Registered Company Number: 09976843
Curzon Energy Plc
Annual Report and Financial Statements
for the year ended 31 December 2020
Curzon Energy Plc
Contents
Company Information
Chairman’s Statement
Strategic Report
Directors’ Report
Remuneration Report
Statement of Directors’ Responsibilities in Respect of the Strategic Report, the
Directors’ Report and the Financial Statements
Independent Auditors’ Report to the Members of Curzon Energy Plc
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Company Statement of Cash Flows
Notes to the Company Financial Statements
Annual Report 2020
Page Number
(i)
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Curzon Energy Plc
Company Information
Directors
John McGoldrick
Chairman and Non-Executive Director
Scott Kaintz
Executive Director
Owen May
Non-Executive Director
Company Secretary
Sam Quinn
Registered Company Number
09976843
Website
www.curzonenergy.com
Registered Address
Kemp House
152 City Road
London
EC1V 2NX
Independent Auditors
Crowe UK LLP
55 Ludgate Hill
London
EC4M 7JW
Annual Report 2020
Company’s Solicitors
Hill Dickenson LLP
The Broadgate Tower
20 Primrose Street
London
EC2A 2EW
Financial Advisor and Broker
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
Registrars
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
B63 3DA
Bankers
Barclays Bank Plc
Level 27
One Churchill Place
London
E14 5HP
Curzon Energy Plc
Chairman’s Statement
Annual Report 2020
I am pleased to present the annual report for Curzon Energy Plc (the “Company”), covering its results for
the year to 31 December 2020.
Period in Review
During the course of 2020, the Company focused its efforts on completing a potential reverse takeover
transaction (“RTO”) with Sun Seven Stars Investment Group (“SSSIG”) that did not ultimately complete.
While all parties put in significant amounts of time and effort towards this goal, and the target itself was
considered of material scale and likely to be of real interest to potential investors, it was ultimately not
possible to combine the various independent businesses proposed by SSSIG to progress a RTO to
completion. As a result, the Company announced after the period, on 3 February 2021 that it had ceased
discussions on a transaction with SSSIG.
Also on 3 February 2021, the Company announced that it had entered a period of exclusivity in order to
conduct due diligence and to potentially acquire a 100% interest in Poseidon Enhanced Technologies Ltd
(“PETL” or “Poseidon”), developer of a proprietary chemical Polyethylene terephthalate (“PET”) plastic
recycling technology, whose goal is to convert used PET into 100% recycled feedstock to support the
global food-grade packaging and fibre industries. PETL’s process allows for the conversion of previously
unrecycled plastics such as colored bottles, trays, fibres and films, converting them directly into Poseidon
rBHET, an interim feedstock for the global PET industry, and fully in line with and supporting a “Circular
Economy”.
Poseidon is currently developing its recycling technology at its facilities in Teesside, UK, and is planning
a global industrial scale roll-out of its technology, following completion of its listing process and associated
capital raise.
Activities at Coos Bay were minimal during the course of the year, with the project remaining on care and
maintenance. The Company has been exploring formal extensions of the project leases as well as a
potential farm-out or sale of the project more broadly.
Results
For the period ended 31 December 2020, the Group incurred a loss of US$617,574 (2019: a loss of
US$3,580,750). The majority of this loss comprised administrative expenses, associated with supporting
the SSSIG transaction as well as required listing and regulatory overheads. Overall administrative
expenses fell during the period from US$913,572 in 2019 to US$528,799 as the Company continued to
operate with reduced overheads.
Outlook
At the time of writing, the United Kingdom and the larger world continue to deal with the effects of the
COVID-19 pandemic and its associated volatility. While many commentators quite reasonably projected
an extended economic downturn following the spread of the COVID-19 pandemic, markets remain
exceptionally buoyant, following various governments’ significant economic stimulus packages lifting
valuations and the rise of retail day traders. Meanwhile, during lockdown, countless individuals have
increased their savings rates whether intentionally or simply due to a lack of viable consumption options
for goods and services. Much of that nascent financial firepower remains on the sidelines, as do the
buildings and capital infrastructure, largely unaffected by the virus itself, and points to a potential period
of significant financial growth, as well of course as the looming threat of inflation, as vaccination levels
increase and consumers make up for missed spending opportunities and lost time.
What is clear, is that many of the world’s governments from the United States to Europe have decided to
use pandemic recovery efforts to refocus their attentions on the impact of carbon emissions and the
environment, including sectors such agriculture, industry, waste, energy and transport. This invigorated
environmental agenda means the opportunity in the Environmental, Social and Governance (ESG) space
that PETL’s chemical recycling addresses is a real one, and is only likely to be bolstered by government
spending stimulus and the introduction of further regulation and legislation by governments in support of
this agenda. Forthcoming virgin plastics penalties in regions such as the EU are stimulating global brands
to invest in and support companies such as PETL offering 100% recycled plastic solutions, facilitating
some of the world’s largest drinks and food brands to honour their aggressive and very publicly declared
recycling targets. PETL is expected to attract very strong investor interest and intends to access green
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Curzon Energy Plc
Annual Report 2020
bonds and related ESG focused capital to tackle what is in essence a multi-national challenge; making
plastics a sustainable part of the global economy.
Curzon, after many months of effort, thus finds itself well positioned with a transaction on the leading edge
of a massive global shift towards ESG investments. Through this transaction, Curzon has ambitious plans
to enter a sector that could not be more in focus and topical, and where the completion of an RTO is likely
to create a dynamic and high growth recycling entity, one that will appeal to institutional and retail investors
alike and one that will help meet one of the world’s great environmental challenges.
So, it is with high expectations that Curzon has begun 2021 and continues to advance a potential
transaction with PET. We thank all stakeholders for their support both historically and in the period ahead
as we look to advance and execute on the opportunity in front of us.
John McGoldrick
Non-Executive Chairman
29 April 2021
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Curzon Energy Plc
Strategic Report
Annual Report 2020
Financial Results
The Group loss for the year to 31 December 2020 was US$617,574 (2019: US$3,580,750). There were
no revenues and the majority of this loss related to administrative and listing costs.
The loss per share was US$0.008 (2019: loss per share US$0.044).
The Group currently has no source of revenue and is reliant on loans to continue to meet its overhead
expenditures. The Group held cash balances of US$47,188 as at 31 December 2020 and has after the
year end, increased its borrowing capacity and current liquidity through the agreement with Poseidon
Enhanced Technologies Ltd.
The Directors note that the Group will need additional funding to continue operations for the foreseeable
future and this means there is a material uncertainty as to the Group’s ability to continue as a going
concern, however, the Directors are confident that the Group will be able to raise, as required, sufficient
cash or reduce its commitments to enable it to continue its operations and to continue to meet, as and
when they fall due, its liabilities for at least the next twelve months from the date of approval of the Group
Financial Statements. The Group Financial Statements have, therefore, been prepared on the going
concern basis.
The Group has 3 members of staff (including Directors).
Principal Activities
The Company was incorporated in England and Wales on 29 January 2016 as an investment company
to acquire oil and gas assets. Its first acquisition was of Coos Bay, which has now been wholly written off.
The Group’s business is now operated through the United Kingdom and is focused on identifying and
acquiring a new business in a promising sector.
Review of the Business
In March 2020, the Company announced that it had executed a letter of intent with Seven Sun Stars
Investment Group (“SSSIG”) to acquire a 100% interest in the London Critical Metals Market (“LCMM”).
Following several months of due diligence, LCMM was over a period of time unable to provide the data
required to advance a reverse takeover process, and as such on 3 February 2021 the Company
terminated these discussions.
On 3 February 2021, the Company announced that it had executed a letter of intent with Poseidon
Enhanced Technologies Ltd to acquire a 100% interest via a potential RTO. PETL and the Company had
entered a period of exclusivity, where each party will conduct due diligence on the other. The parties
have further agreed that during this period they will work towards the execution and delivery of a sale and
purchase agreement.
Key Performance Indicators (KPIs)
As the Company is currently pursuing a potential reverse takeover, the Directors take the view that KPIs
would not provide materially useful information to investors at this time. As the business develops further,
the addition of KPIs will be considered and added as appropriate.
Principal Risks and Risk Management
As the Company is currently pursuing a reverse takeover, that would materially change the nature of the
business, the primary risk to the business during this period is going concern risk and a potential inability
to fund the business through the transition.
The Company’s Risk Mitigation Strategies Include the Following:
Utilising the Directors’ experience in fundraising to maintain a balance of funding sources during
the period of transition;
Managing the Company’s existing debt positions, keeping all stakeholders up to date and
informed as to progress of the transaction;
Judicious use of capital and cost control during the transition.
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Curzon Energy Plc
Strategic Report continued
Annual Report 2020
Corporate Responsibility
The Company takes its responsibilities as a corporate citizen seriously. The Board’s primary goal is to
create shareholder value in a responsible way, which serves all stakeholders.
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of
stakeholders in their decision making. The Directors continue to have regard to the interests of the
Company’s employees and other stakeholders, including the impact of its activities on the community, the
environment and the Company’s reputation, when making decisions. Acting in good faith and fairly
between members, the Directors consider what is most likely to promote the success of the Company for
its members in the long term.
The Directors are fully aware of their responsibilities to promote the success of the Company in
accordance with section 172 of the Companies Act 2006. The Board regularly reviews our principal
stakeholders and how we engage with them. The stakeholder voice is brought into the boardroom
throughout the annual cycle through information provided by management and also by direct engagement
with stakeholders themselves. The relevance of each stakeholder group may increase or decrease
depending on the matter or issue in question, so the Board seeks to consider the needs and priorities of
each stakeholder group during its discussions and as part of its decision making.
The Board welcomes the opportunity to engage with our shareholders and with the capital markets more
generally. The Board achieves this through dialogue with shareholders, prospective shareholders and
capital markets participants, including corporate brokers. Feedback from any such meetings or calls
would be shared with all Board members.
Investors, prospective investors and analysts can contact the Executive Director as well as access
information on our corporate website. The Board believes that appropriate steps have been taken during
the year so that all members of the Board, and in particular the non-executive Directors, have an
understanding of the views of major shareholders.
Governance
The Board considers sound governance as a critical component of the Company’s success and the
highest priority. The Company has an effective and engaged Board, with a strong non-executive
presence drawn from diverse backgrounds and with well-functioning governance committees. Through
the Company’s compensation policies and variable components of employee remuneration, the
Remuneration Committee of the Board seeks to ensure that the Company’s values are reinforced in
employee behavior and that effective risk management is promoted.
Analysis by Gender
Category
Directors
Senior Managers
Other Employees
Male
3
0
0
Female
0
0
0
Employees and Their Development
The Company is dependent upon the qualities and skills of its employees and their commitment plays a
major role in the Company’s business success. Employees’ performance is aligned to the Company’s
goals through an annual performance review process and via incentive programs. The Company provides
employees with information about its activities through regular briefings and other media. The Company
operates a Share Option Scheme operated at the discretion of the Remuneration Committee.
Diversity and Inclusion
The Company does not discriminate on the grounds of age, gender, nationality, ethnic or racial origin,
non-job-related-disability, sexual orientation or marital status. The Company gives due consideration to
all applications and provides training and the opportunity for career development wherever possible. The
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Strategic Report continued
Annual Report 2020
Board does not support discrimination of any form, positive or negative, and all appointments are based
solely on merit.
Health and Safety
The Company endeavors to ensure that the working environment is safe and healthy and conducive to
the wellbeing of employees, who are able to balance work and family commitments. The Company has a
Health and Safety at Work Policy, which is reviewed regularly by the Board and is committed to the health
and safety of its employees and others, who may be affected by the Company’s activities. The Company
provides the information, instruction, training and supervision necessary to ensure that employees are
able to discharge their duties effectively. The health and safety procedures used by the Company ensure
compliance with all applicable legal, environmental and regulatory requirements as well as its own internal
standards.
Outlook
Both PETL and the Company are currently working to expedite all aspects of a potential RTO process
where such a transaction would be conditional upon agreeing definitive documentation and receipt of the
required regulatory approvals from the FCA and its primary market functions, among other matters.
The Board’s view is that current market conditions are ideal for an ESG-focused business such as PETL.
With the world beginning to come out of the COVID-19 pandemic and government stimulus expected to
focus on green energy and sustainable investment, the Company anticipates that a transaction with PETL
will deliver a dynamic business focused on plastics recycling with high-growth potential and with excellent
ESG credentials. Such a business is expected to have broad appeal to both institutional and retail
investors and attract appropriate funding that will allow it to achieve its potential in the coming years and
in so doing help meet one of the world’s great environmental recycling challenges.
After several challenging years, Curzon now seems poised to transform itself into an exciting and forward-
looking proposition for the benefit of all of our stakeholders.
Signed by order of the Board.
Scott Kaintz
Chief Executive Officer
29 April 2021
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Curzon Energy Plc
Directors’ Report
Annual Report 2020
The Directors present their report on the Company, together with the audited financial statements of the
Company for the year ended 31 December 2020.
Cautionary Statement
The review of the business and its future development in the Strategic Report has been prepared solely
to provide additional information to shareholders to assess the Company’s strategies and the potential for
these strategies to succeed. It should not be relied on by any other party for any other purpose. The
review contains forward looking statements, which are made by the Directors in good faith based on
information available to them up to the time of the approval of the reports and should be treated with
caution due to the inherent uncertainties associated with such statements.
Results and Dividends
Given the nature of the business and its development strategy, it is unlikely that the Board will recommend
a dividend in the next few years. The Directors believe the Company should seek to re-invest any profits
to fund the Company’s growth strategy over the short- and medium-term horizons.
