TIDMORCP
RNS Number : 3052E
Oracle Power PLC
29 June 2023
29 June 2023
Oracle Power PLC
("Oracle", the "Company" or the "Group")
Final Results for the year ended 31 December 2022
Posting of Annual Report
Notice of AGM
Oracle Power PLC (AIM:ORCP) is pleased to announce its audited
results for the 12 months ended 31 December 2022. The Company's
Annual Report for the year ended 31 December 2022, together with
formal Notice of the Company's 2023 Annual General Meeting ("AGM"),
will be made available on the Company's website at
www.oraclepower.co.uk/investor-relations/aim-rule-26/ and are being
posted to shareholders today.
The AGM will be held at the offices of Charles Russell Speechlys
LLP, 5 Fleet Place, London EC4M 7RD on Wednesday, 26 July 2023 at
11:00 a.m.
For further information:
Oracle Power PLC +44 (0) 203 580
Naheed Memon - CEO 4314
Strand Hanson Limited (Nominated Adviser &
Joint Broker)
Rory Murphy / Matthew Chandler / Rob Patrick +44 (0) 207 409
3494
Global Investment Strategy UK Limited (Joint
Broker) +44 (0) 207 048
Samantha Esqulant 9432
Buchanan (Financial PR) +44 (0) 207 466
Bobby Morse / Oonagh Reidy / Abigail Gilchrist 5000
CHAIRMAN'S STATEMENT
I am pleased to present the financial statements for Oracle
Power PLC ("Oracle" or the "Company") for the year ended 31
December 2022.
In December 2022, Andreas Migge, one of our non-executive
directors left the Company. It was then with sadness that we learnt
that he had died in February 2023. We would like to offer our
condolences to his friends and family.
The political tensions between the United States and China
slowed down some progress in the development of the mine and power
project at Block VI in the Thar desert. However, during the course
of the year the Company continued to advance its initiatives for
the development of Block VI. The Government of Pakistan established
demand for 1,320 MW of Thar coal-based power in 2027, allowing for
potential development of the project. Subsequently, post period we
signed an agreement for potential offtake for 1,320 MW of coal
generated power as well as another agreement with PowerChina to
develop, in parallel, a 1 GW solar farm at Thar.
During the year, we focused most of our attention on our Green
Hydrogen ("GH") project, which comprises the planned construction
of a 400MW plant producing 55,000 tonnes of green hydrogen per
annum backed by 1,200MW of hybrid solar/wind, green hydrogen/power
plants.
This project is being developed through Oracle Energy Limited.
This company is owned 70% by His Highness Sheikh Ahmed Dalmook Al
Maktoum through his wholly owned company Kaheel Energy FZE, and 30%
by Oracle Power Plc. Oracle will be primarily responsible for
putting the project together and Kaheel Energy will use its
position and influence to facilitate market access and
financing.
To that end, we have acquired a 7,000 acres site in the Thatta
district in Southeast Pakistan. This lease for this land has been
granted to us by the Government of Sindh and is for an initial
period of 30 years. This lease is now fully paid for and registered
to Oracle Energy Limited.
We have been issued with a Letter of Intent ("LOI") from the
Directorate of Alternative Energy of the Government of Sindh (the
"Directorate of Alternative Energy"), relating to the establishment
of a 1,200MW hybrid solar/wind, green hydrogen/power project. In
order to obtain formal approval of the LOI, we needed to provide a
$600,000 performance guarantee bond which has now been put in
place.
In addition to the above, we have an LOI from TUV SUD for the
certification of the hydrogen output. Thyssenkrupp Uhde is
undertaking the various feasibility studies, and post period land
and renewable power studies have also been commenced.
In terms of our funding position, we raised GBP1,200,000 before
expenses through two equity placings to finance the development of
the green hydrogen project.
The development of the green hydrogen project has advanced
rapidly and it should not be long before the project acheives
bankability and Oracle can benefit from potential transactions with
one or more energy or fuel companies.
With regard to Western Australia, we decided not to carry out
any more work on the Jundee East project as we did not manage to
find viable gold deposits. Post year end, we signed a "farm-in"
agreement for the Northern Zone with Riversgold Ltd, the details of
which can be found in our RNS dated 9 May 2023. We will retain a
minority interest and be carried for the next phase of its
development.
Operational highlights of 2022 are described in the Chief
Executive's Report.
The Pakistan Government remains supportive of both the
development of the Thar coal project and the GH project in Thatta.
The broad parameters of security remain as last year: there have
been no major incidents and, overall, order has been
maintained.
We are most grateful to the Pakistani Authorities, to the
Chinese Authorities and the Joint Cooperation Committee (JCC) of
CPEC for their support.
Above all, I wish to thank our shareholders for their continued
confidence, patience and support, enabling us to make progress on
our projects.
Mark Steed
Chairman
CHIEF EXECUTIVE'S REPORT
I am pleased to present a report on the Company's progress for
the year ended 31 December 2022.
This year has been one of very notable progress for the Company.
During the year, we focused on the development of the Company's
significant GH project in Pakistan and also continued to explore
our Western Australia assets and develop our Thar asset. I am happy
to say that we have made significant progress, and I provide an
overview below.
