Company registration number: 06409712
InfraStrata plc
Annual Report &
Financial Statements
2017
Table of Contents
Directors, secretary, advisers and shareholder information
Chairman’s statement
Strategic Report
Report of the directors
Independent auditor’s report
Page
1
2
3 - 8
9 - 14
15 - 18
Consolidated statement of comprehensive income
19
Consolidated statement of financial position
Company statement of financial position
Consolidated statement of changes in equity
Company statement of changes in equity
Consolidated statement of cash flows
Company statement of cash flows
Notes to the financial statements
Letter from the Chairman with Notice of General Meeting
Notice of General Meeting
Proxy Form with Notes
20
21
22
23
24
25
26 - 46
47
48
49 - 50
InfraStrata plc – Annual Report and Financial Statements 2017
Directors, secretary, advisers and shareholder information
Directors
Graham Victor Lyon (Non-executive Chairman)
Adrian Richard Pocock (Chief Executive Officer)
Matthew Paul Beardmore (Non-Executive Director)
Karen Campbell (Non-Executive Director) Also Known as Karen
Jenner
Company secretary
Simon Holden, Kerman & Co.
Registered office
Auditor
Tax advisers
Registrars
200 Strand
London, WC2R 1DJ
Nexia Smith & Williamson Audit Limited
1 Bishops Wharf, Walnut Tree Close
Guildford
Surrey, GU1 4RA
Smith & Williamson LLP
1 Bishops Wharf, Walnut Tree Close
Guildford
Surrey, GU1 4RA
Link Market Services Limited
The Registry
34 Beckenham Road
Beckenham
Kent, BR3 4TU
Nominated adviser and broker
Solicitors
Bankers
Allenby Capital Limited
5 St Helen’s Place
London, EC3A 6AB
Kerman & Co LLP
200 Strand
London, WC2R 1DJ
Bank of Scotland plc
33 Old Broad Street
London, EC2N 1HZ
InfraStrata plc – Annual Report and Financial Statements 2017
1
Chairman’s statement
It is a privilege to serve as Chairman of InfraStrata plc (the “Company”). Since joining our Chief Executive, Adrian
Pocock, on the Company’s board of directors (the “Board”) we have established a very pro-active Board with the
addition of Matt Beardmore and Karen Campbell as non-executive directors.
The four of us are committed to taking the Company forwards and completing the necessary actions to commence
the construction of the Islandmagee gas storage project in County Antrim, Northern Ireland (the “Project”). I must
thank the previous Board for establishing the groundwork for the Project and a smooth handover to the new team.
I would also thank all those involved in maintaining the very positive local support we retain in Northern Ireland.
More importantly I must thank our Shareholders for their patience. We now must take this Company forward. We
look forward rather than back, although by necessity the accounts reported today show activities before the new
Board was appointed.
There is an indisputable need for the Project. The fundamentals of energy security and supply for the island of
Ireland are in no doubt and we believe that Islandmagee can be the central energy hub providing the energy
resource to help ‘keep the lights on’ in the foreseeable future. The announced decommissioning of the Rough gas
storage facility in the UK, which has provided the majority of the country’s gas storage capacity over recent years,
has emphasised the UK’s lack of natural gas storage. In due course, once constructed, this will be partially offset
by Islandmagee. The unfortunate fire at Baumgarten in Austria during December 2017 highlighted the delicate
supply and demand balance of gas resource throughout Europe. Gas prices spiked considerably and states of
energy emergencies were announced. Islandmagee will therefore not only provide Shareholders with a return on
their investment but also importantly to provide security of energy supply to the island of Ireland and the UK.
This fact was recognised and reaffirmed by the European Union confirming the extension of the EU Grant,
originally set to expire in December 2017, for an additional year until December 2018, together with the renewal of
our status as a Project of Common Interest (PCI).
The EU Grant provides 50%, up to a maximum of €4.024m, of the costs associated with the Front End
Engineering & Design ("FEED") for Islandmagee. Utilisation of the EU Grant is subject to the Company obtaining
matched funding from other sources. The Board is therefore focused on establishing this match funding. Under
the terms of the EU Grant, certain activity milestones are required to be met, including completion of the FEED
engineering report by 28 September 2018 and completion of the FEED by 20 December 2018.
In December 2017, we were pleased to announce that our wholly-owned subsidiary, InfraStrata UK Limited
acquired the remaining 10% interest in the Islandmagee gas storage project company, Islandmagee Storage
Limited ("IMSL") from Moyle Energy Investments Limited. Following this acquisition, we now own 100% of IMSL.
The acquisition allows the Company to go forward with complete ownership and enhances our flexibility and
decision-making processes.
Moyle has confirmed its commitment to enable the SNIP (Scotland to Northern Ireland) gas pipeline to facilitate
gas flow in either direction between Northern Ireland and Scotland, thereby allowing IMSL to be of major interest
to gas suppliers in Scotland, in England and Wales and further afield into Europe.
The Board has very tight control on the Company’s funds and aims to be one of the most cost-efficient boards on
the AIM market. Ongoing salary costs have been reduced by over 50% compared with those prior to the
restructuring of the Board. The Board rely heavily on its own expertise to realise this project.
The Company has recently announced a placing to raise £375,000 before costs. Once completed, the funds from
this placing will fund the Company’s minimum levels of corporate costs and care and maintenance costs on the
Project to the end of November 2018.
The further progression of the FEED will require the securing of additional funding, however, the Board currently
believes that the FEED can be commenced on an overall budget that represents a significant reduction on
previous estimates published by InfraStrata.
The Board has established good ongoing discussions with those that wish to potentially utilise the facility once
built, and many major international organisations that wish to participate in the development of the Project.
We have created strong relationships with existing and newly interested parties and intend to build on these to
deliver financial close for the FEED programme in the near future.
We look forward to a positive year for the Company.
Graham Lyon
Non-executive Chairman, 29th January 2018
InfraStrata plc – Annual Report and Financial Statements 2017
2
Strategic Report
OPERATIONAL REVIEW – ISLANDMAGEE GAS STORAGE PROJECT
Review of the stages required to achieve shareholder value:
a. Concept Evaluation, FEED and commercialisation programme
b. Monetisation of the Project
c. Future Funding – UK Guarantees Scheme
a. Concept Evaluation, FEED and commercialisation programme
InfraStrata plc (“InfraStrata” or the “Company”) is in the process of seeking to secure pre-contracted revenue
agreements in relation to the Project’s future storage capacity to support further project finance.
The demise of the Rough storage facility has focused the attention of some International and major gas traders to
the fact that there has been a dramatic change in the UK Gas Storage and Trading Markets, and these are
predicted to become more volatile due to factors such as lowered capacity, the impact of Brexit and recent
problems with the European Gas Network.
We have an active dialogue with a number of potential ‘Tenants’ for the storage space that we hope to finalise in
the near term, which will add a strong degree of assistance to our discussions with other institutions, in order to
gain further funding.
We have examined the FEED and other costs in great detail, and anticipate that there may be cost efficiencies
available to the project, which should become more apparent once we have the findings of the FEED. The Board
is focused on completing the FEED Funding with a number of prospective partners, and hopes to reach a
conclusion to this as soon as possible, bearing in mind that we can only progress at the rate of external parties.
Further details are highlighted in the Review of the Year and Subsequent Events section of this report.
The extension of the EU Grant for a further year has assisted us greatly in seeking to finalise the funding package
for the FEED, as the EU Grant gives the Company and its providers of prospective finance a greater degree of
comfort in relation to the overall deliverability of the FEED.
This grant from the EU under the Connecting Europe Facility (“CEF”) for 50% of the cost of FEED and related
insitu downhole testing is for up to a maximum of €4.024m. An advance payment of €1.6m (£1.4m) was received
in July 2016 and has since been held in a Euro denominated bank account pending completion of the remaining
50% funding required to both match the grant for FEED and also to complete the commercialisation programme.
The balance of the grant will be received from the EU following completion of the FEED.
The new Board has generated many new initiatives and potential routes to market for the Project.
We are in discussion with a number of global gas producers keen to increase their ability to import and store gas
into the UK. By participating in the Islandmagee project, this offers them the chance to increase volume, maximise
their gas sale price, and take advantage of positive fluctuations in the gas price that are not currently available to
them.
The potential increase in demand for gas both in Northern Ireland and the Republic of Ireland is predicted to grow
strongly over the next few years.
The ‘Gas to the West’ Northern Ireland project is being carried out by Mutual Energy and has the support of the
Northern Ireland Government, and is targeted to deliver gas to domestic and commercial customers that do not
currently have access to mains gas.
The Island of Ireland does not currently have large scale gas storage facilities, and the current infrastructure still
relies on oil-fired and coal-fired power stations, which means that without a storage facility, there will be the
distinct possibility that the gas infrastructure is unable to satisfy demand, resulting in the need to rely on oil and
coal-fired electricity generation, which is not a preference, from an environmental perspective. Wind Energy has
grown over recent years, but when there is no wind there is greater demand for conventionally generated
electricity, and the recent announcement concerning the proposed closure of the oil and coal-fired Kilroot Power
Station is likely to increase the demand for gas-fired generation.
There is a new initiative from the Department for the Economy in Northern Ireland to support projects that provide
Environmental benefits and Energy Security.
CBRE Capital Advisors has been appointed to manage a new Northern Ireland fund which was established in
November 2017. The £100m fund will provide debt finance for real estate, regeneration, low carbon and
infrastructure projects and will be managed on behalf of the Department of Finance and the Northern Ireland
Strategic Investment Board. The Board has engaged with the Fund and hopes that its application will be
favourably viewed, having already satisfied the high demands and standards required for the Project of Common
Interest and EU INEA.
InfraStrata plc – Annual Report and Financial Statements 2017
3
Strategic Report
Monetisation of the Project
A number of events have taken place over the last twelve months in relation to the value of InfraStrata’s interest in
the Islandmagee Gas storage Project.
The post year-end purchase of Moyle Energy Investments Limited’s remaining 10% shareholding interest in IMSL
now gives InfraStrata complete ownership over the Project and 100% of its value.
The imminent closure of Centrica’s storage facility at Rough in the North Sea has resulted in a major focus on the
future importance of Islandmagee as a key component of the UK’s overall gas storage facilities.
Rough is no longer categorised as a storage facility, and is now regarded as a production facility, with licenses
issued to produce all remaining gas into the network, subject of course to leaving sufficient gas within the facility to
ensure that safety pressures are maintained.
Once the UK has left the European Union, it may no longer have a right to demand gas from EU member states
during times of gas shortage. Whilst free market mechanisms are likely to mean that gas will still be available, the
potential for price volatility is likely to increase, resulting in greater interest in the Project from gas traders.
The continued reduction in gas production from the UK Continental Shelf also increases our reliance on imports
from Europe and Liquid Natural Gas imports from further afield.
In December 2017, there was an unexpected series of events that resulted in major price volatility in the gas price,
with prices spiking 49% and this is perhaps an indication of what could reoccur in the future.
The Company is in discussions with a number of major gas traders and producers that can see the future benefit
of acquiring access to a large storage facility to enhance their ability to store and trade larger energy volumes in
an increasingly restricted and unpredictable market.
We look forward to making announcements on the above themes in due course.
b. Future Funding - UK Guarantees Scheme
IMSL is pre-qualified to participate in the UK Guarantees Scheme. This is a UK Government supported scheme to
provide support of up to 65% of the capital cost of important infrastructure projects, including: Drax B Power;
Northern Line Extension; Mersey Gateway Bridge; Ineos Grangemouth Ethane Import and Storage Facilities; and
Hinkley Point C.
This is carried out by the Government underwriting the principal sum and interest on sums advanced by the
Government’s banking partners.
InfraStrata’s board has met with the Government’s legal advisers and two of the participating banks.
The UK Guarantees Scheme is now administered by the Infrastructure and Projects Authority, which is part of HM
Treasury.
Additional funding opportunities are available to the Project as a result of its status as a Project of Common
Interest of the European Union.
REVIEW OF THE YEAR AND SUBSEQUENT EVENTS
On the 27th June at the General Meeting called by certain requisitioning shareholders, there was a vote in favour
of changing the composition of the Board. All members of the previous Board were removed and in their place,
Adrian Pocock and Peter Wale, being the requisitioning shareholders, were appointed.
Subsequently, further additions to the Board were made with the addition of Graham Lyon as Non-Executive
Chairman and Matthew Beardmore and Karen Campbell as Non-Executive Directors. Due to his increasing
commitments on other projects, Peter Wale resigned from the Board in November 2017.
Following a review of the shortest route to achieving progress for the Company, the Board established firm
working relationships with many key players in the gas storage and energy trading markets.
The Board has worked hard with various partners to ensure that the European Union Project of Common Interest
(“PCI”) status was renewed and also to extend the INEA Grant for one year, to retain the ability to call on these
funds to partially fund the FEED process. The PCI status was reconfirmed in December 2017 for a further two
years.
InfraStrata plc – Annual Report and Financial Statements 2017
4
Strategic Report
The Board has consolidated the relationships with proposed Project contractors and is moving closer to
concluding the final elements of the required funding, having regard to the best interests of the Shareholders in
the medium and long term. It has been very difficult to balance the objective of ensuring the financial security of
the Company against the short-term share price performance.
The announcement by Centrica of the closure of the Rough storage facility in the North Sea has highlighted the
importance of the Islandmagee Project and has resulted in substantial new interest from energy traders and
suppliers.
The Board is moving ahead in negotiations for forward commitments for the gas storage space and will make
announcements once these become contractual.
In addition, the Board is also pursuing negotiations with gas producers that may wish to increase their ability to
import liquefied natural gas into the UK and the European gas network. This has the potential to further enhance
the energy security of the island of Ireland and the UK as a whole.
It is reassuring that the investors have backed InfraStrata with new investment in the Company and the additional
working capital has enabled us to pursue our short and longer term objectives.
The Board has drastically cut costs, and the current overall Board costs are less than half of those expended
previously, which makes a key contribution to the overall running costs of the Company.
Having reviewed all of the options available to the Company, the Board has decided that the best way to ensure
the Company is able to utilise the European Union grant funding is to commence the FEED in order to comply
with the prescribed timescales.
We are progressing contracts and the final elements of the funding and will report on this when we are in a
position to do so.
On 4 November 2016, InfraStrata announced that following the completion of a tendering process, the Company
had selected FEED contractors for the Project’s Islandmagee above-ground facilities and for the sub-surface
elements. The FEED will include a detailed plant design specification for the Project, a detailed project plan and
cost estimate. The FEED contractors have international reputations and experience of working on many existing
salt cavern storage projects, including in the UK.