Directors’ Insurance and Indemnities
The Directors have the benefit of the indemnity provisions, contained in the Company’s Articles of
Association (‘Articles’), and the Company has maintained throughout the year Directors’ and officers’
liability insurance for the benefit of the Company, the Directors and its officers. The Company has entered
into qualifying third-party indemnity arrangements for the benefit of all its Directors in a form and scope,
which comply with the requirements of the Companies Act 2006, and which were in force throughout the
year and remain in force.
Business Review and Future Developments
Details of the business activities and developments made during the period can be found in the Strategic
Report and in note 1 to the Financial Statements respectively.
Financial Instruments and Risk Management
Disclosures regarding financial instruments are provided within note 20 to the Financial Statements.
Capital Structure and Issue of Shares
Details of the Company’s share capital, together with details of the movements during the period, are set
out in note 17 to the Financial Statements. The Company has one class of Ordinary Shares, which carry
no right to fixed income.
Post Balance Sheet Events
On 3 February 2021, the Company announced it has informed Sun Seven Stars Investment Group
("SSSIG") of the formal termination of the Letter of Intent, first announced on 18 March 2020. As the
period of exclusivity with SSSIG had already expired, no further obligations remain among the parties.
The Company further announced the execution of a Letter of Intent ("LOI") with Poseidon Enhanced
Technologies Limited ("PET"). The Company will now enter an initial period of exclusivity with PET during
which each party will conduct due diligence on the other. The parties have agreed that during this period
they will work towards the execution and delivery of a definitive purchase agreement, contemplating a
reverse takeover of Curzon by PET ("RTO"), which will be conditional upon receipt of the required
regulatory approvals from the FCA and its primary market functions, among other matters. For providing
PET with an initial period of exclusivity, lasting through to 28 February 2021, PET will lend the Company
an initial amount of £65,000 in the form of a one-year loan Note (the "Note"), carrying an annual interest
rate of 10% per annum, and convertible at the price of any subsequent share issue alongside the
contemplated RTO transaction. Under the terms of the Note, a total of £500,000 is authorised to be made
available to the Company through mutually agreed drawdowns. Any additional drawdowns, including in
relation to potential ongoing exclusivity, will be deducted from this total authorised amount as they are
made.
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Annual Report 2020
Exclusivity Extension
On 1 March 2021, the Company announced that under the terms of the LOI, initially announced on 3
February 2021, Poseidon Enhanced Technologies has informed the Company of an extension of the
existing exclusivity period through 1 April 2021.
On 29 March 2021, the Company announced that Poseidon Enhanced Technologies has informed the
Company of an extension of the existing exclusivity period through 1 May 2021.
On 28 April 2021, the Company announced that Poseidon Enhanced Technologies had informed the
Company of an extension of the existing exclusivity period through 1 June 2021.
Loan Extension
On 25 March 2021, the Company announced that it had extended its outstanding loan with Sun Seven
Stars Investment Group to 30 August 2021.
Directors
The Directors of the Company, who have served during the period and at the date of this report are:
Director
Role
John McGoldrick
Chairman and Non-
Executive Director
Date of
Appointment
Date of
Resignation
Board
Committee*
4/10/2017
N, R, A
Scott Kaintz
Executive Director
27/06/2018
Owen May
Non-Executive Director
27/09/2016
N, R, A
*Board Committee abbreviations are as follows: N = Nomination Committee; A = Audit and Risk Committee; R = Remuneration
Committee.
Board of Directors
Details of the current Directors and their backgrounds are as follows:
John McGoldrick (Chairman and Non-Executive Director, aged 63)
John McGoldrick has over thirty years of experience in a variety of senior management roles, notably at
Enterprise Oil where he was responsible for its US operations up until Shell’s takeover in 2002. Since
then, Mr. McGoldrick has served as executive chairman of Caza Oil & Gas Inc. (formerly Falcon Bay
Energy LLC), a US onshore exploration and production company, which went public in Toronto and
London in 2007, becoming Non-Executive Chairman in 2010. From 2008 to 2013, Mr. McGoldrick was a
Non-Executive Director of Vanguard Natural Resources LLC, a NYSE-listed Oil & Gas company focused
on the US. In January 2012, Mr. McGoldrick joined Dart Energy International as CEO, subsequently
becoming CEO of Dart Energy in March 2013. He held this post until Dart Energy’s takeover by IGas at
the end of 2014. Mr. McGoldrick holds a Bachelor of Engineering in Chemical Engineering with
Management Economics from University of Bradford.
Scott Kaintz (Executive Director and Chief Executive Officer, aged 43)
Scott has extensive experience leading, funding and operating publicly traded natural resource
exploration and development businesses on the London markets. He started his career as a US Air Force
Officer working across Europe, the Middle East and Central Asia. He subsequently held managerial and
technology roles in the defence sector in Europe, before transitioning to corporate finance and investment
positions, focused primarily on capital raising and making debt and equity investments in small-cap listed
companies. Scott has significant experience in emerging markets, with a particular emphasis on the
countries of the former Soviet Union. Scott holds a BSLA in Russian language and Russian Area Studies
from Georgetown University as well as MBA degrees from Columbia Business School and London
Business School. He is also a Director of Corcel Plc and Red Rock Resources Plc.
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Directors’ Report continued
Annual Report 2020
Owen May (Non-Executive Director, aged 60)
Mr. Owen May is an American banker with over 30 years of experience on Wall Street. He currently serves
as a Managing Director of MD Global Partners, a full-service investment-banking firm, and is actively
involved in a broad range of investment activities in Israel, China and Europe. Mr. May started his career
at Lehman Brothers as a Financial Advisor in the high-net-worth division in 1985. After leaving Lehman
Brothers in 1989, Mr. May joined D.H. Blair & Co., a small boutique firm on Wall Street. In 1993, Mr May
went on to establish May Davis Group, a full-service investment banking firm on Wall Street that offered
a full range of investment banking, research, sales, trading and retail brokerage services. In 2007, Mr.
May established MD Global Partners LLC, a firm that specialises in corporate finance, mergers &
acquisitions, restructuring and business development. Following his undergraduate degree in Biology at
University of Miami, Mr. May earned an MBA in Finance from Duke University’s Fuqua School of
Business, where he currently sits on the Board of Visitors and offers career coaching and opportunities
to programme participants. He also continues to hold a position on the President’s Council for the
University of Miami.
Directors’ Interests in Shares
Directors’ interests in the shares of the Company, at the date of this report, are disclosed below.
Director
John McGoldrick
Scott Kaintz
Owen May
Ordinary Shares Held
% Held
316,455
949,367
-
0.32
0.95
-
Substantial Interests
As at 08 March 2021, the Company has been advised of the following significant interests (greater than
3%) in its ordinary share capital:
Shareholder
Jim Nominees Limited, Designation JARVIS
Ordinary
Shares Held
% Held
40,042,082
40.19%
Hargreaves Lansdown (Nominees) Limited, Designation 15942
5,409,227
5.43%
Interactive Investor Services Nominees Limited, Designation SMKTNOMS
4,616,440
4.63%
Hargreaves Lansdown (Nominees) Limited, Designation HLNOM
4,219,667
4.23%
Queensbury Inc
4,000,000
4.01%
Interactive Investor Services Nominees Limited, Designation SMKTNOMS
3,288,979
3.30%
Corporate Governance
The Board is committed to maintaining high standards of corporate governance and, so far as appropriate
given the Company’s size and the constitution of the Board, complies with the Corporate Governance
Guidelines for Small and Mid-Sized Companies (the “QCA Code”).
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Directors’ Report continued
Annual Report 2020
The Board
The Board currently comprises one Executive Director and two Non-Executive Directors. The Board is
ultimately responsible for the day-to-day management of the Company’s business, its strategy and key
policies. Members of the Board are appointed by the Shareholders. The Board also has power to appoint
additional directors, subject to such appointments being approved by Shareholders. At least six board
meetings are held per year.
Director
Number of Meetings Held During
Tenure
Number of Meetings Attended
John McGoldrick
Scott Kaintz
Owen May
7
7
7
7
7
7
As prescribed by the QCA Code, the Board has established three committees: An Audit and Risk
Committee, a Remuneration Committee and a Nomination Committee.
Each of the committees were formed on admission of the Company to the Standard Listing Segment on
4 October 2017. The Audit and Risk Committee and the Remuneration Committees have met once each
during 2020.
Audit and Risk Committee
The Audit and Risk Committee, which comprises John McGoldrick and Owen May, is responsible,
amongst other things, for monitoring the Group’s financial reporting, external and internal audits and
controls, including reviewing and monitoring the integrity of the Group’s annual and half-yearly financial
statements, reviewing and monitoring the extent of non-audit work undertaken by external auditors,
advising on the appointment of external auditors, overseeing the Group’s relationship with its external
auditors, reviewing the effectiveness of the external audit process and reviewing the effectiveness of the
Group’s internal control review function. The ultimate responsibility for reviewing and approving the annual
report and accounts and the half-yearly reports remains with the Board. The Audit and Risk Committee
gives due consideration to laws and regulations, the provisions of the UK Corporate Governance Code
and the requirements of the Listing Rules. The Audit and Risk Committee shall meet at least once a year
at appropriate intervals in the financial reporting and audit cycle and otherwise as required.
Remuneration Committee
The Remuneration Committee, which comprises John McGoldrick and Owen May, is responsible,
amongst other things, for assisting the Board in determining its responsibilities in relation to remuneration,
including making recommendations to the Board on the Company’s policy on executive remuneration,
including setting the parameters and governance framework of the Group’s remuneration policy and
determining the individual remuneration and benefits package of each of the Company’s Executive
Directors and the Group. It is also responsible for approving the rules and basis for participation in any
performance related pay-schemes, share incentive schemes and obtaining reliable and up-to-date
information about remuneration in other companies. The Remuneration Committee shall meet at least
once a year.
Nomination Committee
The Nomination Committee, which comprises John McGoldrick as Chairman and Owen May, will identify
and nominate, for the approval of the Board, candidates to fill Board vacancies as and when they arise.
The Nominations Committee will meet as required.
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Annual Report 2020
Share Dealing Policy
The Company has adopted a Share Dealing Policy, which sets out the requirements and procedures for
dealings in any of its listed securities. The Share Dealing Policy applies widely to the Directors of the
Company and its subsidiaries, the Company’s employees and persons closely associated with them. The
policy complies with the Market Abuse Regulations, which came into effect on 3 July 2016.
Anti-Bribery and Anti-Corruption Policy
The Company has adopted an Anti-Bribery and Anti-Corruption Policy, which applies to the Directors and
any future employees of the Company. The Directors believe that the Group, through its internal controls,
has appropriate procedures in place to reduce the risk of bribery and that all employees, agents,
consultants and associated persons are made fully aware of the Group’s policies and procedures with
respect to ethical behaviour, business conduct and transparency.
Health and Safety
The safety of the Group’s employees and contractors is critical to its operations. Coos Bay requires its
contractors working on site to comply with all applicable laws in connection with the performance of its
work, including applicable requirements of the Occupational Health and Safety Act and the rules
promulgated thereunder (OSHA). As Coos Bay currently maintains no employees and almost all work on
site is performed by independent contractors, Coos Bay has not developed any formal safety procedures
or training programs beyond those that may be required by OSHA or other applicable laws. The Board
intends to review Coos Bay’s health and safety practices from time-to-time to ensure that they remain
consistent with current industry standards.
Relations with Shareholders
As detailed further below, the Directors seek to build on a mutual understanding of objectives between
the Company and its shareholders by meeting to discuss long term issues and receive feedback,
communicating regularly throughout the year and issuing trading updates as appropriate. The Board also
seeks to use the Annual General Meeting to communicate with its shareholders.
Fair, Balanced and Understandable Assessment of Position and Prospects
The Board has shown its commitment to presenting fair, balanced and comprehensible assessments of
the Company’s position and prospects by providing comprehensive disclosures within the financial report
in relation to its activities. The Board has applied the principles of good governance relating to Directors’
remuneration as described below. The Board has determined that there are no specific issues, which
need to be brought to the attention of shareholders.
Remuneration Strategy
The Company operates in a competitive market. If it is to compete successfully, it is essential that it
attracts, develops and retains high quality staff. Remuneration policy has an important part to play in
achieving this objective. The Company aims to offer its staff a remuneration package, which is both
competitive in the relevant employment market and which reflects individual performance and
contribution.
Share Options and Warrants
Certain Directors have interests in these as follows:
Name
Number of
Options or Warrants
Exercise Price
Vesting
Expiry Date
John McGoldrick
280,854
£0.10
25 Sept 2018
25 Sept 2022
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Annual Report 2020
Communication with Shareholders
The Board attaches great importance to communication with both institutional and private shareholders.
Regular communication is maintained with all shareholders through Company announcements, the half-
year Statement and the Annual Report and Financial Statements.
The Directors seek to build on a mutual understanding of objectives between the Company and its
shareholders. Institutional shareholders are in contact with the Directors through presentations and
meetings to discuss issues and to give feedback regularly throughout the year. With private shareholders,
this is not always practical.
The Board therefore intends to use the Company’s Annual General Meeting as the opportunity to meet
private shareholders, who are encouraged to attend, and at which the Board will give a presentation on
the activities of the Company.
Following the presentation, there will be an opportunity to meet and ask questions of Directors and to
discuss development of the business.
The Company operates a website at http://www.curzonenergy.com/investor-relations
The website contains details of the Company and its activities, regulatory announcements, Company
announcements, interim statements, preliminary statements and annual reports.
Greenhouse Gas Emissions
The Group has as yet minimal greenhouse gas emissions to report from the operations of the Company
and its subsidiaries and does not have responsibility for any other emission producing sources under the
Companies Act 2006 (Strategic Report and Directors Report) Regulations 2014.
COVID-19 Pandemic
The Group has been largely unaffected by the COVID-19 to date, however, the ongoing disruptions to the
world economy may ultimately impact the Company’s future prospects. Capital for future development
may be scare or unavailable and material transactions such as the one currently proposed with Poseidon
Enhanced Technologies Ltd (more fully detailed above in Post Balance Sheet Events) could ultimately be
more difficult to complete.