In Pakistan, we continued to actively pursue the development of
our Thar Block VI, for power as well as for CTG/L (coal to
gas/liquid). We maintained an active dialogue with the Power
Division, Ministry of Energy, throughout the year, to secure
permission for development of the Company's 1,320MW, coal to power
project under the China-Pakistan Economic Corridor ("CPEC"). In
September 2022, the Government of Pakistan published its annual
Indicative Generation Capacity Expansion Plan (the "IGCEP"), a
demand-supply policy guidance chart for Pakistan and the demand for
1,320 MW of local coal fired power was stated as required in 2027.
This inclusion which confirms demand for 1,320 MW coal-based power,
allows for potential development of the project, subject to
financing and off-take. In 2022 Q4, and subsequent to the
publication of the IGCEP, we initiated dialogue with off takers
other than the Government of Pakistan. We signed an MOU post
period, for an off-take with the largest private power utility,
along with the Government of Sindh as a facilitator and potential
investor, preparing a pathway for the development of this important
project.
Furthermore, following significant progress made in 2021 with
respect to CTG/L, the Company signed an MOU in January 2022, with
Sui Southern Gas Company Limited ("SSGC"), the public gas
distribution company, based on the understanding that a buy back
arrangement with SSGC would trigger required government policy
formulation, as well as provide necessary guarantees to lenders. I
can also confirm that generally, Oracle continued to receive
encouragement and support from the Government of Pakistan for
mobilisation of CTG/L development, given Pakistan's critical gas
crisis.
In Western Australia, Oracle continued to conduct active
exploration on both the tenements. We began an extensive drilling
programme at Jundee East ("JE") in February 2022 which concluded in
March 2022, covering 3830m in 54 holes. Subsequently complete
geochemical analysis for downhole data was done to confirm gold
mineralisation which was then followed by geochemical analysis of
surface data for lithium and rare earth elements. The results
obtained were not favourable and it was decided post period end not
to undertake further drilling at JE.
At the Company's Northern Zone ("NZ") project, 25 km from
Kalgoorlie, the results from the maiden drill programme targeting
felsic intrusives porphyry bodies which had concluded in September
2021, were received in January 2022. The results established a low
grade but potentially large mineralisation across the tenement. The
Company carried out further metallurgical tests to confirm gold
recovery rates. The results from these tests which were received in
June 2022, confirmed excellent gold recovery rate of up to 94.7%.
The Company proceeded to prepare a budget and plan for further
drilling, opting for a diamond drilling programme to establish a
JORC resource at NZ. In parallel the Company also started dialogue
with potential JV partners. A "farm-in" agreement for NZ with an
ASX listed company was entered into post period and work on NZ at
minimum cost for the Company is expected to commence post
period.
In 2022, the Company accelerated the development of its GH
project in the wind corridor in Thatta in Pakistan. The project was
launched in Q4 2021, and the Company has achieved major
developmental milestones in 2022, for the first GH project in
Pakistan and one of the largest in the region. The Company set up a
new company, Oracle Energy Limited, for the development of the GH
project in Pakistan in November 2021. In March 2022, the Company
signed a JV agreement between Oracle and Kaheel Energy, a company
owned by HH Sheikh Ahmed Dalmook Al Maktoum. The Company owns 30
percent of Oracle Energy with the balance owned by Kaheel Energy.
The Company has retained management and the project has made good
progress. In May 2022, a pre-feasibility study was completed by
Power China International for 400 MW of GH production and 1.2 GW of
hybrid power generation. Oracle Energy was issued an LOI from the
Government of Sindh for the production of 1.2 GW of hybrid
renewable power.
Subsequently, a lease for 7,000 acres (28.3 sq km) of land in
the Gharo-Keti Wind Corridor was awarded to Oracle Energy for the
project. In November 2022, Oracle Energy then commissioned
Thyssenkrupp to undertake the feasibility study for green hydrogen
and green ammonia, endorsing faith in the project by introducing
highly reputable stakeholders. Results from this study are expected
during the course of 2023. In parallel, Oracle Energy forged a
relationship with a highly credible certification company by
signing an LOI with TUV SUD for green hydrogen and green ammonia
certification, across the entire production value chain. Post
period end the project has continued to move quickly. Land studies
were commenced, and non-binding arrangements have been initiated
with potential off takers and investors.
In summary, the Company has strengthened its portfolio and
undertaken significant development on all its projects. We have
achieved exceptional milestones especially for the GH project and
concluded a joint development agreement for one of our gold assets.
We have also paved a way forward for potential development of our
Thar asset.
I remain grateful to all the relevant authorities in Pakistan
and Western Australia for supporting our initiatives. I am also
thankful to the authorities in China for continuing to support
projects in CPEC. I wish to also profoundly thank the Company's
team in the UK, Pakistan and Australia, for their work and
dedication. Above all I thank our shareholders for their continued
confidence, patience and support, enabling us to grow our company.
The Company remains committed to increasing shareholder value and
to becoming a company of recognizable size and repute.