The FEED contractors will provide loans in aggregate of up to £1.1m based on a total anticipated engineering
budget of around £4m. These loans, which are subject to contracts being agreed and upon InfraStrata securing
the remaining funding for the FEED, will be repayable at the Financial Investment Decision date (“FID”), when a
decision will be made as to whether to proceed to construction, or on 31 December 2018, whichever is earlier.
The loans will be secured on the assets of IMSL and attract interest at 10% per annum, which will be rolled up and
paid on the loan repayment date.
On 16 March 2017, the Company announced that it had commenced the first phase of FEED, known as Concept
Evaluation, funded using part of the net proceeds of the placing completed on 3 March 2017. Concept Evaluation
involved the FEED contractors undertaking a value enhancement exercise on the Project’s current design basis.
The objective was to identify opportunities through which the current design and phasing could be optimised, to
enhance the overall project value and in particular, to assess the potential for accelerating the delivery of capacity
(or part thereof) to the gas markets. The Company commissioned a Concept Evaluation Report from Costain.
This report was issued in June 2017 and contains commercially confidential information. However, the report
does conclude that a phased approach to the construction of the facility is viable, economical and may offer the
best value for money to the Company and its Shareholders.
The report highlights that a capital requirement of £200m based on approx. 200mcm of storage space has the
potential to achieve first gas within three years of the FID. This enables the facility to be commercialised much
quicker and to generate revenues earlier than it has previously been envisaged.
The remainder of the facility could then be constructed for an additional £85m to deliver the full operational
capacity.
In addition to the capital and time requirements, the report also identifies the potential to save up to 30% on the
cost of injection and withdrawal costs compared to the projections previously assumed for the Islandmagee
Project.
The findings in this report are extremely positive for the Company and its Shareholders. The detailed FEED will
build on these findings and test all of the assumptions and data to categorically evidence the feasibility of all
items.
InfraStrata plc – Annual Report and Financial Statements 2017
5
Strategic Report
In connection with the placing to raise £810,000 (approximately £754,000 after expenses) that was completed in
March 2017, the Company stated that part of the net proceeds would be used to provide additional working capital
and cover the anticipated costs of the Project until the end of the year, depending on progress with the Concept
Evaluation phase of the FEED. Having commenced the Concept Evaluation process and having seen the early
results from the process, the Board was of the view that it was important that Concept Evaluation was completed
in order to receive the full benefit of the outcome of the process (as described above) and to add value to the
Project as a whole. The Company therefore committed to finance the entire Concept Evaluation phase. On 1 June
2017 and 19 October 2017, £130,000 and £500,000, respectively, were raised via a share placing to progress the
ongoing work. A further placing to raise £375,000 for corporate costs and care and maintenance costs of its
Project was announced just prior to the issue of this report.
Following the completion of the FEED and commercialisation programme the Project will be ready to move into
construction and delivery. At that time the Company will further evaluate the optimum way to structure the funding
of the initiation and delivery of that programme for Shareholders and will evaluate the available sources of
funding, including both debt and equity participation, to fund the continuing operations of the Company and the
commencement of construction. The full project construction is expected to be delivered over a number of years
at an aggregate cost of approximately £300m and to be delivered on a phased basis.
The Board remains confident that the Islandmagee Project is economically viable and that following the
completion of the FEED and commercialisation programme, the Company should be capable of attracting new
investment for the Project.
OPERATIONAL REVIEW – FINANCE
Petroleum exploration and evaluation operations have been classified as discontinued. The Group recognised cash
revenue from continuing operations of £Nil (2016: £500,000). (The 2016 revenue arose from the sale of data, which
was a one off item). Management and administrative expenses totalled £895,404 (2016: £932,635) of which
£725,820 (2016: £677,735) was attributable to continuing operations. The Group incurred a loss of £964,131 (2015:
profit of £66,955) including a loss of £180,672 (2016: profit of £244,569) from discontinued operations. The profit in
2016 was stated after crediting a profit on the disposal of Exploration and Evaluation assets of £453,945. The loss for
2017 when added to the cumulative losses of £26,761,093 brought forward leaves a retained loss of £27,725,224 to
be carried forward. Management and administrative expenditure is further analysed in note 5 to the financial
statements.
Gross capital expenditure on the Islandmagee gas storage project during the year ended 31 July 2017 was
£475,188, comprising costs associated with the completion of the Concept Evaluation phase of FEED, renewal of
land options and other general Project costs. Net Exploration and Evaluation capital expenditure during the year
ended 31 July 2017 was £6,902. All of the Company’s petroleum exploration licence interests have now been
assigned or relinquished and no further expenditure is expected.
In May 2015, the Company concluded a Convertible Loan Facility Agreement with Baron Oil Plc (“Baron”) under
which Baron provided a loan for €1.8m (approximately £1.4m) to InfraStrata which was used as working capital to
bridge the receipt of the CEF grant, 70% of which amounting to €1.75m (approximately £1.35m) was received
from the EU in May 2016 and placed into an escrow arrangement as security for the loan. In August 2016, the
loan was repaid in full by release to Baron of the £1,358,063 held in escrow, a payment of £42,301 and a further
payment of £136,134 for the interest on the loan which had been accrued and capitalised to intangible gas
storage development costs at 31 July 2016. Following a revision to the terms of the Convertible Loan Facility
Agreement announced on 26 September 2016, Baron had an accompanying option to acquire the number of
ordinary shares in InfraStrata that represented 16.666% of the enlarged ordinary share capital of the Company
(from time to time) for a payment of £1,536,498. This option expired on 31 March 2017 without being exercised.
On 5 January 2017, the Company entered into a new secured loan agreement with Baron for a facility of up to
£300,000 to provide working capital for the Group and £200,000 of this facility was drawn down during January
2017. On 29 March 2017, the Company announced that following the completion of the placing to raise £810,000
before expenses (see below) it had repaid the £200,000 drawn down on the loan facility with Baron. The loan
facility has been cancelled and its various security arrangements have been released.
Baron remains entitled to receive an additional £200,000 (the “Additional Payment”) in the event of a sale or
disposal by InfraStrata or its subsidiaries of substantially all of their assets, which comprise interests in the
Islandmagee Project, and/or a change in control of InfraStrata or its subsidiaries within two years from the date of
the loan agreement. In the event of a partial disposal of InfraStrata’s or its subsidiaries’ interests in the
Islandmagee Project (whereby InfraStrata and InfraStrata UK Limited retain control of IMSL), the Additional
Payment will be reduced to £100,000, with the remaining £100,000 payable in the event of a subsequent disposal
or change in control of IMSL or the Islandmagee gas storage project during the two-year period. The accounting
treatment of this contingent settlement financial liability is described in note 20 to the financial statements.
InfraStrata plc – Annual Report and Financial Statements 2017
6
Strategic Report
On 3 March 2017, the Company issued 162,000,000 shares of 0.01 penny at 0.5 pence each to raise £754,420
after expenses and on 1 June 2017 the Company issued 26,000,000 shares of 0.01 penny at 0.5 pence each to
raise £120,809 after expenses.
The Group’s cash and cash equivalents at 31 July 2017 were £1,548,169 (2016 - £3,812,069) including
approximately £1.4 million (€1.6 million) received in advance from the EU in respect of the FEED programme
grant which is held in a Euro denominated bank account pending completion of the remaining 50% funding
required to match the grant for FEED.
On 20 October 2017, InfraStrata completed a placing of 125,000,000 new ordinary shares of 0.0001 penny at an
issue price of 0.4 pence each to raise £457,586 after expenses. This was made in order to meet working capital
expenses. A further placing to raise £375,000 for corporate costs and care and maintenance costs of its Project
was announced just prior to the issue of this report. Once completed, the funds from this placing will fund the
Company’s minimum levels of corporate costs and care and maintenance costs on the Project to the end of
November 2018
KEY PERFORMANCE INDICATORS
Key performance indicators (“KPIs”), both financial and non-financial, are used by the Board to monitor progress
against predetermined objectives and our strategy:
The new Board has reviewed and revised these, and at the date of this report they are being achieved.
Objective
Definition
KPIs
We endeavour to
develop projects in
accordance with project
schedules
Predetermined and agreed project
development schedules adhered to
including renewal of EU Grants and PCI
status
Delivery of projects to comply with
projected timescales..
We aim to manage
Group working capital
prudently
Management and control of working
capital ensuring liquidity in order to
satisfy Company Act and AIM Rules
requirements
Maintenance of capital to ensure
liquidity and to meet Audit
requirements.
The KPIs are reported at Board meetings. Measurement entails analysing variance between expected and actual
progress, financial position and financial performance
Since the appointment of the new Board, the KPIs have been met.
PRINCIPAL RISKS & UNCERTAINTIES
The Board is responsible for the effectiveness of the Group’s risk management activities and internal control
processes. As a participant in the gas storage development industry, the Group is exposed to a wide range of
business risks in the conduct of its operations. The Group is exposed to financial, operational, strategic and external
risks which are further described below. These risks are not exhaustive and additional risks or uncertainties may
arise or become material in the future. Any of these risks, as well as other risks and uncertainties in this document,
could have a material effect on the Group’s business.
Financing – the risk of not obtaining sufficient financing
Access to adequate working capital is critical to our ability to pursue our existing and future projects and to continue
as a going concern. A deterioration of the capital markets may reduce our ability to raise new equity funding. We
work closely with our professional advisers and brokers to identify the optimum approach and timing to secure new
equity financing to provide working capital.
As detailed in Note 2, the Group needs to raise funds to enable it to meet its liabilities after November 2018 and for
the balance of the FEED costs not covered by agreed in principle loans and the EU grant. Although the EU grant has
been extended to December 2018, as the United Kingdom will be leaving the European Union, this is unlikely to be
extended further. To the extent that the grant cannot be used by the deadline and the grant funding is reduced,
additional funding will be needed to cover the shortfall.
The Group seeks to manage risk for our shareholders by attracting investment through quality partners where
possible thereby minimising our own commitments to pay project development costs. We do not make financial
commitments unless such funding has been secured through joint venture partners or otherwise new investment
in our projects or we have a high degree of confidence that it will be secured.
InfraStrata plc – Annual Report and Financial Statements 2017
7
Strategic Report
Strategic and external risks - failure to manage and grow the business while creating shareholder value
There is no assurance that the Group’s gas storage development will be successful. We place a premium on
recruitment and retention of suitably skilled personnel, compliance with applicable legislation and careful
management of cash resources and requirements.
The successful progression of the Group’s activities depends not only on technical success, but also on the ability of
the Group to obtain appropriate financing through equity or debt financing or disposing of interests in projects or via
other means.
We place great emphasis on regular communication with shareholders, including the release of announcements for
the interim and annual results, and after significant developments. We seek to ensure that through such
communication our shareholders are aware of our strategy and operations and that management has their
continuing support. The Company’s system of Corporate Governance is set out in the Report of the Directors on
pages 11 to 13.
Operational risks - damage to shareholder value, environment, personnel or communities caused by
operational failures
InfraStrata has recruited a new Board of Directors with relevant skills to manage the operational risks of our projects
and ensure they are progressed in the shortest possible timescales in a cost effective manner. We have built up our
core competencies in project development and have developed excellent relationships with government and public
stakeholders in the geographical areas in which we operate.
Our management team works alongside strong and experienced joint venture partners in all projects and is
supported by a highly effective network of carefully selected service delivery specialists such as environmental
consultants and drilling engineering services. In this way we seek to mitigate the potential risk that we fail to be seen
to be acting in a socially responsible manner and/or fail to maintain good local community relations.
On behalf of the Board
Adrian Pocock
Chief Executive Officer
29th January 2018
InfraStrata plc – Annual Report and Financial Statements 2017
8
Report of the Directors
for the year ended 31 July 2017
The directors have pleasure in presenting their report and audited financial statements for the year ended 31 July
2017.
GENERAL
InfraStrata plc is incorporated and domiciled in England and Wales.
HEALTH, SAFETY AND ENVIRONMENT
There were no reportable health, safety or environmental incidents during the financial year.
SHARE CAPITAL
At the date of this report 501,041,599 ordinary shares are issued and fully paid. Details of movements in share
capital during the year are given in note 24 to the financial statements; post year end movements are detailed in
note 29
RESULTS AND DIVIDENDS
Petroleum exploration and evaluation operations have been classified as discontinued. The Group recognised cash
revenue from continuing operations of £Nil (2016: £500,000). Management and administrative expenses totalled
£895,404 (2016: £932,635) of which £725,820 (2016: £677,735) was attributable to continuing operations. The
Group incurred a loss of £964,131 (2015: profit of £66,955) including a loss of £180,672 (2016: profit of £244,569)
from discontinued operations. The profit in 2016 was stated after crediting a profit on the disposal of Exploration and
Evaluation assets of £453,945. The loss for 2017 when added to the cumulative losses of £26,761,093 brought
forward leaves a retained loss of £27,725,224 to be carried forward.
The directors do not recommend the payment of a dividend (2016: £nil).
RISK MANAGEMENT
The financial risk management objectives and policies of the Company in relation to the use of financial instruments,
and the exposure of the Company and its subsidiary undertakings to its main risks, credit risk and liquidity risk, are set
out in note 23 to the financial statements. The principal risks and uncertainties relating to the Group’s business and
how we mitigate them are detailed in the Strategic Report on pages 7 and 8.
DIRECTORS
The directors, who served during the year and subsequently, were as follows:
A R Pocock (appointed 27 June 2017)
G V Lyon (appointed 7 November 2017)
M P Beardmore (appointed 7 November 2017)
K Campbell (appointed 9 November 2017)
P V Wale (appointed 27 June 2017 resigned 9 November 2017)
K M Ratcliff (ceased 27 June 2017)
S McGarrity (ceased 27 June 2017)
A E Gardiner (resigned 25 June 2017)
A D Hindle (ceased 27 June 2017)
M E Hazzard (ceased 27 June 2017)
All directors benefit from the provisions of individual directors’ Personal Indemnity insurance policies. Premiums
payable to third parties are as described in note 7 to the financial statements. None of the current directors have
been granted share options in the Company.
InfraStrata plc – Annual Report and Financial Statements 2017
9
Report of the Directors
for the year ended 31 July 2017
The directors of the Company at the date of this Annual Report and their abridged CVs are as follows:
Graham Lyon - Non-Executive Chairman
Graham is a senior energy, oil and gas executive with over 30 years' experience encompassing global technical,
operational and commercial leadership roles.