The Company currently intends to hold its Annual General Meeting on 09 June 2021 at 2.00 pm, and due
to potential social distancing restrictions, that may still be in place at that time, it encourages all
shareholders to vote via proxy to avoid putting themselves and others at risk by attending the meeting in
person.
Financial Risk Management
The Group is exposed to a variety of financial risks, including currency risk, credit risk and liquidity risk.
Some of the objectives and policies applied by management to mitigate these risks are outlined in note
20 to the Consolidated Financial Statements.
Share Capital
The Company’s Ordinary Shares of £0.0001 per share and Deferred share of £0.0099 represent 100% of
its total share capital. At a meeting of the Company every member present in person or by proxy shall
have one vote for every Ordinary Share of which he is the holder. Holders of Ordinary Shares are entitled
to receive dividends. Deferred shares do not carry any voting right or right to receive dividends.
On a winding-up or other return of capital, holders are entitled to share in any surplus assets pro rata to
the amount paid up on their Ordinary Shares. The shares are not redeemable at the option of either the
Company or the holder. There are no restrictions on the transfer of shares.
Independent Auditors
During the year, Crowe U.K. LLP was re-appointed as auditor to the Company.
11
Curzon Energy Plc
Directors’ Report continued
Annual Report 2020
Provision of Information to Auditors
Each of the persons, who are Directors at the time when this Directors' Report is approved, has confirmed
that:
so far as that Director is aware, there is no information relevant to the audit of which the
Company's auditors are unaware; and
each Director has taken all the steps that ought to have been taken as a director in order to be
aware of any information needed by the Company's auditors in connection with preparing their
report and to establish that the Company's auditors are aware of that information.
Signed by order of the Board
Scott Kaintz
Chief Executive Officer
29 April 2021
12
Curzon Energy Plc
Remuneration Report
Annual Report 2020
The Board of Directors has established a Remuneration Committee. The Remuneration Committee (the
‘Committee’) comprises our two Non-Executive Directors, John McGoldrick and Owen May.
The members of the Remuneration Committee have the necessary experience of executive compensation
matters relevant to their responsibilities as members of such a committee by virtue of their respective
professions, contacts within the minerals industry as well as experience in the broader business
community. In addition, each member of the Remuneration Committee keeps abreast on a regular basis
of trends and developments affecting executive compensation. Accordingly, it is considered that the
Remuneration Committee has sufficient experience and knowledge to set appropriate levels of
compensation. Neither the Company nor the Remuneration Committee engaged independent consultants
to evaluate the levels of compensation during the year ended 31 December 2020.
Committee’s Main Responsibility
The Remuneration Committee is responsible, amongst other things, for assisting the Board in determining
its responsibilities in relation to remuneration, including making recommendations to the Board on the
Company’s policy on executive remuneration, including setting the parameters and governance
framework of the Group’s remuneration policy and determining the individual remuneration and benefits
package for the Company’s Executive Directors and the Group. It is also responsible for approving the
rules and basis for participation in any performance related pay-schemes, share incentive schemes and
obtaining reliable and up-to-date information about remuneration in other companies. The Remuneration
Committee shall meet at least once a year.
Statement of Policy on Directors’ Remuneration
The Company’s policy is to set remuneration to attract and retain the highest quality of directors and
senior executives, and to:
align their interests with shareholders’;
avoid incentivising excessive risk taking by executives;
be proportionate to the contribution of the individuals concerned; and
be sensitive to pay and employment conditions elsewhere in the group.
The Company is at an early stage of development. As a result, the use of traditional performance
standards, such as corporate profitability, is not considered by the Remuneration Committee to be
appropriate in the evaluation of corporate or Directors’ performance. Discretionary bonuses may be paid
to aid staff retention and reward performance.
The Company provides Executive Directors with base fees, which represent their minimum compensation
for services rendered during the financial year. The base fees of Directors and senior executives depend
on the scope of their experience, responsibilities and performance.
The Remuneration Committee has considered the risk implications of the Company’s compensation
policies and practices and has concluded that there is no appreciable risk associated with such policies
and practices since such policies and practices do not have the potential of encouraging an executive
officer or other applicable individual to take on any undue risk or to otherwise expose the Company to
inappropriate or excessive risks. Furthermore, although the Company does not have in place any specific
prohibitions, preventing executives from purchasing financial instruments, including prepaid variable
forward contracts, equity swaps, collars or units of exchange funds that are designed to hedge or offset
a decrease in market value of options or other equity securities of the Company granted in compensation
or held directly or indirectly by the director, the Company is unaware of the purchase of any such financial
instruments by any Director.
The Company does not anticipate making any significant changes to its compensation policies and
practices during 2021.
13
Curzon Energy Plc
Remuneration Report continued
Annual Report 2020
Directors’ Remuneration
The Directors, who held office on 31 December 2020 and who had beneficial interests in the ordinary
shares of the Company, are summarised as follows:
Name of Director
Position
John McGoldrick
Chairman, Non-Executive Director
Scott Kaintz
Chief Executive Officer, Executive Director
Directors’ Service Contracts
John McGoldrick was appointed by the Company with effect from Admission to act as Chairman and a
Non-Executive Director of the Company under a letter of appointment, dated 04 October 2017. His
appointment is terminable on three months’ written notice on either side. He is entitled to a fee of £50,000
per annum.
Owen May was appointed as a Director on 27 September 2016. He has been appointed to act as a Non-
Executive Director of the Company pursuant to a letter of appointment with the Company, dated 23 May
2017. His appointment is terminable on three months’ written notice on either side. Owen is entitled to a
fee of £25,000 per annum payable in cash or shares at the discretion of the Board.
Scott Kaintz was appointed as a Director on 27 June 2018. He was appointed to act as an Executive
Director and Chief Executive Officer as of 5 November 2018. His appointment continues until terminated
by either party giving four months written notice. Scott is entitled to a fee of £120,000 per annum.
Summary Compensation Table (audited)
The following table sets forth the compensation awarded, paid to or earned by each Director during 2020:
2020
Directors’
fees
US$
Social
security
costs
US$
Total cash-
compensation
US$
Share-based
Payments
(options)
US$
Total
compensation
US$
John McGoldrick
63,800
-
63,800
Scott Kaintz
Owen May
Total Directors’
compensation
148,335
20,995
169,330
29,242
-
29,242
241,377
20,995
262,371
-
-
-
-
63,800
169,330
29,242
262,371
John McGoldrick has, through agreement with the Company, agreed to defer payment of his 2017, 2018,
2019 and 2020 Director’s compensation, which at 31 December 2020 totaled £152,500 (US$208,498).
Owen May has, through agreement with the Company, agreed to defer payment of his 2018, 2019 and
2020 Director’s compensation, which at 31 December 2020 totaled £47,917 (US$65,512).
14
Curzon Energy Plc
Remuneration Report continued
Summary Compensation Table (audited)
Annual Report 2020
2019
John McGoldrick
Scott Kaintz
Owen May
Brian James Kinane
Total Directors’
compensation
Directors’
fees
US$
63,799
95,699
31,900
-
Social
security
costs
US$
Total cash-
compensation
US$
Share-based
Payments
(options)
US$
Total
compensation
US$
-
63,799
20,766
84,565
7,800
103,499
-
-
31,900
-
-
-
-
103,499
31,900
-
191,398
7,800
199,198
20,766
219,964
Share-Based Awards (audited)
The Company has awarded the following share options to the Directors of the Company in accordance
with its share option plan:
Director
Number of
Options
Exercise
Price
Vesting
Expiry Date
John McGoldrick
280,854
£0.10
25 Sept 2018
25 Sep 2022
There were no awards of annual bonuses or incentive arrangements in the period. All remuneration was
therefore fixed in nature and no illustrative table of the application of remuneration policy has been
included in this report.
Directors’ Interests in Shares (audited)
Directors’ interests in the shares of the Company at the date of this report are disclosed below.
Director
John McGoldrick
Scott Kaintz
Owen May
Ordinary Shares Held
% Held
316,455
949,367
-
0.38
1.14
-
Other Matters Subject to Audit
The Company does not currently have any pension plans for any of the Directors and does not pay
pension amounts in relation to their remuneration.
Other Matters
The Company does not currently have any annual or long-term incentive schemes in place for any of the
Directors and as such there are no disclosures in this respect.
The performance of the Remuneration Committee is yet to be assessed given the short time frame that it
has been operational.
No performance graph has been included here as the Company is in the early stages of its business
development.
15
Annual Report 2020
Curzon Energy Plc
Remuneration Report continued
Signed
John McGoldrick
Chairman of the Remuneration Committee
29 April 2020
16
Curzon Energy Plc
Annual Report 2020
Statement of Directors’ Responsibilities in Respect of the Strategic Report, the
Directors’ Report and the Financial Statements
The Directors are responsible for preparing the Strategic Report, the Directors’ Report and the Financial
Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that
law they have elected to prepare the Financial Statements in accordance with IFRSs as adopted by the
EU and applicable law.
Under company law, the Directors must not approve the Financial Statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group
for that period. In preparing these Financial Statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgments and estimates that are reasonable and prudent;
state whether they have been prepared in accordance with IFRSs as adopted by the EU; and
prepare the Financial Statements on the going concern basis, unless it is inappropriate to
presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the Financial Statements comply with the
Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the UK governing the preparation and dissemination
of Financial Statements may differ from legislation in other jurisdictions.
We confirm that to the best of our knowledge:
the Financial Statements, prepared in accordance with International Financial Reporting
Standards as adopted by the EU, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Group;
the Directors report includes a fair review of the development and performance of the business
and the position of the Company, together with a description of the principal risks and
uncertainties that they face.
By Order of the Board
John McGoldrick
Director
29 April 2020
17
Curzon Energy Plc
Annual Report 2020
Independent Auditor’s Report to the Members of Curzon Energy Plc
Opinion
We have audited the Financial Statements of Curzon Energy Plc (the “Company”) and its subsidiaries
(the “Group”) for the year ended 31 December 2020, which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated and Company Statements of Financial Position, the
Consolidated and Company Statements of Cash Flows, the Consolidated and Company Statements of
Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards
the Company, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
the Financial Statements give a true and fair view of the state of the Group’s and the Company’s
affairs as at 31 December 2020 and of the Group’s loss for the year then ended;
the Group Financial Statements have been properly prepared in accordance with International
Financial Reporting Standards as adopted by the European Union;
the Company Financial Statements have been properly prepared in accordance with IFRSs as
adopted by the European Union as applied in accordance with the provisions of the Companies
Act 2006; and
the Financial Statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the Financial Statements section of our report. We are independent of the
Company in accordance with the ethical requirements that are relevant to our audit of the Financial
Statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to note 2 to the Financial Statements, which details the factors the Group and the
Company has considered, when assessing the going concern position. As detailed in note 2, the
uncertainty surrounding the availability of funds to finance ongoing working capital requirements indicates
the existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue
as a going concern. Our opinion is not modified in respect of this matter.
In auditing the Financial Statements, we have concluded that the Director's use of the going concern basis
of accounting in the preparation of the Financial Statements is appropriate. Our evaluation of the Directors
assessment of the entity’s ability to continue to adopt the going concern basis of accounting included
review of letter of intent with Poseidon Enhanced Technologies Ltd and cashflow forecast prepared by
management.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described
in the relevant sections of this report.
Overview of Our Audit Approach
Materiality
In planning and performing our audit, we applied the concept of materiality. An item is considered material
if it could reasonably be expected to change the economic decisions of a user of the Financial Statements.
We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements
identified.
18
Curzon Energy Plc
Annual Report 2020
Independent Auditor’s Report to the Members of Curzon Energy Plc continued
Based on our professional judgement, we determined overall materiality for the Financial Statements as
a whole to be £35,000, based on 5% of the adjusted results of the year.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for
the audit of the Financial Statements. Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit
area having regard to the internal control environment.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for
related party transactions and Directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £1,750. Errors below
that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on
qualitative grounds.
Overview of the Scope of Our Audit
There are two key components of the Group, Curzon Energy Plc as an entity and the US Group headed
by Coos Bay Energy LLC. The audit of Curzon Energy Plc was conducted from the UK. The accounting
records were provided to us by management.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the Financial Statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified. These matters included those which
had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing
the efforts of the engagement team. These matters were addressed in the context of our audit of the
Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Besides the matter described in the Material Uncertainty Related to Going Concern section, we have
determined no other matters to be communicated in our report.
Other Information
The Directors are responsible for the other information. The other information comprises the information
included in the Annual Report, other than the Financial Statements and our Auditor’s Report thereon. Our
opinion on the Financial Statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the Financial Statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the Financial
Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the Financial Statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on Other Matters Prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared
in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Strategic Report and the Directors' Report for the financial year for
which the Financial Statements are prepared is consistent with the Financial Statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable
legal requirements.
19
Curzon Energy Plc
Annual Report 2020
Independent Auditor’s Report to the Members of Curzon Energy Plc continued
Matters on which We are Required to Report by Exception
In light of the knowledge and understanding of the Group and the Parent Company and their environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic Report
or the Directors’ Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us
to report to you if, in our opinion:
adequate accounting records have not been kept by the Company, or returns adequate for our
audit have not been received from branches not visited by us; or
the Financial Statements and the part of the Directors’ Remuneration Report to be audited are
not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of the Directors for the Financial Statements
As explained more fully in the Directors’ responsibilities statement set out on page 17, the Directors are
responsible for the preparation of the Financial Statements and for being satisfied that they give a true
and fair view, and for such internal control as the Directors determine is necessary to enable the
preparation of Financial Statements that are free from material misstatement, whether due to fraud or
error.