Ms Naheed Memon,
Chief Executive Officer
CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEARED 31
DECEMBER 2022
2022 2021
Note GBP GBP
CONTINUING OPERATIONS
Administrative expenses (1,311,012) (881,973)
LOSS FROM OPERATIONS (1,311,012) (881,973)
Finance income 6 14,592 94
Amounts written off and p/l on disposals 6,762 -
LOSS BEFORE TAX (1,289,658) (881,879)
LOSS FOR THE YEAR (1,289,658) (881,879)
2022 2021
Pence Pence
Earnings per share attributable to the ordinary
equity holders of the parent
PROFIT OR LOSS
Basic 9 (0.04) (0.04)
Diluted 9 (0.04) (0.04)
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE
YEARED 31 DECEMBER 2022
2022 2021
GBP GBP
Loss for the year (1,289,658) (881,879)
ITEMS THAT WILL OR MAY BE RECLASSIFIED TO PROFIT
OR LOSS:
Exchange gains arising on translation on foreign
operations (178,459) (130,361)
(178,459) (130,361)
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET
OF TAX (178,459) (130,361)
TOTAL COMPREHENSIVE INCOME (1,468,117) (1,012,240)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2022
2022 2021
Note GBP GBP
Assets
NON--CURRENT ASSETS
Property, plant and equipment 10 3,885 5,856
Intangible assets 11 5,023,296 5,403,066
Investments in equity--accounted associates 13 668,782 -
Loans and other financial assets 14 580,079 369,390
6,276,042 5,778,312
CURRENT ASSETS
Trade and other receivables 15 45,069 50,108
Cash and cash equivalents 25 150,905 872,000
195,974 922,108
TOTAL ASSETS 6,472,016 6,700,420
Liabilities
CURRENT LIABILITIES
Trade and other payables 18 203,034 170,321
203,034 170,321
TOTAL LIABILITIES 203,034 170,321
Net assets 6,268,982 6,530,099
ISSUED CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE
PARENT
Share capital 17 3,078,297 2,650,325
Share premium reserve 16 18,632,040 17,853,012
Foreign exchange reserve 17 (995,125) (816,666)
Share scheme reserve 17 58,179 66,733
Retained earnings 17 (14,504,409) (13,223,305)
TOTAL EQUITY 6,268,982 6,530,099
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2022
2022 2021
Note GBP GBP
Assets
NON--CURRENT ASSETS
Property, plant and equipment 10 274 479
Intangible assets 11 3,665,622 3,978,851
Investments in equity--accounted associates 13 668,782 -
Investments 13 2,898,531 3,703,047
Loans and other financial assets 14 2,605,218 1,985,987
9,838,427 9,668,364
CURRENT ASSETS
Trade and other receivables 15 40,731 230,070
Cash and cash equivalents 25 137,291 850,442
178,022 1,080,512
TOTAL ASSETS 10,016,449 10,748,876
Liabilities
NON--CURRENT LIABILITIES
CURRENT LIABILITIES
Trade and other liabilities 18 175,961 909,763
175,961 909,763
TOTAL LIABILITIES 175,961 909,763
Net assets 9,840,488 9,839,113
ISSUED CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE
PARENT
Share capital 17 3,078,297 2,650,325
Share premium reserve 18,632,040 17,853,012
Financial liabilities at FVTPL credit risk
reserve 58,179 66,733
Retained earnings (11,928,028) (10,730,957)
TOTAL EQUITY 9,840,488 9,839,113
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31
DECEMBER 2022
Total
attributable
to equity
Share scheme Foreign exchange Retained holders
Share capital Share premium reserve reserve earnings of parent Total equity
GBP GBP GBP GBP GBP GBP GBP
At 1 January
2022 2,650,325 17,853,012 66,733 (816,666) (13,223,305) 6,530,099 6,530,099
Comprehensive
income for the
year
Loss for the
year - - - - (1,289,658) (1,289,658) (1,289,658)
Other
comprehensive
income - - - (178,459) - (178,459) (178,459)
Total
comprehensive
income for
the year - - - (178,459) (1,289,658) (1,468,117) (1,468,117)
Contributions
by and
distributions
to
owners
Issue of
share capital 427,972 779,028 - - - 1,207,000 1,207,000
Transfer
to/from
retained
earnings - - (8,554) - 8,554 - -
Total
contributions
by and
distributions
to owners 427,972 779,028 (8,554) - 8,554 1,207,000 1,207,000
At 31
December 2022 3,078,297 18,632,040 58,179 (995,125) (14,504,409) 6,268,982 6,268,982
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31
DECEMBER 2022
Total attributable
to equity
Foreign exchange holders
Share capital Share premium Share scheme reserve reserve Retained earnings of parent Total equity
GBP GBP GBP GBP GBP GBP GBP
At 1 January
2021 2,146,862 16,908,975 180,229 (686,305) (12,454,922) 6,094,839 6,094,839
Comprehensive
income for the
year
Loss for the
year - - - - (881,879) (881,879) (881,879)
Other
comprehensive
income - - - (130,361) - (130,361) (130,361)
Total
comprehensive
income for
the year - - - (130,361) (881,879) (1,012,240) (1,012,240)
Contributions
by and
distributions
to
owners
Issue of
share capital 503,463 944,037 - - - 1,447,500 1,447,500
Transfer
to/from
retained
earnings - - (113,496) - 113,496 - -
Total
contributions
by and
distributions
to owners 503,463 944,037 (113,496) - 113,496 1,447,500 1,447,500
At 31
December 2021 2,650,325 17,853,012 66,733 (816,666) (13,223,305) 6,530,099 6,530,099
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31
DECEMBER 2022
Share scheme Retained
