value through the profit and loss.

The financial statements are presented in sterling, the currency of the primary economic environment in which the Company operates and in which the majority of the Company's transactions are denominated.

The principal accounting policies adopted are set out below.

Going concern

The financial statements have been prepared on the going concern basis. The Directors have prepared cash flow forecasts for the period ending 30 June 2018 which take account of the current cost and operational structure of the Company. These forecasts demonstrate that the Company has sufficient cash funds available to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the financial statements have been prepared on a going concern basis.

Investments available for sale

Classification

 The Company classified its investments in unlisted shares that are not traded in an active market as available for sale at inception. Available for sale financial assets are non-derivatives that are either designated as available for sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.

Recognition

Purchases and sales of investments are recognised on the trade date - the date on which the Company commits to purchase or sell the investments.

Measurement

Unlisted Investments are initially recognised at cost, being the fair value of consideration given. Where the Company has investments in equity instruments that do not have a quoted price in an active market and whose fair value cannot be reliably measured these are carried at historic cost less any identified impairment losses at the end of each reporting period.

Fair value hierarchy

IFRS 13 requires disclosure of fair value measurements by level of the following fair value hierarchy:

Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities that the entity can readily observe;

Level 2 - inputs are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly; and

Level 3 - inputs that are not based on observable market data (unobservable inputs).

Unlisted Investments are therefore classified at level 2 of the fair value hierarchy when initially recognised.

Taxation

The tax charge represents the sum of current and deferred tax. 

Current tax payable is based on taxable profits for the year. Taxable profits differ from net profits as reported in the income statement because it excludes items that are taxable or deductible in other years and items that are not taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the liability method. Deferred tax liabilities are recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets are offset when there is a legally enforceable right to offset current tax assets against current liabilities and when deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on either the same taxable entity or different taxable entity where there is an intention to settle on a net basis.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability or the asset is realised.

Borrowing costs

Unless borrowing costs are capitalised that are directly attributable to the acquisition, construction or production of a qualifying asset, borrowing costs are expensed in the period they are incurred. Borrowing costs are calculated using the effective interest rate method. No borrowing costs were capitalised in the year (2015: Nil).

Currencies

Transactions in currencies other than Sterling are recorded at the rates of exchange prevailing on the dates of the transactions. Monetary items in the statement of financial position are retranslated at the closing exchange rate at each statement of financial position date, and the resulting translation differences are recorded in profit or loss.

Impairment of investments available for sale

At each reporting date, if there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses shall not be reversed.

Financial instruments

Financial assets and financial liabilities are recognised in the Company's statements of financial position when the Company has become a party to the contractual provisions of the instrument.

Loans and other receivables

Loans and other receivables are recognised initially at fair value and subsequently measured at amortised costs using the effective interest rate method, as reduced by appropriate provisions for estimated irrecoverable amounts less provision for impairment. A provision for impairment is accounted for when management deems the specific receivable balance not to be collectable. The amount of the impairment loss is recognised in the income statement.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term deposits and liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised on the expected yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expect life of the expected financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. 

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 creates a residual interest in the assets of the Company.

Trade payables

Trade payables are stated at their amortised cost less any discount or rebate received.

Dividends

Dividend distribution to the Company's shareholders is recognised as a liability in the Company's financial statements in the period in which the dividends are approved by the Company's shareholders.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Capital redemption reserve

Where a company acquires its own shares out of free reserves, then a sum equivalent to the nominal value is transferred to a capital redemption reserve.

Critical accounting judgements and key sources of estimation uncertainty

The Directors consider the critical accounting estimates and judgements used in the financial statements and concluded that the main areas of judgement are:

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the critical accounting judgements, apart from those involving estimations (which are dealt with separately below), that the Directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

(a)  Critical judgements in applying the Company's accounting policy

In the process of applying the Company's accounting policies which are described above, management has not had to make any further significant judgements on the amounts recognised in the financial statements.

(b)  Key sources of estimation uncertainty

As the Company is an investing company, the key source of estimation uncertainty is the impairment review of unlisted investments.

3.          Segment analysis

The segmental analysis relates to the operations of the Company, as these are individual financial statements of the Company. The Company has one reportable operating segment on the basis that it earns revenues and incurs expenses from one business activity; being investing, and on the basis that it operates in one geographical location; being the United Kingdom. During the current year, the Company did not generate any turnover from its investment activities, as no acquisition was completed during the reporting period.

4.          Loss from operations

The auditors have not provided non-audit services during 2016.

5.          Staff costs

During the year there were no employees (2015: nil) employed by the Company excluding Directors in administration roles.  The staff costs during the year include the accrual of director fees in the amount of £16,000 which were not paid during the reporting period.

6.          Directors' remuneration

The emoluments (including pension contributions) paid to Directors during the year was as follows:

An accrual of £16,000 for directors which were unpaid during the reporting period has been made.

As at 31 December 2016, no Director was accruing benefits under a money purchase scheme (2015: none). At the year-end no Director had any share options.

7.             Taxation on loss on ordinary activities

Factors affecting tax charge for the year:

The tax assessed for the year is lower than the standard rate of corporation tax in the UK 20 % (2015: 20%). 

                                                                                                                                                                        2016                        2015

                                                                                                                                                                       £'000                      £'000

Loss on ordinary activities before tax                                                                                                            (115)                       (104)

Loss on ordinary activities multiplied by standard rate

of corporation tax in the UK of 20.0% (2015: 20.0%)                                                                                     (23)                        (20)

Effects of:

Unrelieved tax losses                                                                                                                                           23                            20

Total tax for the year                                                                                                                                             -                              -

No deferred tax assets have been recognised in the year (2015: nil).