He is currently a Director of Soncer Limited, a private Oil and Gas leadership consulting firm, undertaking board
and executive positions for private and listed companies. He has actively led and advised on major M&A
transactions and the financing and restructuring of companies and projects throughout the world.
Graham is Executive Chairman at Comet Energy, a private Canadian oil and gas company and is Non-Executive
Chairman of Pearland Energy, a Nigerian oil and gas company. Graham also Chairs the Technical Advisory
Committee and is a Board Adviser to Sirius Petroleum plc (AIM: SRSP). As adviser to Sirius Petroleum, Graham
has contributed in structuring the vendor financing consortia that Sirius has put together to develop its Nigerian oil
production assets.
Graham has recently held a number of board level positions at private and listed companies including; Non-
Executive Director at Tarbagatay Munay LLP, a private Kazakhstani oil and gas company where he also chaired
the Corporate Governance committee, Hawkley Oil & Gas Limited (ASX: HOG), Range Resources Limited (AIM:
RRL, ASX: RRS) where he chaired the Reserves committee and was a member of Remuneration, Nomination
and Corporate Governance committees, and MENA Hydrocarbons (TSX: MNH) as CEO. Before establishing
Soncer, Graham was Vice President of Petro-Canada (TSX: PCA), where he led business development for its
international business unit, which was formerly the international company Veba Oil and Gas GmbH. In his earlier
technical career he worked for Shell and Chevron.
Adrian Richard Pocock - Chief Executive Officer
Adrian spent many years practising as a Chartered Surveyor, working for some of the largest property companies
and partnerships in the UK at Director level. He holds an MBA from Strathclyde Business School and studied
Master's level Contract and Construction Law at the Glasgow School of Law. He has extensive property asset
management experience, having led and been a member of a diverse range of project support teams, ranging
from small companies to companies with property portfolios valued in excess of £3 billion. He has worked with
some of the largest organisations in the UK, including the NHS, the Bank of England and British Land. He ran his
own commercial property development company for 10 years and has held Senior positions with Knight Frank,
Conrad Ritblat and others.
Matthew Beardmore - Non-Executive Director
Matthew is a practising solicitor and quantity surveyor who has been primarily focused on the delivery of major
built environment and infrastructure projects from conception to completion. During the last 20 years Matthew has
had responsibility for the contractual, operational and commercial performance of a portfolio of projects worth in
aggregate over £3bn. This has ranged from power plants to football stadia as well as major urban regeneration
schemes. Within the last five years Matthew has obtained significant experience and knowledge through working
in a role as Head of Capital Projects for a UK regional government authority. He therefore, has significant
experience with the EU funding framework. The Board believes that these skills are going to be very beneficial to
InfraStrata and will ensure the Company maximises its potential in this area.
leadership experience
Karen Campbell - Non-Executive Director
Karen Campbell is a highly experienced, well connected senior property and infrastructure development
international
executive, with extensive
infrastructure, rail, mixed commercial and residential development programmes. Since 2015, she worked as
Senior Development Manager and subsequently Head of Oversite Development for Crossrail Limited to develop
its extensive property portfolio including prime office, retail and residential space. Karen has recently been
appointed as Head of Commercial Development for Euston & Old Oak Common at High Speed Two (HS2)
Limited, the company responsible for developing and promoting the UK’s new high-speed rail network. Karen is a
member of the Royal Institution of Chartered Surveyors. She has held senior level positions with organisations
such as Montagu Evans LLP, BT Group plc and Manchester Airport Group.
in major complex London, national and
DIRECTORS EMOLUMENTS
The directors’ emoluments are disclosed in note 7 to the Financial Statements.
InfraStrata plc – Annual Report and Financial Statements 2017
10
Report of the Directors
for the year ended 31 July 2017
DIRECTORS AND SUBSTANTIAL SHAREHOLDINGS
The directors of the Company held the following beneficial shareholdings as at 21 January 2018.
Ordinary shares of 0.01p each
Graham Lyon
Matthew Beardmore
Adrian Pocock
Karen Campbell
Number
914,085
1,500,903
12,655,055
-
%
0.18
0.30
2.53
-
The directors of the Company held the following beneficial shareholdings as at 31 July 2017.
Ordinary shares of 0.01p each
Peter Wale
Adrian Pocock
Number
9,889,000
12,655,055
%
2.63
3.37
The Company has also received notification of the following interests in 3% or more of the Company’s issued
share capital at 31 July 2017. The holdings and percentages presented are at the date of notification.
Ordinary shares of 0.01p each
AXA Investment Managers S.A.
Eugene Whyms
CORPORATE GOVERNANCE
Number
37,500,000
5,659,725
%
9.97
3.72
The UK Corporate Governance Code
The directors recognise the value of the UK Corporate Governance Code (“the Code”) and whilst under the AIM
Rules compliance with the Code is not required the directors have regard to the recommendations of the Code in
so far as is appropriate for a public company of its size.
The Board
At the financial year end the Board comprised one Executive Director and one Non-executive director whose
background and experience are relevant to the Company’s activities. The directors are of the opinion that the
Board has a suitable balance. The Board, through the directors, maintain regular contact with its professional
advisers to ensure that the Board develops an understanding of the views of major shareholders about the
Company. All directors have access to the advice and services of the company secretary who is responsible to
the Board for ensuring that the Board procedures are followed and that the applicable rules and regulations are
complied with. In addition, the company secretary will ensure that the directors receive appropriate training as
necessary. The appointment and removal of the company secretary is a matter for the Board as a whole.
The table below contains details on the number of meetings held during the period and individual director
attendance.
Board
Audit
Committee
Remuneration
Committee
Number of meetings held during the 2017 financial year
21
1
2
Executive Directors
Adrian Pocock (appointed 27 June 2017)
Andrew Hindle (ceased 27 June 2017)
Stewart McGarrity (ceased 27 June 2017)
Anita Gardiner (resigned 25 June 2017)
Non-executive Directors
Peter Wale (appointed 27 June 2017)
Ken Ratcliff (ceased 27 June 2017)
Maurice Hazzard (ceased 27 June 2017)
No. of
meetings
attended
No. of
meetings
attended
No. of
meetings
attended
1
19
19
19
1
19
19
-
-
-
-
-
1
1
-
-
-
-
-
2
2
InfraStrata plc – Annual Report and Financial Statements 2017
11
Report of the Directors
for the year ended 31 July 2017
CORPORATE GOVERNANCE (continued)
Audit Committee
The members of the Audit Committee are currently Karen Campbell (Chair) and Adrian Pocock.. For the financial
period to which this Annual Report relates, the members were comprised of Kenneth Ratcliffe (Chairman) and
Maurice Hazzard. There was one meeting of the Audit Committee during the financial year which was attended by
all members of the Committee. Senior representatives of the external auditor attend these meetings if considered
appropriate. The external auditor has unrestricted access to the Chairman of the committee.
The role of the Audit Committee includes:
Consideration of the appointment of the external auditor and the audit fee.
Reviewing the nature, scope and results of the external audit.
Monitoring the integrity of the financial statements and interim report.
Discussing with the auditors any problems and reservations arising from the interim and final results.
Reviewing the auditor’s management letter and management’s response.
Reviewing on behalf of the Board the Group’s system of internal control and making recommendations to
the Board.
The Committee also keeps under review the necessity for establishing an internal audit function but considers
that, given the size of the Group and the close involvement of senior management in day-to-day operations, there
is currently no requirement for such a function. Notwithstanding the absence of an internal audit function, the
Committee keeps under review the effectiveness of the Group’s internal controls and risk management systems.
Remuneration Committee
The members of the Remuneration Committee are currently Graham Lyon (Chairman), Matthew Beardmore and
Karen Campbell. For the financial period to which this Annual Report relates, the members comprised Maurice
Hazzard (Chairman) and Kenneth Ratcliffe. The committee met twice in the year to 31 July 2017.
The Group’s policy is to remunerate senior executives fairly in such a manner as to facilitate the recruitment,
retention and motivation of staff. The Remuneration Committee recommends to the Board a framework for the
remuneration of the Executive Directors and the senior management of the Group.
The principal objectives of the Committee include:
Determining and recommending to the Board the remuneration policy for the Chief Executive and
Executive Directors.
Reviewing the design of share incentive plans for approval by the Board and determining the annual
award policy to Executive Directors under existing plans.
The Committee remains acutely aware of the need to balance the financial performance of the Company with the
need to maintain incentive and motivation for the executive team.
Relations with Shareholders
Communication with Shareholders is given high priority and the Company therefore communicates regularly with
Shareholders including the release of announcements for the interim and annual results and after significant
developments. The Annual General Meeting, which this year is being held on 31 January 2018, is normally
attended by all directors. Shareholders are invited to ask questions on matters including the Group’s operations
and performance and to meet with the directors after the formal proceedings have ended.
The Company maintains a website (www.infrastrata.co.uk) for the purpose of improving information flow to
Shareholders as well as potential investors. The website contains all regulatory and press announcements and
financial reports as well as extensive operational information about the Group’s activities and enquiries from
Shareholders on matters relating to their holdings and the business of the Group are welcomed. The Board
encourages Shareholders to attend the Annual General Meeting, at which members of the Board are available to
answer questions.
InfraStrata plc – Annual Report and Financial Statements 2017
12
Report of the Directors
for the year ended 31 July 2017
CORPORATE GOVERNANCE (continued)
Internal controls
The directors are responsible for the Group’s system of internal controls, the setting of appropriate policies on
those controls, and regular assurance that the system is functioning effectively and that it is effective in managing
business risk. Internal control systems are designed to meet the particular needs of the Group and to manage
rather than eliminate the risk of failure to meet business objectives. The internal controls cover financial,
operational and compliance matters and are reviewed on an on-going basis.
The directors consider that the frequency of Board meetings and the information provided to the Board in relation
to Group operations assists the identification, evaluation and management of significant risks relevant to its
operations on a continuous basis.
The Group’s internal controls can only provide reasonable and not absolute assurance against material
misstatement or loss or the risk of failure to meet business objectives. Having thus monitored risk management
and internal control processes in place, the Board considers that the Company’s internal control systems operated
appropriately during the year and up to the date of signing of the Annual Report and Financial Statements.
GOING CONCERN
The directors have prepared the financial statements on the going concern basis which assumes that the Group
will continue in operational existence for the foreseeable future. The basis of this assumption is detailed in the
Strategic Report and the accounting policies in note 2 to the financial statements.
DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial
statements in accordance with applicable law and regulations.
Applicable company law requires the directors to prepare Group and Company financial statements for each
financial year. Under that law the directors have elected (as required by the rules of the AIM market of the London
Stock Exchange) to prepare Group financial statements in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the European Union (“EU”) and have elected to prepare the Company financial
statements in accordance with IFRS as adopted by the EU and as applied in accordance with the provisions of the
Companies Act 2006 (the “CA 2006”).
The Group financial statements are required by law and IFRS adopted by the EU to present fairly the financial
position and performance of the Group; the CA 2006 provides in relation to such financial statements that
references in the relevant part of that Act to financial statements giving a true and fair view are references to their
achieving a fair presentation.
Under company law the directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the
Group for that period.
In preparing each of the Group and Company financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements 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 Group
and 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 to enable them to ensure that the financial statements comply with the CA 2006. They are also responsible
for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company’s website.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
InfraStrata plc – Annual Report and Financial Statements 2017
13
Report of the Directors
for the year ended 31 July 2017
DISCLOSURE OF INFORMATION TO THE AUDITOR
In the case of each person who was a director at the time this report was approved: so far as the director was aware
there was no relevant audit information of which the Company’s auditor was unaware; and the director had taken all
steps that the director ought to have taken as a director to make himself or herself aware of any relevant audit
information and to establish that the Company’s auditor was aware of that information. This information is given and
should be interpreted in accordance with the provisions of section 418 of the CA 2006.
AUDITOR
A resolution to re-appoint the Company’s auditor, Nexia Smith & Williamson Audit Limited, will be proposed at the
Annual General Meeting to be held on 31 January 2018. This resolution, together with the proxy form and notes for
voting, was previously circulated to Shareholders on 5 January 2018.
On behalf of the Board
A Pocock
Director
29 January 2018
InfraStrata plc – Annual Report and Financial Statements 2017
14
Independent auditor’s report
to the members of InfraStrata plc
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INFRASTRATA PLC
Opinion
We have audited the financial statements of InfraStrata plc (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 31 July 2017 which comprise the Consolidated Statement of Comprehensive Income,
the Consolidated and Parent Company Statements of Financial Position, the Consolidated and Parent Company
Statement of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows, and the 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 parent company financial statements,
as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the parent 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 parent 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 parent
company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
In our opinion:
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31 July 2017 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union and 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 group and parent 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 as applied to listed entities, 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 in the financial statements, which indicates that as at 31 July 2017, the group and
parent company were dependent upon the receipt of future funding to continue as going concerns. If such funding
is not available, the group and parent company would need to seek alternative sources of funding to enable them
to meet their liabilities as they fall due for the foreseeable future.
As stated in note 2, these conditions indicate that a material uncertainty exists that may cast significant doubt on
the group’s and parent company’s ability to continue as going concerns. Our opinion is not modified in respect of
this matter.
Key Audit Matters
We identified the key audit matters described below as those that were of most significance in the audit of the
financial statements of the current year. Key audit matters include the most significant assessed risks of material
misstatement, including those risks that had the greatest effect on our overall strategy, the allocation of resources
in the audit and the direction of efforts of the audit 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. The two key audit matters are related, and are therefore addressed together in this
report.
InfraStrata plc – Annual Report and Financial Statements 2017
15
Independent auditor’s report
to the members of InfraStrata plc
Carrying value of the group’s development assets relating to the Islandmagee gas storage facility and the
amounts due to the parent company from its subsidiaries
Description of the risks
The carrying value of the proposed Islandmagee gas storage project of £6,591,302 and the balance of £7,113,671
due to the parent company from its subsidiaries are significant in the financial statements of the group and the
parent company, respectively. As explained in note 2 to the financial statements, the group is seeking further
funding to complete the Front End Engineering and Design (“FEED”); thereafter, the group will be seeking funding
for the full project construction. If the group cannot obtain funding, the carrying value of the project is likely to be
impaired.
Assuming that the project is ultimately constructed, the value of the project is dependent on a number of estimates
and factors, including the construction costs, the construction time frame, the revenue able to be generated from
the project, the cost of capital applicable to the project and the discount rate to be applied. Any adverse variations
in these factors could result in the project becoming impaired in value.
Additionally, if the group and parent company are unable to continue as going concerns, it is likely that the project
will become impaired in value.