Share capital Share premium reserve earnings Total equity
GBP GBP GBP GBP GBP
At 1 January 2022 2,650,325 17,853,012 66,733 (10,730,957) 9,839,113
Comprehensive income for
the year
Loss for the year - - - (1,205,625) (1,205,625)
Total comprehensive
income
for the year - - - (1,205,625) (1,205,625)
Contributions by and
distributions
to owners
Issue of share capital 427,972 779,028 - - 1,207,000
Share warrants exercised - - (8,554) 8,554 -
Total contributions by
and distributions to
owners 427,972 779,028 (8,554) 8,554 1,207,000
At 31 December 2022 3,078,297 18,632,040 58,179 (11,928,028) 9,840,488
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31
DECEMBER 2021
Share scheme Retained
Share capital Share premium reserve earnings Total equity
GBP GBP GBP GBP GBP
At 1 January
2021 2,146,862 16,908,975 180,229 (10,049,674) 9,186,392
Comprehensive
income for
the year
Loss for the
year - - - (794,779) (794,779)
Total
comprehensive
income
for the year - - - (794,779) (794,779)
Contributions
by and
distributions
to owners
Issue of
share capital 503,463 944,037 - - 1,447,500
Share
warrants
exercised - - (113,496) 113,496 -
Total
contributions
by
and
distributions
to owners 503,463 944,03 (113,496) 113,496 1,447,500
At 31
December 2021 2,650,325 17,853,012 66,733 (10,730,957) 9,839,113
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARED 31 DECEMBER
2022
2022 2021
Note GBP GBP
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss for the year (1,289,658) (881,879)
ADJUSTMENTS FOR
Depreciation of property,
plant and equipment 10 205 1,942
Impairment losses on
intangible assets 11 579,728 -
Impairment loss recognised on
loans to associates 25,785 -
Finance income 6 (14,592) (94)
Gain on disposal of subsidiary
undertaking (6,762) -
Net foreign exchange
loss/(gain) 10,300 (7,206)
Income tax expense - 46
(694,994) (887,191)
MOVEMENTS IN WORKING CAPITAL:
Increase in trade and other
receivables (38,025) (45,174)
Increase/(decrease) in trade
and other payables 25,305 (110,943)
CASH GENERATED FROM
OPERATIONS (707,714) (1,043,308)
NET CASH USED IN OPERATING
ACTIVITIES (707,714) (1,043,308)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of Australia
exploration fixed assets 11 (238,245) (190,599)
Purchase of Pakistan project
fixed assets 11 (140,718) (94,317)
Payments for investments in
associates 13 (668,782) -
Issue of loans 6 (184,929) -
Interest received 6 14,592 94
NET CASH USED IN INVESTING
ACTIVITIES (1,218,082) (284,822)
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of ordinary shares 16 1,207,000 647,500
NET CASH FROM FINANCING ACTIVITIES 1,207,000 647,500
NET CASH DECREASE IN CASH AND CASH
EQUIVALENTS (718,796) (680,630)
Cash and cash equivalents at the
beginning
of year 872,000 1,554,424
Exchange loss on cash and cash
equivalents (2,299) (1,794)
CASH AND CASH EQUIVALENTS AT THE OF THE
YEAR 25 150,905 872,000
COMPANY STATEMENT OF CASH FLOWS FOR THE YEARED 31 DECEMBER
2022
2022 2021
Note GBP GBP
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss for the year (1,205,625) (794,779)
ADJUSTMENTS FOR
Depreciation of property,
plant and equipment 10 205 205
Amortisation of intangible
fixed assets 11 313,229 -
Impairment loss recognised on
other receivables 301,462 20,070
Forgiveness of other loan (804,516) -
Finance income 6 (66,938) (17,058)
Loss on sale of discontinued
operations, net of tax 804,516 -
Net foreign exchange
loss/(gain) 47,944 (7,242)
(609,723) (798,804)
MOVEMENTS IN WORKING CAPITAL:
Increase in trade and other
receivables (665) (6,173)
Decrease in trade and other
payables (733,801) (162,136)
Decrease in loans to
subsidiaries 78,228 (365,704)
CASH GENERATED FROM
OPERATIONS (1,265,961) (1,332,817)
NET CASH USED IN OPERATING
ACTIVITIES (1,265,961) (1,332,817)
CASH FLOWS FROM INVESTING
ACTIVITIES
Payments for investments in
associates (668,782) -
Interest received 14,592 94
NET CASH (USED IN)/FROM
INVESTING ACTIVITIES (654,190) 94
CASH FLOWS FROM FINANCING
ACTIVITIES
Issue of ordinary shares 1,207,000 647,500
NET CASH FROM FINANCING
ACTIVITIES 1,207,000 647,500
NET CASH DECREASE IN CASH AND
CASH EQUIVALENTS (713,151) (685,223)
Cash and cash equivalents at
the beginning of year 850,442 1,535,665
CASH AND CASH EQUIVALENTS AT
THE OF THE YEAR 25 137,291 850,442
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER 2022
1. STATUTORY INFORMATION
Oracle Power PLC is a public company, limited by shares and
registered and domiciled in England and Wales. It is the ultimate
holding company of the Oracle Power Plc Group. The Group is
primarily involved in an energy project, based on the exploration
and development of coal and building a mine--mouth power plant in
Pakistan. The Group also has two gold prospects in Western
Australia and a green hydrogen project in Pakistan. The
presentation currency of the financial statements is the Pound
Sterling (GBP). The Company's registered number and registered
office address can be found on the General Information page.
