Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
ENERGY
FOR
PAKISTAN
Annual Report and Accounts 2012
Contents
Chairman’s Statement
Chief Executive’s Report
Report of the Directors
Report of the Independent Auditors
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
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
01
02
03
11
13
14
15
16
17
18
19
Notes to the Consolidated Statement of Cash Flows 20
Notes to the Consolidated Financial Statements
Company Information
21
44
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
01
Chairman’s statement
for the year ended 31 December 2012
I am pleased to present Oracle Coalfields’ (or the “Company”) results for the period ending 31 December 2012. During
the year your company continued to make good progress, including the issuance of the Mining Lease, the signing of the
Joint-Development Agreement with Karachi Electric Supply Company (KESC) and the preparation of an Implementation
Plan to proceed with mine development and production. As might be expected for a mining company at this stage of
development, the consolidated financial results for the year to 31 December 2012 show an operational loss after taxa-
tion for Oracle and its subsidiaries (“Group”) of £741,799 (2011: £948,092). The basic loss per share was 0.35p (2011: loss
0.46p).
At the end of 2012 the Group had cash and cash equivalents of £99,592 (2011: £1,604,602) and total assets less current
liabilities of £3.52 million (2011: £4.23 million).
Early in 2013, £934,000 of further capital was raised including contributions from shareholders and management. The
Group is now expected to have sufficient working capital to cover its working capital requirements over 2013. However,
additional funds will be required to develop the Block VI coal mine. The Group is therefore considering options to raise
the necessary debt and equity, and has started discussions with potential strategic investors/technical partners from the
Middle East and Far East.
Whilst Oracle has made continued progress in developing the project, 2012 was a mixed year in Pakistan on the political
and security fronts. Consequently, international investors have been hesitant, and foreign direct investment in the coun-
try was low in 2012 on a year on year basis. That said, due to the urgent need to resolve the energy crisis in Pakistan,
the Government remains keen to assist your Company in the development of the coal project and provides significant
support.
The Board extends its thanks to the Coal & Energy Development Department, the Thar Coal Energy Board, the Sindh
Coal Authority, and the Government of Sindh for their continued assistance. The Board also continues to be very grate-
ful for the patience and support of our shareholders.
Your Company is moving from project development to project implementation. Completion of the implementation
phase will largely depend on financing and on entering a suitable partnership, both of which require thorough assess-
ment. The Board aims to pursue both objectives this year as expeditiously as possible with the goal of making the project
a significant contributor to Pakistan’s energy mix.
Adrian Loader
Chairman
25 March 2013
02
Chief executive’s statement
for the year ended 31 December 2012
The Government’s continued support for the earliest development of the Thar Coalfield is a key part of its strategy to meet
the growing domestic demand for energy at the lowest possible cost whilst alleviating the national balance of payments
by reducing dependency on imported fuel.
After completion in 4th Quarter 2011 by SRK Consulting of the Technical Feasibility Study on the Block VI coal deposit
in the Thar Coalfield, Sindh Province the Study was submitted to the Mines & Mineral Development Department,
Government of Sindh, which issued the Mining Lease to the Company’s local subsidiary, Sindh Carbon Energy Limited
(“SCEL) in April 2012. The Mining Lease is a 30 year lease with an option to extend for another 30 years.
During 2012, SCEL entered a Joint-Development Agreement (JDA) with Karachi Electric Supply Company (KESC). The JDA
sets out KESC’s intent to develop a 300 MW mine-mouth power plant at Block VI with an option to increase to 1,100 MW
over time. The JDA is a significant step in the Company’s relationship with KESC which is making considerable efforts to
develop coal-fired power plants in Sindh Province, and so reduce dependence on oil and gas-fired power plants in view of
cost and secure long term supply of fuel. The emphasis on Thar coal, and particularly the Block VI project, is important for
KESC to provide the necessary security of supply.
Following the JDA with KESC, the Company appointed Dargo Associates Ltd, a leading independent coal consultant
who have been involved with the project since 2007, to review the SRK Technical Feasibility Study and advise on a
smaller mine to support a minimum 300 MW power plant at site. In 4th Quarter of 2012, Dargo Associates published the
Implementation Plan for a 2.4 million tonnes per annum open-pit mine that could feed a 300 MW power plant as well as
supply local industries such as the cement sector. Capital and operating expenditure estimates were reduced substantially
from previous figures. This is further detailed in the following section under Block VI: from Feasibility to Implementation.
During this period, the Company also entered a Memorandum of Understanding (MOU) with Thatta Cement Company, a
leading cement company in Pakistan. This agreement is in addition to the MOU previously entered with Lucky Cement Ltd.
Pre-development work in preparation for mining is currently under way at the site including a Corporate Social
Responsibility Programme (CSR). The CSR activities include basic healthcare, clean water and livestock veterinary care for
the local communities. The work programme also covers activities such as drilling water wells to determine the number
required for both the coal mine and the power plant. An access road within the Block VI is under consideration.
The Company is making every effort to ensure that the development of the coal mine at Block VI, Thar Coalfield, complies
with the requirements of international standards and practice and due corporate governance.
The Baseline Studies of the Environmental & Social Impact Assessment (ESIA) undertaken by Hagler Bailly of Pakistan and
Wardell Armstrong International are complete with Social Impact studies due to be completed in the 2nd Quarter of 2013.
The Company will then submit the ESIA to the Sindh Environmental Protection Agency, Government of Sindh (SEPA) for
a public hearing in Thar which is planned for 3rd Quarter 2013. As with the Baseline Studies, your Company believes that
there should be no major impediments for the project.
With the grant of the Mining Lease, signing of the JDA with KESC, implementation plan to proceed with open pit mining
operation and commencement of pre-development work, Oracle is definitely moving from the development to the
implementation phase.
Shahrukh Khan
Chief Executive Officer
25 March 2013
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
03
Report of the Directors
for the year ended 31 December 2012
The Directors present their report with the financial statements of the Company and the Group for the year ended 31
December 2012.
PRINCIPAL ACTIVITY
The principal activity of the Group in the year under review was that of the exploration for and development of coal in
Pakistan. The exploration and development is primarily carried out in Pakistan, but the Group is controlled, financed and
administered within the United Kingdom which remains the principal place of business.
REVIEW OF BUSINESS
A review of the results for the year and of outlook and future developments in the business is given in the Chairman’s
Statement and the Chief Executive’s Report, which form part of this Annual Report.
PRINCIPAL RISKS AND UNCERTAINTIES FACING THE GROUP
The Group is principally engaged in the development of lignite coal resources in Block VI in the Thar desert in the
Sindh province in Pakistan through commercial open cast mine supplying projected mine-mouth power stations.
The principal strategic and operational risks and uncertainties facing the Group are described below. Information on
financial risk management is set out in the Financial Instruments section in this report.
Environmental and social risk
The Thar project is subject to environmental regulations both in Pakistan and through international standards and
conventions. Non-compliance could significantly impact the development of the mine and raising of debt financing.
The development of the Thar mine could negatively impact communities near its operation due to resettlements,
population inflow and necessary infrastructure.
Technical risk
Co-completion risk exists where the success of one project depends on the completion of another. Both the mine and
any associated power station cannot operate without the other. If the power station does not complete on time then
the mine cannot start deliveries, and vice versa. There is a similar co-dependency in operational phase.
The mine must be de-watered prior to mine construction and during production. The water produced must be
disposed of safely.
Economic risk
There are inherent uncertainties in estimation of the capital and operating costs to reach first production, and the fiscal
regime applicable to the project, which will only be resolved when the project contracts are negotiated and the fiscal
regime legally confirmed.
Offtake agreements need to be reached at sustainable commercial rates with mine mouth power stations to justify the
project investment, with sufficient creditworthiness to meet lenders’ risk criteria.
Financing risk
Delivery of the Group’s strategy will require significant financing to fund the cash-sink required for development of its
Thar project. Delays in reaching a Final Investment Decision (‘FID’), or failure to obtain the necessary funding to reach
FID and for the construction phase, and on terms which are acceptable, could mean the Group is not able to fulfil its
strategy or remain as a going concern.
Political, legal and regulatory risk
Although the Government has demonstrated a strong support for the Thar mining development, there is potential for
the Group’s operations and financial results to be affected by instability and changes to the legal, regulatory or fiscal
frameworks in Pakistan. This includes political unrest, variation to the lease terms, and changes to the royalty and
tax rates. The relevant federal and provincial authorities need to fund and complete local infrastructure, including the
power transmission line from the power station(s).
The risk of terrorist attack on the Company and its staff in Pakistan, or on suppliers and customers, remains very real
and could restrict the Company’s ability to manage at the site and the Karachi Office.