If the project value is impaired, the subsidiaries may not be able to earn sufficient funds in order to repay the
intercompany balances owed.
The Group’s impairment assessments requires significant judgement, in particular regarding the availability of
funding for both group’s recurring running costs and the project, the capital cost of the project, the construction
timeframe, the cost of capital required to fund the project, the discount rate to be applied and the revenue to be
earned from the gas storage facility. The revenue that can be earned depends on the future demand for gas
storage facilities, future gas prices and the volatility of those gas prices.
Our Response to the risk
We challenged the assumptions used in the client’s impairment assessment. As part of our procedures we:
-
-
-
-
-
reviewed the directors’ assumptions relating to the availability of funding for the FEED and for the longer
term, including reviewing documentation relating to the funding already agreed and funding provisionally
agreed
compared the directors’ commercial assumptions with available third party evidence, such as expert
reports commissioned by the directors, market data and communications with potential commercial
partners
re-performed a discounted cash flow analysis based on the directors’ assumptions and compared the
results of this with the directors’ own analysis
performed a sensitivity analysis on the discounted cash flow analysis
assessed if the uncertainties inherent in the project were correctly disclosed in the financial statements
Material uncertainties
The directors’ assessment is that no impairment is required to the project value and the balances due from
subsidiaries, but that conclusion is dependent upon the availability of future funding and other uncertain future
events. Therefore, as more fully explained in note 2, there are material uncertainties regarding the carrying value
of the project and the balances due to the parent company from its subsidiaries. The financial statements do not
include the impairment of the project or the impairment of the parent company’s balances due from its subsidiaries
that would result if the group were unable to raise such funds.
Our opinion is not modified in respect of this matter.
Our application of materiality
The materiality for the group financial statements as a whole was set at £350,000. This has been determined with
reference to the benchmark of the group’s net assets, which we consider to the one of the principal considerations
for members of the parent company in assessing the performance of the group. Materiality represents 5% of the
group’s net assets as presented on the face of the Group Statement of Financial Position.
The materiality for the parent company financial statements as a whole was set at £280,000. This has been
determined with reference to the benchmark of the parent company’s net assets as the parent company exists
primarily as a holding company for the group. Materiality represents 5% of net assets as presented on the face of
the Parent Company Statement of Financial Position, capped at 80% of group materiality.
InfraStrata plc – Annual Report and Financial Statements 2017
16
Independent auditor’s report
to the members of InfraStrata plc
An overview of the scope of our audit
At the end of the year, the Group comprised of three companies. We are appointed auditor and have performed
audits of the financial statements of each company. All of the Group’s assets and liabilities are located in the UK.
All group entities have common management and centralised process and controls. Therefore our audit work was
all conducted solely in the UK.
Other information
The other information comprises the information included in the Annual Report, other than the financial statements
and our auditor’s report thereon. The directors are responsible for the other information. 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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the 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.
Matters on which we are required to report by exception
In the 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 parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
the parent company financial statements 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 directors
As explained more fully in the directors’ responsibilities statement, set out on page 14, 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 group’s and the parent
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 group or the parent
company or to cease operations, or have no realistic alternative but to do so.
InfraStrata plc – Annual Report and Financial Statements 2017
17
Independent auditor’s report
to the members of InfraStrata plc
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.
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.
Guy Swarbreck
Senior Statutory Auditor,
for and on behalf of
Nexia Smith & Williamson
Statutory Auditor
Chartered Accountants
1 Bishops Wharf
Walnut Tree Close
Guildford, GU1 4RA
30 January 2018
InfraStrata plc – Annual Report and Financial Statements 2017
18
Consolidated statement of comprehensive income
for the year ended 31 July 2017
Notes
2017
£
2016
£
Continuing operations
Revenue
Cost of sales
Gross profit
Management and administrative expenses
Operating loss
Finance expense
Finance income
Loss before taxation
Taxation
Loss for the year from continuing operations
(Loss) profit for the year from discontinued operations
(Loss) profit for the year attributable to the equity
holders of the parent
Other comprehensive income
Total comprehensive (loss) profit for the year
attributable to the equity holders of the parent
Basic and diluted earnings per share
Continuing operations
Discontinued operations
Continuing and discontinued operations
4
5
20
10
11
3
3
12
-
-
-
500,000
-
500,000
(725,820)
(677,735)
(725,820)
(177,735)
(58,000)
361
-
121
(783,459)
(177,614)
-
-
(783,459)
(177,614)
(180,672)
244,569
(964,131)
66,955
-
-
(964,131)
66,955
(0.30)p
(0.07)p
(0.37)p
(0.10)p
0.14p
0.04p
InfraStrata plc – Annual Report and Financial Statements 2017
19
Consolidated statement of financial position
as at 31 July 2017
Non-current assets
Intangible fixed assets:
Gas Storage Development
Exploration & Evaluation
Property, plant and equipment
Deferred liability
Total non-current assets
Current assets
Trade and other receivables
Deferred liability
Restricted cash
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables
Grant received in advance
Short-term borrowings
Total current liabilities
Net current assets
Financial liability
Net assets
Shareholders’ funds
Share capital
Share premium
Merger reserve
Share based payment reserve
Retained earnings
Notes
14
15
16
20
18
20
19
21
22
19
19
20
24
25
26
2017
£
6,591,302
-
440,100
42,000
2016
£
6,116,114
19,459
440,744
-
7,073,402
6,576,317
98,718
100,000
-
1,548,169
1,182,572
-
1,358,063
2,454,006
1,746,887
4,994,641
(149,625)
(1,440,913)
-
(1,693,055)
(1,358,886)
(1,400,364)
(1,590,538)
(4,452,305)
156,349
(200,000)
542,336
-
7,029,751
7,118,653
10,853,460
14,297,307
8,988,112
616,096
(27,725,224)
10,834,660
13,440,878
8,988,112
616,096
(26,761,093)
Total equity
7,029,751
7,118,653
Company registration number: 06409712
Approved and authorised for issue by the Board on 29 January 2018
Graham Lyon
Director
Adrian Pocock
Director
InfraStrata plc – Annual Report and Financial Statements 2017
20
Company statement of financial position
as at 31 July 2017
Non-current assets
Intangible exploration assets
Property, plant and equipment
Deferred liability
Total non-current assets
Current assets
Trade and other receivables
Deferred liability
Restricted cash
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables
Grant received in advance
Short-term borrowings
Total current liabilities
Net current assets
Financial liability
Net assets
Shareholders’ funds
Share capital
Share premium
Merger reserve
Share based payment reserve
Retained earnings
Notes
15
16
20
18
20
19
21
22
19
19
20
24
25
26
2017
£
-
-
42,000
2016
£
19,459
644
-
42,000
20,103
7,211,230
100,000
-
1,545,779
7,049,850
-
1,358,063
2,442,818
8,857,009
10,850,731
(117,186)
(1,440,913)
-
(1,631,577)
(1,358,886)
(1,400,364)
(1,558,099)
(4,390,827)
7,298,910
6,459,904
(200,000)
-
7,140,910
6,480,007
10,853,460
14,297,307
8,466,827
616,096
(27,092,780)
10,834,660
13,440,878
8,466,827
616,096
(26,878,454)
Total equity
7,140,910
6,480,007
Company registration number: 06409712
The company’s loss for the period was £214,325 (2016 profit: £722,481).
Approved and authorised for issue by the Board on 29 January 2018.
Graham Lyon
Director
Adrian Pocock
Director
InfraStrata plc – Annual Report and Financial Statements 2017
21
Consolidated statement of changes in equity
for the year ended 31 July 2017
Share
capital
£
Share
premium
£
Merger
reserve
£
Share
based
payment
reserve
£
Retained
earnings Total equity
£
£
Balance at 31 July 2015
10,474,160
13,379,415
8,988,112
603,626
(26,828,048)
6,617,265
Profit for the year
Total comprehensive profit for the year
-
-
-
-
Shares issued
Share issue costs
360,500
90,125
(28,662)
Share based payments
-
-
-
-
-
-
-
-
-
12,470
66,955
66,955
66,955
66,955
-
-
450,625
(28,662)
12,470
Balance at 31 July 2016
10,834,660
13,440,878
8,988,112
616,096
(26,761,093)
7,118,653
Loss for the year
Total comprehensive loss for the year
-
-
-
-
Shares issued (Note 24)
18,800
921,200
Share issue costs
(64,771)
-
-
-
-
-
-
(964,131)
(964,131)
(964,131)
(964,131)
-
940,000
(64,771)
Balance at 31 July 2017
10,853,460 14,297,307
8,988,112
616,096
(27,725,224)
7,029,751
InfraStrata plc – Annual Report and Financial Statements 2017
22
Company statement of changes in equity
for the year ended 31 July 2017
Share
capital
£
Share
premium
£
Merger
reserve
£
Share
based
payment
reserve
£
Retained
earnings Total equity
£
£
Balance at 31 July 2015
10,474,160
13,379,415
8,466,827
603,626
(27,600,935)
5,323,093
Profit for the year
Total comprehensive profit
for the year
-
-
-
-
Shares issued
Share issue costs
360,500
90,125
(28,662)
Share based payments
-
-
-
-
-
-
-
-
-
12,470
722,481
722,481
722,481
722,481
-
-
450,625
(28,662)
12,470
Balance at 31 July 2016
10,834,660
13,440,878
8,466,827
616,096
(26,878,454)
6,480,007
Loss for the year
Total comprehensive loss for
the year
-
-
-
-
Shares issued (Note 24)
Share issue costs
18,800
921,200
(64,771)
-
-
-
-
-
-
(214,326)
(214,326)
(214,326)
(214,326)
-
940,000
(64,771)
Balance at 31 July 2017
10,853,460
14,297,307
8,466,827
616,096
(27,092,780)
7,140,910
InfraStrata plc – Annual Report and Financial Statements 2017
23
Consolidated statement of cash flows
for the year ended 31 July 2017
Operating activities
Operating loss for the year
Depreciation
Decrease (Increase) in trade and other receivables
(Decrease) increase in trade and other payables
Share option expense
Exchange differences
Cash (used in) discontinued operations
Notes
2017
£
(725,820)
644
1,083,854
(1,543,430)
-
82,027
(154,311)
2016
£
(177,735)
167
(882,164)
938,264
12,470
33,301
(180,933)
Net cash (used in) continuing and discontinued operating
activities
(1,257,036)
(256,630)
Investing activities
Interest received
Purchase of intangible assets:
Gas Storage Development
Exploration and Evaluation (discontinued)
Proceeds from Exploration and Evaluation assets (discontinued):
Disposals
Receipt of back costs under farmout agreements
Grants received
Purchase of equipment
361
121
(475,188)
(6,902)
-
-
-
-
(608,760)
(43,158)
626,459
252,481
2,689,852
(458)
Net cash (used in) generated from investing activities
(481,729)
2,916,537
Financing activities
Proceeds on issue of ordinary shares
Drawdown of short-term borrowings
Repayment of short-term borrowings
875,229
200,000
(1,600,364)
421,963
300,000
-
Net cash (used in) generated from financing activities
(525,135)
721,963
Net (decrease) increase in cash and cash equivalents
(2,263,900)
3,381,870
Cash and cash equivalents at beginning of year
3,812,069
430,199
Cash and cash equivalents at end of year
1,548,169
3,812,069
Cash and cash equivalents consist of:
Restricted cash
Cash at bank
19
21
-
1,548,169
1,358,063
2,454,006
1,548,169
3,812,069
Significant non-cash transactions
As disclosed in Note 20, the Group has recognised a financial liability in respect of contractual payments which
may become due in any future disposal of its assets and a corresponding deferred asset which has been
amortised. These transactions are non-cash items and do not appear in the statement of cash flows. In 2016 there
were no material non-cash items.
InfraStrata plc – Annual Report and Financial Statements 2017
24
Company statement of cash flows
for the year ended 31 July 2017
Operating activities
Operating profit for the year
Depreciation
Increase in trade and other receivables
(Decrease) Increase in trade and other payables
Share option expense
Exchange differences
Cash (used in) discontinued operations
Notes
2017
£
2016
£
23,985
644
(161,380)
(1,514,391)
-
82,027
(154,311)
329,529
167
(1,870,246)
973,141
12,470
33,301
(180,933)
Net cash (used in) continuing and discontinued operating
activities
(1,723,426)
(702,571)
Investing activities
Interest received
Purchase of exploration intangible assets (discontinued)
Proceeds from Exploration and Evaluation assets (discontinued):
Disposals
Receipt of back costs under farmout agreements
Grants received
Purchase of equipment
361
(6,902)
-
-
-
-
121
(43,158)
626,459
252,481
2,689,852
(458)
Net cash (used in) generated from investing activities
(6,541)
3,525,297
Financing activities
Proceeds on issue of ordinary shares
Drawdown of short-term borrowings
Repayment of short-term borrowings
875,229
200,000
(1,600,364)
421,963
300,000
-
Net cash (used in) generated from financing activities
(525,135)
721,963
Net (decrease) increase in cash and cash equivalents
(2,255,102)
3,544,689
Cash and cash equivalents at beginning of year
3,800,881
256,192
Cash and cash equivalents at end of year
1,545,779
3,800,881
Cash and cash equivalents consist of:
Restricted cash
Cash at bank
19
21
-
1,545,779
1,358,063
2,442,818
1,545,779
3,800,881
Significant non-cash transactions
As disclosed in Note 20, the Group has recognised a financial liability in respect of contractual payments which
may become due in any future disposal of its assets and a corresponding deferred asset which has been
amortised. These transactions are non-cash items and do not appear in the statement of cash flows.
InfraStrata plc – Annual Report and Financial Statements 2017
25
Notes to the financial statements
for the year ended 31 July 2017
1.
General information
InfraStrata plc is a company incorporated in England & Wales under the Companies Acts 2006 and is
domiciled in the United Kingdom and is listed on the AIM market of the London Stock Exchange. The
company’s registered office is 200 Strand, London, England, WC2R 1DJ.
2.
Accounting policies
The financial statements are based on the accounting policies set out below which have been consistently
applied.
Basis of preparation
InfraStrata plc adopted International Financial Reporting Standards (IFRS) as adopted by the European
Union effective in July 2017, as the basis for preparation of its financial statements. The financial
information has been prepared under the historical cost convention as modified by the revaluation of
certain financial assets.
Going concern
The directors have prepared cash flow projections which indicate that, including the proceeds of the
January 2018 placing, the Group and parent Company have sufficient funds to meet their corporate costs
and the care and maintenance costs of Islandmagee gas storage project (the "Project") to the end of
November 2018.