2. ACCOUNTING POLICIES
2.1 Going concern
During the year under review, the Group experienced net cash
outflows from operating activities which it financed from existing
cash resources held at the start of the year and cash received from
the issue of new equity share capital. The Directors have
considered the cash flow requirements of the Group over the next 12
months and believe that additional funding will be required to meet
the Group's cash requirements over that period. Post year end in
February 2023 and June 2023 the Company raised GBP500,000 and
GBP363,000 supporting that cash requirement. This additional cash
requirement creates a material uncertainty that may cast
significant doubt on the Company's ability to continue as a going
concern. However, the Directors expect to be able to meet the
funding requirements for the Group to continue as a going concern
for at least 12 months from the date of the approval of these
financial statements, and consequently, the Directors consider it
appropriate to adopt the going concern basis in the preparation of
the financial statements.
2.2 Compliance with accounting standards
These financial statements have been prepared in accordance with
UK adopted International Financial Reporting Standards and IFRIC
interpretations and with those parts of the Companies Act 2006
applicable to reporting groups under IFRS.
The financial statements have been prepared under the historical
cost convention.
2.3 Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
amounts reported for revenues and expenses during the year and the
amounts reported for assets and liabilities at the statement of
financial position date. However, the nature of estimation means
that the actual outcomes could differ from those estimates.
The key sources of estimation uncertainty that have a
significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are the measurement of any impairment on intangible assets and the
estimation of share--based payment costs.
The principal risk and uncertainty of the intangible assets
(exploration assets) is that the Group may not reach financial
close - as disclosed in Note 11. The board have tested the
intangible assets for impairment. For this test, the board
considered market values of the assets (where applicable); results
from technical and feasibility studies and reports; and the
possibility of future project options available. Based on this, the
board have concluded that no impairment provision is required other
than for the Jundee East Tenement in Western Australia that has
been determined to be uneconomic to develop further.
The Group determines whether there is any impairment of
intangible assets on an annual basis.
At the balance sheet date, the intangible assets are carried
forward at their cost of GBP5,603,024 (2021: GBP5,403,066) less
impairment of GBP579,728.
2.4 Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 December each year. Control is
achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain
benefits from its activities.
Business acquisitions have been accounted for in accordance with
IFRS 3, 'Business Combinations'. Fair values are attributed to the
Group's share of net assets. Where the cost of acquisition exceeds
the fair values attributed to such assets, the difference is
treated as purchased goodwill and is capitalised.
2.5 Intangible assets
(i) Intangible fixed assets -- Australia exploration costs
Expenditure on the acquisition costs, exploration and evaluation
of interests in licences, including related finance and
administration costs, are capitalised. Such costs are carried
forward in the statement of financial position under intangible
assets and amortised over the minimum period of the expected
commercial production of gold in respect of each area of interest
where:
a) such costs are expected to be recouped through successful
development and exploration of the area of interest or
alternatively by its sale;
b) exploration activities have not yet reached a stage that
permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves and active operations in relation
to the areas are continuing.
An annual impairment review is carried out by the Directors when
specific facts and circumstances indicate that an impairment test
is required, such as:
(1) the period for which the entity has the right to explore in
the specific area has expired during the period or will expire in
the near future, and is not expected to be renewed.
(2) substantive expenditure on further exploration for and
evaluation of mineral resources in the specific area is neither
budgeted nor planned.
(3) exploration for and evaluation of mineral resources in the
specific area have not led to the discovery of commercially viable
quantities of mineral resources and the entity has decided to
discontinue such
activities in the specific area.
(4) sufficient data exist to indicate that, although a
development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be
recovered in full from successful development or by sale.
In any such case, or similar cases, the entity shall perform an
impairment test in accordance with IAS 36. Any impairment loss is
recognised as an expense in accordance with IAS 36
Australia exploration costs are carried at cost less any
provision for impairment.
(ii) Intangible fixed assets -- Pakistan project costs
Expenditure on the Pakistan project to achieve final project
approval prior to the start of mine operations including related
finance and administration costs are capitalised. Such costs are
carried forward in the statement of financial position under
intangible assets and amortised over the minimum period of the
expected commercial production of coal in respect of each area of
interest.
The Pakistan project costs are tested annually for impairment by
comparing the carrying amount to the recoverable amount Pakistan
project costs are carried at cost less any provision for
impairment.
2.6 Property, plant and equipment
Property, plant and equipment is stated at historical cost less
accumulated depreciation. Depreciation is provided at the following
annual rates in order to write off each asset over its estimated
useful life.
Fixtures and fittings -- 15% on reducing balance
Motor vehicles -- 20% on reducing balance
Computer equipment -- 30% on reducing balance
2.7 Investments
Investments in subsidiaries are stated at cost. The investments
are reviewed annually and any impairment is taken directly to the
statement of profit or loss. Investments in subsidiaries are fully
consolidated within the Group financial statements.