04
Report of the Directors
for the year ended 31 December 2012 - continued
RESULTS AND DIVIDENDS
During the year the Group continued to utilise its funds to develop it’s Pakistan Thar mine project. The expenditures
are either capitalised in accordance with IFRS, or expensed. The capitalised expenditures are shown as intangible fixed
assets in the Statement of Financial Position and the expensed expenditures are shown as administrative expenses in
the Income Statement and hence determine the loss for Oracle Coalfields PLC Group of Companies after taxation of
£741,799 (2011: £948,092). No dividends will be distributed for the year ended 31 December 2012 (2011: nil).
GOING CONCERN
The Directors have considered the cashflow requirements of the Group over the next 18 months. If the Group is to
continue exploration and development of the Thar mine project it will be necessary to raise additional funds. Whilst
it is difficult in the current economic downturn to generate the extra funds required, the Directors expect to meet
the funding requirements and therefore believe that the going concern basis is appropriate for the preparation of the
financial statements
SUBSTANTIAL SHAREHOLDINGS
The Directors are aware of the following who were interested, directly or indirectly, in 3% or more of the Group’s
ordinary shares on 31 December 2012:
Mr S Khan
Regency Mines plc
Starvest plc
Sunvest Corporation Limited
Mr A Neubauer
Mr R Rowan
Shareholding
29,530,791
23,600,000
21,867,333
20,000,000
19,335,330
10,000,000
% holding
13.74%
10.93%
10.12%
9.26%
8.95%
4.63%
AUTHORITY TO ISSUE SHARES
Each year at the AGM the Directors seek authority to allot shares. The authority, when granted, lasts until the next AGM.
At the last AGM held on 29th May 2012, shareholders gave authority for the Directors to allot equity securities for cash
up to an aggregate nominal value of £200,000.
HEALTH AND SAFETY
There were no reported personal injuries or fatalities among the Company’s staff or contractors during the year.
SIGNIFICANT AGREEMENTS
The Companies Act 2006 requires the Company to disclose any significant agreements which take effect, alter or
terminate upon a change in control of the Company. The Company is not aware of, or party to, any such agreement.
EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is given in the notes to the financial statements.
DIRECTORS
The Directors during the year under review were:
Mr W A Loader
Chairman
Mr S Khan
Chief Executive
Mr A C R Scutt
Senior Independent Non-Executive Director
Mr M R Stead
Non-Executive Director
Mr G A Philip
Finance Director
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
05
Report of the Directors
for the year ended 31 December 2012 - continued
The beneficial interests of the Directors holding office on 31 December 2012 in the issued share capital of the company
were as follows:
Ordinary 0.1p shares
Mr S Khan
Mr A C R Scutt
Mr W A Loader
Mr M R Stead
31 December 2012
1 January 2012
or date of appointment if later
29,530,791
113,000
100,000
20,000
29,530,791
113,000
100,000
20,000
In addition to the above, in his capacity as a joint honorary trustee, Mr A C R Scutt also holds 225,000 shares for The
Acumen Brigade Investment Club and 165,000 shares for The Ridgeway Investors Group. Mr A C R Scutt is not a
beneficial member of these investment clubs and has no beneficial interest in the shareholdings.
Ordinary 0.1p shares under option
Mr S Khan
Mr A C R Scutt
Mr W A Loader
Mr M R Stead
Mr M R Stead
Number
6,000,000
2,000,000
1,000,000
200,000
250,000
Exercise price
5p
5p
10p
5p
10p
Expiry date
31.03.2017
31.03.2017
01.08.2016
31.03.2017
31.03.2017
INFORMATION ON DIRECTORS AND SENIOR MANAGEMENT
Adrian Loader
Chairman
Mr Loader has extensive international experience with Royal Dutch Shell in strategy, business development, energy
projects and new markets. He held regional responsibility for Shell Pakistan and, as President of Shell Canada, was
responsible for Shell’s oil sands open pit mining operations. Mr Loader is currently a Director of Holcim and a member
of the International Advisory Board of Garda World. He previously served on the boards of Shell Canada, Alliance-Boots,
Candax Energy and Compton Petroleum, the last two as Chairman. Mr Loader is a Fellow of the Chartered Institute of
Personnel and Development and holds a Masters degree in History from Cambridge University.
Shahrukh Khan
Chief Executive Officer
Mr Khan was educated in USA and UK. He was awarded a BA in Business administration and Economics at Richmond,
the American International University in London. Mr Khan has project finance experience in the natural resource and
infrastructure related sector, predominantly in the Middle East, South Asia and China. He has specialist expertise in large
and complex projects, including project valuation and investment appraisal, feasibility studies and other project finance
related services.
Anthony Scutt
Senior Independent Non-Executive Director
Mr Scutt is a qualified Chartered Secretary and a Certified Internal Auditor with the US Institute of Internal Auditors. He
had over 30 years of financial management expertise with Shell International Petroleum and worked in many parts of
the world, including the Malagasy Republic, East and Central Africa, South Vietnam, Cambodia, the Philippines, Gabon
and latterly as the Chief Internal Auditor of Shell UK. Mr Scutt then went on to become an investment analyst, writer and
investor. Mr Scutt is a Non-Executive Director of AIM-listed Starvest plc and Beowulf Mining plc, and unlisted Agricola
Resources plc.
06
Report of the Directors
for the year ended 31 December 2012 - continued
Roderick Stead
Non-Executive Director
Mr Stead was awarded a BSc in Economics from the London School of Economics and is qualified accountant, FCCA.
He brings experience in a variety of management roles in the oil, gas, coal, mining and forestry industries in different
environments. This includes Board experience in over 16 companies with particular expertise in corporate governance
issues, strategic business analysis and the management of major joint venture relationships. Mr Stead has extensive
experience in project finance negotiations with investment banks, multilateral agencies, export credit agencies,
commercial banks, law firms and accountants.
Tony Philip
Finance Director and Company Secretary
Tony holds a Bachelors Degree in Economics from Bristol University and is a Chartered Accountant. He has over 30
years of financial management experience, much of this with the Shell Group, operating in a wide variety of finance
roles managing company finances and governance, including several major project financings within African and
Middle Eastern countries with US, EU and local investors. He has worked with many project companies, notably Nigeria
LNG, Oman LNG, and West African Gas Pipeline, through from feasibility stage to successful operations.
Brian Rostron
Mining and Contracts manager
Brian is a Mining Engineer with over 30 years international experience and an expert on coal. He is a Chartered Engineer
who has been responsible for the operational management of various coal mining companies with overall responsibility
for production, financial performance, acquisitions and restructuring. Mr Rostron has previously worked with Miller
Argent South Wales Ltd, H.J. Banks Mining, Scottish Coal Company, Coal Contractors Ltd as well as the Confederation of
UK Coal Producers and UK member of Eurocoal Executive Committee
GROUPS’ POLICY ON PAYMENT OF CREDITORS
The Group has a policy to pay suppliers within their credit terms whenever it is satisfied that the supplier has provided
goods and services in accordance with agreed terms and conditions. At the statement of financial position date, the
trade payables outstanding represented 40 days.
FINANCIAL INSTRUMENTS
The Group’s financial instruments comprise cash and cash equivalents, loan investments and financial assets and
various items such as trade receivables, trade payables, accruals and prepayments that arise directly from its operations.
The main purpose of these financial instruments is to finance the Group’s operations. The Board regularly reviews and
agrees policies for managing the level of risk arising from the Group’s financial instruments which are summarised as
follows
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
policy throughout the year has been to ensure that it has adequate liquidity to meet its liabilities when due by careful
management of its working capital.
Credit risk
The Group’s principal financial assets are the cash and cash equivalents and taxation receivable as recognised in the
statement of financial position, and which represent the Group’s maximum exposure to credit risk in relation to financial
assets.
Capital management
The Company’s capital consists wholly of ordinary shares. The Board’s policy is to preserve a strong capital base in
order to maintain investor, creditor and market confidence and to safeguard the future development of the business,
whilst balancing these objectives with the efficient use of capital.
Market risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates, interest rates
and equity prices will affect the Group’s and Company’s income or value of its holdings in financial instruments.
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
07
Report of the Directors
for the year ended 31 December 2012 - continued
Commodity price risk
The principal activity of the Group is the development of a coal mining property in Pakistan and the principal market risk
facing the Group is an adverse movement in the commodity price of coal.
REMUNERATION REPORT
This report has been prepared in accordance with the requirements of Schedules 2 Part 1 to the Companies Act 2006 (the
Schedule) and also meets the requirements of the Listing Rules of the Financial Services Authority and describes how the
Board has applied the Principles of Good Governance relating to Directors’ Remuneration. In accordance with Section 439
of the Companies Act 2006 (the Act), a resolution to approve the report will be proposed at the Annual General Meeting
of the Company at which the Financial Statements are to be approved.
