29 November 2019
IamFire plc
(formerly Karoo Energy plc)
(the “Company” or “IamFire”)
AUDITED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 APRIL
2019
Chief Executive Officer's statement
and Group Strategic Report
for the year ended
30 April 2019
PRINCIPAL ACTIVITY
The principal activity of the Company during the year was that
of investment in coal bed methane and shale gas exploration.
Following the disposal of the subsidiaries post year end the
principal activity of the Company going forward is that of an
investment vehicle.
REVIEW OF BUSINESS
I was appointed to the Board of Directors upon leading a
restructure and recapitalisation that was subject to General
Meeting approval on the 11th October 2019 where all resolutions were duly
passed. Through engaging in discussions with the Board of Directors
over a period of time, it was clear that it was important the
Company retain its listed status and work effectively with new
Directors & shareholders (both existing and new) to not only
recover and create value but to treat this restructure as an
opportunity to create a company with a reinvigorated purpose. I saw
this as an opportunity to get involved with the Company, providing
exposure to an international network that extends access to global
capital, assets and skilled operators.
Karoo (now named, IamFire plc) were unfortunate in not being
able to proceed with a listing on AIM earlier this year and in the
process, assumed substantive costs associated with the admission
process. Given the substantial trade creditors associated with the
Company, it was encouraging and refreshing to see the
responsibility Noel Lyons
demonstrated in personally satisfying and restructuring the trade
creditors through entering a voluntary, informal insolvency process
[the bulk of the creditors being parties that undertook services
for Karoo with respect the attempted admission to AIM],
representing the commitment to turning the situation around. It is
also commendable that the participating creditors agreed to the
terms of satisfaction with Noel
Lyons.
In Botswana, the exploration
licenses were not extended due to the inability to capitalise the
expenditure requirements that would ensure retention. To this end
the Company incurred losses in writing off the capital expended on
the exploration licenses.
With Karoo (now named, IamFire plc) restructured, recapitalised
with a modest capital finance £143,000 and its balance sheet
restored the Board and I will be focused on creating a lean,
low-cost investment vehicle seeking to transact, efficiently. The
Board and I have already instilled disciplined, internal
capital-management procedures that ensure we focus on capitalising
our core costs of operation, assuming no Director’s salaries and
for compensation to be awarded in parallel with performance and to
be equity-driven.
Importantly as a company we will work to transact in association
with capital markets. Assets of interest to the Company must be
stress-tested in assuring that our shareholders will be confident
that any acquisition that is made by the Company can be both
capitalised and developed, meaningfully.
The Board and I will be working with our international network
to review a number of different opportunities, with our review
protocol governed principally by; distressed assets with underlying
value that can be capitalised and enhanced through the Boards
respective skillsets.
As I conclude my first review of the business as a Director of
the Company, I would like to extend my sincerest thanks to the
existing shareholders for their support in this restructure, the
incumbent board for their assistance and I look forward to updating
our shareholders and the market as developments occur and working
to augment value for all associated.
FINANCIALS
The financial results for the year-ended 30 April 2019 show a loss after taxation of
£204,834 (2018: loss of £877,835) and year end cash of £2,130
(2018: £41,419). There have been no funds raised in the current
year, with the Group raising £502,449 net of expenses during the
prior year.
OUTLOOK
The focus for the Board and I for the coming year will be to
operate a low-cost investment vehicle that will focus on
identifying a transaction that will attract both broad market
interest and present an enhanced platform for which we can access
the required capital to invest and develop an interest.
It is a natural function and reality of growth market issuers to
rely on capital markets and to this end, the Board and I will be
specific in the purpose and channels for which we look to
capitalise the Company moving forward, ensuring that capital
investment via an equity finance is aligned with the remit and
rationale of the business as we progress.
The Board and I are considering a number of different corporate
avenues for the business to explore and further pursue and will
ensure that effective communication is in place throughout the
process when of material significance to our shareholders and the
wider market.
ON BEHALF OF THE BOARD:
B S Tennent-Bhohi - Director
The Directors of the Company accept responsibility for the
content of this announcement.