2.8 Investments in associates
An associate is an entity over which the Group has significant
influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not
control or joint control over those policies.
The results and assets and liabilities of associates are
incorporated in these consolidated financial statements using the
equity method of accounting, except when the investment, or a
portion thereof, is classified as held for sale, in which case it
is accounted for in accordance with IFRS 5. Under the equity
method, an investment in an associate or a joint venture is
initially recognised in the consolidated statement of financial
position at cost and adjusted thereafter to recognise the Group's
share of the profit or loss and other comprehensive income of the
associate or joint venture. When the Group's share of losses of an
associate exceeds the Group's interest in that associate or joint
venture (which includes any long--term interests that, in
substance, form part of the Group's net investment in the
associate, the Group discontinues recognising its share of further
losses. Additional losses are recognised only to the extent that
the Group has incurred legal or constructive obligations or made
payments on behalf of the associate.
An investment in an associate is accounted for using the equity
method from the date on which the investee becomes an associate or
a joint venture. On acquisition of the investment in an associate ,
any excess of the cost of the investment over the Group's share of
the net fair value of the identifiable assets and liabilities of
the investee is recognised as goodwill, which is included within
the carrying amount of the investment. Any excess of the Group's
share of the net fair value of the identifiable assets and
liabilities over the cost of the investment, after reassessment, is
recognised immediately in profit or loss in the period in which the
investment is acquired.
The requirements of IAS 36 are applied to determine whether it
is necessary to recognise any impairment loss with respect to the
Group's investment in an associate or joint venture. When
necessary, the entire carrying amount of the investment (including
goodwill) is tested for impairment in accordance with IAS 36
Impairment of Assets as a single asset by comparing its recoverable
amount (higher of value in use and fair value less costs of
disposal) with its carrying amount. Any impairment loss recognised
forms part of the carrying amount of the investment. Any reversal
of that impairment loss is recognised in accordance with IAS 36 to
the extent that the recoverable amount of the investment
subsequently increases.
The Group discontinues the use of the equity method from the
date when the investment ceases to be an associate or joint
venture, or when the investment is classified as held for sale.
When the Group retains an interest in the former associate or joint
venture and the retained interest is a financial asset, the Group
measures the retained interest at fair value at that date and the
fair value is regarded as its fair value on initial recognition in
accordance with IFRS 9. The difference between the carrying amount
of the associate or joint venture at the date the equity method was
discontinued, and the fair value of any retained interest and any
proceeds from disposing of a part interest in the associate or
joint venture is included in the determination of the gain or loss
on disposal of the associate or joint venture. In addition, the
Group accounts for all amounts previously recognised in other
comprehensive income in relation to that associate or joint venture
on the same basis as would be required if that associate or joint
venture had directly disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognised in other
comprehensive income by that associate or joint venture would be
reclassified to profit or loss on the disposal of the related
assets or liabilities, the Group reclassified the gain or loss from
equity to profit or loss (as a reclassification adjustment) when
the equity method is discontinued.
The Group continues to use the equity method when an investment
in an associate becomes an investment in a joint venture or an
investment in a joint venture becomes an associate. There is no
remeasurement to fair value upon such changes in ownership
interests.
When the Group reduces its ownership interest in an associate or
a joint venture but the Group continues to use the equity method,
the Group reclassifies to profit or loss the proportion of the gain
or loss that had previously been recognised in the other
comprehensive income relating to that reduction in ownership
interest if that gain or loss would be reclassified to profit or
loss on the disposal of the related assets or liabilities.
When a group entity transacts with an associate or a joint
venture of the Group, profits and losses resulting from the
transactions with the associate or joint ventures are recognised in
the Group's consolidated financial statements only to the extent of
interests in the associate or joint venture that are not related to
the Group.
2.9 Leasing
All leases held are either short--term leases or are for low
value assets. The rentals paid are charged to the statement of
profit or loss on a straight-line basis over the period of the
lease.
2.10 Foreign currency
In preparing the financial statements of each individual group
entity, transactions in currencies other than the entity's
functional currency (foreign currencies) are recognised at the
rates of exchange prevailing at the dates of the transactions. At
the end of each reporting period, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at that
date. Non--monetary items carried at fair value that are
denominated in foreign currencies are retranslated at the rates
prevailing at the date when the fair value was determined.
Non--monetary items that are measured in terms of historical cost
in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in profit
or loss in the period in which they arise except for exchange
differences on foreign currency borrowings relating to assets under
construction for future productive use, which are included in the
cost of those assets when they are regarded as an adjustment to
interest costs on those foreign currency borrowings;
For the purposes of presenting these consolidated financial
statements, the assets and liabilities of the Group's foreign
operations are translated into pounds using exchange rates
prevailing at the end of each reporting period. Income and expense
items are translated at the average exchange rates for the period,
unless exchange rates fluctuate significantly during that period,
in which case the exchange rates at the dates of the transactions
are used. Exchange differences arising, if any, are recognised in
other comprehensive income and accumulated in equity (and
attributed to non--controlling interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the
Group's entire interest in a foreign operation, a disposal
involving loss of control over a subsidiary that includes a foreign
operation, or a partial disposal of an interest in a joint
arrangement or an associate that includes a foreign operation of
which the retained interest becomes a financial asset), all of the
exchange differences accumulated in equity in respect of that
operation attributable to the owners of the Company are
reclassified to profit or loss.