Remuneration policy
Executive remuneration packages are designed to attract, motivate and retain Directors of the necessary calibre and to
reward them for enhancing value to shareholders. The performance measurement of the Executive Director and key
members of senior management and the determination of their annual remuneration package is undertaken by the
Remuneration Committee. The remuneration of Non-executive Directors is determined by the Board within limits set in
the Articles of Association.
Executive Directors are entitled to accept appointments outside the Company providing the Board’s permission is sought.
Non-executive Directors’ terms of engagement
The Non-executive Directors have specific terms of engagement. Their remuneration is determined by the Board. In the
event that a Non-executive undertakes additional assignments for the Company, the Non-executive’s fee will be agreed
by the Company in respect of each assignment.
Aggregate Directors’ remuneration
The remuneration paid to the Directors, in accordance with the service contracts, during the year ended 31 December
2012 was as follows:
Executive
Mr S Khan
Mr G A Philip
Non-executive
Mr M R Stead
Mr A C R Scutt
Mr W A Loader
Salary
& fees
£
112,767
73,938
38,797
27,416
61,557
Pensions
£
-
-
-
-
-
Termination
benefits
£
Share based
payments
£
2012
Total
£
2011
Total
£
-
-
-
-
-
-
-
-
-
-
112,767 91,761
73,938 47,352
38,797 64,727
27,416 23,643
61,557 36,066
Directors’ Service Contracts
The Directors have contracts with an indefinite term and a stated termination notice period.
Executive
Mr S Khan
Mr G A Philip
Non-executive
Mr M R Stead
Mr A C R Scutt
Mr W A Loader
Date of appointment
Notice period
13.2.2007
1.10.2011
1.11.2007
22.12.2006
1.8.2011
1 month
1 month
6 months
6 months
3 months
08
Report of the Directors
for the year ended 31 December 2012 - continued
CORPORATE GOVERNANCE REPORT
Throughout 2012 the Board has continued to demonstrate its commitment to maintaining high standards of corporate
governance. The Board supports the ideals of the UK Corporate Governance Code (the “Code”), issued by the Financial
Services Authority in June 2010. This statement describes how the Company applies the principles of the Code and the
Company’s compliance with the specific provisions of the Code. The principles set out in the Code cover four areas:
the Board, Directors’ remuneration, accountability and audit, and relations with shareholders. With the exception of the
Directors’ Remuneration (which is dealt with separately in the Remuneration Report) the following report sets out how
the Board has applied such principles.
Board and Board Committees
The Board of Directors
The Board of the Company is responsible for the Group’s system of corporate governance. At 31 December 2012 the
Board consisted of five Directors being a Chief Executive Officer, Mr S Khan; a Finance Director, Mr G A Philip; and three
Non-executive Directors including the Chairman, Mr W A Loader. The two other Non-executive Directors were Mr A C
R Scutt, Senior Independent Director and Mr M R Stead.
Details of Directors’ service contracts are given in the Remuneration Report on page 9.
All Directors had access throughout the year to the advice and services of the Company Secretary, Mr G A Philip,
who was responsible for ensuring that Board procedures and applicable regulations under the Company’s Articles of
Association or otherwise were complied with. Each Director is entitled, if necessary, to seek independent professional
advice at the Company’s expense.
Board meetings
The Board of Directors meets every two months and has a defined schedule of matters reserved for its decision. The
matters so reserved include responsibility for the overall Group strategy, approval of contracts, commitments to capital
expenditure budgets over £10,000, appointment of directors and staff, approval of remuneration of directors on the
recommendation of the Nomination Committee, issue of shares and warrants, appointment of a financial advisor,
approval of announcements to the market, and a final investment decision to proceed with project implementation.
The Board met 11 times during the year.
Board Committees
The Board Committees, which are comprised of Non-executive Directors (except for the Nomination Committee which
is chaired by the Chief Executive, Mr S Khan), operate within defined terms of reference and report regularly to the
Board.
Audit Committee
The Audit Committee is responsible for (a) reviewing a wide range of matters including half year and annual results
before their submission to the Board, and for monitoring the controls that are in force to ensure the integrity of
information reported to shareholders, and (b) advising the Board on the appointment of external auditors and on their
remuneration for both audit and non-audit work, and discusses the nature, scope and results of the audit with the
external auditors, and (c) reviewing the cost effectiveness and the independence and objectivity of the external auditors.
The Audit Committee comprises Mr M R Stead (Chairman) and Mr A C R Scutt. During the year there were three fully
attended meetings.
Nomination Committee
The Nomination Committee was established post-admission to review the structure, size and composition of the
Board, including the skills, knowledge and experience required and to make recommendations to the Board with regard
to any changes.
The Nomination Committee comprises Mr S Khan (Chairman), Mr A C R Scutt and Mr M R Stead. During the year there
were two fully attended meetings.
Remuneration Committee
The Remuneration Committee is responsible for reviewing the remuneration of Board members and senior executives
of the Company. This responsibility will extend to the review of the remuneration of Board members and senior
executives of the Pakistani subsidiary - at present the Directors of Sindh Carbon Energy Limited are unpaid. It is policy
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
09
Report of the Directors
for the year ended 31 December 2012 - continued
that no individual participates in discussions or decisions concerning his own remuneration. None of the Committee
has any conflicts of interest arising from cross-directorships or day-to-day involvement in running the business.
The Remuneration Committee is entirely non-executive Directors, being Mr A C R Scutt (Chairman) and Mr M R Stead.
No meetings were needed during the year as matters were covered by Board Meetings.
Re-election
All Directors are submitted for re-election at regular intervals, subject to continued satisfactory performance. All
Directors are subject to election by shareholders at the first annual general meeting after their appointment.
Accountability and audit
Financial Reporting
The Board is responsible for presenting a balanced and understandable assessment of the Company’s position and
prospects, extending to interim financial reports and other announcements. All major announcements are approved by
the Chairman, the Executive Directors and the NOMAD.
Internal control
The Directors have overall responsibility for ensuring that the Group maintains a system of internal control to provide
them with reasonable assurance that the assets of the Group are safeguarded and that the shareholders’ investments
are safeguarded. The system includes internal controls covering financial, operational and compliance areas, and risk
management. There are limitations in any system of internal control, which can provide reasonable but not absolute
assurance with respect to the preparation of financial information, the safeguarding of assets and the possibility of
material misstatement or loss.
At the time of the AIM listing, the Board reviewed the system of financial internal controls in place and adopted a series
of accounting and control procedures. These were further strengthened later during 2012 with a series of changes
being made particularly in respect of commitments, payments, cashflow forecasting and monthly financial reporting.
The Board considers that an internal audit function would not be appropriate at this stage of the Group’s development
but keeps the matter under review.
Relations with shareholders
The Directors place great importance on maintaining good communications with both institutional and private
investors. The Group reports formally to shareholders twice a year and more regular communication is provided
through Press Releases and through the website. The Chief Executive supported by the Group’s brokers, presented to
shareholders regularly during the year.
10
Report of the Directors
for the year ended 31 December 2012 - continued
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors
have elected to prepare the financial statements in accordance with International Financial Reporting Standards as
adopted by the European Union. 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 the group and of the profit
or loss of the group for that period. In preparing these financial statements, the directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state that the financial statements comply with IFRS;
prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s and the group’s transactions and disclose with reasonable accuracy at any time the financial position of the
company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the company and the group 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.
STATEMENT AND DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act
2006) of which the group’s auditors are unaware, and each director has taken all the steps that he ought to have taken
as a director in order to make himself aware of any relevant audit information and to establish that the group’s auditors
are aware of that information.
AUDITORS
The auditors, Price Bailey LLP, have expressed their willingness to continue in office and a resolution to re-appoint them
will be proposed at the Group’s forthcoming Annual General Meeting.
On behalf of the Board:
Adrian Loader
Chairman
25 March 2013
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
11
Report of the independent auditors
to the members of Oracle Coalfields PLC group of companies
We have audited the financial statements of Oracle Coalfields plc Group of Companies for the year ended 31 December
2012 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income,
the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Cash Flow Statement
and the related notes. 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 company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and
express an opinion on the financial statements in accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards
for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud
or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and the
parent company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In
addition, we read all the financial and non-financial information in the Chairman’s Statement, the Chief Executive’s
Report and the Report of the Directors to identify material inconsistencies with the audited financial statements. If we
become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements:
•
give a true and fair view of the state of the group’s and the parent company’s affairs as at 31 December 2012 and of
the group’s loss for the year then ended;
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.
•
•
•
Emphasis of matter - Going concern
In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of
the disclosures made in note 1 to the financial statements concerning the company’s ability to continue as a going
concern. The ability of the company to continue to trade is dependent on the company being able to raise sufficient
funds. Based upon the current economic climate there exists a material uncertainty which may cast significant doubt
as to whether the company will be able to generate sufficient funds and therefore the company’s ability to continue as
a going concern. The financial statements do not include the adjustments that would be necessary if the company was
unable to continue as a going concern.