ENQUIRIES:
Company
IamFire plc
Burns Singh Tennent-Bhohi (Director)
Telephone:020 3778 0755
Corporate Adviser
Peterhouse Capital Limited
Guy Miller / Mark Anwyl
Telephone: 020 7220 9795
Consolidated Statement of Profit and
Loss and Other Comprehensive
Income for the year ended
30 April 2019
2019
2018
Notes
£
£
CONTINUING OPERATIONS
Other operating
income
4
30,311
-
Administrative
expenses
5
(228,155)
(870,941)
OPERATING
LOSS
(197,844)
(870,941)
Finance
costs
7
(7,000)
(7,000)
Finance
income
7
10
106
|
|
|
|
|
| LOSS BEFORE INCOME TAX |
8 |
(204,834) |
(877,835) |
|
|
|
|
|
|
|
|
Income
tax
9
-
-
|
|
|
|
|
| LOSS FOR THE YEAR |
(204,834) |
(877,835) |
|
|
|
|
|
|
|
|
|
|
|
|
Loss attributable to:
Owners of the
parent
(197,844)
(831,175)
Non-controlling
interests
(7,200)
(46,660)
(204,834)
(877,835)
Earnings per share attributable to the
owners of the parent expressed
in pence per
share:
10
Basic
(0.10)
(0.41)
Diluted
(0.10)
(0.41)
Consolidated Statement of Profit and
Loss and Other Comprehensive Income
for the year ended
30 April 2019
2019
2018
£
£
LOSS FOR THE
YEAR
(204,834)
(877,835)
OTHER COMPREHENSIVE
INCOME
-
-
|
|
|
|
|
| TOTAL COMPREHENSIVE INCOME FOR
THE YEAR |
(204,834) |
(877,835) |
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to:
Owners of the
parent
(197,844)
(831,175)
Non-controlling
interests
(7,200)
(46,660)
(204,834)
(877,835)
Consolidated Statement of Financial
Position
30 April 2019
2019
2018
Notes
£
£
ASSETS
NON-CURRENT ASSETS
Intangible
assets
11
-
135,439
-
135,439
CURRENT ASSETS
Trade and other
receivables
13
35,220
41,072
Cash and cash
equivalents
14
2,130
41,419
37,350
82,491
TOTAL
ASSETS
37,350
217,930
EQUITY
SHAREHOLDERS' EQUITY
Called up share
capital
16
511,837
511,837
Share
premium
17
2,231,786
2,231,786
Retained
earnings
17
(3,040,821)
(2,843,187)
(297,198)
(99,564)
Non-controlling
interests
15
(61,766)
(54,566)
TOTAL
EQUITY
(358,964)
(154,130)
LIABILITIES
CURRENT LIABILITIES
Trade and other
payables
18
396,314
372,060
TOTAL
LIABILITIES
37,350
372,060
TOTAL EQUITY AND
LIABILITIES
37,350
217,930
The financial statements were approved by the Board of Directors
on 28 November 2019 and were signed
on its behalf by:
B S Tennent-Bhohi – Director
Company Statement of Financial
Position
30 April 2019
2019
2018
Notes
£
£
ASSETS
NON-CURRENT ASSETS
Intangible
assets
11
-
-
Investments
12
-
312,674
-
312,674
CURRENT ASSETS
Trade and other
receivables
13
36,240
189,841
Cash and cash
equivalents
14
1,234
41,419
37,474
231,260
TOTAL
ASSETS
37,474
543,934
EQUITY
SHAREHOLDERS' EQUITY
Called up share
capital
16
511,837
511,837
Share
premium
17
2,231,786
2,231,786
Retained
earnings
17
(3,087,450)
(2,529,646)
TOTAL
EQUITY
(343,827)
213,977
LIABILITIES
CURRENT LIABILITIES
Trade and other
payables
18
381,301
329,957
TOTAL
LIABILITIES
381,301
329,957
TOTAL EQUITY AND
LIABILITIES
37,474
543,934
As permitted by Section 408 of the Companies Act 2006, the
income statement of the parent company is not presented as part of
these financial statements. The parent company's loss for the
financial year was £557,804 (2018: loss of £1,276,364).
The financial statements were approved by the Board of Directors
on 28 November 2019 and were signed
on its behalf by:
B S Tennent-Bhohi - Director
Consolidated Statement of Changes in
Equity
for the year ended
30 April 2019
Called up
share
Share
Retained
capital
premium earnings
£
£
£
Balance at
1 May 2017
469,590
1,771,584 (2,078,646)
Changes in equity
| Loss for the year |
- |
|
- |
|
(831,175) |
Total comprehensive loss for the
year
-
- (831,175)
Issue of share
capital
42,247
494,375
-
Cost of share
issue
-
(34,173)
-
Share based
payments
-
-
66,634
Balance at
30 April 2018
511,834 2,2231,786
(2,843,187)
Changes in equity
| Loss for the year |
- |
|
- |
|
(197,634) |
Total comprehensive loss for the
year
-
- (197,634)
Issue of share
capital
-
-
-
Cost of share
issue
-
-
-
Share based
payments
-
-
-
Balance at
30 April 2019
511,837
2,231,786 (3,040,821)
Non-controlling
Total
Sub-Total
interests
equity
£
£
£
Balance at
1 May 2017
162,528
(7,906) 154,622
Changes in equity
| Loss for the
year |
(831,175) |
|
(46,660) |
|
(877,835) |
Total comprehensive loss for the
year
(831,175)
(46,660) (877,835)
Issue of share
capital
536,622
- 536,622
Cost of share
issue
(34,173)
-
(34,173)
Share based
payments
66,634
-
66,634
Balance at
30 April 2018
(99,564)
(54,566) (154,130)
Changes in equity
| Loss for the year |
(197,634) |
|
(7,200) |
|
(204,834) |
Total comprehensive loss for the
year
(197,634)
(7,200) (204,834)
Issue of share
capital
-
-
-
Cost of share
issue
-
-
-
Share based
payments
-
-
-
Balance at
30 April 2019
(297,198)
(61,766) (358,964)
Company Statement of Changes in
Equity
for the year ended
30 April 2019
Called up
share
Share
Retained
Total
capital
premium
earnings
equity
£
£
£
£
Balance at
1 May 2017
469,590
1,771,584
(1,319,916) 921,258
Changes in equity
Issue of share
capital
42,247
494,375
- 536,622
Cost of share
issue
-
(34,173)
-
(34,173)
Share based
payments
-
-
66,634
66,634
Total comprehensive
income
-
- (1,276,364)
(1,276,364)
Balance at
30 April 2018
511,837
2,231,786
(2,529,646) 213,977
Changes in equity
Issue of share
capital
-
-
-
-
Cost of share
issue
-
-
-
Share based
payments
-
-
-
-
Total comprehensive
income
-
-
(557,804) (557,804)
Balance at
30 April 2019
511,837
2,231,786
(3,087,450) (343,827)
Consolidated Statement of Cash
Flows
for the year ended
30 April 2019
2019
2018
£
£
Cash flows from operating
activities
Cash used in
operations
1
(32,299)
(389,613)
Interest
paid
(7,000)
(7,000)
Net cash used in operating
activities
(39,299)
(396,613)
Cash flows from investing
activities
Purchase of intangible fixed
assets
-
(64,523)
Interest
received
10
106
Net cash used in investing
activities
10
(64,417)
Cash flows from financing
activities
Share
issue
-
502,449
Costs of Share
Issue
-
-
Net cash from financing
activities
-
502,449
|
|
|
|
|
| Increase/(decrease)
in cash and cash equivalents |
(39,289) |
41,419 |
|
|
|
|
| Cash and cash equivalents at
beginning of year |
2 |
41,419 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents at end
of year |
2 |
2,130 |
41,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
There is no net debt in either year.