The next phase of the development of the Project is the completion of the FEED programme which will take
to the end of December 2018 at a total estimated cost including all the Group’s financial commitments
during that period of £4.5 million. Of that total £3.1m is expected to be met by the grant from the EU and
loans from the selected FEED contractors, leaving a further £1.4m additional funding requirement to
complete not only the FEED but the commercialisation programme during 2018, and to cover corporate
costs.
Under the terms of the EU Grant, certain activity milestones are required to be met, including completion of
the FEED engineering report by 28 September 2018 and completion of the FEED by 20 December 2018.
Failure to meet these milestones may result in the grant being reduced. The loans from the FEED
contractors are subject to contracts being agreed and upon InfraStrata securing the remaining funding for
the FEED. The loans are expected to be repayable at the Financial Investment Decision date (“FID”), when
a decision will be made as to whether to proceed to construction, or on 31 December 2018, whichever is
earlier.
The directors are in advanced discussions with potential key investors to the project and anticipate that the
additional funding of £1.4m required to complete the FEED and commercialisation programme during 2018,
and cover corporate costs, can be secured in the first quarter of 2018. However the timing and success of
such fundraising cannot be guaranteed. After preparing cash flow forecasts, considering the cash currently
on hand, and the progress towards gaining the additional funding as described above, the directors have a
reasonable expectation that the Group has adequate resources to continue in operational existence for the
foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
Following the completion of the FEED and commercialisation programme at the end of 2018 the project will
be ready to move into the Financial Investment Decisions stage, where it will evaluate the available
sources of funding, including both debt and equity participation, to fund both the continuing operations of
the Company beyond December 2018, the repayment of the FEED contractor loans, and construction and
delivery of the programme for our shareholders. The full project construction is expected to be delivered on
a phased basis over a number of years at an aggregate cost of approximately £300 million.
Should the Project not proceed as expected, the ability of the parent Company’s subsidiaries to repay inter-
company debt due to the parent Company would be in doubt.
The directors remain confident that the project is economically viable and that following the completion of
the FEED and commercialisation programme, further new investment for the Company and the project will
be secured. Having reviewed the value of gas storage assets in accordance with the principles set out
below, and the value of balances due to the parent Company from its subsidiaries, the directors are of the
opinion that these assets are not impaired in value.
InfraStrata plc – Annual Report and Financial Statements 2017
26
Notes to the financial statements
for the year ended 31 July 2017
2.
Accounting policies (continued)
Going concern (continued)
However the success of the 2018 fundraising is uncertain. The directors have concluded that a material
uncertainty exists that may cast significant doubt upon the Group’s ability to continue as a going concern
and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal
course of business. Were the Group no longer a going concern, the Group’s capitalised project
development costs totalling £6,591,302 and amounts due to the Company from its subsidiaries amounting
to £7,113,671 may become impaired in value, provision would be required for the future liabilities arising as
a consequence of the Group ceasing business and assets and liabilities currently classified as non-current
would be reclassified as current.
Adoption of new and revised standards
IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers have been adopted by
the EU and minor changes to other standards arising from annual improvements have been issued but are
yet to be adopted. None of these standards are expected to have a material effect on the Group financial
statements. IFRS 16 Leases has also been issued; as the Group currently has no material leases, this is
not expected to have a significant impact. The Group will assess the impact of the new standard on the
Group in due course.
Basis of consolidation
The financial information incorporates the financial information of the Company and entities controlled by
the Company. Control is achieved where the Company has power to govern the financial and operating
policies of an investee entity so as to obtain benefits from its activities.
Business combinations and goodwill
On acquisition, the assets and liabilities and contingent liabilities of subsidiaries are measured at their fair
values at the date of acquisition. Any excess of cost of acquisition over the fair values of the identifiable net
assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of
the identifiable net assets acquired (i.e. discount on acquisition) is credited to profit or loss in the period of
acquisition. Goodwill arising on consolidation is recognised as an asset and reviewed for impairment at
least annually. Any impairment is recognised immediately in profit or loss, and is not subsequently
reversed.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker as required by IFRS 8 “Operating Segments”. The chief operating decision-
maker, who is responsible for allocating resources and assessing performance of the operating segments,
has been identified as the Board of directors. The accounting policies of the reportable segments are
consistent with the accounting policies of the Group as a whole. Segment profit or loss represents the profit
or loss attributable to equity holders of the parent attributable to each segment. This is the measure of
profit that is reported to the Board of directors for the purpose of resource allocation and the assessment of
segment performance. When assessing segment performance and considering the allocation of resources,
the Board of directors review information about segment assets and liabilities.
Property plant and equipment
Property plant and equipment is stated at cost less accumulated depreciation and any recognised
impairment loss. The initial cost of an asset comprises its purchase price or construction cost and any costs
directly attributable to bringing the asset into operation.
Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the
straight-line method, once the asset has been brought into use, on the following basis:
Office equipment
Freehold land
20-33%
0%
The carrying values of property plant and equipment are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable.
InfraStrata plc – Annual Report and Financial Statements 2017
27
Notes to the financial statements
for the year ended 31 July 2017
2.
Accounting policies (continued)
Capitalisation and impairment of intangible gas storage assets
Costs of development of gas storage facilities are capitalised as intangible assets once it is probable that
future economic benefits that are attributable to the assets will flow to the Group and until consent to
construct has been awarded, at which time the capitalised costs are transferred to plant and equipment
provided there being reasonable certainty of construction proceeding. The nature of these costs includes all
direct costs incurred in project development, including any directly attributable finance costs. No
amortisation or depreciation is provided until the storage facility is available for use.
An impairment test is performed annually and whenever events or circumstances arising during the
development phase indicate that the carrying value of a development asset may exceed its recoverable
amount. The aggregate carrying value is compared against the expected recoverable amount of the cash
generating unit, generally by reference to the present value of the future net cash flows expected to be
derived from storage revenue. The present value of future cash flows is calculated on the basis of future
storage prices and cost levels as forecast at the statement of financial position date.
The cash generating unit applied for impairment test purposes is generally an individual gas storage facility.
Where the carrying value of the facility is greater than the present value of its future cash flows a provision
is made. Any such provisions are charged to cost of sales.
Government grants
Government grants are recognised only when there is reasonable assurance that the Group will comply
with the conditions attaching to the grant and that the grants will be received. Capital grants are recognised
to match the related development expenditure and are deducted in arriving at the carrying value of the
related assets.
Investments
Investments in subsidiaries are stated at cost less provision for impairments.
Taxation
Tax expense represents the sum of the tax currently payable and any deferred tax. The taxable result
differs from the net result as reported in the statement of comprehensive income because it excludes items
of income or expense that are taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the statement of financial position date. Deferred tax is the tax
expected to be payable or recoverable on differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the liability method. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference arises from goodwill or from the initial
recognition (other than in a business combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable
temporary differences arising on investments in subsidiaries, except where the Group is able to control the
reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each statement of financial position date and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all
or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in
the period when the liability is settled or the asset realised.
Deferred tax is charged or credited to the statement of comprehensive income, except when it relates to
items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
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 they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current assets and liabilities on a net basis.
InfraStrata plc – Annual Report and Financial Statements 2017
28
Notes to the financial statements
for the year ended 31 July 2017
2.
Accounting policies (continued)
Foreign currency
Transactions in foreign currency are recorded at the rates of exchange prevailing on the dates of the
transactions. At each statement of financial position date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on the statement of financial
position date and gains or losses are taken to operating profit.
Leases
Leases are classified as finance leases or hire purchase lease contracts whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as
operating leases.
Rental costs under operating leases are charged on a straight-line basis over the lease term.
Share based payment transactions
Employees (including senior executives) of the Group receive part of their remuneration in the form of
share based payment transactions, whereby employees render services as consideration for equity
instruments (equity settled transactions).
The cost of equity settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the performance and or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the vesting date). The cumulative expense
recognised for equity settled transactions at each reporting date until the vesting date reflects the extent to
which the vesting period has expired and the Group’s best estimate of the number of equity instruments
that will ultimately vest. The statement of comprehensive income charge or credit for a period represents
the movement in cumulative expense recognised as at the beginning and end of that period. No expense is
recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition, which are treated as vesting irrespective of whether or not the market condition is
satisfied, provided that all other performance conditions are satisfied.
Where an equity settled award is cancelled, it is treated as if it had vested on the date of cancellation, and
any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award, and designated as a replacement award on the date that is granted,
the cancelled and new awards are treated as if they were a modification of the original award, as described
in the previous paragraph.
Retirement benefit costs
The Company has a defined contribution plan which requires contributions to be made into an
independently administered fund. The amount charged to the statement of comprehensive income in
respect of pension costs reflects the contributions payable in the year. Differences between contributions
payable during the year and contributions actually paid are shown as either accrued liabilities or prepaid
assets in the statement of financial position.
Financial instruments
Financial assets and financial liabilities are recognised on the statement of financial position when the
Group becomes a party to the contractual provisions of the instrument.
Trade, other receivables and cash and cash equivalents are measured at initial recognition at fair value and
are subsequently measured at amortised cost using the effective interest method. A provision is
established when there is objective evidence that the Group will not be able to collect all amounts due. The
amount of any provision is recognised in the statement of comprehensive income. Cash and cash
equivalents comprise cash held by the Group, short-term bank deposits with an original maturity of three
months or less, and cash held in escrow (“restricted cash”). Restricted cash relates to amounts held in
escrow which may only be used to repay the Baron Oil loan.
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised
cost, using the effective interest rate method.
InfraStrata plc – Annual Report and Financial Statements 2017
29
Notes to the financial statements
for the year ended 31 July 2017
2.
Accounting policies (continued)
Financial instruments (continued)
Financial liabilities and equity instruments issued by the Group are classified in accordance with the
substance of the contractual arrangements entered into and the definitions of a financial liability and an
equity instrument. Equity instruments issued by the Company are recorded at the proceeds received, net of
direct issue costs. Convertible financial instruments denominated in foreign currencies are not treated as
compound financial instruments on initial recognition or subsequently, including when the repayment of the
instrument is agreed at a specific sterling rate using funds held in escrow.
Interest bearing bank loans, overdrafts and other loans are recorded at the proceeds received, net of direct
issue costs. Finance costs are accounted for on an accruals basis in the statement of comprehensive
income using the effective interest method.
Revenue
Revenue is recognised as the fair value of the consideration received or receivable and represents the
amounts receivable for services delivered during the normal course of business. Revenue is recognised as
the services are delivered.
Data licensing
Revenue from licensing of data to other parties is recognised in full upon the delivery of the data to the
licensee.
Judgements in applying accounting policies and key sources of estimation uncertainty
Amounts included in the financial statements involve the use of judgement and/or estimation. These
estimates and judgements are based on management’s best knowledge of the relevant facts and
circumstances, having regard to previous experience, but actual results may differ from the amounts
included in the financial statements. Information about such judgements and estimation is contained in the
accounting policies and/or the notes to the financial statements, and the key areas are summarised below.
Capitalisation of gas storage costs
The assessment of whether costs incurred on gas storage development should be capitalised or expensed
involves judgement. Any expenditure where it is not probable that future economic benefits will flow to the
Group are expensed. Management considers the nature of the costs incurred and the stage of project
development and concludes whether it is appropriate to capitalise the costs. The key assumptions depend
on whether it is probable that the expenditure will result future economic benefits that are attributable to the
assets.
Review of gas storage project asset carrying values
The assessment of capitalised project costs for any indications of impairment involves judgement. When
facts or circumstances suggest that impairment exists, a formal estimate of recoverable amount is
performed and an impairment loss recognised to the extent that the carrying amount exceeds recoverable
amount. Recoverable amount is determined to be the higher of fair value less costs to sell and value in use.
The key assumptions are the net income expected to be generated from the facilities, the cost of
construction and the date from which the facilities become operational. Management assigns values and
dates to these inputs after taking into account market information, engineering design costing and the
project programme. A discount rate of 8% is applied in determining gas storage project net present values.
Salt cavern gas storage projects are long term investments and cash flows are therefore projected over
periods greater than 5 years. Engineering design provides for a project life of 40 years. It is assumed that
100% of a project’s capacity will be sold from the date that the capacity becomes operational.
Recognition of contingent financial liability
As detailed in note 20, the recognition or otherwise of the contingent liability arising from the January 2017
Baron Oil Plc loan agreement requires judgement as to whether the Group will dispose of an interest on the
Islandmagee project prior to 4 January 2019. As at the date of approval of the financial statements it is not
possible to reliably determine whether or not such a disposal will occur and therefore the contingent liability
has been recognised in full.
InfraStrata plc – Annual Report and Financial Statements 2017
30
Notes to the financial statements
for the year ended 31 July 2017
3.
Segment information
The directors have determined the Group’s operating segments by reference to the risk profile of the
Group’s activities, which are affected predominately by location of the Group’s assets. The Group’s
continuing gas storage operations are located in Northern Ireland. In both years presented petroleum
exploration activities have been classified as discontinued operations.
2017
Discontinued
Operations
-exploration
Total
£
15,273
(169,584)
(26,361)
-
-
Continuing operations – gas storage
Northern
Ireland
£
-
(541,942)
-
-
-
Central
income and
costs
£
-
(183,878)
-
(58,000)
361
Total
£
-
(725,820)
-
(58,000)
361
Revenue
Management & administrative expenses
Impairment of Exploration & Evaluation assets
Finance expense
Finance income
Pre and post tax loss for the year
(180,672)
(541,942)
(241,517)
(783,459)
Analysis of:
Assets by segment
Liabilities by segment
44,702
(44,702)
8,466,155
(1,454,689)
309,432
(291,147)
8,775,587
(1,745,836)
-
7,011,466
18,285
7,029,751
Cash flows from discontinued operations
Cash flows arising from discontinued operations comprise net cash used in discontinued operations of £154,311,
and net cash used in investing activities of £6,902.
2016
Revenue
Management & administrative expenses
Profit on disposal of Exploration & Evaluation
assets
Impairment of Exploration & Evaluation assets
Finance income
Discontinued
Operations
-exploration
Total
£
73,967
(254,900)
453,945
(28,443)
-
Continuing operations – gas storage
Northern
Ireland
£
500,000
(494,146)
Central
income and
costs
£
-
(183,589)
-
-
-
-
-
121
Total
£
500,000
(677,735)
-
-
121
Pre and post tax profit / (loss) for the year
244,569
5,854
(183,468)
(177,614)
Analysis of:
Assets by segment
Liabilities by segment
1,497,566
(1,426,217)
9,266,058
(2,922,841)
807,334
(103,247)
10,073,392
(3,026,088)
71,349
6,343,217
704,087
7,047,304
Cash flows from discontinued operations
Cash flows arising from discontinued operations comprise net cash used in discontinued operations of £180,933,
and net cash received from investing activities of £835,782.