Emphasis of matter - Exploration costs
In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the
disclosures made in note 10 to the financial statements concerning the valuation of the exploration costs. The ability of
the Group to continue its exploration activities and justify sufficient value to justify the carrying value of the intangible
assets is dependent on them being able to generate sufficient funds. Based upon the current economic climate
there exists a material uncertainty which may cast significant doubt as to whether the Group will be able to generate
sufficient funds and therefore the Group’s ability to continue all of its exploration activities. The financial statements do
not include the adjustments that would be necessary if the Group was unable to raise these funds.
12
Report of the independent auditors
to the members of Oracle Coalfields PLC group of companies - continued
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Report of the Directors for the financial year for which the financial
statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
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.
Martin Clapson FCA (Senior Statutory Auditor)
for and on behalf of Price Bailey LLP
Chartered Accountants & Statutory Auditors
Richmond House
Ely
Cambridgeshire
CB7 4AH
28 March 2013
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
Consolidated income statement
for the year ended 31 December 2012
CONTINUING OPERATIONS
Revenue
Administrative expenses
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS
Exceptional items
OPERATING LOSS
Finance income
LOSS BEFORE INCOME TAX
Income tax
LOSS FOR THE YEAR
Loss attributable to:
Owners of the parent
Earnings per share expressed in pence per share:
Basic
Diluted
13
2011
£
-
Notes
2012
£
2
-
4
5
6
7
9
(743,663)
(660,156)
(743,663)
(660,156)
-
(293,429)
(743,663)
(953,585)
1,864
5,493
(741,799)
(948,092)
-
-
(741,799)
(948,092)
(741,799)
(948,092)
-0.35
-0.33
-0.46
-0.42
14
Consolidated statement of comprehensive income
for the year ended 31 December 2012
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Exchange difference on consolidation
Income tax relating to other comprehensive income
2012
£
2011
£
(741,799)
(948,092)
(10,742)
(3,884)
-
-
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX
(10,742)
(3,884)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(752,541)
(951,976)
Total comprehensive income attributable to:
Owners of the parent
(752,541)
(951,976)
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
15
Consolidated statement of financial position
for the year ended 31 December 2012
ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Investments
Loans and other financial assets
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital
Share premium
Translation reserve
Share scheme reserve
Retained earnings
Non-controlling interests
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Notes
2012
£
2011
£
10
11
12
13
14
15
17
18
18
18
3,672,424
3,204,424
1,816
-
2,127
-
60,149
62,705
3,734,389
3,269,256
52,016
99,592
91,271
1,604,602
151,608
1,695,873
3,885,997
4,965,129
216,011
214,211
6,070,418
6,029,702
(19,189)
63,070
(8,447)
63,070
18
(2,824,688)
(2,082,889)
3,505,622
4,215,647
16
16,029
16,029
3,521,651
4,231,676
19
364,346
364,346
733,453
733,453
3,885,997
4,965,129
The financial statements were approved and authorised for issue by the Board of Directors on 25 March 2013 and were
signed on its behalf by:
Shahrukh Khan
Chief Executive Officer
16
Company statement of financial position
for the year ended 31 December 2012
ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Investments
Loans and other financial assets
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital
Share premium
Share scheme reserve
Retained earnings
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Notes
2012
£
2011
£
10
11
12
13
14
15
17
18
18
18
2,639,040
2,258,391
331
64,115
1,033,339
-
64,115
901,173
3,736,825
3,223,679
89,364
97,686
114,247
1,594,780
187,050
1,709,027
3,923,875
4,932,706
216,011
214,211
6,070,418
6,029,702
63,070
63,070
(2,786,785)
(2,059,304)
3,562,714
4,247,679
19
361,161
361,161
685,027
685,027
3,923,875
4,932,706
The financial statements were approved and authorised for issue by the Board of Directors on 25 March 2013 and were
signed on its behalf by:
Shahrukh Khan
Chief Executive Officer
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
17
Consolidated statement of changes in equity
for the year ended 31 December 2012
Called up
share
capital
£
Retained
earnings
£
Share
premium
£
Translation
reserve
£
Balance at 1 January 2011
184,211
(1,134,797)
3,284,291
(4,563)
Changes in equity
Issue of share capital
Equity-settled share-based payment transactions
Loss for the year
Other comprehensive income
Balance at 31 December 2011
Changes in equity
Issue of share capital
Loss for the year
Other comprehensive income
Balance at 31 December 2012
30,000
-
-
-
-
-
(948,092)
-
2,745,411
-
-
-
214,211
(2,082,889)
6,029,702
1,800
-
40,716
-
-
(741,799)
-
-
-
216,011
(2,824,688)
6,070,418
-
-
-
(3,884)
(8,447)
-
-
(10,742)
(19,189)
Balance at 1 January 2011
Changes in equity
Issue of share capital
Share
scheme
reserve
£
-
-
Equity-settled share-based payment transactions
63,070
63,070
Non-controlling
interests
Total
£
£
Total
equity
£
2,329,142
16,029
2,345,171
2,775,411
-
-
(948,092)
(3,884)
-
-
-
-
2,775,411
63,070
(948,092)
(3,884)
63,070
4,215,647
16,029
4,231,676
-
-
-
42,516
(741,799)
(10,742)
-
-
-
42,516
(741,799)
(10,742)
63,070
3,505,622
16,029
3,521,651
Loss for the year
Other comprehensive income
Balance at 31 December 2011
Changes in equity
Issue of share capital
Loss for the year
Other comprehensive income
Balance at 31 December 2012
18
Company statement of changes in equity
for the year ended 31 December 2012
Called up
share
capital
£
Retained
earnings
£
Share
premium
£
Share
scheme
reserve
£
Total
equity
£
Balance at 1 January 2011
184,211
(1,121,437)
3,284,291 - 2,347,065
Changes in equity
Issue of share capital
Equity-settled share-based
payment transactions
Loss for the year
30,000
-
-
-
-
(937,867)
2,745,411
-
2,775,411
-
-
63,070
63,070
-
(937,867)
Balance at 31 December 2011
214,211
(2,059,304)
6,029,702
63,070
4,247,679
Changes in equity
Issue of share capital
Loss for the year
1,800
-
40,716
-
(727,481)
-
-
-
42,516
(727,481)
Balance at 31 December 2012
216,011
(2,786,785)
6,070,418
63,070
3,562,714
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
19
Consolidated statement of cash flows
for the year ended 31 December 2012
Cash flows from operating activities
Cash generated from operations
Net cash from operating activities
Cash flows from investing activities
Purchase of intangible fixed assets
Purchase of tangible fixed assets
Interest received
Net cash from investing activities
Cash flows from financing activities
Proceeds of share issue
Cost of share issue
Net cash from financing activities
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year as restated
Cash and cash equivalents at end of year
Notes
2012
£
2011
£
1
(446,246)
(642,572)
(446,246)
(642,572)
(1,100,872)
(2,067,152)
(497)
1,247
-
4,878
(1,100,122)
(2,062,274)
42,667
3,000,000
(151)
(195,000)
42,516
2,805,000
(1,503,852)
100,154
1,603,444
1,504,448
99,592
1,604,602
2
2
20
Notes to the consolidated statement of cash flows
for the year ended 31 December 2012
1. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
Loss before income tax
Depreciation charges
Equity-settled share-based transactions
Finance income
Decrease/(increase) in trade and other receivables
Increase in trade and other payables
Cash generated from operations
2. CASH AND CASH EQUIVALENTS
2012
£
2011
£
(741,799)
(948,092)
166
-
(1,864)
-
33,482
(5,493)
(743,497)
(920,103)
39,872
257,379
(54,563)
332,094
(446,246)
(642,572)
The amount disclosed on the statement of cash flow in respect of cash and cash equivalents are in respect of these
statement of financial position amounts:
Year ended 31 December 2012
Cash and cash equivalents as previously reported
Effect of exchange rate changes
Cash and cash equivalents as restated
Year ended 31 December 2011
Cash and cash equivalents as previously reported
Effect of exchange rate changes
Cash and cash equivalents as restated
Cash and cash equivalents consist of cash in and hand and balances with banks.
31 December 2012 31 December 2011
£
£
99,592
1,604,602
-
(1,158)
99,592
1,603,444
31 December 2011 31 December 2010
£
£
1,604,602
1,506,475
-
(2,027)
1,604,602
1,504,448
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
21
Notes to the consolidated financial statements
for the year ended 31 December 2012
1. ACCOUNTING POLICIES
Reporting entity
Oracle Coalfields PLC Group is a group domiciled in United Kingdom. The address of the Group’s registered office
is Richmond House, Broad Street, Ely, Cambridgeshire, CB7 4AH. The Group primarily is involved in the exploration
for coal.