Notes to the Consolidated Statement of
Cash Flows
for the year ended
30 April 2019
| 1. |
RECONCILIATION OF LOSS BEFORE
INCOME TAX TO CASH GENERATED FROM OPERATIONS |
2019
2018
£
£
Loss
before income
tax
(204,834) (877,835)
Impairment of intangible
assets
101,548 251,238
Disposal
of intangible
assets
33,891
-
Share
based
payments
-
66,634
Finance
costs
7,000
7,000
Finance
income
(10)
(106)
(62,405) (553,069)
Decrease/in trade and other
receivables
5,852
54,188
Increase/in trade and other
payables
24,254 109,268
|
|
|
|
|
|
Cash used in operations |
(32,299) |
(389,613) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2. CASH AND CASH
EQUIVALENTS
The amounts disclosed on the Statement of Cash Flows in respect
of cash and cash equivalents are in respect of these Statement of
Financial Position amounts:
Year
ended 30 April 2019
30/4/19 30/04/18
£
£
Cash and
cash
equivalents
2,130
41,419
Company Statement of Cash Flows
for the year ended
30 April 2019
2019
2018
£
£
Cash flows from operating
activities
Cash used in
operations
A
(33,195)
(454,136)
Interest
paid
(7,000)
(7,000)
Net cash used in operating
activities
(40,195)
(461,136)
Cash flows from investing
activities
Interest
received
10
106
Net cash from in investing
activities
10
106
Cash flows from financing
activities
Share
issue
-
502,449
Costs of Share
Issue
-
-
Net cash from financing
activities
-
502,449
|
|
|
|
|
| Increase/(decrease)
in cash and cash equivalents |
(40,185) |
41,419 |
|
|
|
|
| Cash and cash equivalents at
beginning of year |
B |
41,419 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents at end
of year |
B |
1,234 |
41,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
There is no net debt in either year.
Notes to the Company Statement of Cash
Flows
for the year ended
30 April 2019
| A. |
RECONCILIATION OF LOSS BEFORE
INCOME TAX TO CASH GENERATED FROM OPERATIONS |
2019
2018
£
£
Loss
before income
tax
(557,804) (1,276,364)
Impairment of investments
assets
312,674
-
Write off
inter-company
loan
155,996
-
Share
based
payments
-
66,634
Finance
costs
7,000
7,000
Finance
income
(10)
(106)
(82,144) (1,202,836)
Decrease/in trade and other
receivables
(2,395) 588,529
Increase/in trade and other
payables
51,344 160,171
|
|
|
|
|
|
Cash used in operations |
(33,195) |
(454,136) |
|
|
|
|
|
|
|
|
|
|
|
|
|
B. CASH AND CASH
EQUIVALENTS
The amounts disclosed on the Statement of Cash Flows in respect
of cash and cash equivalents are in respect of these Statement of
Financial Position amounts:
Year
ended 30 April 2019
30/4/19 30/04/18
£
£
Cash and
cash
equivalents
1,234
41,419
Notes to the Financial Statements
for the year ended
30 April 2019
1. STATUTORY
INFORMATION
IamFire plc is a public limited company, registered in
England and Wales. The company's registered number and
registered office address can be found on the Company Information
page. The principal activity is disclosed in the Strategic
Report.
2. ACCOUNTING
POLICIES
Basis
of preparation
The company financial statements of IamFire plc and its
subsidiaries (together, "the Group") have been prepared in
accordance with International Financial Reporting Standards
("IFRS"), as adopted by the European Union, IFRIC interpretations,
and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
IFRS is subject to amendment and interpretation by the IASB and
the IFRS Interpretations Committee, and there is an on-going
process of review and endorsement by the European Commission. These
accounting policies comply with each IFRS that is mandatory for
accounting periods ending on 30 April
2019.
The financial statements are presented in GBP (£) and rounded to
the nearest £. GBP is also the functional currency of the Group.
The financial statements ae prepared under the historical cost
convention.
The principal accounting policies set out below have been
consistently applied to all periods presented.
New and amended standards mandatory
for the first time for the financial periods beginning on or after
1 January 2018:
As of 1 January 2018, the Group
has adopted IFRS 9 and IFRS 15.
The Group adopted IFRS 9, Financial Instruments (‘IFRS 9’),
which replaced IAS 39, Financial Instruments: Recognition and
Measurement. IFRS 9 addresses the classification, measurement and
recognition of financial assets and liabilities.
The Group reviewed the financial assets and liabilities reported
on its Statement of Financial Position and completed an assessment
between IAS 39 and IFRS 9 to identify any accounting changes. The
financial assets subject to this review were trade and other
receivables. The financial liabilities subject to this review were
the trade and other payables. Based on this assessment of the
classification and measurement model, there were no changes to
classification and measurement other than changes in
terminology.