In addition, in relation to a partial disposal of a subsidiary
that includes a foreign operation that does not result in the Group
losing control over the subsidiary, the proportionate share of
accumulated exchange differences are re--attributed to
non--controlling interests and are not recognised in profit or
loss. For all other partial disposals (i.e. partial disposals of
associates or joint arrangements that do not result in the Group
losing significant influence or joint control), the proportionate
share of the accumulated exchange differences is reclassified to
profit or loss.
Goodwill and fair value adjustments to identifiable assets
acquired and liabilities assumed through acquisition of a foreign
operation are treated as assets and liabilities of the foreign
operation and translated at the rate of exchange prevailing at the
end of each reporting period. Exchange differences arising are
recognised in other comprehensive income.
2.11 Employee benefits
Retirement benefit costs and termination benefits
The group operates a defined contribution pension scheme.
Contributions payable to the group's pension scheme are charged to
the income statement in the period to which they relate.
2.12 Share--based payments
Share--based payment transactions of the Company
Where equity settled share warrants are awarded to employees,
the fair value of the warrants at the date of grant is charged to
the statement of profit or loss over the vesting period.
Non--market vesting conditions are taken into account by adjusting
the number of equity instruments expected to vest at each statement
of financial position date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of
warrants that eventually vest. Market vesting conditions are
factored into the fair value of all warrants granted. As long as
all other vesting conditions are satisfied, a charge is made
irrespective of whether market vesting conditions are satisfied.
The cumulative expense is not adjusted for failure to achieve a
market vesting condition.
Where terms and conditions of warrants are modified before they
vest, the increase in the fair value of the warrants, measured
immediately before and after the modification, is also charged to
the statement of profit or loss over the remaining vesting
period.
Where equity instruments are granted to persons other than
employees, the statement of profit or loss is charged with the fair
value of goods and services received.
2.13 Financial instruments
Financial assets and financial liabilities are recognised in the
Group's statement of financial position when the Group becomes a
party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially
measured at fair value, except for trade receivables that do not
have a significant financing component which are measured at
transaction price. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities
at fair value through profit or loss) are added to or deducted from
the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised
immediately in profit or loss.
Financial Assets:
The Group classifies its financial assets other than investments
in subsidiaries and associates as financial assets at amortised
cost, at fair value through other comprehensive income (FVOCI) or
at fair value through profit or loss (FVTPL). The classification
depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial
assets at initial recognition.
A financial asset is measured at amortised cost if it is held
within a business model whose objective is to collect contractual
cash flows and its contractual terms give rise on specified dates
to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
A financial asset is measured at FVOCI if it is held within a
business model whose objective is achieved by collecting
contractual cash flows and selling financial assets and its
contractual terms give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal
amount outstanding.
A financial asset is measured at FVTPL if it is not measured at
amortised cost or at FVOCI.
All of the group financial assets are currently classified as at
amortised cost.
Financial assets at amortised cost are subsequently measured at
amortised cost using the effective interest method. The amortised
cost id reduced by impairment losses. They are included in current
assets, except for maturities greater than 12 months after the
balance sheet date. These are classified as non-current assets.
Trade receivables, with standard payment terms of between 30 to
65 days, are recognised and carried at the lower of their original
invoiced and recoverable amount.
A loss allowance is recognised on initial recognition of
financial assets held at amortised cost, based on expected credit
losses, and is re-measured annually with changes appearing in
profit or loss. Where there has been a significant increase in
credit risk of the financial instrument since initial recognition,
the loss allowance is measured based on lifetime expected losses.
In all other cases, the loss allowance is measured based on
12-month expected losses. For assets with a maturity of 12 months
or less, including trade receivables, the 12-month expected loss
allowance is equal to the lifetime expected loss allowance.
The Group's financial assets are disclosed in notes 14 and
15.
Financial Liabilities:
The Group classifies its financial liabilities as at amortised
cost or at FVTPL. A financial liability is measured at FVTPL if it
is classified as held for trading, it is a derivative or it is
designated as such on initial recognition, otherwise it is
classified as at amortised cost.
All of the group financial liabilities are currently classified
as at amortised cost.
Financial liabilities at amortised cost are subsequently
measured at amortised cost using the effective interest method.
They are classified as non-current when the payment falls due
greater than 12 months after the year end date.
2.14 Cash and cash equivalents
Cash and cash equivalents for the purpose of the cash flow
statement comprise cash and bank balances.
2.15 New Standards and Interpretations applied
There are no IFRSs or IFRIC interpretations that are effective
for the first time for the financial year beginning 1 January 2022
that would be expected to have a material impact on the Group.
New and revised standards not yet effective
Certain new accounting standards and interpretations have been
issued but have not been applied by the Group in preparing these
financial statements as they are not as yet effective. These
standards are not expected to have a material impact on the Group
in the current or future periods and on foreseeable future
transactions.