Going concern
The Directors have considered the cashflow requirements of the Group over the next 18 months. If the Group is to
continue its explorations it may be necessary to raise additional funds. Whilst it is difficult in the current economic
downturn to generate the extra funds required, the Directors expect to meet the funding requirements and therefore
believe that the going concern basis is appropriate for the preparation of the financial statements.
Compliance with accounting standards
These financial statements have been prepared in accordance with International Financial Reporting Standards and
IFRIC interpretations and with those parts of the Companies Act 2006 applicable to reporting groups under IFRS.
The financial statements have been prepared under the historical cost convention.
Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the amounts reported for revenues and expenses during the year and the amounts reported for assets and
liabilities at the statement of financial position date. However, the nature of estimation means that the actual outcomes
could differ from those estimates.
The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year are the measurement of any impairment on intangible
assets and the estimation of share-based payment costs. The Group determines whether there is any impairment
of intangible assets on an annual basis. The estimation of share-based payment costs requires the selection of an
appropriate model, consideration as to the inputs necessary for the valuation model chosen and the estimation of the
number of awards that will ultimately vest.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by
the Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company
has the power to govern the financial and operating policies of an investee entity so as to obtain benefits
from its activities.
Business acquisitions have been accounted for in accordance with IFRS 3, ‘Business Combinations’. Fair values are
attributed to the Group’s share of net assets. Where the cost of acquisition exceeds the fair values attributed to such
assets, the difference is treated as purchased goodwill and is capitalised. In the case of subsequent acquisitions of
minority interests, the difference between the consideration payable for the additional interest in the subsidiary and the
minority interest’s share of the assets and liabilities reflected in the consolidated statement of financial position at the
date of acquisition of the minority interest has been treated as goodwill.
Intangible fixed assets - exploration costs
Expenditure on the acquisition costs, exploration and evaluation of interests in licences, including related finance
and administration costs, are capitalised. Such costs are carried forward in the statement of financial position under
intangible assets and amortised over the minimum period of the expected commercial production of coal in respect of
each area of interest where:
a) such costs are expected to be recouped through successful development and exploration of the area of interest or
alternatively by its sale;
b) exploration activities have not yet reached a stage that permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves and active operations in relation to the areas are continuing.
An annual impairment review is carried out by the Directors to consider whether any exploration or development costs
have suffered impairment in value where a site has been abandoned or confirmed as no longer technically feasible.
22
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
Accumulated costs in respect of areas of interest that have been abandoned are written off to the profit and loss
account in the year in which the area is abandoned.
Exploration costs are carried at cost less any provision for impairment.
Property, plant and equipment
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Motor vehicles
- 20% on reducing balance
Computer equipment - 30% on reducing balance
Investments
Fixed asset investments are stated at cost. The investments are reviewed annually and any impairment is taken directly
to the income statement.
Financial instruments
Financial assets and liabilities are recognised on the statement of financial position when the Group
becomes a party to the contractual provisions of the instrument.
• Cash and cash equivalents comprise cash held at bank and short term deposits
• Trade payables are not interest bearing and are stated at their nominal value
• Equity instruments issued by the Company are recorded at the proceeds received except where those
proceeds appear to be less than the fair value of the equity instruments issued, in which case the equity
instruments are recorded at fair value. The difference between the proceeds received and the fair value
is reflected in the share based payments reserve.
• Derivative assets designated at fair value are loans made in Pakistan Rupees and their values are subject
to foreign exchange fluctuations.
Taxation
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules,
using tax rates enacted or substantially enacted by the statement of financial position date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of
financial position date.
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
23
Notes to the consolidated financial statements
for the year ended 31 December 2012 continued
1. ACCOUNTING POLICIES - continued
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of
financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at
the date of transaction. Exchange differences are taken into account in arriving at the operating result.
Profit and losses of overseas subsidiary undertakings are translated into sterling at average rates for the year. The
statements of financial position of overseas subsidiary undertakings are translated at the rate ruling at the statement
of financial position date. Differences arising from the translation of Group investments in overseas subsidiary
undertakings are recognised as a separate component of equity.
Net exchange differences classified as equity are separately tracked and the cumulative amount disclosed as a
translation reserve.
The principal place of business of the Group is the United Kingdom with sterling being the functional currency. Funds
are advanced to Pakistan as required to finance the exploration costs which are payable in Rupees.
Hire purchase and leasing commitments
Rentals paid under operating leases are charged to the income statement on a straight line basis over the period of the
lease.
Share-based payment transactions
Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is
charged to the income statement over the vesting period. Non-market vesting conditions are taken into account
by adjusting the number of equity instruments expected to vest at each statement of financial position date so
that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that
eventually vest. Market vesting conditions are factored into the fair value of all options granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of whether market vesting conditions are satisfied. The
cumulative expense is not adjusted for failure to achieve a market vesting condition.
Where terms and conditions of options are modified before they vest, the increase in the fair value of the options,
measured immediately before and after the modification, is also charged to the income statement over the remaining
vesting period.
Where equity instruments are granted to persons other than employees, the income statement is charged with the fair
value of goods and services received.
Cash and cash equivalents
Cash and cash equivalents for the purpose of the cash flow statement comprise cash and bank balances.
24
Notes to the consolidated financial statements
for the year ended 31 December 2012 continued
1. ACCOUNTING POLICIES - continued
New standards and interpretations applied
In preparing these financial statements the Company has reviewed all new standards and interpretations, but there are
no standards effective for the year commencing 1 January 2012 requiring new interpretations to be applied.
New Standards and Interpretations adopted with no effect on the financial statements
The following new and revised Standards and Interpretations have also been adopted in these financial statements.
Their adoption has not had any significant impact on the amounts reported in these financial statements but may affect
the accounting for future transactions or arrangements:
• IAS 12 Income Taxes (amended 2010) - limited scope amendment
• IFRS 7 Financial Instruments (amended 2010) - annual review of IFRSs
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are not yet effective for the year
commencing 1 January 2012 and have not been applied in preparing these financial statements:
• IAS 1 Presentation of Financial Statements (amended 2011 and 2012)
• IAS 16 Property, Plant and Equipment (amended 2012)
• IAS 19 Employee Benefits (amended 2011)
• IAS 27 Separate Financial Statements (amended 2011 and 2012)
• IAS 28 Investments in Associates (amended 2011)
• IAS 32 Financial Instruments (amended 2011 and 2012)
• IAS 34 Interim Financial Reporting (amended 2012)
• IFRS 1 First-time adoption of International Financial Reporting Standards (amended 2012)
• IFRS 7 Financial Instruments (amended 2011)
• IFRS 9 Financial Instruments (issued 2009, 2010 and 2011)
• IFRS 10 Consolidated Financial Statements (issued 2011 and 2012)
• IFRS 11 Joint Arrangements (issued 2011 and 2012)
• IFRS 12 Disclosure of Interests in Other Entities (issued 2011 and 2012)
• IFRS 13 Fair Value Measurement (issued 2011)
• IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (not yet EU endorsed)
The Directors do not consider that the implementation of any of these new standards will have a material impact upon
reported income or reported net assets.
2. SEGMENTAL REPORTING
The principal activity of the Group is the exploration for and development of coal in Pakistan. All expenses are in
respect of this one activity and there are no business segments requiring separate disclosure.
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
25
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
3. EMPLOYEES AND DIRECTORS
Wages and salaries
Social security costs
2012
£
410,354
50,280
460,634
2011
£
244,081
27,857
271,938
The above costs include salaries of £101,400 (2011 - nil) and social security costs of £14,780 (2011 - nil) which have
been capitalised within intangible assets exploration costs on the basis that they were incurred solely in respect of the
development of the exploration project.
The average monthly number of employees during the year was as follows:
Directors
Administration and production
2012
2011
5
2
7
2012
£
5
1
6
2011
£
Directors’ remuneration
280,880
205,923
Information regarding the highest paid director is as follows:
Emoluments etc
4. EXCEPTIONAL ITEMS
2012
£
2011
£
100,000
81,667
During the 2011 the Group incurred costs of £225,929 in respect of delisting from the PLUS market and achieving
a listing on AIM. Included in the costs is £170,929 for legal and professional fees, together with £55,000 paid to the
auditors in their capacity as reporting accountants.
5. NET FINANCE INCOME
Finance income:
Deposit account interest
Other loan interest
2012
£
1,247
617
1,864
2011
£
4,878
615
5,493
26
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
6. LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging:
Other operating leases
Depreciation - owned assets
Auditors’ remuneration
Foreign exchange differences
Auditors’ other services - reporting accountant for AIM application
Equity-settled share-based payment transactions
2012
£
41,369
559
14,850
341
-
-
2011
£
21,981
569
11,574
-
55,000
33,482
The depreciation charges shown above include £393 (2011 - £569) which has been capitalised as exploration costs by
the subsidiary company in accordance with the accounting policy.
7. INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2012 nor for the year
ended 31 December 2011.
Factors affecting the tax expense
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:
Loss on ordinary activities before income tax
Loss on ordinary activities multiplied by the standard rate of corporation tax
2012
£
2011
£
(741,799)
(948,092)
in the UK of 24.500% (2011 - 26.500%)
(181,741)
(251,244)
Effects of:
Interest capitalised in subsidiary
Potential deferred taxation on losses for year
Effect of change of rate of tax
Expenses disallowed for tax purposes
Capital allowances in advance of depreciation
Tax expense
Tax effects relating to effects of other comprehensive income
Exchange difference on consolidation
3,508
155,372
22,942
-
(81)
-
2012
Tax
£
-
-
2,710
170,775
-
77,759
-
-
Net
£
(10,742)
(10,742)
Gross
£
(10,742)
(10,742)
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
27
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
7. INCOME TAX - continued
Exchange difference on consolidation
Gross
£
(3,884)
(3,884)
2011
Tax
£
-
-
Net
£
(3,884)
(3,884)
The Group and Company has estimated excess management charges of £2,257,310 (2011 - £1,529,498) to carry
forward against future income. The overseas subsidiary has not yet generated profits or losses and there is no charge
for foreign taxation for the year (2011 - nil).
8. LOSS OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented
as part of these financial statements. The parent company’s loss for the financial year was £(727,481) (2011 - £(937,867)).
9. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the
conversion of all dilutive potential ordinary shares.
Reconciliations are set out below.
2012
Weighted
average
number
of
shares
Per-share
amount
pence
Earnings
£
Basic EPS
Earnings attributable to ordinary shareholders
(741,799)
214,504,260
-0.35
Effect of dilutive securities
Options granted
Diluted EPS
Adjusted earnings
-
13,531,184
-
(741,799)
228,035,444
-0.33
28
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
9. EARNINGS PER SHARE - continued
Basic EPS
Earnings attributable to ordinary shareholders
(948,092)
205,663,055
-0.46
2011
Weighted
average
number
of
shares
Per-share
amount
pence
Earnings
£
Effect of dilutive securities
Options granted
Diluted EPS
Adjusted earnings
10. INTANGIBLE ASSETS
Group
COST
At 1 January 2012
Additions
Exchange differences
At 31 December 2012
NET BOOK VALUE
At 31 December 2012
Group
COST
At 1 January 2011
Additions
Exchange differences
At 31 December 2011
NET BOOK VALUE
At 31 December 2011
-
21,801,507
-
(948,092)
227,464,562
-0.42
Exploration
costs
£
3,204,424
581,838
(113,838)
3,672,424
3,672,424
Exploration
costs
£
855,830
2,369,512
(20,918)
3,204,424
3,204,424
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
10. INTANGIBLE ASSETS - continued
29
Exploration
costs
£
2,258,391
380,649
2,639,040
2,639,040
Exploration
costs
£
370,184
1,888,207
2,258,391
2,258,391
Totals
£
6,287
497
(740)
6,044
4,160
559
(491)
4,228
Motor
vehicles
£
Computer
equipment
£
5,868
-
(691)
5,177
3,946
339
(466)
3,819
419
497
(49)
867
214
220
(25)
409
1,358
458
1,816
Company
COST
At 1 January 2012
Additions
At 31 December 2012
NET BOOK VALUE
At 31 December 2012
Company
COST
At 1 January 2011
Additions
At 31 December 2011
NET BOOK VALUE
At 31 December 2011
11. PROPERTY, PLANT AND EQUIPMENT
Group
COST
At 1 January 2012
Additions
Exchange differences
At 31 December 2012
DEPRECIATION
At 1 January 2012
Charge for year
Exchange differences
At 31 December 2012
NET BOOK VALUE
At 31 December 2012
30
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
11. PROPERTY, PLANT AND EQUIPMENT - continued
Group
COST
At 1 January 2011
Exchange differences
At 31 December 2011
DEPRECIATION
At 1 January 2011
Charge for year
Exchange differences
At 31 December 2011
NET BOOK VALUE
At 31 December 2011
Company
COST
Additions
At 31 December 2012
DEPRECIATION
Charge for year
At 31 December 2012
NET BOOK VALUE
At 31 December 2012
12. INVESTMENTS
Company
COST
At 1 January 2012 and 31 December 2012
NET BOOK VALUE
At 31 December 2012
Motor
vehicles
£
Computer
equipment
£
6,123
(255)
5,868
3,615
481
(150)
3,946
437
(18)
419
131
88
(5)
214
Totals
£
6,560
(273)
6,287
3,746
569
(155)
4,160
1,922
205
2,127
Computer
Equipment
£
497
497
166
166
331
Shares in
group
undertakings
£
64,115
64,115
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
12. INVESTMENTS - continued
Company
COST
At 1 January 2011 and 31 December 2011
NET BOOK VALUE
At 31 December 2011
31
Shares in
group
undertakings
£
64,115
64,115
The group or the company’s investments at the balance sheet date in the share capital of companies include the following:
Subsidiary
Sindh Carbon Energy Limited
Country of incorporation: Pakistan
Nature of business: Coal exploration and mining
Class of shares:
Ordinary
Aggregate capital and reserves
%
holding
80.00
2012
£
2011
£
80,144
80,144
The subsidiary company was incorporated in Pakistan on 23 January 2007 for the exploration and future extraction of
coal in Pakistan. This company was formed under a joint venture arrangement whereby Oracle Coalfields PLC agreed
to acquire 80% of the ordinary share capital at par, fully paid by cash.
The investment in share capital for the 80% holding amounted to £64,115.
13. LOANS AND OTHER FINANCIAL ASSETS
Group
At 1 January 2012
Exchange movement
At 31 December 2012
Group
At 1 January 2011
Exchange movement
At 31 December 2011
Other loans
£
62,705
(2,556)
60,149
Other loans
£
63,645
(940)
62,705
32
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
13. LOANS AND OTHER FINANCIAL ASSETS - continued
Group
Oracle Coalfields PLC has a joint venture agreement with Sindh Koela Limited for the exploration of coal through a
project company, Sindh Carbon Energy Limited incorporated in Pakistan, dated 6 September 2006 and amended on
17 June 2008. Under the terms of the agreement Sindh Koela Limited is entitled to receive 20% of the issued shares in
Sindh Carbon Energy Limited and these shares are funded by a loan from Oracle Coalfields PLC. The obligation to fund
the 20% shareholding is capped at 5,000,000 shares of PKR 10 per share. The loan accrues interest on a daily basis at a
rate of 9 per cent per annum. The loan is unsecured and repayable from 50% of dividends due to Sindh Koela Limited
from Sindh Carbon Energy Limited, when the joint venture starts to generate revenues, or repayable in full on any early
transfer of shares by Sindh Koela Limited in Sindh Carbon Energy Limited.
There is a loan of PKR 2,000,000, amounting to £16,029 (2011 - £16,029) made by Oracle Coalfields PLC to Sindh Koela
Limited, representing Sindh Koela Limited’s initial 20 per cent shareholding of 200,000 shares of PKR 10 per share.
Further loans were made to Sindh Koela Limited to fund initial expenditure in Pakistan on behalf of the Group as
follows:
At the statement of financial position date there is a loan of £25,000 (2011 - £25,000) from Oracle Coalfields PLC to
Sindh Koela Limited. The loan is interest free, unsecured and is not due for repayment until the joint venture starts to
generate revenues.
At the statement of financial position date there is a loan of PKR 3,000,000, amounting to £19,120 (2011 - £21,676) from
Sindh Carbon Energy Limited to Sindh Koela Limited. The loan is interest free, unsecured and is not due for repayment
until the joint venture starts to generate revenues.
Company
At 1 January 2012
New in year
At 31 December 2012
Company
At 1 January 2011
New in year
At 31 December 2011
Loans to
group
undertakings
£
860,144
132,166
992,310
Loans to
group
undertakings
£
438,336
421,808
860,144
Other
loans
£
41,029
-
Totals
£
901,173
132,166
41,029
1,033,339
Other
loans
£
41,029
-
41,029
Totals
£
479,365
421,808
901,173
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
33
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
13. LOANS AND OTHER FINANCIAL ASSETS - continued
Company
Oracle Coalfields PLC has a joint venture agreement with Sindh Koela Limited for the exploration of coal through
a project company, Sindh Carbon Energy Limited incorporated in Pakistan, dated 6 September 2006 and amended
on 17 June 2008. Under the terms of the agreement Sindh Koela Limited is entitled to receive 20 per cent of the
issued shares in Sindh Carbon Energy Limited and these shares are funded by a loan from Oracle Coalfields PLC. The
obligation to fund the 20 per cent shareholding is capped at 5,000,000 shares of PKR 10 per share. The loan accrues
interest on a daily basis at a rate of 9 per cent per annum. The loan is unsecured and repayable from 50 per cent of
dividends due to Sindh Koela Limited from Sindh Carbon Energy Limited, when the joint venture starts to generate
revenues, or repayable in full on any early transfer of shares by Sindh Koela Limited in Sindh Carbon Energy Limited.