The corporation tax rate was 20.0% from 1 April 2014 to 1 April 2017. Thus the corporation tax rate for the year ended 31 December 2016 is 20.0%.

The Company has unused tax losses of £1.8 million and capital losses of £2.5 million. The deferred tax asset for these losses, amounting to £835,000 (2015: £835,000) has not been recognised as the timing of profits is uncertain.

8.          Loss per share

9.          Investments available for sale

10.        Trade and other receivables

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value. All receivables are due within one year.

11.        Share capital

At 31^st December 2016 no share options were outstanding (2015: nil).

On 8 January 2016, the Company announced the placement of 40,000,000 ordinary shares at 0.5 pence per share to raise gross proceeds of £200,000 to provide additional working capital for the Company. The funds in respect of this placement were received prior to 31 December 2015.

As at 31 December 2016, the Company's total issued ordinary share capital was 320,915,895 ordinary shares of 0.1p each and 6,915,896 "A" Deferred Shares of 1.65 pence per share.

The holders of ordinary shares are entitled to one vote per share at the meetings of the Company and to dividends as declared in proportion to the amounts paid up on the ordinary shares. No shares are of the Company are currently redeemable or liable to be redeemable at the option of the holder or the Company.

The holders of "A" Deferred Shares do not have any right to receive written notice of or attend, speak or vote at any general meeting of the Company, or to any dividend declared by the Company. They may however be redeemed by the Company at any time at its option for one penny for all the "A" Deferred Shares without obtaining sanction of such holders.

12.        Trade and other payables

The Directors consider that the carrying amount of trade and other payables approximates to their fair value.  All liabilities are due within one year.

13.           Related party transactions

The amount of £7,260 due to Saltwind as at 31 December 2015 was fully repaid on 5 January 2016. There were no loans from related party as at 31 December 2016.

The directors are the key management of the Company (refer to note 7).

14.        Financial risk management

The Company's operations expose it to a limited level of credit, foreign currency and liquidity risk. There is not any financial risk arising from the effects of changes in market prices of commodities based on its current activities.

The Company does not use derivative financial instruments to manage interest rate costs, and no hedge accounting is thus applied. Given the size of the Company, the Directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the Board.

Credit risk

The Company's credit risk is primarily attributable to its trade receivables and cash balances. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

Price risk

Price risk arises from uncertainty about the future prices of financial instruments held within the Company's portfolio. It represents the potential loss that the Company might suffer through holding market positions in the face of market movements. The investments in equity and fixed interest stocks of unlisted companies are not traded and as such the prices are more uncertain than those of more widely traded securities. The Board's strategy in managing the market price risk inherent in the Company's portfolio of equity investments is determined by the requirement to meet the Company's investment objective. The Directors manage these risks by regular reviews of the portfolio within the context of current market conditions. Unlisted investments are valued as per accounting policy in these financial statements.

Liquidity risk

The Company actively maintains a treasury system that maintains a net credit position and is designed to ensure the Company have sufficient available funds for operations and planned expansions.

Maturity of financial liabilities

The following table shows details the Company's remaining contractual maturity for its non-derivative financial liabilities. The maturity of the financial liabilities table has been drawn up based on the undisclosed cash flows based on the earliest date on which the Company can be required to pay.

Interest rate risk

The Company's exposure to changes in interest rate risk relates primarily to interest-earning financial assets and interest-bearing financial liabilities. Interest rate risk is managed by the Company on an ongoing basis with the primary objective of limiting the extent to which net interest expense could be affected by an adverse movement in interest rates.

Foreign currency risk

The Company incurs foreign currency risk on investments that are denominated in currencies other than Sterling. At present, the Company does not have any formal policy for hedging against exchange exposure. The Company may, when necessary, enter into foreign currency forward contracts to hedge against exposure from foreign currencies fluctuations. As at both 31 December 2015 and 31 December 2016 the Company has an investment denominated in Canadian Dollar. Any movement in the Canadian Dollar against Sterling will create a fair value gain or loss. The Company has assessed the impact of changes in exchange rates as not being significant to the Company.

14.           Financial risk management (continued)

Capital risk management

The Directors consider the Company's capital to comprise of share capital and reserves stated on the statement of financial position. The Company manages its capital to ensure the Company will be able to continue on a going concern on a long term basis while ensuring the optimal return to shareholders and other stakeholders through an effective debt and equity balance. No changes were made in the objectives, policies and processes during the current or previous year.

The share capital, including share premium, and reserves totalling £509,000 (2015: £624,000) provides the majority of the working capital required by the Company. The Management reviews the capital structure and makes adjustment to it in the light of changes in economic conditions. 

Other financial assets and liabilities

The notional amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents and trade and other payables) are assumed to approximate their fair value.

Categories of financial instruments

15.        Post balance sheet events

On 19 April 2017, the Company announced that it had entered into a share subscription agreement in the amount of AUD$500,000 (approx. £300,000) to acquire an initial 2.0% interest in Tonsley (a subsidiary of ASX listed Plymouth), which holds the right to earn up to a 75% interest in the advanced San Jose Lithium-Tin Project in Spain.

On 19 April 2017, the Company announced the arrangement of subscriptions totalling £367,500 for 73,500,000 new Ordinary Shares of 0.1p each at a price of 0.5p per share to fund the investment in Tonsley and for working capital purposes.

16.        Ultimate controlling party

Jeremy Edelman is the ultimate controlling party.

Note to the announcement:

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2016 or 2015.  The financial information for the year ended 31 December 2015 is derived from the statutory accounts for that year.  The audit of statutory accounts for the year ended 31 December 2016 is complete.