In preparing the Financial Statements, the Directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an Auditor’s Report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these Financial Statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud, is detailed below, however, the primary responsibility for the prevention and detection of
fraud lies with management and those charged with governance of the Company. We obtained an
understanding of the legal and regulatory frameworks that are applicable to the Group and the procedures
in place for ensuring compliance. The most significant identified, was the Companies Act 2006.
As part of our audit planning process, we assessed the different areas of the Financial
Statements, including disclosures, for the risk of material misstatement. This included considering
the risk of fraud, where direct enquiries were made of management and those charged with
governance concerning both, whether they had any knowledge of actual or suspected fraud and
their assessment of the susceptibility of fraud. We considered the risk was greater in areas that
involve significant management estimate or judgement. Based on this assessment we designed
audit procedures to focus on the key areas of estimate or judgement, as disclosed on page 35 of
the Financial Statements.
20
Curzon Energy Plc
Annual Report 2020
Independent Auditor’s Report to the Members of Curzon Energy Plc continued
We have read Board and Committee minutes of meetings, as well as regulatory announcements,
as part of our risk assessment process to identify events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to commit fraud. As part of this
process, we have considered whether remuneration incentive schemes or performance targets
exist for the Directors.
In addition to the risk of management override of controls, we have considered the fraud risk
related to any unusual transactions or unexpected relationships, including assessing the risk of
undisclosed related party transactions. Our procedures to address this risk included specific
testing of journal transactions based on risk criteria, both at the year end and throughout the year.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements
of the Financial Statements may not be detected, even though the audit is properly planned and performed
in accordance with the ISAs (UK).
The potential effects of inherent limitations are particularly significant in the case of misstatement,
resulting from fraud because fraud may involve sophisticated and carefully organised schemes, designed
to conceal it, including deliberate failure to record transactions, collusion or intentional misrepresentations
being made to us.
A further description of our responsibilities for the audit of the Financial Statements is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
Other Matters which We are Required to Address
We were appointed by the Board on 24 June 2020 to audit the Financial Statements for the year ended
31 December 2020. Our total uninterrupted period of engagement is 5 years, covering the period ended
31 December 2016 to 31 December 2020.
The non-audit services, prohibited by the FRC’s Ethical Standard, were not provided to the Company and
we remain independent of the Group and the Parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit Committee.
Use of Our Report
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in an Auditor's Report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company's members as a body, for our audit work, for this report, or for
the opinions we have formed.
Matthew Stallabrass
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
29 April 2021
21
Curzon Energy Plc
Annual Report 2020
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2020
Note
6
7
10
4
8
Administrative expenses
Loss from operations
Finance expense, net
Impairment of exploration and evaluation assets
Loss before taxation
Income tax expense
Loss for the year attributable to
equity holders of the parent company
Other comprehensive loss
2020
US$
2019
US$
(528,799)
(913,572)
(528,799)
(913,572)
(88,775)
(108,178)
-
(2,559,000)
(617,574)
(3,580,750)
-
-
(617,574)
(3,580,750)
(Loss) on translation of parent net assets and results
from functional currency into presentation currency
Total comprehensive loss for the year
(82,297)
(39,602)
(699,871)
(3,620,352)
Loss per share - Basic and diluted, US$
9
(0.008)
(0.044)
The notes on pages 27 to 62 form part of these Financial Statements
22
Curzon Energy Plc
Consolidated Statements of Financial Position
as at 31 December 2020
Annual Report 2020
Note
2020
US$
As reported
2019
Re-stated
2019*
US$
US$
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Restricted cash
Total non-current assets
Current assets
Prepayments and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables*
Borrowings
Total current liabilities
Total liabilities
10
12
13
14
15
16
-
-
-
683
-
683
125,000
125,000
125,000
125,000
125,683
125,683
41,699
47,188
88,887
31,203
28,709
31,203
28,709
59,912
59,912
213,887
185,595
185,595
737,835
835,826
690,315
1,183,018
698,798
698,798
1,920,853
1,534,624
1,389,113
1,920,853
1,534,624
1,389,113
Capital and reserves attributable to shareholders
Share capital
Share premium
Share-based payments reserve
Warrants reserve
Merger reserve
17
1,105,547
1,103,457
1,103,457
3,619,332
3,586,947
3,586,947
474,792
375,198
474,792
213,250
474,792
213,250
31,212,041
31,212,041
31,212,041
Foreign currency translation reserve
(185,673)
(103,376)
(103,376)
Accumulated losses*
Total capital and reserves
Total equity and liabilities
(38,308,203)
(37,836,140)
(37,690,629)
(1,706,966)
(1,349,029)
(1,203,518)
213,887
185,595
185,595
*Details on 2018 loss re-statement are provided in note 2.
The Financial Statements were approved and authorised for issue by the Board of Directors on 29 April 2021 and
were signed on its behalf by:
John McGoldrick
Director
The notes on pages 27 to 62 form part of these Financial Statements.
23
Curzon Energy Plc
Annual Report 2020
Consolidated Statements of Changes in Equity
Share
capital
US$
Share
premium
Other
reserves
Accumulated
losses
US$
US$
US$
Total
US$
Equity at 1 January 2019,
as reported
1,024,036
3,563,122
31,793,304
(34,255,390)
2,125,072
Re-stated 2018 loss*
-
-
-
145,511
145,511
Equity at 1 January 2019,
re-stated
Loss for the year
Other comprehensive loss
for the year
Total comprehensive loss
for the year
Issue of shares
Issue of warrants
Issue of share options
Total transactions with
shareholders
Equity at 31 December
2019, re-stated
Loss for the year
Other comprehensive loss
for the year
Total comprehensive loss
for the year
Issue of shares
Share issue costs
Issue of warrants
Total transactions with
shareholders
Equity at 31 December
2020
1,024,036
3,563,122
31,793,304
(34,109,879)
2,270,583
-
-
-
-
-
-
-
(3,580,750)
(3,580,750)
(39,602)
-
(39,602)
(39,602)
(3,580,750)
(3,620,352)
79,421
46,064
-
-
(22,239)
-
-
22,239
20,766
79,421
23,825
43,005
-
-
-
-
125,485
-
20,766
146,251
1,103,457
3,586,947
31,796,707
(37,690,629)
(1,203,518)
-
-
-
-
-
-
-
(617,574)
(617,574)
(82,297)
-
(82,297)
(82,297)
(617,574)
(699,871)
2,090
206,871
(12,538)
-
-
(161,948)
161,948
-
-
2,090
32,385
161,948
-
-
-
-
208,961
(12,538)
-
196,423
1,105,547
3,619,332
31,876,358
(38,308,203)
(1,706,966)
*Details on 2018 loss re-statement are provided in note 2.
24
Curzon Energy Plc
Other Reserves
Annual Report 2020
Share-
based
payments
reserve
Warrants
reserve
US$
US$
Foreign
currency
translation
reserve
US$
Merger
reserve
US$
Total Other
reserves
US$
Other reserves at 1
January 2019
Other comprehensive
loss for the year
Total comprehensive
loss for the year
Issue of warrants
Issue of share options
Other reserves at 31
December 2019
Other comprehensive
loss for the year
Total comprehensive
loss for the year
Issue of warrants
Other reserves at 31
December 2020
31,212,041
454,026
191,011
(63,774)
31,793,304
-
-
-
-
-
-
-
20,766
-
-
22,239
-
(39,602)
(39,602)
(39,602)
(39,602)
-
-
22,239
20,766
31,212,041
474,792
213,250
(103,376)
31,796,707
-
-
-
-
-
-
-
-
(82,297)
(82,297)
(82,297)
(82,297)
161,948
-
161,948
31,212,041
474,792
375,198
(185,673)
31,876,358
25
Curzon Energy Plc
Consolidated Statement of Cash Flows
Cash flow from operating activities
Loss before taxation
Adjustments for:
Finance expenses
Share-based payments charge
Impairment of exploration assets
Unrealised foreign exchange movements
Operating cashflows before working capital changes
Changes in working capital:
Increase in payables
(Increase)/decrease in receivables
Net cash used in operating activities
Financing activities
Issue of ordinary shares, net of share issue costs
Proceeds from new borrowings
Net cash flow from financing activities
Net increase /(decrease) in cash and cash equivalents in the
period
Cash and cash equivalents at the beginning of the period
Annual Report 2020
Notes
2020
US$
2019
US$
7
18
10
7
17
16
(617,574)
(3,580,750)
111,881
112,093
-
-
20,766
2,559,000
(23,106)
(3,915)
(528,799)
(892,806)
26,464
309,917
(10,496)
27,084
(512,831)
(555,805)
196,423
104,021
331,760
528,183
362,320
466,341
15,352
(89,464)
28,709
125,621
Restricted cash held on deposits
12
125,000
125,000
Total cash and cash equivalents at the beginning of the period,
including restricted cash
153,709
250,621
Effect of the translation of cash balances into presentation currency
3,127
(7,448)
Cash and cash equivalents at the end of the period
47,188
28,709
Restricted cash held on deposits
12
125,000
125,000
Total cash and cash equivalents at the end of the period, including
restricted cash
172,188
153,709
26
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information
1. General Information
The Company is incorporated and registered in England and Wales as a public limited company. The
Company’s registered number is 09976843 and its registered office is at Kemp House, 152 City Road,
London EC1V 2NX. On 4 October 2017, the Company’s shares were admitted to the Official List (by way
of Standard Listing) and to trading on the London Stock Exchange’s Main Market.
With effect from admission, the Company has been subject to the Listing Rules and the Disclosure
Guidance and Transparency Rules (and the resulting jurisdiction of the UK Listing Authority) to the extent
such rules apply to companies with a Standard Listing pursuant to Chapter 14 of the Listing Rules.
The principal activity of the Company is that of an investment company, currently focused on acquiring a
new business in the environmental, social and corporate governance space (ESG).
2. Accounting Policies
The principal accounting policies adopted are set out below.
The Group Financial statements are presented in US Dollars as historically the entirety of the Company’s
operations have been located in the United States.
Basis of Preparation
The Financial Statements have been prepared in accordance with International Financial Reporting
Standards and IFRIC interpretations as endorsed by the EU (“IFRS”) and the requirements of the
Companies Act applicable to companies reporting under IFRS.
The Financial Statements are prepared on a going concern basis and under the historical cost convention.
The preparation of the Group Financial Statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires the Directors to exercise their judgment in the process of
applying the Group’s accounting policies. The areas involving a higher degree of judgment and
complexity, or areas where assumptions and estimates are significant to the Group Financial Statements
are disclosed below.
Current assets and liabilities disclosed in the notes to the accounts are those expected to be settled in
less than one year.
a) New standards, interpretations and amendments effective from 1 January 2020
There were no new standards or interpretations effective for the first time for periods beginning
on or after 1 January 2020 that had a significant effect on the Curzon Group’s Financial
Statements. During the period, the following new standards were adopted:
Amendments to References to Conceptual Framework in IFRS Standards – effective from 1
January 2020;
Definition of Material (Amendments to IAS 1 and IAS 8) – effective from 1 January 2020;
Amendments to IFRS 9, IAS 39 and IFRS17: Interest Rate Benchmark Reform;
Amendment to IFRS 3 Business Combinations – effective 1 January 2020.
The adoption of these standards has not had a material impact on the financial information of the
Group in reporting period and is not expected to have a significant impact in the future. Other new
and amended standards and Interpretations issued by the IASB did not impact the Group as they
are either not relevant to the Group’s activities or require accounting, which is consistent with the
Group’s current accounting policies.
27
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
2. Accounting Policies continued
b) New standards, interpretations and amendments not yet effective
At the date of authorisation of these Financial Statements, a number of amendments to existing
standards and interpretations, which have not been applied in these Financial Statements, were
in issue but not yet effective for the year presented. The Directors do not expect that the adoption
of these standards will have a material impact on the financial information of the Group in future
periods.
Prior Period Error Re-stated
In the reporting period, the Groups identified an error related to the year ended 31 December 2018. A
US$145,511 accrual to previous Directors of the Company for bonus payments, that were never earned
or paid out and was waived by the previous Directors in the year ended 31 December 2018, was still
included in the Accounts Payable balance and therefore required to be reversed from the accounts.
The error was retrospectively corrected through opening Retained Earnings at 1 January 2019, which
affected comparative year balances at 31 December 2019 in the following lines in the Statement of
Financial position:
Accounts Payable balance decreased from previously reported US$835,826 to re-stated number
of US$690,315;
Accumulated Loss balance changed from previously reported loss of US$37,836,140 to re-stated
loss of US$37,690,629.
Basis of Consolidation
The Company was incorporated on the 29 of January 2016. It acquired Coos Bay Energy LLC on the 4
of October 2017. At the time of its acquisition by the Company, Coos Bay Energy LLC consisted of Coos
Bay Energy LLC and its wholly owned US Group. It is the Directors’ opinion that the Company at the date
of acquisition of Coos Bay Energy LLC did not meet the definition of a business as defined by IFRS 3 and
therefore the acquisition was outside on the IFRS 3 scope.
Where a party to an acquisition fails to satisfy the definition of a business, as defined by IFRS 3,
management have decided to adopt a “merger accounting” method of consolidation as the most relevant
method to be used.
The Group consistently applies it to all similar transactions in the following way:
the acquired assets and liabilities are recorded at their existing carrying values rather than at fair
value;
no goodwill is recorded;
all intra-group transactions, balances and unrealised gains and losses on transactions are
eliminated from the beginning of the first comparative period or inception, whichever is earlier;
comparative periods are restated from the beginning of the earliest comparative period presented
based on the assumption that the companies have always been together;
all the pre-acquisition accumulated losses of the legal acquirer are assumed by the Group as if
the companies have always been together;
all the share capital and membership capital contributions of all the companies, included into the
legal acquiree sub-group less the Company’s cost of investment into these companies, are
included into the merger reserve; and
28
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
2. Accounting Policies continued
the Company’s called up share capital is restated at the preceding reporting date to reflect the
value of the new shares that would have been issued to acquire the merged company had the
merger taken place at the first day of the comparative period. Where new shares have been
issued during the current period that increased net assets (other than as consideration for the
merger), these are recorded from their actual date of issue and are not included in the
comparative statement of financial position.