InfraStrata plc – Annual Report and Financial Statements 2017
31
Notes to the financial statements
for the year ended 31 July 2017
4.
Revenue
Revenue comprises:
Licensing of seismic data
5.
Profit or loss before taxation
Fees payable to the Group’s auditor and its associates:
- for the audit of the Company’s annual financial statements
- for the audit of the Company’s subsidiaries
- other services relating to taxation
- all other services
Depreciation
Net foreign exchange loss
Operating lease rentals – land and buildings
Project management & company administrative expenditure
Management & administrative expenditure paid in cash
Advisor costs relating to Islandmagee Storage
Advisor costs relating to Strategic Review and General Meeting
Non-cash items:
Share options expense
Exchange differences
Depreciation
Pre-licence costs written off
Attributable to:
Continuing operations
Discontinued operations
6.
Employee information
Average number of Executive Directors and staff
Staff costs for the above persons and Non-executive Directors:
Wages and salaries
Social security costs
Defined contribution pension plan expenditure and other costs
Other staff costs
Share based payments
2017
£
-
-
2017
£
17,050
12,950
11,645
3,400
644
371
14,275
2017
£
820,714
11,771
61,904
-
371
644
-
2016
£
500,000
500,000
2016
£
17,050
12,950
23,660
3,825
167
23,180
30,000
2016
£
853,850
41,520
-
12,470
23,180
167
1,448
895,404
932,635
725,820
169,584
677,735
254,900
895,401
932,635
2017
Number
2016
Number
3
£
446,282
48,093
3,509
14,020
-
5
£
467,848
54,111
10,412
14,710
12,470
Staff costs before recoveries and capitalisation
511,904
559,551
InfraStrata plc – Annual Report and Financial Statements 2017
32
Notes to the financial statements
for the year ended 31 July 2017
7.
Directors’ and key management emoluments and compensation
Group and Company
2017
Executive Directors
Adrian Pocock (appointed 27 June 2017)
Andrew Hindle (ceased 27 June 2017)
Stewart McGarrity (ceased 27 June 2017)
Anita Gardiner (resigned 25 June 2017)
Non-executive directors
Peter Wale (appointed 27 June 2017)
Kenneth Ratcliff (ceased 27 June 2017)
Maurice Hazzard (ceased 27 June 2017)
Share based payment
Employers national insurance contributions
Benefits
Pension
Salary &
fees
£
7,404
82,305
105,010
104,635
2,468
28,385
13,979
£
-
3,337
2,670
750
-
-
-
344,186
6,757
£
-
-
-
-
-
-
-
-
Total
2017
£
7,404
85,642
107,680
105,385
2,468
28,385
13,979
350,943
-
42,314
393,257
Total
2016
£
2016
Executive Directors
Andrew Hindle
Stewart McGarrity
Anita Gardiner
Non-executive directors
Kenneth Ratcliff
Maurice Hazzard
Alan Booth (resigned 11 November 2015)
Salary &
fees
£
121,667
113,333
112,748
29,969
11,875
4,167
Benefits
Pension
£
3,684
2,947
834
-
-
-
£
-
-
1,587
125,351
116,280
115,169
-
-
-
29,969
11,875
4,167
Share based payment
Employers national insurance contributions
393,759
7,465
1,587
402,811
9,928
48,235
460,974
On 1 October 2015, the Company implemented a Performance Incentive Scheme under which voluntary
salary reductions were taken to preserve the Group’s cash resources. The scheme ended on 30 September
2016 without the crystallisation of any incentive payments under the scheme.
InfraStrata plc – Annual Report and Financial Statements 2017
33
Notes to the financial statements
for the year ended 31 July 2017
7. Directors’ and key management emoluments and compensation (continued)
Aggregate emoluments above include amounts for the value of options to acquire ordinary shares in the
Company granted or held by directors. No director held any Enterprise Management Incentive or other
options at 31 July 2017 and no options were exercised by any person who was a director at any time during
the 2017 and 2016 financial years.
Executive Directors and directors’ indemnity insurance premiums of £15,914 (2016: £15,624) were paid in
respect of all directors. Since October 2015 no director has participated in the Group Stakeholder Pension
Plan.
8.
Share based payment plans
A share based payment plan was created in the year ended 31 July 2008. All directors and employees are
entitled to a grant of options subject to the Board of directors’ approval. The options do not have a cash
settlement alternative. The options granted are Enterprise Management Incentive share options for
qualifying employees. The following table illustrates the number and weighted average exercise prices
(WAEP) of, and movements in, share options during the year.
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Outstanding at the end of the year
2017
Number
6,379,167
-
-
6,379,167
2017
WAEP
£
0.1807
-
-
0.1807
2016
Number
6,379,167
-
-
6,379,167
2016
WAEP
£
0.1807
-
-
0.1807
Exercisable at the end of the year
6,379,167
0.1807
6,379,167
0.1807
The range of exercise prices for options outstanding at the end of the year was £0.10 - £2.28. The weighted
average remaining option life for the share options outstanding at 31 July 2017 is 4 years (2016: 5 years).
The fair value of equity settled options granted is estimated as at the date of the grant using a Black-Scholes
model, taking into account the terms and conditions upon which the options were granted.
9.
Retirement benefits
The Group operates a defined contribution retirement plan for all qualifying employees who wish to
participate. The assets of the scheme are held separately from those of the Group in funds under the control
of independent trustees. The total cost charged to expenses of £3,509 (2016: £10,412) represents
contributions payable to the scheme by the Group at rates specified in the rules of the scheme for the year.
As at 31 July 2017, employer and employee contributions of £Nil (2016: £585) due in respect of the current
period had not been paid over to the scheme.
10.
Finance income
Interest on bank deposits
2017
£
361
2016
£
121
InfraStrata plc – Annual Report and Financial Statements 2017
34
Notes to the financial statements
for the year ended 31 July 2017
11.
Income tax
2017
£
2016
£
The major components of income tax expense for the years ended 31
July 2017 and 2016 are:
a) Income tax recognised in profit or loss
Continuing operations
Current income tax charge/(credit)
Adjustments in respect of current income tax of previous years
Total Current tax
Deferred tax charge/(credit)
-
origination and reversal of timing differences
Total deferred tax
-
-
-
-
-
-
-
-
-
-
b) A reconciliation between tax expense and the product of
accounting loss from continuing operations for the years ended
31 July 2017 and 2016 is as follows:
Accounting loss before tax from continuing operations
(783,459)
(177,614)
Loss on continuing activities multiplied by the standard rate of tax
(19.67%; 2016: 20%)
Expenses not permitted for tax purposes
Tax losses carried forward
Items not subject to tax
(154,106)
11,535
142,571
-
(35,524)
2,527
67,693
(34,696)
-
-
The accounting loss from discontinued operations is £180,672 (2016 – profit - £244,569). No tax charge /
credit arises in 2017 due to expenses not permitted for tax purposes and losses carried forward. No tax
charge arose on the 2016 profit as the profit was not subject to tax.
c) Factors that may affect the future tax charge
The Group has trading losses of £5,700,467 (2016: £4,821,243) which may reduce future tax charges.
Future tax charges may also be reduced by capital allowances on cumulative capital expenditure.
No balance is recognised due to the uncertainty of future results.
InfraStrata plc – Annual Report and Financial Statements 2017
35
Notes to the financial statements
for the year ended 31 July 2017
12. Earnings per share
(Loss) profit
The (loss) profit for the purposes of basic and diluted loss per share
being the net (loss) profit attributable to equity shareholders
Continuing operations
Discontinued operations
Continuing and discontinued operations
Number of shares
Weighted average number of ordinary shares for the purposes of:
Basic earnings per share
Basic and diluted earnings per share
Continuing operations
Discontinued operations
Continuing and discontinued operations
2017
£
2016
£
(783,459)
(180,672)
(964,131)
(177,614)
244,569
66,955
259,405,983
172,318,503
(0.30)p
(0.07)p
(0.37)p
(0.10)p
0.14p
0.04p
For 2017, the share options were not dilutive as a loss was incurred. For 2016 the share options were not
dilutive as the exercise price on all options in issue was in excess of the average price of the Company’s
shares throughout the year.
13.
(Loss) profit attributable to InfraStrata plc
The loss for the period dealt with in the financial statements of InfraStrata plc was £214,326 (2016 profit:
£722,481). As provided by s408 of the Companies Act 2006, no statement of comprehensive income is
presented in respect of InfraStrata plc.
14.
Intangible assets – Gas Storage Development
Group
£
Company
£
Cost
At 1 August 2015
Additions
Grant accrual during year (note 19)
At 31 July 2016
Additions
Net book value
At 31 July 2017
Capitalised finance costs
5,704,951
608,760
(197,597)
6,116,114
475,188
6,591,302
-
-
-
-
-
-
-
Additions during the year to 31 July 2017 include capitalised finance costs totalling £16,002 (2016 -
£135,843).
Capital and other commitments
In the event that the project does not proceed to development IMSL would have an obligation to reinstate the
area of the well-pad which has already been constructed. This is an unrecognised contingent liability
estimated at £100,000 (2016: £100,000). At 31 July 2017 the Group had capital commitments of £nil (2016:
£Nil relating to the project.
InfraStrata plc – Annual Report and Financial Statements 2017
36
Notes to the financial statements
for the year ended 31 July 2017
15.
Intangible assets – Exploration & Evaluation
Cost
At 1 August 2015
Additions
Disposals
Impairments
At 31 July 2016
Additions
Disposals
Impairments
Net book value
At 31 July 2017
Group
£
Company
£
429,139
280,877
43,158
(424,395)
(28,443)
43,158
(276,133)
(28,443)
19,459
19,459
6,902
-
(26,361)
6,902
-
(26,361)
-
-
The Company’s interest in exploration licence PL1/10 was assigned on 16 February 2017 with no
consideration payable. The Company’s interest in exploration licence P2123 was relinquished on 19 December
2016.
The Company has a retained Net Profits Interest in each of exploration licences P1918, P2222 and P2235. No
value has been ascribed to the Net Profits Interests retained on each of the licence interests as it is not
possible to determine a reliable fair value for these instruments.
16.
Property, plant and equipment
Group
Cost
At 1 August 2015
Additions
At 31 July 2016
Additions
Written-off
At 31 July 2017
Depreciation
At 1 August 2015
Charge for the year
At 31 July 2016
Charge for the year
Written-off
At 31 July 2016
Net book value
At 31 July 2017
Freehold
property
£
Office
equipment
£
Total
£
523,418
458
523,876
-
(83,776)
83,318
458
83,776
-
(83,776)
-
440,100
82,965
167
82,965
167
83,132
644
(83,776)
-
-
83,132
644
(83,776)
-
440,100
440,100
-
440,100
-
-
440,100
-
-
-
-
-
-
440,100
At 31 July 2016
440,100
644
440,744
InfraStrata plc – Annual Report and Financial Statements 2017
37
Notes to the financial statements
for the year ended 31 July 2017
16.
Property, plant and equipment (continued)
Company
Cost
At 1 August 2015
Additions
At 31 July 2016
Additions
Written-off
At 31 July 2017
Depreciation
At 1 August 2015
Charge for the year
At 31 July 2016
Charge for the year
Written-off
At 31 July 2017
Net book value
At 31 July 2017
At 31 July 2016
17.
Investments
Company
Investment in subsidiaries
Cost
Balance at 1 August 2016 and 31 July 2017
Impairment
Balance at 1 August 2016 and 31 July 2017
Net book value
Balance at 31 July
Investment in subsidiaries
Freehold
property
£
Office
equipment
£
-
-
-
-
-
-
-
-
-
-
-
-
Total
£
18,172
458
18,630
-
(18,630)
18,172
458
18,630
-
(18,630)
-
-
17,819
167
17,986
644
(18,630)
17,819
167
17,986
644
(18,630)
-
-
-
-
644
644
2017
£
2016
£
15,247,011
15,247,011
(15,247,011)
(15,247,011)
-
-
The Company’s subsidiary undertakings at 31 July 2017**, all of which are wholly owned unless indicated
otherwise, are as follows:
InfraStrata UK Limited
Holding and corporate
England
InfraStrata UK Limited owns the following
subsidiary undertakings:
Islandmagee Storage Limited (90% owned*)
Sub surface gas storage developer Northern Ireland
Infrastrata UK Limited’s registered office address is 200 Strand, London, England, WC2R 1DJ. Islandmagee
Storage Limited’s registered office address is 8 Portmuck Road, Islandmagee, Larne, Co Antrim, Northern
Ireland, BT40 3TW,
InfraStrata plc – Annual Report and Financial Statements 2017
38
Notes to the financial statements
for the year ended 31 July 2017
17.
Investments (continued)
Company
Investment in subsidiaries
* In September 2016 InfraStrata UK Limited increased its interest in Islandmagee Storage Limited from 65%
to 90% effected by the issue of new shares in Islandmagee Storage Limited which reduced Moyle’s interest
from 35% to 10%. The transaction will mean that when the construction and operation of the facility is certain
or when the current shareholders’ interests in the project are monetised Moyle will no longer have to advance
IMSL approximately £2m plus interest to enable Islandmagee Storage Limited to partially repay shareholders
loans paid to date by InfraStrata UK Limited. As detailed in note 29, after the year end InfraStrata UK Limited
increased its ownership to 100%.
Under the terms of a preliminary shareholder agreement entered into by InfraStrata UK Limited and Moyle in
January 2010, InfraStrata UK Limited continues to assume one hundred percent of the risks and rewards of
ownership of Islandmagee Storage Limited (including voting rights) until such time as Moyle settles its share
of the intercompany loan to Islandmagee Storage Limited when the construction and operation of the facility is
certain or when the current shareholders’ interests in the project are monetised. Therefore InfraStrata plc
includes 100% of the results, assets and liabilities of Islandmagee Storage Limited in its financial statements.
** During the year the Company’s subsidiaries Portland Gas Limited, Portland Gas Storage Limited and
Portland Gas Transportation Limited were dissolved. These companies had no assets or liabilities other than
loans from or to other group companies which had been fully impaired in the Company’s financial statements
at 31 July 2016.
The Company has impaired its investment in InfraStrata UK Limited and loan receivable from InfraStrata UK
Limited as required.
18.