3. SEGMENT INFORMATION
Based on risks and returns, the Directors consider that the
primary business reporting format is by business segment which are
currently:
1) the principal activity of the Group which is an energy
project, based on the exploration and development of coal mining
and building a mine--mouth power plant in Pakistan ("Pakistan
Energy Project");
2) an investment in Western Australia for the exploration and
future extraction of gold ("Australia Gold Project"); and
3) a green hydrogen project in Pakistan ("Pakistan Green
Hydrogen Project").
The segments are not yet revenue generating and the primary
financial reporting metrics are the value of intangible assets
relating to the projects and total spend to date. The Pakistan
Green Hydrogen Project is carried out through the Company's
investment in associates which is not included in the analysis
below.
To--date the Group has raised a total GBP23.2m and spent
GBP18.0m on Thar Block VI and GBP0.5m on the Western Australia gold
project net of impairment of GBP0.6m.
The following is an analysis of the Group's results by
reportable segment in the year under review:
2022 2021
----------------------------- ---------------- ----------------
GBP GBP
----------------------------- ---------------- ----------------
Pakistan Energy Project (9,318) (5,277)
============================= ================ ================
Australia Gold Project (630,945) (78,168)
Total (640,263) (83,445)
============================= ================ ================
Central administration costs (670,749) (798,528)
============================= ================ ================
Finance income 14,592 94
============================= ================ ================
Other gains and losses 6,762 -
Profit before tax (1,289,658) (881,879)
============================= ================ ================
The accounting policies of the reportable segments are the same
as the Group's accounting policies described in note 2. Segment
profit represents the profit earned by each segment without
allocation of the share of profits of associates and joint
ventures, central administration costs including directors'
salaries, finance income, non--operating gains and losses in
respect of financial instruments and finance costs, and income tax
expense. This is the measure reported to the Group's Chief
Executive for the purpose of resource allocation and assessment of
segment performance.
Segment assets
2022 2021
-------------------------- -------------------- --------------------
GBP GBP
-------------------------- -------------------- --------------------
Pakistan Energy Project 4,529,390 4,593,369
========================== ==================== ====================
Australia Gold Project 493,906 809,697
Total segment assets 5,023,296 5,403,066
========================== ==================== ====================
Unallocated assets 3,885 5,856
Consolidated total assets 5,027,181 5,408,922
========================== ==================== ====================
For the purposes of monitoring segment performance and
allocating resources between segments the
Group's Chief Executive monitors the tangible, intangible and
financial assets attributable to each
segment. All assets are allocated to reportable segments with
the exception of investments in associates, and other financial
assets.
Other segment information
Additions
Depreciation & Amortisation to non--current*
------------------------ ------------------------ ---------------------- --------------- -----------------
assets*
------------------------ ------------------------ ---------------------- --------------- -----------------
2022 2021 2022 2021
------------------------ ------------------------ ---------------------- --------------- -----------------
GBP GBP GBP GBP
======================== ======================== ====================== =============== =================
Pakistan Energy Project 1,133 1,737 140,718 97,762
======================== ======================== ====================== =============== =================
Australia Gold Project - - 238,225 186,919
======================== ======================== ====================== =============== =================
1,133 1,737 378,943 284,681
======================== ======================== ====================== =============== =================
*The amounts exclude additions to financial instruments.
In addition to the depreciation and amortisation reported above,
impairment losses of GBP579,727 (2021: GBPnil) were recognised in
respect of non--current assets. These impairment losses were all
attributable to the Australia Gold Project.
25. NOTES SUPPORTING STATEMENT OF CASH FLOWS
Group
2022 2021
GBP GBP
Cash at bank available on demand 32,795 34,378
Short--term deposits 118,110 837,622
CASH AND CASH EQUIVALENTS IN THE STATEMENT OF
FINANCIAL POSITION 150,905 872,000
CASH AND CASH EQUIVALENTS IN THE STATEMENT OF
CASH FLOWS 150,905 872,000
Company
2022 2021
GBP GBP
Cash at bank available on demand 19,181 12,820
Short--term deposits 118,110 837,622
CASH AND CASH EQUIVALENTS IN THE STATEMENT OF FINANCIAL POSITION 137,291 850,442
CASH AND CASH EQUIVALENTS IN THE STATEMENT OF CASH FLOWS 137,291 850,442
26. RECONCILIATION OF CHANGES IN LIABILITIES ARISING FROM
FINANCING ACTIVITIES
Group
Trade and other
payables Borrowings Total
GBP GBP GBP
Balance at 1 January
2021 322,655 800,000 1,122,655
Cash flows (152,334) - (152,334)
Non--cash changes
Issue of share capital - (800,000) (800,000)
Balance at 31 December
2021 170,321 - 170,321
Cash flows 32,713 - 32,713
Balance at 31 December
2022 203,034 - 203,034
Company
Trade and other Amounts owed to
payables Borrowings group undertakings Total
GBP GBP GBP GBP
Balance at
1 January 2021 267,183 800,000 804,716 1,871,899
Cash flows (162,036) - (100) (162,136)
Non--cash changes
Issue of share
capital - (800,000) - (800,000)
Balance at
31 December
2021 105,147 - 804,616 909,763
Cash flows 70,814 - - 70,814
Forgiveness
of debt (804,616) (804,616)
Balance at
31 December
2022 175,961 - - 175,961
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END
FR NKFBNDBKBAAB
(END) Dow Jones Newswires
June 29, 2023 02:00 ET (06:00 GMT)
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