IFRS 15 requires an expected quantitative impact of the
application of IFRS 15 to be included within the financial
statements. Recharged rental income recognition is not considered
to change as a result of the transition to IFRS 15. The Group has
no other revenue sources.
Of the other IFRSs and IFRICs adopted, none have had a material
effect on future Groups Financial Statements.
International Financial Reporting
Standards in issue but not yet effective and not yet adopted:
At the date of authorisation of these financial statements, the
IASB and IFRS Interpretations Committee have issued standards,
interpretations and amendments.
Whilst these standards and interpretations are not effective
for, and have not been applied in the preparation of, these
financial statements, the following may have an impact going
forward:
| New/Revised International Financial
Reporting Standards |
|
Effective Date: Annual periods
beginning on or after: |
|
EU adopted |
|
| IFRS 16 Leases |
|
1 January 2019 |
|
Yes |
|
IFRS 16 introduces a single lease accounting model. This
standard requires lessees to account for all leases under a single
on-balance sheet model. Under the new standard, a lessee is
required to recognise all lease assets and liabilities on the
balance sheet; recognize amortisation of leased assets and interest
on lease liabilities over the lease term; and separately present
the principal amount of cash paid and interest in the cash flow
statement. Due to the renegotiation of the leases management do not
consider that adoption of this standard will have a material impact
on the financial statements.
Basis
of consolidation
The consolidated financial statements incorporate the results of
IamFire plc ("the Company") and entities controlled by the Company
(its subsidiaries). Control is achieved where the Company is
exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through
its power over the entity.
Income and expenses of subsidiaries acquired or disposed of
during the year are included in the Consolidated Statement of
Comprehensive Income from the effective date of acquisition and up
to the effective date of disposal, as appropriate. When necessary,
adjustments are made to the financial statements of subsidiaries to
bring their accounting policies into line with those used by the
Group.
The Group applies the acquisition method of accounting to
account for business combinations. The consideration transferred
for the acquisition of a subsidiary is the fair values of the
assets transferred, the liabilities incurred, and the equity
interests issued by the Group. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date.
Acquisition-related costs of business combinations that have
occurred after the date of transition are expensed as incurred.
All intra-Group transactions, balances, income and expenses are
eliminated in full on consolidation. Accounting policies of
subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Going
concern
The financial statements have been prepared on a going concern
basis, which assumes that the Group and Company will continue in
operational existence for the foreseeable future.
During the year ended 30 April
2019 the Group made a loss of £239,884 (2018: a loss of
£877,835) and as at 30 April 2019 it
had net current liabilities of £394,014 (2018: net current
liabilities of £289,569).
The Group and Company have no revenue but has cash resources to
finance activities whilst it identifies and completes suitable
transaction opportunities. When a suitable transaction is
identified, the Directors will consider the need for further
funding to complete the transaction.
Following a restructuring in October
2019 and the sale of both subsidiaries, the company is now
unencumbered by significant trade creditors and has raised
£143,000.
The Directors consider that the continued adoption of the going
concern basis is appropriate having reviewed the cash flow
forecasts for the coming 18 months and the Financial Statements do
not reflect any adjustments that would be required if they were to
be prepared on any other basis.
Intangible assets
The Group accounts for oil and gas expenditure under the full
cost method of accounting.
Costs (other than payments to acquire the legal right to
explore) incurred prior to acquiring the rights to explore are
charged directly to the income statement. All costs incurred after
the rights to explore an area have been obtained, such as
geological, geophysical, data costs and other direct costs of
exploration and appraisal are accumulated and capitalised as
intangible exploration and evaluation ("E&E") assets.
E&E costs are not amortised prior to the conclusion of
appraisal activities. At the completion of appraisal activities if
technical feasibility is demonstrated and commercial reserves are
discovered, then following development sanction, the carrying value
of the relevant E&E asset will be reclassified as a development
and production asset within tangible fixed assets.
If after completion of appraisal activities in an area, it is
not possible to determine technical feasibility or commercial
viability, then the costs of such unsuccessful exploration and
evaluation are written off to the income statement. The costs
associated with any wells which are abandoned are fully amortised
when the abandonment decision is taken.
Development and production assets, are accumulated generally on
a field by-field basis and represent the costs of developing the
commercial reserves discovered and bringing them into production,
together with the E&E expenditures incurred in finding
commercial reserves which have been transferred from intangible
E&E assets.
Financial
instruments
Financial assets and financial liabilities are recognised when
the Group and Company becomes a party to the contractual provisions
of the financial instrument. Please refer to note 20 in the
Financial Statements for further disclosure.
Financial assets and financial liabilities are measured
initially at fair value plus transactions costs. Financial assets
and financial liabilities are measured subsequently as described
below.
Financial assets
The Group and Company classify their financial assets into one
of the following categories, depending on the purpose for which the
asset was acquired. The classification depends on the purpose for
which the financial assets were acquired. Financial assets are
either held at amortised cost, fair value through profit or loss;
or fair value through other comprehensive income. Management
determines the classification of its financial assets at initial
recognition.
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They incorporate various types of contractual monetary
assets, such as advances made to affiliated entities which give
rise to other receivables and cash and cash equivalents includes
cash in hand and deposits held at call with banks. Other
receivables are carried at amortised cost less any provision for
impairment, as the contracted cashflows solely relate to the
payment of principal and interest. Impairment provisions are
recognised when there is objective evidence (such as significant
financial difficulties on the part of the counterparty) that the
Group and Company will be unable to collect all of the amounts due
under the terms of the receivable, the amount of such a provision
being the difference between the net carrying amount and the
present value of the future expected cash flows associated with the
impaired receivable.