There is a loan of PKR 2,000,000, amounting to £16,029 (2011 - £16,029) made by Oracle Coalfields PLC to Sindh Koela
Limited, representing Sindh Koela Limited’s initial 20% shareholding of 200,000 shares of PKR 10 per share.
At the statement of financial position date there is a loan of £25,000 (2011 - £25,000) from Oracle Coalfields plc to
Sindh Koela Limited. The loan is interest free, unsecured and is not due for repayment until the joint venture starts to
generate revenues.
Oracle Coalfields PLC made loans of £132,166 (2011 - £421,808) to Sindh Carbon Energy Limited, its subsidiary
company during the period and the amount outstanding at the statement of financial position date was £992,310
(2011 - £860,144). Interest accrues on a daily basis at a rate of 1% over the Bank of England base rate. The loan is
unsecured and although it is repayable on demand, it is unlikely to be repaid until the project becomes successful and
the subsidiary starts to generate revenue.
14. TRADE AND OTHER RECEIVABLES
Current:
Other receivables
VAT
Prepayments and accrued income
15. CASH AND CASH EQUIVALENTS
Cash in hand
Bank deposit account
Bank accounts
2012
£
34,339
5,363
12,314
52,016
2012
£
25
87,661
11,906
99,592
Group
2011
£
4,804
52,845
33,622
91,271
Company
2012
£
2011
£
72,108
5,363
11,893
89,364
28,257
52,845
33,145
114,247
Group
Company
2011
£
-
2012
£
25
2011
£
-
1,584,780
87,661
1,584,780
19,822
10,000
10,000
1,604,602
97,686
1,594,780
34
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
16. NON-CONTROLLING INTERESTS
The minority interest of £16,029 represents 20 per cent of the issued share capital of the subsidiary which is held by
Sindh Koela Limited, a company in which the Group is involved in a joint venture arrangement. Since the subsidiary was
incorporated for the joint venture, there are no pre-acquisition reserves or goodwill.
17. CALLED UP SHARE CAPITAL
Allotted, issued and fully paid 216,011,000 (2011 - 214,211,000)
Ordinary shares of 0.1p each
2012
£
2011
£
216,011
214,211
666,666 Ordinary shares of 0.1p each were allotted as fully paid for cash at a premium of 2.9p per share during the year.
1,133,334 Ordinary shares of 0.1p each were allotted as fully paid for cash at a premium of 1.9p per share during the year.
The number of shares in issue are as follows:
At 1 January 2012
Issued during the year
At 31 December 2012
18. RESERVES
Group
2012
No.
2011
No.
214,211,000
184,211,000
1,800,000
30,000,000
216,011,000
214,211,000
Retained
earnings
£
Share
premium
£
Translation
reserve
£
Share
scheme
reserve
£
Totals
£
At 1 January 2012
(2,082,889)
6,029,702
(8,447)
63,070
4,001,436
Deficit for the year
(741,799)
Cash share issue
Cost of share issue
Exchange translation difference
-
-
-
-
40,867
(151)
-
At 31 December 2012
(2,824,688)
6,070,418
-
-
-
(10,742)
(19,189)
-
-
-
-
(741,799)
40,867
(151)
(10,742)
63,070
3,289,611
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
35
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
18. RESERVES - continued
Group
Retained
earnings
£
Share
premium
£
Translation
reserve
£
At 1 January 2011
(1,134,797)
3,284,291
(4,563)
Deficit for the year
(948,092)
Cash share issue
Cost of share issue
Equity-settled share-
based payment transactions
Exchange translation difference
-
-
-
-
-
2,969,999
(195,000)
(29,588)
-
At 31 December 2011
(2,082,889)
6,029,702
Share
scheme
reserve
£
-
-
-
-
Totals
£
2,144,931
(948,092)
2,969,999
(195,000)
63,070
-
33,482
(3,884)
63,070
4,001,436
Share
scheme
reserve
£
Totals
£
-
-
-
-
(3,884)
(8,447)
Share
premium
£
Retained
earnings
£
(2,059,304)
6,029,702
63,070
4,033,468
(727,481)
-
-
-
40,867
(151)
-
-
-
(727,481)
40,867
(151)
Company
At 1 January 2012
Deficit for the year
Cash share issue
Cost of share issue
At 31 December 2012
(2,786,785)
6,070,418
63,070
3,346,703
At 1 January 2011
Deficit for the year
Cash share issue
Cost of share issue
Equity-settled share-based payment transactions
Retained
earnings
£
Share
premium
£
(1,121,437)
3,284,291
(937,867)
-
-
-
-
2,969,999
(195,000)
(29,588)
Share
scheme
reserve
£
-
-
-
-
Totals
£
2,162,854
(937,867)
2,969,999
(195,000)
63,070
33,482
At 31 December 2011
(2,059,304)
6,029,702
63,070
4,033,468
36
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
19. TRADE AND OTHER PAYABLES
Current:
Trade payables
Social security and other taxes
Other payables
Accruals and deferred income
20. LEASING AGREEMENTS
Group
Within one year
Between one and five years
Company
Within one year
Between one and five years
Group
2012
£
99,677
3,817
218,350
42,502
364,346
2011
£
472,817
17,121
18,824
224,691
733,453
Company
2012
£
2011
£
99,677
3,817
218,350
472,817
17,121
18,824
39,317
176,265
361,161
685,027
Non-cancellable
operating leases
2012
£
19,200
-
19,200
2012
£
19,200
-
19,200
2011
£
38,400
19,200
57,600
2011
£
38,400
19,200
57,600
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
37
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
21. FINANCIAL INSTRUMENTS
The Group and Company financial instruments comprise cash and cash equivalents, loan investments and financial
assets and various items such as trade receivables, trade payables, accruals and prepayments that arise directly from its
operations.
The main purpose of these financial instruments is to finance the Group’s operations. The Board regularly reviews and
agrees policies for managing the level of risk arising from the Group’s financial instruments which are summarised as
follows
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
policy throughout the year has been to ensure that it has adequate liquidity to meet its liabilities when due by careful
management of its working capital.
The following tables illustrate the contractual maturity profiles of its financial liabilities, all of which are repayable within
one year, as at 31 December:
Group
Current liabilities:
Trade and other payables
Tax liabilities
Company
Current liabilities:
Trade and other payables
Tax liabilities
2012
£
2011
£
360,529
3,817
364,346
716,332
17,121
733,453
357,343
667,906
3,817
17,121
361,160
685,027
All of the Group and Company liabilities are due for payment within one year.
Credit Risk
The Group’s principal financial assets are the cash and cash equivalents and taxation receivable as recognised in
the statement of financial position, and which represent the Group’s maximum exposure to credit risk in relation to
financial assets.
The Company has made an unsecured loan of £992,310 (2011 - £860,144) to its subsidiary Sindh Carbon Energy
Limited. Although it is repayable on demand, it is unlikely to be repaid until the project becomes successful and the
subsidiary starts to generate revenue.
Capital Management
The Company’s capital consists wholly of ordinary shares. The Board’s policy is to preserve a strong capital base in
order to maintain investor, creditor and market confidence and to safeguard the future development of the business,
whilst balancing these objectives with the efficient use of capital.
The Company entered in July 2012 into a £2 million Equity Line Facility with Dutchess Opportunity Cayman Fund Ltd
and made a drawdown of a net amount of £22,542 at year-end through the issue of 1,133,334 new ordinary shares of
0.1p each at a gross price of 2p per share (Note 17 refers).