Going Concern
The Group Financial Statements have been prepared on a going concern basis, which assumes that the
Group will continue to be able to meet its liabilities as they fall due for the foreseeable future. The
operations of the Company are currently being financed by funds lent to the Company by Poseidon
Enhanced Technologies Ltd. (“PET”). In exchange for a period of exclusivity in relation to a potential
reverse takeover transaction, PET has agreed to loan the Company an initial amount of £65,000 in the
form of a one-year loan note carrying an annual interest rate of 10%. PET has agreed to lend up to a
total of £500,000 in order to support the Company during the ongoing due diligence and potential reverse
takeover process.
The Company further continues to rely on a US$1,000,000 credit facility provided from a company related
to the largest shareholder that provides the Group up to US$500,000 minimum funding and an additional
US$500,000 at the discretion of the lender. On 13 February 2020, the Company was notified that the
entire outstanding balance of this loan, constituting US$200,000 of principal and US$32,000 of interest
was sold to C4 Energy Ltd, a UK incorporated private entity, and was subsequently refinanced to 30
October 2020. This left US$800,000 of the underlying facility undrawn with the original lender. If any
amounts were to be drawn on this facility, they would be repayable 12 months from the date of drawdown.
The Group believes that, based on the current low overhead expenditure, the proceeds from the loans
being provided by PET and the undrawn amount of US$800,000 remaining on the US$1,000,000 credit
facility will be sufficient for the Group to operate for a period of 12 months from the date of the approval
of these Financial Statements.
The Group currently has no source of revenue and is reliant on loans to continue to meet its overhead
expenditures. The Group held cash balances of US$47,188 as at 31 December 2020 and has
subsequently increased its borrowing capacity and current liquidity through the agreement with PET.
The Directors note that the Group will need additional funding to continue operations for the foreseeable
future and this means there is a material uncertainty as to the Group’s ability to continue as a going
concern, however the Directors are confident that the Group will be able to raise, as required, sufficient
cash or reduce its commitments to enable it to continue its operations, and to continue to meet, as and
when they fall due, its liabilities for at least the next 12 months from the date of approval of the Group
Financial Statements. The Group Financial Statements have, therefore, been prepared on the going
concern basis.
Functional Currency
Functional and Presentation Currency
The individual financial information of each Group entity is measured in the currency of the primary
economic environment in which the entity operates (its functional currency). The Company’s functional
currency is UK Pound Sterling (£). All other companies, belonging to the Curzon Group, have US Dollar
as their functional currency. The Group Financial Statements are presented in US Dollars ($).
Transactions and Balances
Transactions in foreign currencies are converted into the respective functional currencies on initial
recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary
assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date.
29
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
2. Accounting Policies continued
Non-monetary assets and liabilities are translated using exchange rates that existed when the values
were determined. All exchange differences are recognised in profit or loss.
On consolidation, the assets and liabilities of the Group’s Pound Sterling operations are translated into
the Group’s presentational currency (US Dollar) at exchange rates prevailing at the reporting date. Income
and expense items are translated at the average exchange rates for the period unless exchange rates
have fluctuated significantly during the year, in which case the exchange rate at the date of the transaction
is used. All exchange differences arising, if any, are recognised as other comprehensive income and are
transferred to the Group’s foreign currency translation reserve.
Rates applied in these Financial Statements:
Closing USD/GBP rate at 31 December
Average USD/GBP rate for the year
2020
1.3672
1.2760
2019
1.3116
1.2760
Decommissioning Costs
Where a material liability for the removal of production facilities and site restoration at the end of the field
life exists, a provision for decommissioning is made. The amount recognised is the present value of
estimated future expenditure determined in accordance with local conditions and requirements. An asset
of an amount equivalent to the provision is also created and depreciated on a unit of production basis.
Changes in estimates are recognised prospectively, with corresponding adjustments to the provision and
the associated asset. At 31 December 2020 and 31 December 2019, no provisions were deemed
necessary.
Impairment
Impairment of Financial Assets
All financial assets are assessed at the end of each reporting period as to whether there is any objective
evidence of impairment as a result of one or more events having an impact on the estimated future cash
flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its
cost is considered to be objective evidence of impairment.
An impairment loss in respect of financial assets carried at amortised cost is recognised in profit or loss
and is measured as the difference between the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the financial asset’s original effective interest rate.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial
asset at the date the impairment is reversed does not exceed what the amortised cost would have been
had the impairment not been recognised.
Impairment of Non-Financial Assets
The carrying values of assets, other than those to which IAS 36 “Impairment of Assets” does not apply,
are reviewed at the end of each reporting period for impairment, when there is an indication that the
assets might be impaired. Impairment is measured by comparing the carrying values of the assets with
their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value
less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.
An impairment loss is recognised in profit or loss immediately.
30
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
2. Accounting Policies continued
When there is a change in the estimates used to determine the recoverable amount, a subsequent
increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss
and is recognised to the extent of the carrying amount of the asset that would have been determined (net
of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in
profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal
of the impairment loss is treated as a revaluation increase.
Financial Instruments
Financial instruments are recognised in the statements of financial position, when the Group has become
a party to the contractual provisions of the instruments.
Financial Assets
The Group classifies its financial assets as financial assets carried at amortised cost, cash and cash
equivalents and restricted cash. Financial assets are initially measured at fair value and subsequently
carried at amortised cost.
Financial assets are derecognized, when the contractual rights to receive cash flows from the financial
assets have expired or have been transferred and the Group has transferred substantially all the risks
and rewards of ownership. On de-recognition of a financial asset in its entirety, the difference between
the carrying amount and the sum of the consideration received and any cumulative gain or loss that had
been recognised in other comprehensive income is recognised in profit or loss.
Amortised Cost
These assets incorporate such types of financial assets, where the objective is to hold these assets in
order to collect contractual cash flows and the contractual cash flows are solely payments of principal and
interest. They are initially recognised at fair value plus transaction costs that are directly attributable to
their acquisition or issue and are subsequently carried at amortised cost, using the effective interest rate
method, less provision for impairment. Impairment provisions receivables are recognised based on the
simplified approach within IFRS 9, using a provision matrix in the determination of the lifetime expected
credit losses. During this process, the probability of the non-payment of the receivables is assessed. This
probability is then multiplied by the amount of the expected loss arising from default to determine the
lifetime expected credit loss for the receivables. On confirmation that the receivable will not be collectable,
the gross carrying value of the asset is written off against the associated provision.
Impairment provisions for receivables from related parties and loans to related parties are recognised
based on a forward-looking expected credit loss model. The methodology, used to determine the amount
of the provision, is based on whether there has been a significant increase in credit risk since initial
recognition of the financial asset. For those where the credit risk has not increased significantly since
initial recognition of the financial asset, twelve month expected credit losses, along with gross interest
income, are recognised. For those for which credit risk has increased significantly but not determined to
be credit impaired, lifetime expected credit losses along with the gross interest income are recognised.
For those that are determined to be credit impaired, lifetime expected credit losses along with interest
income on a net basis are recognised.
The Group's financial assets, measured at amortised cost, comprise other receivables and cash and cash
equivalents in the Consolidated Statement of Financial Position.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, bank balances, bank overdrafts, deposits with
financial institutions and short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
31
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
2. Accounting Policies continued
Restricted Cash
Restricted cash are funds held as a collateral related to stand-by letters of credit related to the Group’s
oil and gas properties. Such deposits are classified as non-current assets and are not classified as part
of cash and cash equivalents as these deposits are not accessible by the Company for unrestricted use
and are not accessible for more than 3 months. More details on the Group’s restricted cash are given in
the note 12.
Financial Liabilities
Financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
financial instrument.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividends, gains and losses, relating to a financial instrument classified
as a liability, are reported as an expense or income. Distributions to holders of financial instruments
classified as equity are charged directly to equity.
All financial liabilities are recognised initially at fair value less financial costs and subsequently measured
at amortised cost, using the effective interest method other than those categorised as fair value through
the Statement of Comprehensive Income.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or
expires. When an existing financial liability is replaced by another from the same party on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a de-recognition of the original liability and the recognition of a new liability and
the difference in the respective carrying amounts is recognised in the Income Statement.
Financial liabilities include the following items:
Bank borrowings are initially recognised at fair value net of any transaction costs directly
attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently
measured at amortised cost, using the effective interest rate method, which ensures that any
interest expense over the period to repayment is at a constant rate on the balance of the liability
carried in the consolidated statement of financial position. For the purposes of each financial
liability, interest expense includes initial transaction costs and any premium payable on
redemption as well as any interest or coupon, payable while the liability is outstanding;
Liability components of convertible loan notes are measured as described further below;
Trade payables and other short-term monetary liabilities, which are initially recognised at fair
value and subsequently carried at amortised cost, using the effective interest method.
Convertible Debt
The proceeds, received on issue of the Group's convertible debt, are allocated into their liability and equity
components. The amount, initially attributed to the debt component, equals the discounted cash flows,
using a market rate of interest that would be payable on a similar debt instrument that does not include
an option to convert. Subsequently, the debt component is accounted for as a financial liability, measured
at amortised cost until extinguished on conversion or maturity of the bond. The remainder of the proceeds
is allocated to the conversion option and is recognised as a separate equity component within
shareholders' equity, net of income tax effects.
Equity instruments
Ordinary Shares
Ordinary shares are classified as equity. Incremental costs, directly attributable to the issue of new shares,
are shown in Share Premium account as a deduction, net of tax, from proceeds. Dividends on ordinary
shares are recognised as liabilities, when approved for distribution.
32
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
2. Accounting Policies continued
Warrants
Warrants classified as equity are recorded at fair value as of the date of issuance on the Company’s
Consolidated Statement of Financial Position and no further adjustments to their valuation are made.
Management estimates the fair value of these liabilities, using option pricing models and assumptions
that are based on the individual characteristics of the warrants or instruments on the valuation date as
well as assumptions for future financings, expected volatility, expected life, yield and risk-free interest
rate.
Taxation
Income tax for each reporting period comprises current and deferred tax.
Current tax is the expected amount of income taxes, payable in respect of the taxable profit for the year
and is measured, using the tax rates that have been enacted or substantively enacted at the end of the
reporting period.
Deferred tax is provided in full, using the liability method, on temporary differences, arising between the
tax bases of assets and liabilities and their carrying amounts in the Group Financial Statements.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and
unused tax credits to the extent that it is probable that future taxable profits will be available against which
the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The
carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or
part of the deferred tax assets to be utilised.
Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from
goodwill or excess of the Group’s interest in the net fair value of the acquired Company’s identifiable
assets, liabilities and contingent liabilities over the business combination costs or from the initial
recognition of an asset or liability in a transaction, which is not a business combination and at the time of
the transaction, affects neither accounting profit nor taxable profit.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period,
when the asset is realised or the liability is settled, based on the tax rates that have been enacted or
substantively enacted at the end of the reporting period.
Deferred tax assets and liabilities are offset, when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when the deferred income taxes relate to the same taxation
authority.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent
that it has become probable that future taxable profit will allow deferred tax assets to be recovered.
Deferred tax, relating to items recognised outside profit or loss, is recognised outside profit or loss.
Deferred tax items are recognised in correlation to the underlying transactions either in other
comprehensive income or directly in equity.
Deferred tax assets and liabilities are recognized, where the carrying amount of an asset or liability in the
Consolidated Statement of Financial Position differs from its tax base, except for differences, arising on
the initial recognition of goodwill, the initial recognition of an asset or liability in a transaction, which is not
a business combination and at the time of the transaction affects neither accounting or taxable profit, and
investments in subsidiaries and joint arrangements, where the Group is able to control the timing of the
reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.
33
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
2. Accounting Policies continued
Leases
The Group held leases to approximately 45,370 acres of prospective coalbed methane lands in the Coos
Bay Basin during the period. These leases are outside of IFRS16 scope. The annual rental payments,
under these operating leases, were recognised as an expense on a straight-line basis over the lease
term.
Employee Benefits
Short-Term Benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in
the period in which the associated services are rendered by employees of the Group.
Post-Employment Benefits
The Group does not currently make provision for post-employment benefits by way of pension plans or
similar arrangements.
Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized, when the Group has a present or constructive obligation as a result of past
events, when it is probable that an outflow of resources, embodying economic benefits, will be required
to settle the obligation and when a reliable estimate of the amount can be made. Provisions are reviewed
at the end of each financial reporting period and adjusted to reflect the current best estimate. Where the
effect of the time value of money is material, the provision is the present value of the estimated
expenditure required to settle the obligation.
A contingent liability is a possible obligation that arises from past events and whose existence will only
be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the
Group. It can also be a present obligation arising from past events that is not recognised because it is not
probable that an outflow of economic resources will be required or the amount of obligation cannot be
measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the Financial Statements. When a
change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as
a provision.
A contingent asset is a probable asset that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control
of the Group. The Group does not recognise contingent assets but discloses its existence, where inflows
of economic benefits are probable, but not virtually certain.
Share-Based Payment Arrangements
Equity-settled share-based payments to employees and others, providing similar services, are measured
at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair
value of equity-settled share-based transactions are set out in note 18 to the Group Financial Statements.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Directors’ estimate of equity instruments that will
eventually vest, with a corresponding increase in equity. Where the conditions are non-vesting, the
expense and equity reserve, arising from share-based payment transactions is recognised in full
immediately on grant.
At the end of each reporting period, the Directors revise their estimate of the number of equity instruments
expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to other
reserves.