A provision for impairment of trade receivables is established
when there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of the
receivables. Significant financial difficulty, high probability of
bankruptcy or a financial reorganisation and default are considered
indicators that the trade receivable is impaired. The amount of the
provision is the difference between the asset's carrying amount and
the present value of the estimated future cash flows discounted at
original effective interest rate. The loss is recognised in the
Income Statement. When a trade receivable is uncollectible, it is
written off against the allowance account for trade receivables.
Subsequent recoveries of amounts previously written off are
credited in the Income Statement.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and all substantial risks and rewards are
transferred.
Financial liabilities
The Group’s financial liabilities include trade and other
payables.
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
Taxation
Current taxes are based on the results shown in the financial
statements and are calculated according to local tax rules, using
tax rates enacted or substantially enacted by the statement of
financial position date.
Deferred taxation is calculated using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated
financial statements. However, if the deferred tax arises from the
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss, it is not
accounted for. Deferred tax is determined using tax rates and laws
that have been enacted or substantively enacted by the balance
sheet date and are expected to apply when the related deferred tax
asset is realised or the deferred tax liability is settled.
Deferred tax liabilities are provided in full.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the Income Statement, except where
they relate to items that are charged or credited directly to
equity in which case the related deferred tax is also charged or
credited directly to equity.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income tax assets and
liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
Foreign
currencies
Assets and liabilities in foreign currencies are translated into
sterling at the rates of exchange ruling at the statement of
financial position date. Transactions in foreign currencies are
translated into sterling at the rate of exchange ruling at the date
of transaction. Exchange differences are taken into account in
arriving at the operating result.
Assets and liabilities of subsidiaries that have a functional
currency different from the presentation currency (pound sterling),
if any, are translated at the closing rate at the date of each
balance sheet presented. Income and expenses are translated at
average exchange rates. All resulting exchange differences are
recognised in other comprehensive income (loss), if any.
Operating
lease commitments
Rentals paid under operating leases are charged to the income
statement on a straight line basis over the period of the
lease.
2. ACCOUNTING POLICIES -
continued
Finance income and costs
Interest is recognised using the effective interest method which
calculates the amortised cost of a financial asset or liability and
allocates the interest income or expense over the relevant period.
The effective interest rate is the rate that exactly discounts
estimated future cash receipts or payments through the expected
life of the financial asset or liability to the net carrying amount
of the financial asset or liability.
Share based
payments
Where share options have been granted to directors, IFRS 2 has
been applied whereby the fair value of the options is measured at
the grant date and spread over the period during which the
employees become entitled to the options. An options valuation
model is used to assess the fair value, taking into account the
terms and conditions attached to the options. The fair value at
grant date is determined including the effect of market based
vesting conditions, to the extent such vesting conditions have a
material impact.
The cost of equity-settled transactions is recognised, together
with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on
the date on which the relevant employees become fully entitled to
the award (the vesting date).
The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting date reflects
the extent to which the vesting period has expired and the Group’s
best estimate of the number of equity instruments that will
ultimately vest.
The charge or credit for a period to the Income Statement
represents the movement in cumulative expense recognised as at the
beginning and end of that period.
No expense is recognised for awards that do not ultimately vest,
except for awards where vesting is conditional upon a market
condition, which are treated as vesting irrespective of whether or
not the market condition is satisfied, provided that all other
performance and/or service conditions are satisfied. Where the
terms of an equity-settled award are modified, the minimum expense
recognised is the expense as if the terms had not been modified. An
additional expense is recognised for any modification, which
increases the total fair value of the share-based payment
arrangement, or is otherwise beneficial to the employee as measured
at the date of modification.
Where an equity-settled award is cancelled, it is treated as if
it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a
new award is substituted for the cancelled award, and designated as
a replacement award on the date that it is granted, the cancelled
and new awards are treated as if they were a modification of the
original award, as described in the previous paragraph.
Where an equity-settled award is forfeited, the cumulative
charge expensed up to the date of forfeiture is credited to the
Income Statement.
3. CRITICAL ACCOUNTING
JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of consolidated financial statements in
conformity with International Financial Reporting Standards as
adopted by the EU requires management to make estimates and
judgements that affect the reported amounts of assets and
liabilities as well as the disclosure of contingent assets and
liabilities at the balance sheet date and the reported amounts of
revenues and expenses during the reporting period.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The following are the significant judgements used in applying
the accounting policies of the Group that have the most significant
effect on the consolidated financial statements:
Impairment of capitalised exploration and evaluation
expenditure:
The future recoverability of capitalised exploration and
evaluation expenditure is dependent on a number of factors,
including whether it successfully recovers the related exploration
and evaluation asset through sale. Factors which could impact the
future recoverability include the level of proved, probable and
inferred resources, future technological changes which could impact
the cost of drilling and extraction, future legal changes
(including changes to environmental restoration obligations),
changes to commodity prices and licence renewal dates and
commitments.
To the extent that capitalised exploration and evaluation
expenditure is determined to be irrecoverable in the future, this
will reduce profits and net assets in the period in which this
determination is made. In addition, exploration and evaluation
expenditure is capitalised if activities in the area of interest
have not yet reached a stage which permits reasonable assessment of
the existence or otherwise of economically recoverable reserves. To
the extent that it is determined in the future that this
capitalised expenditure should be written off, this will reduce
profits and net assets in the period in which this determination is
made. Refer to note 11 in respect of intangible assets.