Trade and other receivables
Amounts due from Group undertakings
Trade receivables
Other receivables
Prepayments
Group
2017
£
-
44,702
32,708
21,308
Group
2016
£
-
1,104,115
37,587
40,870
Company
2017
£
7,113,671
44,702
31,549
21,308
Company
2016
£
5,873,052
1,104,115
37,462
35,221
98,718
1,182,572
7,211,230
7,049,850
An element of the Company and Group’s credit risk is attributable to its trade and other receivables. Based
on prior experience and an assessment of the current economic environment, the directors did not consider
any provision for irrecoverable amounts was required and consider that the carrying amounts of these
assets approximates to their fair value.
InfraStrata plc – Annual Report and Financial Statements 2017
39
Notes to the financial statements
for the year ended 31 July 2017
19. Grants and short-term borrowings
Short-term borrowings and restricted cash
In May 2015, the Company concluded a Convertible Loan Facility Agreement with Baron Oil Plc (“Baron”)
under which Baron provided a loan for €1.8 million (£1,400,364) to InfraStrata which was used as working
capital to bridge the receipt of the CEF grant, 70% of which amounting to €1.75 million (£1,358,063) was
received from the EU in May 2016 and placed into an escrow arrangement as security for the loan. In August
2016, the loan was repaid in full by release to Baron of the £1,358,063 held in escrow, a payment of £42,301
and a further payment of £136,134 for the interest on the loan which had been accrued and capitalised to
intangible gas storage development costs at 31 July 2016. Following a revision to the terms of the
Convertible Loan Facility Agreement announced on 26 September 2016, Baron had an accompanying option
to acquire the number of ordinary shares in InfraStrata that represented 16.666% of the enlarged ordinary
share capital of InfraStrata (from time to time) for a payment of £1,536,498. This option expired on 31 March
2017 without being exercised.
On 5 January 2017, the Company entered into a new secured loan agreement with Baron for a facility of up
to £300,000 to provide working capital for the Group and £200,000 of this facility was drawn down during
January 2017. On 29 March 2017, the Company repaid the £200,000 drawn down on the loan facility with
Baron. The loan facility was cancelled and its various security arrangements were released. The Company is
exposed to a contingent financial liability arising from this loan agreement – see note 20.
Grant received in advance
In May 2016, the Company signed a further grant agreement with the European Commission’s Connecting
Europe Facility in relation to the Islandmagee gas storage project for a maximum of €4.024 million or up to
50% of the costs of Front End Engineering and Design (“FEED”) for the project. An advance of 40% of the
maximum grant amounting to €1.6 million has since been held in in a Euro denominated bank account
(included in Cash and cash equivalents in the statement of financial position) pending completion of the
remaining 50% funding required to match the grant and is included in the statement of financial position as a
current liability.
At the prevailing year end exchange rate the cash balance included in the statement of financial position is
£1,432,408 (2016: £1,350,781) and the grant received in advance is £1,440,913 (2016: £1,358,886).
20.
Financial liability
Following repayment and cancellation of the 5 January 2017 loan (see note 19 above) Baron remains entitled
to receive an additional £200,000 (the “Additional Payment”) in the event of a sale or disposal by InfraStrata
or its subsidiaries, Islandmagee Storage Limited and InfraStrata UK Limited, of substantially all of their
assets, which comprise interests in the Islandmagee gas storage project, and/or a change in control of the
Company, Islandmagee Storage Limited or InfraStrata UK Limited, within two years from the date of the loan
agreement. In the event of a partial disposal of the Company, Islandmagee Storage Limited or InfraStrata UK
Limited's interests in the Islandmagee gas storage project (whereby the Company and InfraStrata UK Limited
retain control of Islandmagee Storage Limited), the Additional Payment will be reduced to £100,000, with the
remaining £100,000 payable in the event of a subsequent disposal or change in control of Islandmagee
Storage Limited or the Islandmagee gas storage project during the two year period.
Under IAS 39 - Financial Instruments: Recognition and Measurement the Company is required to recognise
the fair value of this contingent settlement financial liability at inception and to subsequently recognise the
liability at its amortised cost, using the effective interest rate method, adjusting the expected future cash
flows as required. Establishing the fair value of the liability and subsequently its amortised cost requires the
determination of the expected future cash flows; if it is not possible to reliably estimate these, then the full
contractual cash flows are used. The directors are currently unable to reliably determine whether a change
in control of InfraStrata or a sale or partial disposal of its subsidiaries or their interests in the Islandmagee
gas storage will take place in the period to 4 January 2019. Therefore, the full liability of £200,000 was
recognised at inception as a financial liability in the consolidated statement of financial position. In
establishing this fair value, discounting for the time value of money has been ignored as immaterial
At inception, IAS 39 requires that the liability initially recognised be deferred thus creating a corresponding
asset which is amortised as an expense to the consolidated statement of comprehensive income over the
two year period from 5 January 2017. The amortisation is undertaken on a straight line basis, save that if
there is a reduction in the amortised cost of the corresponding liability arising from reductions in expected
future cash flows, the amortisation will be accelerated accordingly.
InfraStrata plc – Annual Report and Financial Statements 2017
40
Notes to the financial statements
for the year ended 31 July 2017
20.
Financial liability (continued)
Amortisation for the period 5 January to 31 July 2017 of £58,000 has been classified as a finance expense in
the statement of comprehensive income. The remaining asset has been recognised as a deferred liability,
with £42,000 included as a non-current asset and £100,000 as a current asset being the proportion of the
liability which is expected to be amortised within twelve months.
The expect future cash flows will be reviewed at each period end and to the extent the future cash out flows
are not expected to crystallise, the amortised cost of the liability will be adjusted, resulting in corresponding
credits to the consolidated statement of comprehensive income. If the expected future cash flows are
subsequently reinstated, the liability is increased and a debit to the consolidated statement comprehensive
income will arise. As at the year end, it is still not possible to reliability determine if there will be a change in
ownership of the subsidiaries and therefore the contingent liability continues to be recognised in full.
21.
Cash and cash equivalents
Group
2017
£
Group
2016
£
Company
2017
£
Company
2016
£
Restricted cash
Cash at bank
-
1,548,169
1,358,063
2,454,006
-
1,545,779
1,358,063
2,442,818
1,548,169
3,812,069
1,545,779
3,800,881
The directors consider that the carrying amount of these assets approximates their fair value. The credit risk
on liquid funds is limited because the counter-parties are banks with high credit ratings.
22.
Trade and other payables
Trade creditors
Preference shares (note 24)
Other taxation and social security
Accruals
Group
2017
£
71,889
12,500
18,949
46,287
Group
2016
£
Company
2017
£
Company
2016
£
550,253
12,500
707,331
422,971
64,935
12,500
18,949
20,802
548,303
12,500
707,643
363,031
149,625
1,693,055
117,186
1,631,577
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
InfraStrata plc – Annual Report and Financial Statements 2017
41
Notes to the financial statements
for the year ended 31 July 2017
23. Financial assets and liabilities
The Group and Company’s financial instruments comprise cash and cash equivalents, short-term borrowings
and items such as trade and other receivables and trade and other payables which arise directly from the
Group’s operations. The Group’s operations expose it to a variety of financial risks including credit risk,
interest rate risk, foreign currency exchange risk and liquidity risk. Given the size of the Group, the directors
have not delegated the responsibility of monitoring financial risk management to a subcommittee of the
Board. The objectives of the financial instrument policies are to reduce the Group and Company’s exposure
to financial risk. The policies set by the Board of directors are implemented by the Company’s finance
department.
Credit risk
The credit risk on liquid funds is limited because the Group and Company policy is to only deal with counter
parties with high credit ratings. With the exception of the funds held in an escrow account and classified as
restricted cash at 31 July 2016, the Group has held all funds in Bank of Scotland during the last two years. In
the directors’ view there is a low risk of the bank holding the Group’s funds at year end failing in the
foreseeable future.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was:
Trade and other receivables
Due from subsidiary undertakings
Restricted cash
Cash and cash equivalents
Group
2017
£
70,349
-
-
1,548,169
Group
2016
£
-
1,141,702
-
1,358,063
2,454,006
Company
2017
£
70,349
7,113,671
-
1,545,779
Company
2016
£
-
1,141,577
5,873,052
1,358,063
2,442,818
The reconciling items between the trade and other receivables presented above and that presented in note
18 are VAT receivable and prepayments. No receivables are past due but not impaired.
Interest rate risk
The Company and Group are exposed to interest rate risk as a result of positive cash balances, denominated
in sterling and in euros, which earn interest at variable rates. Any surplus cash is held on deposit with Bank
of Scotland. An effective interest rate increase or decrease by 1% on the cash and cash equivalents balance
at year end would result in a before tax financial effect of an increase or decrease of £15,482 (2016:
£24,540).
As disclosed in note 19, the Group and Company’s short-term borrowings at 31 July 2016 bore interest at a
fixed rate of 8% and were repaid in full with interest in August 2016.
Foreign currency risk
At 31 July 2017, €1.6 million (£1,440,913) received in advance in respect of a grant for the FEED study on
Islandmagee gas storage project was held in a Euro denominated bank account pending completion of the
remaining 50% funding required to match the grant. The value of the amount received will be converted into
sterling when the match funding has been secured to pay for suppliers on the FEED study in sterling.
InfraStrata plc – Annual Report and Financial Statements 2017
42
Notes to the financial statements
for the year ended 31 July 2017
23. Financial assets and liabilities (continued)
The currency risk disclosures are as follows:
Cash and cash equivalents
Cash and cash equivalents
Grant received in advance
Short term convertible borrowings and accrued interest
Group
2017
USD
-
Group
2016
USD
£1,046
Euros
£1,432,408
(£1,440,913)
-
Euros
£1,350,781
(£1,358.886)
(£178,435)
The book value of financial assets and liabilities disclosed is considered to be equal to fair value.
Liquidity risk
The total carrying value of Group and Company financial liabilities is disclosed in note 21 (trade and other
payables) and in note 20 (financial liability). The Company seeks to issue share capital or dispose of assets
when external funds are required. The reconciling items between the contractual maturities presented
below and that presented in notes 21 and 20 are taxes and accruals. The following table shows the
contractual maturities of the Group’s and Company’s financial liabilities, all of which are measured at
amortised cost.
Trade & other payables
Within one month
More than one month less than one year
Short term Borrowings
Within one month
More than one month less than one year
Financial liability (Note 20)
Within one month
More than one month less than one year
More than one year
Group
2017
£
Group
2016
£
Company
2017
£
Company
2016
£
71,889
-
550,253
-
64,935
-
548,303
-
-
-
-
200,000
1,400,364
-
-
-
-
-
-
-
200,000
1,300,364
-
-
-
-
24.
Share capital and redeemable preference shares
Share capital classed as equity
Number
2017
£
Number
2016
£
Ordinary shares of 0.01p
Ordinary shares of 1p
Deferred shares of 1p
Second deferred shares of 0.01p
376,041,599
-
895,424,391
18,616,118,301
37,604
-
8,954,244
1,861,612
-
188,041,599
895,424,391
-
-
1,880,416
8,954,244
-
10,853,460
10,834,660
InfraStrata plc – Annual Report and Financial Statements 2017
43
Notes to the financial statements
for the year ended 31 July 2017
24.
Share capital and redeemable preference shares (continued)
Allotted, called up and fully paid
Ordinary shares
1p Ordinary Shares
0.01p Ordinary Shares
Total
Number
£
Number
At 31 July 2015
151,991,599
1,519,916
Issue of 1p ordinary shares
36,050,000
360,500
-
At 31 July 2016
188,041,599
1,880,416
-
-
-
£
-
-
-
£
1,519,916
360,500
1,880,416
Share subdivision
(188,041,599)
(1,880,416)
188,041,599
18,804
(1,861,612)
Issue of 0.01p Ordinary shares
At 31 July 2017
-
-
-
-
188,000,000
18,800
18,800
376,041,599
37,604
37,604
Allotted, called and fully paid
Deferred Shares
1p Deferred Shares
Number
£
0.01p Second Deferred
Shares
£
Number
Total
£
At 31 July 2015 and 31 July 2016
895,424,391
8,954,244
-
-
8,954,244
Share subdivision
-
-
18,616,118,301
1,861,612
1,861,612
At 31 July 2017
895,424,391
8,954,244
18,616,118,301
1,861,612
10,815,856
Redeemable preference shares of £1 each
(classified as liabilities)
At 31 July 2017, 2016 and 2015
Allotted called up and part paid
Number
£
50,000
12,500
On 31 January 2017, following approval at the Company’s AGM, the existing ordinary shares of 1 pence
each were subdivided into 1 New Ordinary Share of 0.01 penny and 99 Second Deferred Shares of 0.01
penny each.
Neither the Deferred Shares nor Second Deferred Shares carry any rights to vote or any dividend rights, are
not admitted to AIM and holders will only be entitled to a payment on return of capital or winding up of the
Company after each of the holders of the Ordinary Shares has received a payment of £10,000,000 on each
such share.
On 3 March 2017, the Company issued 162,000,000 shares of 0.01 penny each at 0.5 pence to raise
£810,000, before expenses, to institutional and other shareholders. The expenses of the issue totalled
£55,580.
On 1 June 2017, the Company issued 26,000,000 shares of 0.01 penny each at 0.5 pence to raise £130,000,
before expenses, to institutional and other shareholders. The expenses of the issue totalled £9,191.
Details of share issues post year end are given in note 29.
InfraStrata plc – Annual Report and Financial Statements 2017
44
Notes to the financial statements
for the year ended 31 July 2017
24.
Share capital and redeemable preference shares (continued)
Preference shares
The preference shares carry the right to an annual dividend out of distributable profits of 0.00001% per
annum on the amount for the time being paid up on each such share and do not carry any voting rights. The
Company may redeem the shares at any time by giving preference shareholders one week’s notice.
Preference shareholders may require the Company to redeem their shares at any time by giving six months’
notice. In each case, any redemption is at par and is subject to the provisions of the Companies Act. The
preference shares are treated as short-term liabilities and included within trade payables.
Authorised share capital
The Company’s articles do not specify an authorised share capital.
Objectives, policies and processes for managing capital
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to achieve its operational objectives.
The Group defines capital as being share capital plus reserves. The Board of directors monitors the level of
capital as compared to the Group’s forecast cash flows and long term commitments and when necessary
issues new shares. Dilution of existing shareholder value is considered during all processes which may result
in an alteration of share capital in issue.
Ordinary share capital in issue is managed as capital and the redeemable preference shares in issue are
managed as current liabilities.
The Group is not subject to any externally imposed capital requirements.