34
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
2. Accounting Policies continued
Operating Segments
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses. The results of an operating segment are reviewed regularly by the
chief operating decision maker to make decisions about resources to be allocated to the segment and
assess its performance, and for which discrete financial information is available.
Summary of Critical Accounting Estimates and Judgments
The preparation of the Group Financial Statements, in conformity with IFRS, requires the use of certain
critical accounting estimates. It also requires the Directors to exercise their judgment in the process of
applying the accounting policies, which are detailed above. These judgments are continually evaluated
by the Directors and management and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
The key estimates and underlying assumptions, concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial period are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if
the revision affects only that period or in the period of the revision and future periods if the revision affects
both current and future periods.
The prime areas, involving a higher degree of judgment or complexity, where assumptions and estimates
are significant to the Financial Statements, are as follows:
Going Concern
The Group Financial Statements have been prepared on a going concern basis as the Directors have
assessed the Group’s ability to continue in operational existence for the foreseeable future. The
operations are currently being financed by third party loans. See Going Concern section on page 29 for
more details.
The Group is reliant on the continuing support from its shareholders and the expected support of future
shareholders.
The Group Financial Statements do not include the adjustments that would result if the Group were not
to continue as a going concern.
Areas of Uncertainty
On 03 February 2021, the Company announced that it had signed a letter of intent with Poseidon
Enhanced Technologies Ltd to potentially acquire a 100% interest in their business, a developer of a
proprietary chemical recycling process for PET plastics. At this stage, there can be no assurance that
this transaction will be completed.
As of H1 2021, the COVID-19 pandemic continued to cause significant economic disruption across nearly
all aspects of the global economy. While the direct material effects on Curzon Energy were considered
relatively minor at the time of writing, the potential for significant ongoing uncertainties, due to the
Pandemic, were expected to continue to exist for the foreseeable future and any impact on the ability to
consummate a reverse takeover transaction with Poseidon Enhanced Technologies was unclear.
3. Segmental Analysis
IFRS 8 “Operating Segments” requires operating segments to be identified on the basis of internal reports
about components of the Group that are regularly reviewed by the chief operating decision maker (which
takes the form of the Directors) as defined in IFRS 8 “Operating Segments”, in order to allocate resources
to the segment and to assess its performance.
35
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
3. Segmental Analysis continued
The principal activity of the Company is that of an investment company, currently focused on acquiring a
new business in the environmental, social and corporate governance space (ESG). At 31 December 2020
and 31 December 2019, the Directors consider there is one reportable operating segment. Accordingly,
an analysis of segment profit or loss, segment assets, segment liabilities and other material items has not
been presented.
The Group operates in one geographic area, being the USA. All intangible assets and operating assets
and liabilities are located in the USA, excluding cash and cash equivalents, which are currently kept and
managed from the UK head office. The management does not consider the UK to be a separate operating
segment. The Group has not yet commenced production and therefore has no revenue.
4. Loss for the Year Before Taxation
Loss before tax is stated after charging / (crediting):
2020
US$
2019
US$
Impairment of exploration and evaluation expenditure
-
2,559,000
Auditor’s remuneration:
fees payable to the Company’s auditor for the audit of the
consolidated and Company financial statements
31,900
32,538
-
-
fees payable to the Company’s auditor for other services:
corporate finance services
Share-based payments
Foreign currency translation (gain)
-
-
29,048
20,766
(23,106)
(3,916)
36
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
5. Directors and Staff
There were no staff employed by the Group during the two years ended 31 December 2020, except for
one Director, Mr Scott Kaintz, who was employed by the Company from 27 June 2018.
Remuneration of Key Management Personnel
The following table sets forth the compensation awarded, paid to or earned by each Director during 2020:
2020
Directors’
fees
US$
Social
security
costs
US$
Total cash-
compensation
US$
Share-based
Payments
(options)
US$
Total
compensation
US$
John McGoldrick
63,800
-
63,800
Scott Kaintz
Owen May
Total Directors’
compensation
148,335
20,995
169,330
29,242
-
29,242
241,377
20,995
262,371
-
-
-
-
63,800
169,330
29,242
262,371
2019
John McGoldrick
Scott Kaintz
Owen May
Brian James Kinane
Total Directors’
compensation
Directors’
fees
US$
63,799
95,699
31,900
-
Social
security
costs
US$
-
7,800
-
-
Total cash-
compensation
US$
Share-based
Payments
(options)
US$
Total
compensation
US$
63,799
103,499
31,900
-
20,766
-
-
-
84,565
103,499
31,900
-
191,398
7,800
199,198
20,766
219,964
The Directors’ emoluments are paid from Coos Bay Energy LLC and the Company.
John McGoldrick has, through agreement with the Company, agreed to defer payment of his 2017, 2018,
2019 and 2020 Director’s compensation, which at 31 December 2020 totaled £152,500 (US$208,498).
Owen May has, through agreement with the Company, agreed to defer payment of his 2018, 2019 and
2020 Director’s compensation, which at 31 December 2020 totaled £47,917 (US$65,512).
37
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
6. Administrative Expenses
Staff costs
Directors’ salaries
Employers NI
Consultants
Professional services
Accounting, audit & taxation
Legal
Marketing
Other
Regulatory compliance
Standard Listing Regulatory Costs
Travel
Business development
Office and Admin
General
IT costs
Mineral rights lease (outside of IFRS 16 scope)
Temporary storage and office rent
Insurance
Total administrative costs
7. Finance Expense (net)
Foreign exchange (gain)
2020
US$
2019
US$
241,376
212,164
15,891
7,800
42,445
66,943
74,752
-
12,235
-
87,927
5,684
29,647
20,757
93,484
101,471
-
492
-
-
1,622
260,281
14,306
29,345
6,329
2,355
11,349
32,049
19,140
16,013
17,545
18,969
528,799
913,572
2020
US$
2019
US$
(23,106)
(3,915)
Interest expense on promissory notes and other short-term loans
111,881
112,093
Total finance expense
88,775
108,178
38
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
8. Taxation
The Group has made no provision for taxation as it has not yet generated any taxable income. A
reconciliation of income tax expense, applicable to the loss before taxation at the statutory tax rate to the
income tax expense at the effective tax rate of the Group, is as follows:
Loss before tax
UK corporation tax credit at 19.00% (2019: 19.00%)
Effect of non-deductible expense
Differences in overseas tax rates
Effect of tax benefit of losses carried forward
Current tax (credit)
2020
US$
2019
US$
(617,574)
(3,580,750)
(117,339)
(680,342)
10,559
(1,287)
108,067
-
501,265
(3,140)
182,217
-
As at 31 December 2020, the tax effects of temporary timing differences, giving rise to deferred tax assets,
was US$1,417,411 (2019: US$1,336,991).
A deferred tax asset in respect of these losses and temporary differences has not been established as
the Group has not yet generated any revenues and the Directors have, therefore, assessed the likelihood
of future profits being available to offset such deferred tax assets to be uncertain.
39
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
9. Loss Per Share
The basic loss per share is derived by dividing the loss for the year attributable to ordinary shareholders
of the Company by the weighted average number of shares in issue.
Diluted loss per share is derived by dividing the loss for the year attributable to ordinary shareholders of
the Company by the weighted average number of shares in issue plus the weighted average number of
ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary
shares.
The following reflects the loss and share data used in the basic and diluted loss per share computations:
2020
2019
(Loss) after tax attributable to the shareholders of the parent (US$)
(617,574)
(3,580,750)
Weighted average number of ordinary shares of £0.01 in issue used
calculation of in basic and diluted EPS
92,632,948
81,185,175
(Loss) per share - basic and fully diluted (US$)
(0.008)
(0.044)
At 31 December 2020, the effect of all potential ordinary shares and contingently issuable shares, that
are presented in the table below, was anti-dilutive as it would lead to a further reduction of loss per share,
therefore, these instruments were not included in the diluted loss per share calculation.
Share options granted to employees - fully vested at the end of the
respective period
Warrants given to shareholders as a part of placing equity
instruments - fully vested at the end of the respective period
Total instruments fully vested
Total number of instruments and potentially issuable instruments
(vested and not vested) not included into the fully diluted EPS
calculation
2020
2019
Number
Number
280,854
280,854
20,612,925
5,636,531
20,893,779
5,917,385
20,893,779
5,917,385
40
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
10. Intangible Assets
Exploration and evaluation expenditure
Cost:
At the beginning of the year
Additions – exploration costs capitalised
At the end of the year
Impairment provision:
At the beginning of the year
Provision for the year
At end of the year
Net Book Value
Environmental Matters
2020
US$
2019
US$
24,716,316
24,716,316
-
-
24,716,316
24,716,316
(24,716,316)
(22,157,316)
-
(2,559,000)
(24,716,316)
(24,716,316)
-
-
The Group has established procedures for a continuing evaluation of its operations to identify potential
environmental exposures and to assure compliance with regulatory policies and procedures. The
Directors monitor these laws and regulations and periodically assesses the propriety of its operational
and accounting policies related to environmental issues. The nature of the Group’s business requires
routine day-to-day compliance with environmental laws and regulations. The Group has incurred no
material environmental investigation, compliance or remediation costs for each of the years ended 31
December 2020 and 31 December 2019. The Directors are unable to predict whether the Group’s future
operations will be materially affected by these laws and regulations. It is believed that legislation and
regulations, relating to environmental protection will not materially affect the results of operations of the
Group.
41
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
11. Subsidiary Undertakings
The Group has the following subsidiary undertakings:
Name
Country of
incorporation
Coos Bay Energy LLC
Westport Energy
Acquisitions Inc.
Westport Energy LLC
Curzon Energy Inc.*
Rigel Energy LLC**
USA
USA
USA
USA
USA
Issued capital
Membership
interests
Proportion held
by Group
Activity
100%
Holding company
Shares
100%
Holding company
Membership
interests
100%
Oil and gas exploration
Shares
100%
Holding company
Membership
interests
100%
Holding company
* Incorporated on 1 May 2019 and dissolved on 26 February 2020 as related transaction did not complete.
** Incorporated on 1 May 2019 and dissolved on 27 February 2020 as related transaction did not complete.
Coos Bay Energy LLC is a limited liability corporation incorporated in Nevada, USA whose registered
office is 1370 Crowley Avenue SE, Portland, Oregon 97302, USA.
Westport Energy Acquisition Inc. was incorporated in May 2010 in Delaware, USA. Its registered office is
located at 100 Overlook Center, 2nd Floor, Princeton Junction, NJ 08540, USA.
Westport Energy LLC was incorporated in December 2008 in Delaware, USA. Its registered office is
located at 100 Overlook Center, 2nd Floor, Princeton Junction, NJ 08540, USA.
12. Restricted Cash
Restricted cash includes funds held as a collateral to support stand-by letters of credit related to the
Group’s oil and gas properties. The letters of credit secure the Group’s reclamation obligations under the
leases and state law. The cash can be taken by Umpqua Bank in the event the letters of credit are drawn
on by the State of Oregon, Department of Geology & Mineral Industries (DOGAMI). The cash is held in
the form of a Certificate of Deposit.
13. Prepayments and Other Receivables
VAT recoverable
Other debtors
Total prepayments and other receivables
2020
US$
3,106
38,593
41,699
2019
US$
4,503
26,700
31,203
The fair value of receivables and deposits approximates their carrying amount as the impact of discounting
is not significant. The receivables are not impaired and are not past due.
42
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
14. Cash and Cash Equivalents
For the purpose of the Statements of Financial Position, cash and cash equivalents comprise the
following:
Cash in hand and at bank
15. Trade and Other Payables
Trade and other payables
Accruals
2020
US$
2019
US$
47,188
28,709
2020
US$
2019,
re-stated
US$
332,159
362,748
388,718
327,567
Total financial liabilities, excluding loans and borrowings, classified as
financial liabilities measured at amortised cost
720,877
690,315
Other payables - tax and social security payments
Total trade and other payables
16,958
-
737,835
690,315
16. Borrowings
Details of the notes and borrowings originated by the Group are disclosed in the table below:
Origination
date
Contractual
settlement date
Original note
value in
original
currency
Annual
interest
rate
Security
Status at 31
December 2020
C4 Energy Ltd
22 Sept 2017
Bruce Edwards
1 Sep 2017
HNW Investor
Group
1 July 2019*
Conversion/Re
payment at
RTO date
Conversion at
RTO date
Conversion/Re
payment at
RTO date
$200,000
15%
unsecured
Outstanding
$100,000
15%
unsecured
Outstanding
£263,265
13%
100%
interest in
Coos Bay
LLC
Outstanding
Sun Seven
Stars
Investment
Group
("SSSIG")
13 Mar 2020
30 Aug 2021
£260,000
10%
unsecured
Outstanding
*Please refer to note 23 Post Balance Sheet Events for more information
43
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
16. Borrowings continued
No interim payments are required under the promissory notes, as the payment terms require the original
principal amount of each note and all accrued interest thereon, to be paid in single lump payments on the
respective contractual settlement dates.
At 1 January
Received during the year
Interest accrued during the year
Exchange rate differences
2020
US$
2019
US$
698,798
213,812
331,760
362,320
109,943
110,700
42,517
11,966
Short-term loans and borrowings 31 December
1,183,018
698,798
Reconciliation of Liabilities Arising from Financing Activities
Cash flows
Proceeds from
new
borrowings
31 Dec 2019
Non-cash flow
Forex movement
Non-cash flow
Interest accrued
31 Dec
2020
HNW Investor Group
334,070
232,378
132,350
-
-
-
17,286
43,704
395,060
-
-
30,000
262,378
15,000
147,350
-
331,760
25,231
21,239
378,230
698,798
331,760
42,517
109,943
1,183,018
C4 Energy Ltd.
Bruce Edwards
Sun Seven Stars
Investment Group
("SSSIG")
Total liabilities from
financing activities
Cash flows
Proceeds from
new
borrowings
31 Dec 2018
Non-cash flow
Forex movement
Non-cash flow
Interest accrued
31 Dec
2019
HNW Investor Group
-
262,320
C4 Energy Ltd.