4. OTHER OPERATING
INCOME
2019
2018
£
£
Recharged
rental
income
30,311
-
Other operating income relates entirely to rent for the sub-let
of the property held under operating lease.
5. SEGMENTAL
REPORTING
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for
allocating resources, assessing the performance of the operating
segment and making strategic decision, has been identified as the
Board of Directors. The Board of Directors consider that the Group
has only one operating segment which was that of investment in coal
bed methane and shale gas exploration. Going forward this will be
as an investment vehicle.
6. EMPLOYEES AND
DIRECTORS
2019
2018
£
£
Wages and
salaries (short term employee
benefits)
6,350
67,900
The average number of employees during the year was as
follows:
2019
2018
Directors
(no
employees)
3
3
2019
2018
£
£
Directors'
remuneration
6,350
67,900
During the year the directors were paid the following amounts:
-
|
£ |
| N Lyons |
3,000 |
| J Negaard |
11,400 |
| A Smith (paid through
Nuthatch Advisors) |
7,200 |
|
|
The difference between the charge in the financial statements
and the amounts paid is represented by the reversal of a prior year
accrual.
7. NET FINANCE
COSTS
2018
2017
£
£
Finance
income:
Bank
interest
received
10
106
Finance
costs:
Interest
payable on loan from
Director
7,000
7,000
Net
finance
costs
6,990
6,894
8. LOSS BEFORE INCOME
TAX
The loss
before income tax is stated after charging:
2019
2018
£
£
Operating
leases
26,400
27,601
Fees paid
to the company’s auditor:
Audit
fees
9,000
9,840
Taxation
compliance
services
-
1,800
Reporting
accountant
services
-
28,000
Impairment of intangible
assets
101,548 251,238
All 2018 audit and
non-audit fees were paid to the Company’s previous auditor.
9. INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose for the year ended
30 April 2019 nor for the year ended
30 April 2018.
Factors affecting the tax expense
2019
2018
£
£
Loss
before income
tax
(204,834) (877,835)
|
|
|
|
|
|
Loss multiplied by the standard rate
of corporation tax in the UK of 19% (2018 - 19%) |
(38,918) |
(166,789) |
|
|
|
|
|
|
|
|
Effects
of:
|
Deferred tax not
provided |
38,918 |
166,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
expense
-
-
Tax losses have been carried forward from prior years totalling
£1,329,627 with further losses incurred in the current year. Due to
the change to an investment vehicle, the losses, although carried
forward, are unlikely to be utilised in future periods. As a
result, no deferred taxation has been provided for.
10. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
The Group does have potentially dilutive shares. However, as the
Group made a loss in both the current and prior years, the basic
and diluted earnings per share are the same.
Reconciliations are set out below.
2019
Weighted
average
number Per-share
Earnings
of
amount
£
shares
pence
Basic
and diluted EPS
|
Earnings attributable to ordinary
shareholders |
(197,844) |
204,734,976 |
(0.10) |
Effect of
dilutive
securities
-
-
-
2018
Weighted
average
number
Per-share
Earnings
of
amount
£
shares
pence
Basic
and diluted EPS
|
Earnings attributable to ordinary
shareholders |
(831,175) |
204,734,976 |
(0.41) |
Effect of
dilutive
securities
-
-
-
11. INTANGIBLE ASSETS
Group
Exploration
and
evaluation
assets
£
COST
At
1 May 2018
135,439
Impairments
(135,439)
At
30 April 2019
-
NET
BOOK VALUE
At
30 April 2019
-
At
30 April 2018
135,439
11. INTANGIBLE ASSETS -
continued
Group
As at 30 April 2019 the Directors
have reviewed the intangible exploration asset
for indicators of impairment in accordance with IFRS 6
Exploration for and Evaluation of Mineral Resources and, as a
result of indicative factors, have undertaken a full
impairment review of the licenses and as a result all exploration
assets were fully impaired.
12. INVESTMENTS
Company
Shares in
group
undertakings
£
COST
At
1 May 2018
312,674
Impairment
(312,674)
NET
BOOK VALUE
At
30 April 2019
-
At
30 April 2018
312,674
The group or the company's investments at the Statement of
Financial Position date in the share capital of companies include
the following:
Subsidiaries
Equatorial Oil and Gas PLC
Registered office: 2nd Floor, 1 Bentick Street,
London, W1G 2EA
Nature of business: Oil and gas exploration
%
Class of
shares:
holding
Ordinary
94.00
Tamboran Botswana (Pty) Ltd
Registered office: Botswana
Nature of business: Oil and gas exploration
%
Class of
shares:
holding
Ordinary
94.00
100% of the interest in Tamboran Botswana (Pty) Ltd is held
indirectly by Equatorial Oil and Gas PLC.
13. TRADE AND OTHER
RECEIVABLES
Group
Company
2019
2018
2019
2018
£
£
£
£
Current:
Trade
receivables
4,795
-
4,795
- Other
receivables
10,250
10,250
10,250
10,250
Director
current
account
15,375
16,595
16,595
16,595
Inter-co
-
Equatorial
-
-
- 155,996
VAT
200
7,227
-
-
Prepayments and accrued
income
4,600
7,000
4,600
7,000
35,220
41,072
36,240 189,841
As at 30 April 2019, the Group
conducted an impairment review in accordance with the provisions of
IFRS 9. As a result of the change in business focus following the
aborted AIM listing all intercompany receivables were written
off.