25. Merger reserve
Company
The merger reserve arose on the demerger of the Portland Gas Group of companies from Egdon
Resources Plc when the Company issued shares at a premium to their nominal value on acquisition of
InfraStrata UK Limited. The reserve is not distributable.
Group
The merger reserve represents the difference between the nominal value of the shares issued on the
demerger and the combined share capital and share premium of InfraStrata UK Limited at the date of the
demerger.
26.
Share based payment reserve
The reserve for share based payments is used to record the value of equity settled share based payments
awarded to employees and transfers out of this reserve are made upon the exercise or expiration of the
share awards. The transfer in of £12,470 in 2016 related to the share option expense for the year. There
were no options forfeited or exercised during the year (2016: £nil). For further information on the share
based payment scheme see note 8.
InfraStrata plc – Annual Report and Financial Statements 2017
45
Notes to the financial statements
for the year ended 31 July 2017
27. Operating lease commitments
Future minimum rentals payable under non-cancellable operating leases as at 31 July are as follows:
Amounts due:
Within one year
Land and
buildings
2017
£
Land and
buildings
2016
£
-
15,000
Operating lease payments represent rentals payable by the Group for office premises. The lease was
terminated in January 2017.
28.
Related party transactions
Group and Company
Until January 2017 InfraStrata plc leased the Group’s head office from Toffee Limited, a company of which
Andrew Hindle (director of InfraStrata plc until 27 June 2017) is a director and shareholder. The rent and
service charges paid during the period were £14,275 (2016: £32,500) and an additional £4,460 was paid for
associated charges. The balance outstanding at 31 July 2017 was £nil (2016: £nil).
Company
The Company has related party relationships with its subsidiaries in the course of normal operations.
InfraStrata plc recovered overhead, technical and project management costs from Islandmagee Storage
Limited of £520,513 (2016: £468,539). Gross balances due to/from subsidiaries were £Nil (2016: £207,732)
/ £15,531,994 (2016: £14,499,107). The amounts due from Group undertakings, which are unsecured, are
stated net of an impairment provision of £8,418,323 (2016: £8,418,323).
29.
Events after the reporting period
On 20 October 2017, InfraStrata completed a placing of 125,000,000 new ordinary shares of 0.01 penny at
an issue price of 0.4 pence each to raise £457,586 after expenses. This was made in order to meet working
capital expenses.
The Company has recently announced a placing to raise £375,000 before expenses. Once completed, the
funds from this placing will fund the Company’s minimum levels of corporate costs and care and maintenance
costs on the Project to the end of November 2018.
In November 2017 a new non-executive board were announced. The chairman’s statement and the Strategic
report note activities since the financial year close of 31st July 2017.
In December 2017, the Company’s wholly-owned subsidiary, InfraStrata UK Limited increased its ownership in
IMSL from 90% to 100% by acquiring the remaining 10% interest from Moyle Energy Investments Limited.
The European Union confirmed the extension of the EU Grant, originally set to expire in December 2017, for
an additional year until December 2018, together with the renewal of the Project’s status as a Project of
Common Interest (PCI).
30. Control of the Group
There is no ultimate controlling party of InfraStrata plc.
InfraStrata plc – Annual Report and Financial Statements 2017
46
Chairman’s Letter of Notice of General Meeting
(Non-Executive Chairman)
(Chief Executive Officer)
(Non-Executive Director)
(Non-Executive Director)
Registered office:
200 Strand
London
WC2R 1DJ
29 January 2018
Directors:
Graham Lyon
Adrian Pocock
Matthew Beardmore
Karen Campbell
Dear Shareholder
1.
Introduction
Notice of the Company’s forthcoming general meeting to be held at 11:00 a.m. on 27 February 2018 (“GM” or
“General Meeting”) appears on the following pages.
2.
Resolution to be proposed at the GM
There is only one resolution to the proposed at the GM, which is the tabling of the annual report and accounts.
A copy of the annual report and accounts (together with the Directors’ and Auditor’s reports on the annual report
and accounts) for the Company for the financial year ended 31 July 2017 (the “Accounts”) has been sent to you
with this document. Shareholders will be asked to receive the Accounts at the General Meeting.
3.
Recommendation
Your Directors consider the Resolutions to be proposed at the GM to be in the best interests of the Company
and its shareholders as a whole. Consequently, the Directors recommend shareholders to vote in favour of the
Resolutions as they intend to do in respect of their own beneficial holdings totalling 15,070,043 Ordinary shares
(representing 3.01 per cent. of the Company’s issued share capital as at the date of this letter).
A form of proxy is included for use at the GM. Forms of proxy should be completed, signed and returned as soon
as possible and in any event so as to be received by Link Asset Services at PXS1, 34 Beckenham Road,
Beckenham, Kent BR3 4ZF not less than 48 hours prior to the time appointed for the holding of the GM on 27
February 2018.
Completion of a proxy form will not prevent you from attending the GM in person if you so wish.
Yours sincerely
Graham Lyon
Non-Executive Chairman
InfraStrata plc – Annual Report and Financial Statements 2017
47
Notice of General Meeting
Notice is hereby given that a General Meeting of InfraStrata plc (the “Company”) will be held at the offices of
Kerman & Co LLP, 200 Strand, London WC2R 1DJ on 27 February 2018 at 11:00 a.m., for the purpose of
passing the following Resolution, which will be proposed as an ordinary resolution.
Ordinary Resolution
1.
To receive the report of the Directors and the audited accounts of the Company for the year ended 31
July 2017, together with the report of the Auditor on those audited accounts.
By order of the Board
Simon W. Holden
Company Secretary
Notes:
Registered office:
200 Strand
London
WC2R 1DJ
Dated: 29 January 2018
(1) A member entitled to attend, speak and vote is entitled to appoint a proxy to attend, speak and vote on his behalf. A
proxy need not be a member of the Company.
(2) A member must be registered as the holder of ordinary shares by 11:00 a.m. on 23 February 2018 in order to be entitled
to vote at the meeting as a member in respect of those shares.
(3) Forms of proxy, together with any power of attorney under which it is executed or a notarially certified copy thereof, must
be completed and, to be valid must reach the Registrar of the Company at Link Asset Services, PXS1, 34 Beckenham,
Kent BR3 4ZF by 11:00 a.m. on 23 February 2018. Your attention is drawn to the other notes on the proxy form.
(4)
If the appointer is a corporation, the form of proxy must be under its common seal or under the hand of an officer or
attorney duly authorised.
(5) The appointment of a proxy does not preclude a member from attending and voting at the meeting.
(6)
In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to
the exclusion of the vote of the other registered holder(s) and for this purpose seniority shall be determined by the order
in which the names stand in the register of members.
(7) Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 only those shareholders on the Register of
Shareholders at close of business on 23 February 2018 shall be entitled to attend, speak and vote at the meeting in
respect of the number of shares registered in their names at that time. If the meeting is adjourned by more than 48
hours, then to be so entitled, shareholders must be entered on the Company’s Register of Members 48 hours before the
time appointed for holding the adjourned meeting or if the Company gives notice of the adjourned meeting, at the time
specified in that notice.
(8) You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares.
You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy,
you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which
they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you).
Please also indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed and
should be returned together.
(9) As at the close of business on 26 January 2018 (the last business day prior to the publication of this notice), the
Company’s issued share capital comprised 501,041,599 ordinary shares of £0.0001 each. Each ordinary share carries
the right to one vote at the annual general meeting of the Company and, therefore, the total number of voting rights in
the Company as at the time and date given above is 501,041,599.
(10) CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service
may do so for the meeting and any adjournment(s) thereof by utilising the procedures described in the CREST Manual.
CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a
voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the
appropriate action on their behalf.
In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (“a CREST
Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (“EUI”)
specifications and must contain the information required for such instructions, as described in the CREST Manual. The
message must be transmitted so as to be received by the issuer’s agent (“RA10”) by 11:00 a.m. on 23 February 2018.
For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message
by the CREST Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in
the manner prescribed by CREST. The issuer’s agent ID is RA10.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does
not make available special procedures in CREST for any particular messages. Normal system timings and limitations will
therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is CREST personal member or sponsored member or has appointed a
voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall
be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this
connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in
particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
Proxy Form
INFRASTRATA PLC
(Incorporated and registered in England with company number 06409712)
Form of Proxy for use at the General Meeting of InfraStrata plc to be held at 200 Strand, London WC2R 1DJ on 27
February 2018 at 11:00 a.m.
I/We, the undersigned, being (a) member/member(s) of InfraStrata plc, hereby appoint the Chairman of the GM or,
Name of Proxy …………………………………………………………………………………………………………………………………
Number of shares ………………………… as my/our proxy to vote for me/us and on my/our behalf at the General Meeting of
the Company to be held at 11.00 a.m. on 27 February 2018 at 200 Strand, London WC2R 1DJ and at any adjournment
thereof. I/We wish my/our proxy to vote as shown below in respect of the resolutions set out in the Notice of the Meeting.
Please indicate by ticking the box if this proxy appointment is one of multiple appointments being made □
For the appointment of one or more proxy, please refer to explanatory note 3 below.
No. Ordinary Resolutions
1
To receive the report and accounts for the year ended 31 July 2017
For
Against
Vote
withheld*
If you want your proxy to vote in a certain way on the resolutions specified, please place an “X” in the appropriate box. If you
fail to select any of the given options your proxy can vote as he/she chooses or can decide not to vote at all. The proxy can
also vote on any other resolution that is put to the meeting.
* The “Vote withheld” option is to enable you to abstain on any particular resolution. However, it should be noted that a “vote
withheld” is not a vote in law and will not be counted in the calculation of the proportion of the votes “For” and “Against” a
resolution.
Signed …………………………………
Dated this …………………… day of …………………………………………………… 2018
Name ……………………………………………………………
Address …………………………………………………………………………………………………………………………………………
Notes:
1
2
3
A proxy need not be a member of the Company but must attend the meeting to represent you. If you wish to appoint as
a proxy a person other than the Chairman of the General Meeting (“GM”), please delete the words “the Chairman of
the GM” and insert the name of the other person. All alterations made to this Proxy Form must be initialled by the
signatory. If you sign and return this Proxy Form with no name inserted in the box, the Chairman of the GM will be
deemed to be your proxy. If the proxy is being appointed in relation to less than your full voting entitlement, please
enter the number of shares in relation to which they are authorised to act as your proxy. If left blank your proxy will be
deemed to be authorised in respect of your full voting entitlement (or if this Proxy Form has been issued in respect of a
designated account for a shareholder, the full voting entitlement for that designated account).
To be effective, this Proxy Form (together with any power of attorney or other authority (if any) under which it is signed,
or a notarially certified copy of such authority) must be received by post or (during normal business hours only) by
hand at the office of the Company’s Registrars, being Link Asset Services at PXS1, 34 Beckenham Road, Beckenham,
Kent BR3 4ZF, by no later than 11:00 a.m. on 23 February 2018.
You are entitled to appoint more than one proxy provided that each proxy is appointed to exercise rights attached to a
different share or shares held by you. You may not appoint more than one proxy to exercise rights attached to any one
share. To appoint more than one proxy, (an) additional Proxy Form(s) may be obtained by contacting the Registrars
helpline on +44 (0)871 664 0300 (calls cost 12p per minute plus network extras) or you may photocopy this form.
Please indicate next to the proxy holder’s name the number of shares in relation to which they are authorised to act as
your proxy. Please also indicate by ticking the box provided if the proxy instruction is one of multiple instructions being
given. All forms must be signed and should be returned together in the same envelope.
InfraStrata plc – Annual Report and Financial Statements 2017
49
4
5
6
7
8
9
10
Completion and return of this Proxy Form will not prevent you from attending in person and voting at the GM should
you subsequently decide to do so.
If you wish your proxy to cast all of your votes “For” or “Against” a resolution you should insert an “X” in the appropriate
box. If you wish your proxy to cast only certain votes “For” and certain votes “Against”, insert the relevant number of
shares in the appropriate box. In the absence of instructions, your proxy may vote or abstain from voting as he or she
thinks fit on the specified resolution and, unless instructed otherwise, may also vote or abstain from voting as he or she
things fit on any other business (including on a motion to amend a resolution to propose a new resolution or to adjourn
the GM) which may properly come before the GM.
The “Vote Withheld” option is provided to enable you to instruct your proxy to abstain from voting on a particular
resolution. A “Vote Withheld” is not a vote in law and will not be counted in the calculation of the proportion of the votes
“For” or “Against” a resolution. The “Discretionary” option is provided to enable you to give discretion to your proxy to
vote or abstain from voting on a particular resolution as he or she thinks fit.
In accordance with the permission in Regulation 41 of the Uncertificated Securities Regulations 1001 (SI 2001 No.
3755), only those holders of ordinary shares who are registered on the Company’s share register at close of business
on 23 February 2018 shall be entitled to attend the above GM (or at close of business on the day which is two days
before the day of any adjourned meeting) and to vote in respect of the number of shares registered in their names at
that time. Changes to entries on the share register after at close of business on 23 February 2018 shall be disregarded
in determining the rights of any person to attend and/or vote at the GM.
This Proxy Form must be signed by the shareholder or his/her attorney. Where the shareholder is a corporation, the
signature must be under seal or signed by a duly authorised representative stating their capacity (e.g. Director,
secretary). In the case of joint shareholders, any one shareholder may sign this Proxy Form or may vote in person at
the GM. If more than one joint shareholder is present at the GM either in person or by proxy, that one of them whose
name stands first in the register of members in respect of the share shall alone be entitled to vote (whether in person
or by proxy) in respect of it.
To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that
the cut-off time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any
amended proxy appointment received after the relevant cut-off time will be disregarded.
In order to revoke a proxy instruction you will need to inform the Company by sending notice in writing clearly stating
your intention to revoke your proxy appointment to Company’s Registrars, being Link Asset Services at PXS1, 34
Beckenham Road, Beckenham, Kent BR3 4ZF. In the case of a member which is a company, the revocation notice
must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the
company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified
copy of such power or authority) must be included with the revocation notice. The revocation notice must be received
by the Company no later than 48 hours before the time of the holding of the GM or any adjournment thereof. If you
attempt to revoke your proxy appointment but the revocation is received after the time specified then your proxy
appointment will remain valid. If you have appointed a proxy and attend the GM in person, your proxy appointment will
automatically be terminated.
If you submit more than one valid proxy appointment in respect of the same share or shares, the appointment received
last before the latest time for the receipt of proxies will take precedence. If the Company is unable to determine which
was received last, none of the proxy appointments in respect of that share or shares shall be valid.
InfraStrata plc – Annual Report and Financial Statements 2017
50