Bruce Edwards
100,433
113,379
100,000
-
1,948
5,459
4,559
69,802
334,070
26,486
232,378
14,412
132,350
Total liabilities from
financing activities
213,812
362,320
11,966
110,700
698,798
44
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
17. Share Capital
Authorised Share Capital
As permitted by the Companies Act 2006, the Company does not have an authorised share capital. The
Company has one class of ordinary shares, which carry no right to fixed income. The ordinary shares
carry the right to one vote per share at General Meetings of the Company and the rights to share in any
distribution of profits or returns of capital and to share in any residual assets available for distribution in
the event of a winding up.
Issued Equity Share Capital
Ordinary shares,
number
Deferred shares,
Share capital,
number
US$
At 1 January 2019
Issue of shares at £0.0158 per share via
placement on 1 March 2019 for cash
At 31 December 2019
Share subdivision on 6 May 2020 – details of
77,020,316
6,012,655
83,032,971
-
-
-
1,024,036
79,421
1,103,457
subdivision are presented in the table below
83,032,971
83,032,971
1,103,457
Issue of shares at £0.01 per share via
placement on 3 June 2020 for cash
16,606,594
-
2,090
At 31 December 2020
99,639,565
83,032,971
1,105,547
Number
Ordinary
shares of
£0.0001
Number
Deferred
shares of
£0.0099
Number
Ordinary
shares of
£0.01 before
subdivision
Share
Capital,
US$
Share
Capital,
US$
-
-
-
83,032,972
1,103,457
Issued and fully paid
Existing Ordinary Shares of
£0.01 each immediately
before subdivision
After subdivision*:
New Ordinary
£0.0001 each
shares of
83,032,972
-
11,035
Deferred Shares of £0.0099
each
- 83,032,972
1,092,422
-
-
-
-
Total Share Capital
1,103,457
1,103,457
45
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
17. Share Capital continued
*On 6 May 2020, the Company’s shareholders approved the subdivision and re-designation of the
83,032,971 Existing Ordinary Shares ("Existing Ordinary Shares") of £0.01 each in the capital of the
Company into (i) 83,032,971 New Ordinary Shares ("New Ordinary Shares") of £0.0001 each and (ii)
83,032,971 Deferred Shares ("Deferred Shares") of £0.0099 each in the capital of the Company, and to
amend the Company's Articles of Association accordingly.
Each New Ordinary Share carries the same rights in all respects under the amended Articles of
Association as each Existing Ordinary Share did under the existing Articles of Association, including the
rights in respect of voting and the entitlement to receive dividends. Each Deferred Share carries no rights
and is deemed effectively valueless.
18. Share Based Payments
Employee Share Options
At 31 December 2020, the Company had outstanding options to subscribe for ordinary shares as follows:
Option exercise price
Number of
options granted
Vesting date
Expiry date
Fair value of
individual option
£0.10
280,854
4 Oct 2018
4 Oct 2022
£0.074
Total options outstanding at
31 December 2020
280,854
2020
2019
Weighted
average
exercise
price
£
Number of
options
Weighted
average
exercise
price
£
Number of
options
Outstanding at the beginning of the period
280,854
0.10
7,633,704
Granted during the period
Forfeited during the period
Exercised during the period
Lapsed during the period
-
-
-
-
-
-
-
-
-
(6,089,394)
-
(1,263,456)
Outstanding at the end of the period
Vested and exercisable at the end of the period
280,854
280,854
0.10
0.10
280,854
280,854
0.17
-
0.16
-
0.18
0.10
0.10
During the financial year, no options (2019: none) were granted. The weighted average fair value of each
option granted during the year was £nil (2019: nil).
The exercise price of options outstanding on 31 December 2020 and 31 December 2019 is £0.1 Their
weighted average remaining contractual life was 1.45 years (2019: 2.45 years).
46
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
18. Share Based Payments continued
No options were exercised during the reporting year (2019: nil).
Share-based remuneration expense, related to the share options granted during the comparative period
and part of the charge relating to the options granted in 2017, is included in the administration expenses
line in the consolidated income statement in the amount of US$ nil (2019: US$20,766).
Warrants
On 31 December 2020, the following warrants were in issue:
Warrant exercise price
Number of
warrants granted
Expiry date
Fair value of individual
warrant
£0.0158
£0.01
3,006,331
5 Mar 2021
17,606,594
3 June 2022
£0.0056
£0.00731
Total warrants in issue at 31
December 2020
20,612,925
Outstanding at the beginning of the period
Granted during the period
Lapsed during the period
Exercised during the period
2020
Number of
warrants
5,636,531
17,606,594
2019
Number of
warrants
3,630,200
4,006,331
(2,630,200)
(2,000,000)
-
-
Outstanding at the end of the period
20,612,925
5,636,531
Vested and exercisable at the end of the period
20,612,925
5,636,531
The exercise price of warrants, outstanding on 31 December 2020, ranged between £0.01 and £0.158
(2019: ranged between £0.0158 and £0.1). Their weighted average remaining contractual life was 1.24
years (2019: 0.93 years).
The weighted average share price (at the date of exercise) of warrants exercised during the year was nil
(2019: nil) as no warrants were exercised.
The following information is relevant in the determination of the fair value of the warrants granted during
the year ended 31 December 2020:
Warrant pricing model used
Weighted average share price at grant date, £
Warrant exercise price, £
Weighted average contractual life, years
Expected volatility, %
Expected dividend growth rate, %
Risk-free interest rate (2-year bond), %
FV of 1 warrant, £
Granted on 3 June 2020
Black-Scholes
0.013
0.015
2
117
0
0.006
0.00731
47
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
18. Share Based Payments continued
Calculation of volatility involves significant judgement by the Directors due to the absence of the historical
trading data for the Company at the date of the grant. Volatility number above was estimated based on
the range of 5-year month end volatilities of 10 similar sized listed companies operating in the Oil and
Gas sector.
The aggregate fair value, related to the share warrants granted to shareholders acting in the capacity of
shareholders during the reporting period, has been allocated to share premium as directly attributable
share issue cost in the amount of US$161,948 (2019: US$22,239).
19. Reserves
Share Premium
The share premium account represents the excess of consideration received for shares issued above
their nominal value net of transaction costs.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses that have arisen from the retranslation
of operations with a functional currency, which differs to the presentation currency.
Retained Earnings
Retained earnings represent the cumulative profit and loss net of distributions to owners.
Warrants Reserve
The warrants reserve represents the cumulative fair value of the warrants, granted to the investors
together with placement shares, still outstanding and not exercised.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge for options granted, still outstanding
and not exercised.
Merger Reserve
The merger reserve represents the cumulative share capital and membership capital contributions of all
the companies included into the legal acquire sub-group less cost of investments into these legal
acquirees.
20. Financial Instruments – Risk Management
General Objectives, Policies and Processes
The overall objective of the Directors is to set policies that seek to reduce risk as far as possible without
unduly affecting the Group’s competitiveness and flexibility. Further details regarding these policies are
set out below.
The Directors review the Group’s monthly reports through which they assess the effectiveness of the
processes put in place and the appropriateness of the objectives and policies it sets.
Categories of Financial Assets and Liabilities
The Group’s activities are exposed to a variety of market risk (including currency risk) and liquidity risk.
The Group’s overall financial risk management policy focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on its financial performance.
The principal financial instruments used by the Group, from which financial instrument risk arises, are as
follows:
48
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
20. Financial Instruments – Risk Management continued
other receivables;
cash and cash equivalents;
trade and other payables; and
borrowings.
The carrying value of financial assets and financial liabilities, maturing within the next 12 months,
approximates their fair value due to the relatively short-term maturity of the financial instruments.
The Group had no financial assets or liabilities carried at fair values at the end of each reporting date.
A summary of the financial instruments held by category is provided below:
Financial assets
Cash and cash equivalents
Other receivables
Restricted cash
Financial liabilities
Trade payables*
Accruals
Short-term borrowings
2020
US$
2019,
*re-stated
US$
47,188
28,708
-
1,245
125,000
125,000
349,117
388,718
362,748
327,567
1,183,018
698,798
Credit Risk
The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from notes and
other receivables. The Directors manage the Group’s exposure to credit risk by the application of
monitoring procedures on an ongoing basis. For other financial assets (including cash and bank
balances), the Directors minimise credit risk by dealing exclusively with high credit rating counterparties.
Credit Risk Concentration Profile
The Group’s receivables do not have significant credit risk exposure to any single counterparty or any
group of counterparties having similar characteristics. The Directors define major credit risk as exposure
to a concentration exceeding 10% of a total class of such asset.
The Company maintains its cash reserves in Barclays Bank UK PLC, which maintains the following credit
ratings:
49
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
20. Financial Instruments – Risk Management continued
Credit Agency
Standard and Poor’s Moody’s
Fitch
R&I
Long Term
A/Stable
A1/Stable
A+/Negative
A/Stable
Short Term
A-1
Unsupported Group Credit /Baseline
bbb+
Credit Assessment/Viability Rating
P-1
baa3
F1
a
N/A
N/A
Exposure to Credit Risk
The Group is exposed to the credit risk of the US Specialty Insurance Company, currently holding a
US$125,000 bond on behalf of the Company’s Coos Bay Energy LLC subsidiary.
Market Risk - Interest Rate Risk
Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Directors’ policy is
to maintain a majority of the Group’s borrowings in fixed rate instruments. The Directors have analysed
the Group’s interest rate exposure on a dynamic basis. This takes into consideration refinancing, renewal
of existing positions and alternative financing. Based on these considerations, the Directors believe the
Group’s exposure to cash flow and fair value interest rate risk is not significant.
Market Risk - Currency Risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign
exchange rates. Currency risk arises when future commercial transactions and recognised assets and
liabilities are denominated in a currency that is not the Company’s (Pound Sterling, £) or its subsidiaries’
functional currency (US$). The Group is exposed to foreign exchange risk, arising from currency
exposures primarily with respect to the UK Pound Sterling (£). The Directors monitor the exchange rate
fluctuations on a continuous basis and act accordingly. The following sensitivity analysis shows the effects
on loss before tax of 10% increase/decrease in the exchange rates of the US$ versus closing exchange
rates of UK Pound Sterling as at 31 December 2020:
50
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
20. Financial Instruments – Risk Management continued
+10%
US$
-10%
US$
Increase in loss by
US$56,435
Decrease in loss by
US$56,435
2020
2020
2020
2019,
*re-stated
2019
2019,
*re-stated
US$
£
Total
US$
US$
£
Total
US$
Loss before tax
Assets and liabilities by currency of
denomination, al numbers are presented
in US$
Financial assets
Cash and cash equivalents
299
46,889
47,188
118
28,590
28,708
Other receivables
Restricted cash
Financial liabilities
Trade payables*
Accruals
-
125,000
-
-
-
-
1,245
1,245
125,000
125,000
-
125,000
54,805
294,312
349,117
65,066 297,682
362,748
-
388,718
388,718
29,721 297,846
327,567
Short-term borrowings
409,728
773,290 1,183,018
364,727 334,071
698,798
Liquidity Risk
The Group currently holds cash balances to provide funding for normal trading activity. Trade and other
payables and short-term borrowings are monitored as part of normal management routine and all amounts
outstanding fall due in one year or less. Borrowings are conducted in both US$ and UK Pound Sterling
and as such the Company monitors fluctuations that may impact both present and future liquidity levels.
Capital Management
The Group defines capital as the total equity of the Group. The Directors’ objectives, when managing
capital, are to safeguard its ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
To meet these objectives, the Directors review the budgets and projections on a regular basis to ensure
there is sufficient capital to meet the needs of the Group through to profitability and positive cash flow.
The capital structure of the Group consists of shareholders’ equity as set out in the consolidated statement
of changes in equity. All working capital requirements are financed from existing cash resources and
borrowings.
Whilst the Group does not currently have distributable profits, it is part of the capital strategy to provide
returns for shareholders and benefits for members in the future.
Capital for further development of the Group’s activities will, where possible, be achieved by share issues
or other finance as appropriate.
51
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
20. Financial Instruments – Risk Management continued
In order to maintain or adjust the capital structure, the Directors may return capital to shareholders, issue
new shares or sell assets to reduce debt. It also ensures that distributions to shareholders do not exceed
working capital requirements.
Fair Value Hierarchy
All the financial assets and financial liabilities, recognised in the Group Financial Statements, are shown
at the carrying value, which also approximates the fair values of those financial instruments. Therefore,
no separate disclosure for fair value hierarchy is required.
21. Leases
All the Group’s leases are short-term leases, which are month-to-month obligations (i.e., US
administrative storage operating lease).
22. Related Party Transactions
Balances and transactions between the Company and its subsidiaries, Coos Bay Energy LLC, Westport
Energy Acquisition Inc. and Westport Energy LLC are eliminated on consolidation and are not disclosed
in this note. Balances and transactions between the Group and other related parties are disclosed below.
Promissory Notes
During the year ended 31 December 2019, US$100,000 of promissory notes were issued to YA Global
Investments LP, a company that is also the majority shareholder of the business, see note 16 for further
information.
On 13 February 2020, the Company announced that it had been informed by YA Global Investments LP
of the sale of its outstanding debt due to YA Global to C4 Energy Ltd, a UK incorporated private Company.
The balance of the loan agreement at that time was US$200,000, with approximately US$32,000 of
accrued interest.
Remuneration of Directors
The remuneration of the senior Executive Management Committee members, who are the key
management personnel of the Group, is set out in aggregate for each of the categories specified in IAS
24 “Related Party Disclosures” in note 5.