14. CASH AND CASH EQUIVALENTS
Group
Company
2019
2018
2019
2018
£
£
£
£
Bank
accounts
2,130
41,419
1,234
41,419
At 30 April 2019 and 2018 all
significant cash and cash equivalents were deposited with major
clearing banks in the UK with at least an 'A' rating.
15. NON-CONTROLLING INTERESTS
Non-Controlling interest for the year was £7,200 (2018:
£46,660).
16. CALLED UP SHARE CAPITAL
Allotted,
issued and fully paid:
Number:
Class:
Nominal
2019
2018
value:
£
£
204,734,976
Ordinary
0.0025
511,837 511,837
16. CALLED UP SHARE CAPITAL -
continued
204,734,976 Ordinary shares of 0.0025 each were allotted as
fully paid at a premium of £0.0275 per share during the year.
Allotted, issued, and fully paid:
|
|
|
2019 |
|
2018 |
|
|
No |
£ |
No |
£ |
| Ordinary shares of £0.0025
each |
|
|
|
|
|
| Opening balance at 1 May |
|
204,734,976 |
511,837 |
187,836,308 |
469,590 |
|
|
|
|
|
|
| Allotments: |
|
|
|
|
|
| 22 May 2017 – shares issued at 3.0p
each resulting premium of £426,240 |
|
- |
- |
15,500,000 |
38,750 |
| 22 May 2017 – shares issued at 3.0p
each resulting premium of £10,963 |
|
- |
- |
398,668 |
997 |
| 22 May 2017 – shares issued at 3.0p
each resulting premium of £27,500 |
|
- |
- |
1,000,000 |
2,500 |
|
|
|
|
|
|
| At 30 April |
|
204,734,976 |
511,837 |
204,734,976 |
511,837 |
|
|
|
|
|
|
17. RESERVES
Group
Retained
Share
earnings
premium
Totals
£
£
£
At
1 May 2018
(2,843,187)
2,231,786 (611,401)
Loss for
the
year
(
197,634)
- (197,634)
At
30 April 2019
(3,040,821)
2,231,786 (809,035)
Company
Retained
Share
earnings
premium
Totals
£
£
£
At
1 May 2018
(2,529,646)
2,231,786 (297,860)
Loss for
the
year
(557,804)
(557,804)
At
30 April 2019
(3,087,450)
2,231,786 (855,664)
17. RESERVES - continued
Equity comprises the following:
-Share capital: represents amounts subscribed for shares at
nominal value.
-Share premium: represents amounts subscribed for share capital,
net of issue costs, in excess of nominal value.
-Retained earnings: represents the accumulated profits and
losses attributable to equity shareholders.
18. TRADE AND OTHER PAYABLES
Group
Company
2019
2018
2019
2018
£
£
£
£
Current:
Trade
payables
262,054
216,561
252,041 211,349
Other
payables
13,200
-
13,200
-
Loan from
Related
Party
94,260
87,260
94,260
87,260
Accruals
and deferred
income
26,800
68,239
21,800
31,348
396,314
372,060
381,301 329,957
Prudent liquidity risk management includes maintaining
sufficient cash balances to ensure the Group and Company can meet
liabilities as they fall due.
In managing liquidity risk, the main objective of the Group is
to ensure that it has the ability to pay all of its liabilities as
they fall due. The Group monitors the level of working capital it
requires. The undiscounted cash flows on the Group's financial
liabilities as at 30 April 2019 and
2018 are presented in the table below.
|
Total |
|
On Demand |
|
Within
2 -6
months |
|
6 – 12
months |
|
£ |
|
£ |
|
£ |
|
£ |
| At 30 April
2019 |
|
|
|
|
|
|
|
| Trade payables |
262,054 |
|
262,054 |
|
- |
|
- |
| Other payables |
13,200 |
|
13,200 |
|
- |
|
- |
| Loan from Related Party |
94,260 |
|
94,260 |
|
- |
|
- |
| Accruals and deferred income |
26,800 |
|
21,800 |
|
- |
|
- |
|
Total |
|
On Demand |
|
Within
2 -6
months |
|
6 – 12
months |
|
£ |
|
£ |
|
£ |
|
£ |
| At 30 April 2018 |
|
|
|
|
|
|
|
| Trade payables |
216,561 |
|
216,561 |
|
- |
|
- |
| Loan from Related Party |
87,260 |
|
87,260 |
|
- |
|
- |
| Accruals and deferred income |
68,239 |
|
69,239 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
372,060 |
|
372,060 |
|
- |
|
- |
19. OPERATING LEASE
COMMITMENTS
Minimum lease payments fall due as follows:
Group
Non-cancellable
operating leases
2019
2018
£
£
Within
one
year
26,400
26,472
Between
one and five
years
54,319
80,719
80,719 107,191
Payments recognised as an expense relating to minimum lease
payments under operating leases during the year totalled £26,400
(2018: £27,601).
20. FINANCIAL INSTRUMENTS
The Company’s financial instruments comprise primarily cash and
various items such as trade debtors and trade payables which arise
directly from operations. The main purpose of these financial
instruments is to provide working capital for the Company’s
operations. The Company does not utilise complex financial
instruments or hedging mechanisms.
The tables below set out the Group’s accounting classification
of each class of its financial assets and liabilities.
| Financial assets |
Measured at amortised
cost |
|
2019 |
|
2018 |
|
£ |
|
£ |
| Financial assets at amortised
costs: |
|
|
|
| Amounts due from director (note
13) |
15,375 |
|
16,595 |
| Other receivables (note 13) |
15,050 |
|
24,477 |
| Cash and cash equivalents (note
14) |
2,130 |
|
41,419 |
|
|
|
|
|
32,555 |
|
82,491 |
All of the above financial assets’ carrying values are
approximate to their fair values, as at 30
April 2019 and 2018.
| Financial
liabilities |
|
|
Measured at amortised cost |
|
|
|
2019 |
|
2018 |
|
|
|
£ |
|
£ |
|
|
|
|
|
|
| Trade payables (note 18) |
|
|
262,054 |
|
216,561 |
| Loan from related party (note
18) |
|
|
94,260 |
|
87,260 |
| Accruals (note 18) |
|
|
26,800 |
|
68,239 |
| Other payables |
|
|
13,200 |
|
- |
|
|
|
|
|
|
|
|
|
396,314 |
|
372,060 |
In the view of management, all of the above financial
liabilities’ carrying values approximate to their fair values as at
30 April 2019 and 2018.
Credit risk
The maximum exposure to credit risk at the reporting date was in
respect of other receivables totalling £15,050 (2018: £24,477).
21. OTHER FINANCIAL
COMMITMENTS
License commitments:
All licence commitments have been withdrawn with the sale of
both subsidiaries after the year end. No further licence
commitments remain.
22. SHARE-BASED PAYMENT
TRANSACTIONS
The Group occasionally issues share options and warrants to
Directors and shareholders. They are settled in equity once
exercised. Details of the number of share options/warrants and the
weighted average exercise price (WAEP) outstanding during the year
are as follows:
| 2019 |
Number of
options/warrants |
WAER
£ |
| Outstanding at the beginning of the
year |
26,750,000 |
0.0408 |
|
|
|
| Number vested &
exercisable at 30 April |
26,750,000 |
0.0408 |
|
|
|
| 2018 |
Number of
options/warrants |
WAER
£ |
| Outstanding at the beginning of the
year |
11,250,000 |
0.0144 |
| Issued |
15,500,000 |
0.0600 |
|
|
|
| Number vested &
exercisable at 30 April |
26,750,000 |
0.0408 |
|
|
|
The Group recognised total expenses of £nil (2018: £66,634)
related to share options accounted for as equity-settled
share-based payment transactions during the year. All options were
cancelled post year end.
23. RELATED PARTY
TRANSACTIONS
During 2016 the Company received a loan from Noel Lyons of £70,000. Interest has been accrued
at 10% per annum and is repayable on demand. The amount outstanding
at 30 April 2019 totalled £94,260
(2018: £87,260). The balance is included within trade and other
payables.
The only other transactions with directors were those in respect
of services provided to the Company, as disclosed within note 6 of
these financial statements.
Noel Lyons is a director of both
the Company and Clean Invest Africa Plc. During the year the
Company received £30,311 from Clean Invest Africa Plc in respect of
rent. At the year end the amount due was £4,796 (2018: £nil).
24. EVENTS AFTER THE REPORTING
PERIOD
The Company has been successfully restructured following a
General Meeting held in October 2019.
The Company undertook and completed a private placement to raise
£143,000, welcomed new board members, shareholders and restructured
all liabilities associated with the Company.
25. ULTIMATE CONTROLLING
PARTY
The directors do not consider there to be an ultimate
controlling party.
26. FINANCIAL RISK MANAGEMENT
FINANCIAL
INSTRUMENTS
The
group's financial instruments comprise listed investments, bank
balances, trade payable and
Other payables all arising in the normal course of business. The
purpose of theses financial instruments is to finance the group's
operations.
The group manages liquidity risk and cash flow risk by
monitoring its cash balances and ensuring that funds are available
to meet liabilities as they fall due. The group's core funding
comes from the proceeds of share issues.
The group's exposure to change in interest rates relates
primarily to cash at bank. Cash is held on either current or on
short term deposits at floating rates of interest determined by the
relevant bank's prevailing base rate. The group seeks to obtain a
favourable interest rate on its cash balances through the use of
bank treasury deposits.
The group holds investments quoted on public markets. In the
opinion of the directors the main risk is due to market price
fluctuations.
CREDIT RISK
The Group’s credit risk is primarily attributable to its cash
balances an trade receivables. The group does not have a
significant concentration of risk, with exposure spread over a
number of third parties.
The credit risk on liquid funds is limited because the third
parties are large international banks with a credit rating of at
least A.
The Group's total credit risk amounts to the total of the sum of
the receivables and cash and cash equivalent.
INTEREST RATE RISK
The Group's only exposure to interest rate risk is the interest
received on the cash held on deposit, which is immaterial. The
Groups only borrowing relates to a loan from Noel Lyons of £70,000 lent in the year to
30 April 2016. The amount outstanding
at 30 April 2019 totalled £94,260
(2018: £87,260). The balance is included within trade and other
payables.
CAPITAL MANAGEMENT
The Group’s capital management objectives are to ensure the
Group’s ability to continue as a going concern and to provide
long-term returns to shareholders
The Group defines and monitors capital on the basis of the
carrying amount of equity, less cash and cash equivalents as
presented on the face of the Balance Sheet and further disclosed in
note 14.
The Board of Directors monitors the level of capital as compared
to the Group’s commitments and adjusts the level of capital as is
determined to be necessary by issuing new shares. The Group is not
subject to any externally imposed capital requirements.
These policies have not changed in the year.
27. SUBSEQUENT EVENTS
On 11th October [upon GM approval] the Company
disposed of its subsidiaries to N.Lyons for a sum of £1.