52
Curzon Energy Plc
Annual Report 2020
Notes to the Consolidated Financial Information continued
23. Events After the Reporting Period
Termination of Discussions – Execution of LOI
On 03 February 2021, the Company announced that it has informed Sun Seven Stars Investment Group
("SSSIG") of the formal termination of the Letter of Intent, first announced on 18 March 2020. As the
period of exclusivity with SSSIG had already expired, no further obligations remain among the parties.
The Company further announced the execution of a Letter of Intent ("LOI") with Poseidon Enhanced
Technologies Limited ("PET"). The Company will now enter an initial period of exclusivity with PET during
which each party will conduct due diligence on the other. The parties have agreed that during this period
they will work towards the execution and delivery of a definitive purchase agreement, contemplating a
reverse takeover of Curzon by PET ("RTO"), which will be conditional upon receipt of the required
regulatory approvals from the FCA and its primary market functions, among other matters. For providing
PET with an initial period of exclusivity, lasting through to 28 February 2021, PET will lend the Company
an initial amount of £65,000 in the form of a one-year loan Note (the "Note"), carrying an annual interest
rate of 10% per annum, and convertible at the price of any subsequent share issue alongside the
contemplated RTO transaction. Under the terms of the Note, a total of £500,000 is authorised to be made
available to the Company through mutually agreed drawdowns. Any additional drawdowns, including in
relation to potential ongoing exclusivity, will be deducted from this total authorised amount as they are
made. After 1 March 2021, further loan funds may be made available by PET to the Company if the
envisaged transaction continues to progress, or in order to extend the initial period of exclusivity beyond
28 February 2021.
Exclusivity Extension
On 1 March 2021, the Company announced that under the terms of the LOI initially announced on 3
February 2021, Poseidon Enhanced Technologies has informed the Company of an extension of the
existing exclusivity period through 1 April 2021.
On 29 March 2021, the Company announced that Poseidon Enhanced Technologies has informed the
Company of an extension of the existing period through 1 May 2021.
On 28 April 2021, the Company announced that Poseidon Enhanced Technologies had informed the
Company of an extension of the existing exclusivity period through 1 June 2021.
Loan Extension
On 25 March 2021, the Company announced that it had extended its outstanding loan with Sun Seven
Stars Investment Group to 30 August 2021.
53
Curzon Energy Plc
Company Statement of Financial Position
as at 31 December 2020
Assets
Non-current assets
Property, plant and equipment
Investments in subsidiaries
Amounts receivable from subsidiary undertakings
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Total liabilities
Capital and reserves attributable to shareholders
Share capital
Share premium
Share-based payments reserve
Warrants reserve
Merger relief reserve
Accumulated losses
Total capital and reserves
Total equity and liabilities
Annual Report 2020
Note
2020
£
2019
£
28
29
30
31
32
33
34
34
-
-
-
-
30,500
34,514
65,014
65,014
521
-
-
521
23,790
21,888
45,678
46,199
499,583
865,285
1,364,868
454,048
532,783
986,831
831,990
830,330
2,718,932
2,693,194
355,269
289,481
355,269
160,777
2,800,000
2,800,000
(8,295,526)
(7,780,202)
(1,299,854)
(940,632)
65,014
46,199
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented its own income
statement or statement of comprehensive income. The Company’s loss for the financial year was
£515,324 (2019: £5,191,316). The Company’s total comprehensive loss for the financial year was
£515,324 (2019: £5,191,316).
The Financial Statements were approved by the Board of Directors and authorised for issue on 29 April
2021 and are signed on its behalf by:
John McGoldrick
Director
The notes to the Company Statement of Financial Position form part of these Financial Statements.
54
Curzon Energy Plc
Company Statement of Changes in Equity
Annual Report 2020
Share
capital
£
Share
Premium
£
Share-
based
payments
reserve
£
Warrants
reserve
£
Merger relief
reserve
£
Accumulated
loss
£
Total
£
Equity at 1 January 2019
770,203
2,675,156
338,995
143,942
2,800,000
(2,588,886)
4,139,410
Loss for the year 2019
Total comprehensive loss
for the year 2019
-
-
-
-
Issue of shares
60,127
34,873
-
-
-
-
-
-
-
16,835
-
(16,835)
-
-
-
16,274
60,127
18,038
16,274
16,835
-
-
-
-
-
-
(5,191,316)
(5,191,316)
(5,191,316)
(5,191,316)
-
-
-
-
95,000
-
16,274
111,274
Issue of warrants
Issue of share options
Total transactions with
shareholders
Equity at 31 December
2019
Loss for the year 2020
Other comprehensive loss
for the year
Total comprehensive loss
for the year 2020
Issue of shares
Transaction costs
Issue of warrants
Total transactions with
shareholders
Equity at 31 December
2020
830,330
2,693,194
355,269
160,777
2,800,000
(7,780,202)
(940,632)
-
-
-
-
-
-
1,661
164,405
-
-
(9,964)
(128,704)
1,661
25,737
-
-
-
-
-
-
-
-
-
-
-
-
128,704
128,704
-
-
-
-
-
-
-
(515,324)
(515,324)
-
-
(515,324)
(515,324)
-
-
-
-
166,066
(9,964)
-
156,102
831,990
2,718,932
355,269
289,481
2,800,000
(8,295,526)
(1,299,854)
55
Curzon Energy Plc
Company Statement of Cash Flows
for the Year Ended 31 December 2020
Annual Report 2020
Notes
2020
£
2019
£
Cash flow from operating activities
Loss before taxation
Adjustments for:
Finance expense
Finance income
Share-based payments charge
Impairment of loans and receivables
Impairment of investments in subsidiaries
Income from forgiven creditors
Unrealised foreign exchange movements
Operating cashflows before working capital changes
Changes in working capital:
Increase in payables
(Increase)/decrease in receivables
Net cash used in operating activities
Financing activities
Issue of ordinary shares, net of share issue costs
Proceeds from new borrowings
Advances granted to subsidiaries
Net cash flow from financing activities
Net increase/(decrease) in cash and cash equivalents in the
period
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
(515,324)
(5,191,316)
87,681
87,849
(39,368)
(39,368)
-
16,274
94,627
1,713,317
-
2,800,275
(15,816)
-
(18,110)
(3,069)
(406,310)
(616,038)
64,802
233,718
(6,709)
20,649
(348,217)
(361,671)
156,102
78,750
260,000
277,540
(55,259)
(71,722)
360,843
284,568
12,626
21,888
34,514
(77,103)
98,991
21,888
56
Curzon Energy Plc
Annual Report 2020
Notes to the Company Financial Statements
24. Significant Accounting Policies
The separate Financial Statements of the Company are presented as required by the Companies Act
2016 (“the Act”). As permitted by the Act, the separate Financial Statements have been prepared in
accordance with International Financial Reporting Standards.
The Financial Statements have been prepared on the historical cost basis. The principal accounting
policies adopted are the same as those set out in note 2 to the Consolidated Financial Statements except
as noted below.
Investments in Subsidiaries
Investments in subsidiaries are carried at cost and are regularly reviewed for impairment if there are any
indications that the carrying value may not be recoverable.
Receivables from Subsidiaries
Impairment provisions for receivables from related parties and loans to related parties are recognized,
based on a forward-looking expected credit loss model. The methodology, used to determine the amount
of the provision, is based on whether there has been a significant increase in credit risk since initial
recognition of the financial asset. For those where the credit risk has not increased significantly since
initial recognition of the financial asset, twelve month expected credit losses along with gross interest
income are recognised. For those for which credit risk has increased significantly but not determined to
be credit impaired, lifetime expected credit losses along with the gross interest income are recognised.
For those that are determined to be credit impaired, lifetime expected credit losses along with interest
income on a net basis are recognised.
Critical Accounting Judgments and Key Sources of Estimation Uncertainty
The Company’s Financial Statements, and in particular its investments in and receivables from
subsidiaries, are affected by the critical accounting judgments and key sources of estimation uncertainty
in respect of going concern judgements which are more fully described in note 2 to the Consolidated
Financial Statements.
25. Auditor’s Remuneration
The auditor’s remuneration for audit and other services is disclosed in note 4 to the Consolidated Financial
Statements.
26. Directors and Staff
Scott Kaintz, Executive Director of the Company, has been the only employee of the Company in the
reporting year after he was employed on 5 November 2018 and to date.
Key management remuneration is disclosed in note 5 to the Consolidated Financial Statements.
57
Curzon Energy Plc
Annual Report 2020
Notes to the Company Financial Statements continued
27. Administrative Expenses
Staff costs
Share-based payments
Standard Listing Prospectus Costs
Standard Listing Regulatory Costs
Professional and consultancy fees
Other general administrative expenses
Total
28. Investments
Investment in subsidiaries
Costs at beginning of the year
Impairment
Total investments in subsidiaries
29. Receivables from Subsidiaries and Related Party Transactions
Loans to subsidiaries
Total loans to subsidiaries
2020
£
2019
£
218,954
166,113
-
-
73,263
75,672
38,421
16,274
203,985
79,524
103,121
63,296
406,310
632,312
2020
£
-
-
-
2019
£
2,800,275
(2,800,275)
-
2020
2019
£
-
-
£
-
-
During the year ended 31 December 2020, the Company recognised expected credit losses in relation to
the intercompany loans in the amount of £94,627 (2019: £1,713,317). This relates to the write-off of the
Company’s Coos Bay coal bed methane project in full, due primarily to the lack of capital available to
advance the project in declining US oil and gas markets.
During the year ended 31 December 2020, the maximum amount owed by the Group to the Company
was £94,627 (2019: £1,713,317). The related party loans are unsecured and are repayable at the time
of completion of a reverse takeover. Interest is receivable at a rate of 9%. At 31 December 2020, £39,368
(2019: £39,368) was accrued and included in the above balance.
58
Curzon Energy Plc
Annual Report 2020
Notes to the Company Financial Statements continued
29. Receivables from Subsidiaries and Related Party Transactions continued
The remuneration of the senior Executive Management Committee members, who are the key
management personnel of the Group, is set out in aggregate for each of the categories specified in IAS
24 “Related Party Disclosures” in note 5.
30. Prepayments and Other Receivables
VAT recoverable
Prepayments
Other debtors
2020
£
2,272
28,227
-
2019
£
3,433
19,408
949
Total prepayments and other receivables
30,499
23,790
The fair value of receivables and deposits approximates their carrying amount, as the impact of
discounting is not significant. The receivables are not impaired and are not past due.
31. Cash and Cash Equivalents
For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:
Cash in hand and at bank
32. Current Liabilities
Trade and Other Payables
Trade and other payables
Accruals
Total trade and other payables
2020
£
2019
£
34,514
21,888
2020
£
2019
£
215,266
226,962
284,317
227,086
499,583
454,048
59
Curzon Energy Plc
Annual Report 2020
Notes to the Company Financial Statements continued
33. Short-Term Borrowings
At 31 December 2020, the Company had an outstanding promissory notes and loans of £865,285 (2019:
£532,783), please refer to note 16.
Cash flows
Proceeds from
new
borrowings, £
Non-cash flow
Forex movement,
£
1 Jan 2020, £
Non-cash flow
Interest accrued, £
31 Dec
2020, £
HNW Investor Group
254,705
177,171
100,907
-
-
-
-
34,251
288,956
(8,773)
(4,888)
23,511
191,909
11,756
107,775
-
260,000
-
16,645
276,645
532,783
260,000
(13,661)
86,163
865,285
C4 Energy Ltd
Bruce Edwards
Sun Seven Stars
Investment Group
("SSSIG")
Total liabilities from
financing activities
Cash flows
Proceeds from
new
borrowings, £
Non-cash flow
Forex movement,
£
1 Jan 2019, £
Non-cash flow
Interest accrued, £
31 Dec
2019, £
HNW Investor Group
-
200,000
C4 Energy Ltd
Bruce Edwards
79,143
89,343
77,540
-
Total liabilities from
financing activities
168,486
277,540
-
-
-
-
54,705
254,705
20,488
177,171
11,564
100,907
86,757
532,783
34. Share Capital
The movements in the share capital account are disclosed in note 17 to the Financial Statements.
60
Curzon Energy Plc
Annual Report 2020
Notes to the Company Financial Statements continued
35. Financial Instruments – Risk Management
The Company’s strategy and financial risk management objectives are described in note 20.
Principal Financial Instruments
The principal financial instruments used by the Company from which risk arises are as follows:
Financial assets
Cash and cash equivalents
Other receivables
Loans due from subsidiaries
Financial liabilities
Trade payables
Accruals
Short-term borrowings
2020
£
2019
£
34,514
21,888
-
-
949
-
215,266
284,317
865,285
226,961
227,086
532,783
Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in
financial loss to the Company.
In addition to the risks described in note 20, which affect the Group, the Company is also subject to credit
risk on the balances receivable from subsidiaries, see note 29. In the year ended 31 December 2020,
credit losses were recognised in full in relation to all the balances receivable from subsidiaries.
Market Risk - Currency Risk
The Companyis exposed to foreign exchange risk, arising from currency exposures primarily with respect
to the US Dollar (US$). The Directors monitor the exchange rate fluctuations on a continuous basis and
act accordingly.
Assets and liabilities by currency of
denomination, al numbers are presented in £
2020
US$
2020
£
2020
Total
£
2019
US$
2019
£
2019
Total
£
Financial assets
Cash and cash equivalents
219
34,295
34,514
90
21,798
21,888
Other receivables
Financial liabilities
Trade payables
Accruals
-
-
-
-
949
949
- 215,266
215,266
- 226,961
226,961
- 284,317
284,317
- 227,086
227,086
Short-term borrowings
299,684 565,601
865,285 278,078 254,705
532,783
61
Curzon Energy Plc
Annual Report 2020
Notes to the Company Financial Statements continued
36. Events After the Reporting Period
Events after the reporting period are more fully described in note 23.
37. Controlling Party
At 31 December 2020, the Company did not have an ultimate controlling party.
62