Analysis of Total Financial Liabilities and Financial Assets
The table below sets out the Group’s IAS 39 classification of each of its financial assets and liabilities at 31 December
2012. All amounts are stated at their carrying value:
38
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
21. FINANCIAL INSTRUMENTS - continued
Group
At 31 December 2012
Cash and cash equivalents
Derivative financial assets
Derivative financial liabilities
Other financial assets
Other financial liabilities
Cash and cash equivalents
Derivative financial assets
Derivative financial liabilities
Other financial assets
Other financial liabilities
At 31 December 2011
Cash and cash equivalents
Derivative financial assets
Derivative financial liabilities
Other financial assets
Other financial liabilities
Cash and cash equivalents
Derivative financial assets
Derivative financial liabilities
Other financial assets
Other financial liabilities
(364,345)
(364,345)
(364,345)
(152,588)
Fair value through
profit and loss
£
Available
for sale
£
-
35,149
-
-
-
35,149
Derivatives used
for hedging
£
-
-
-
-
-
-
-
-
-
-
-
-
Amortised
cost
£
-
-
-
-
Fair value through
profit and loss
£
Available
for sale
£
-
37,705
-
-
-
37,705
-
-
-
-
-
-
Derivatives used
for hedging
£
Amortised
cost
£
Loans and
receivables
£
99,592
-
-
77,016
-
176,608
Total
£
99.592
35,149
-
77,016
Loans and
receivables
£
1,604,602
-
-
116,271
-
1,720,873
Total
£
1,604,602
37,705
-
116,271
-
-
-
-
-
-
-
-
-
-
(733,453)
(733,453)
(733,453)
1,025,125
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
21. FINANCIAL INSTRUMENTS - continued
39
Loans and
receivables
£
97,686
-
-
1,106,674
-
1,204,360
Total
£
97,686
16,029
-
1,106,674
Loans and
receivables
£
1,594,780
-
-
999,391
-
2,594,171
Total
£
1,594,780
16,029
-
999,391
Fair value through
profit and loss
£
Available
for sale
£
-
16,029
-
-
-
16,029
-
-
-
-
-
-
Derivatives used
for hedging
£
Amortised
cost
£
Fair value through
profit and loss
£
Available
for sale
£
-
16,029
-
-
-
16,029
-
-
-
-
-
-
Derivatives used
for hedging
£
Amortised
cost
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(361,160)
(361,160)
(361,160)
859,229
(685,027)
(685,027)
(685,027)
1,925,173
Company
At 31 December 2012
Cash and cash equivalents
Derivative financial assets
Derivative financial liabilities
Other financial assets
Other financial liabilities
Cash and cash equivalents
Derivative financial assets
Derivative financial liabilities
Other financial assets
Other financial liabilities
At 31 December 2011
Cash and cash equivalents
Derivative financial assets
Derivative financial liabilities
Other financial assets
Other financial liabilities
Cash and cash equivalents
Derivative financial assets
Derivative financial liabilities
Other financial assets
Other financial liabilities
40
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
21. FINANCIAL INSTRUMENTS - continued
Other financial assets comprise trade and other receivables due within and after more than one year. Other financial
liabilities comprise trade and other payables and accruals due within and after more than one year.
Derivative assets designated at fair value are loans made in Pakistan Rupees and their values are subject to foreign
exchange fluctuations.
Market Risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates, interest rates and
equity prices will affect the Group’s and Company’s income or value of its holdings in financial instruments.
Sensitivity Analysis
The Group has carried out a sensitivity analysis that measures the estimated charge to the income statement and equity
of a 1% difference in market interest rates applicable at 31 December 2012 with all other measures remaining constant.
Similarly, the sensitivity analysis in respect of currency risk measures the estimated charge to the income statement and
equity of a 10% difference in the market rate of the Pakistan Rupee.
The sensitivity analysis includes the following assumptions:
a) Changes in market interest rates only affect interest income or expense of variable financial instruments.
b) Changes in foreign currency rates only affect those items of income and expense and assets and liabilities
denominated in the said currencies.
Interest rate risk
Variable rate instruments
410
(410)
410
(410)
Income Statement
100 bps Increase
£
100 bps Decrease
£
Equity (before tax)
100 bps Increase 100 bps Decrease
£
£
Currency risk
Cash and cash equivalents
Loans
Trade receivables
Trade payables
Income Statement
Equity (before tax)
10% Increase
£
10% Decrease
£
10% Increase
£
10% Decrease
£
-
-
-
-
-
-
-
-
-
-
(191)
(3,515)
(56)
319
(3,443)
191
3,515
56
(319)
3,443
Fair Values of Financial Assets and Liabilities
The carrying values of the financial instruments of the Group and Company are the same as their fair values.
Commodity Price Risk
The principal activity of the Group is the development of a coal mining property in Pakistan and the principal market risk
facing the Group is an adverse movement in the commodity price of coal.
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
41
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
22. RELATED PARTY DISCLOSURES
During the year, Oracle Coalfields PLC has accrued interest receivable of £14,318 (2011 - £10,225) and £617 (2011 -
£615) in respect of loans made to Sindh Carbon Energy Limited and Sindh Koela Limited respectively. The interest was
outstanding at the year end and is included within other receivables.
Key management personnel compensation
The directors’ and key management personnel of the Group during the year were are follows:
Mr S Khan (Chief Executive Officer)
Mr A C R Scutt (Non-Executive Director)
Mr M R Stead (Non-Executive Director)
Mr W A Loader (Chairman)
Mr G A Philip (Finance Director)
The aggregate compensation made to key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based benefits
2012
£
2011
£
314,475
230,067
-
-
-
314,475
-
-
33,482
263,549
Details of key management personnel compensation are disclosed in the Remuneration Report included in the
Directors Report.
Key management personnel equity holdings
Details of key management personnel beneficial interests in the fully paid Ordinary shares of the Company and share
options held, are unchanged during the year and are disclosed in the Directors Report.
23. EVENTS AFTER THE REPORTING PERIOD
Following a share placement on 18 January 2013, the Company raised £934,240 (before expenses) from the placement
of 62,282,707 new ordinary shares at a placing price of 1.5p per share. Share capital of £622,827 (62,282,707 shares
of 0.1p nominal value each) was subsequently admitted to trading on AIM on 23 January 2013 and the total share
premium of £311,413 was recorded.
Other than the above, there has not arisen in the interval between the year end and the date of this report any other
item, transaction or event of a material nature, likely, in the opinion of the Directors of the Group to effect:
i) The Group’s operations in future financial periods; or
ii) The results of those operations in future periods; or
iii The Group’s state of affairs in future financial periods.
42
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
24. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
Group
Loss for the financial year
Proceeds of share issue
Cost of share issue
Exchange translation difference
Equity-settled share-based transactions
Net (reduction)/addition to shareholders’ funds
Opening shareholders’ funds
Closing shareholders’ funds
Company
Loss for the financial year
Proceeds from issue of shares
Cost of share issue
Equity-settled share-based transactions
Net (reduction)/addition to shareholders’ funds
Opening shareholders’ funds
Closing shareholders’ funds
2012
£
2011
£
(741,799)
(948,092)
42,667
3,000,000
(151)
(224,589)
(10,742)
-
(3,884)
63,070
(710,025)
1,886,505
4,215,647
2,329,142
3,505,622
4,215,647
2012
£
2011
£
(727,481)
(937,867)
42,667
3,000,000
(151)
(224,589)
-
63,070
(684,965)
1,900,614
4,247,679
2,347,065
3,562,714
4,247,679
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
43
Notes to the consolidated financial statements
for the year ended 31 December 2012 - continued
25. SHARE-BASED PAYMENT TRANSACTIONS
The Company has a share option programme that entitles the holders to purchase shares in the Company with the
options exercisable at the price determined at the date of granting the option. The terms and conditions of the grants
are as follows; there are no vesting conditions to be met and all options are to be settled by the issue of shares:
Grant date
13 February 2007 (expiry date extended on admission to AIM)
15 November 2007 (expiry date extended on admission to AIM)
14 April 2011
18 April 2011
1 August 2011
23 July 2012
The number and weighted average exercise prices of share options is as follows:
Number of
instruments
Contractual life
of options
8,080,000
10 years
200,000
600,000
250,000
1,000,000
666,666
6 years
5 years
6 years
5 years
3 years
Company
Outstanding at 1 January
Expired during the period
Granted during period
Outstanding at 31 December
Exercisable at 31 December
Weighted
average
exercise price
2012
5.60p
5.00p
4.80p
5.73p
5.73p
Number
of options
2012
22,630,000
(12,500,000)
666,666
10,796,666
10,796,666
Weighted
average
Number
exercise price of options
2011
2011
5.00p
20,780,000
-
-
9.32p
1,850,000
5.60p
22,630,000
5.23p
13,100,000
No share options were exercised during the year (2011 - nil). During the year 12,500,000 options expired unexercised
(2011 - nil) with a weighted average exercise price of 5p. The options outstanding at 31 December 2012 have an
exercise price of 5.73p (2011 - 5.6p), and a weighted average remaining contractual life of 3.70 years (2011 - 3.93 years).
The fair value of services received and commission payable in return for share options granted is based on the fair value
of share options granted, measured using a binomial lattice model, with the following inputs:
Fair value at grant date
Share price
Exercise price
Expected volatility
Option life
Risk-free interest rate
Services
23.07.12
2.75p
1p
4.8p
43%
3 years
3.75%
Services
1.08.11
8.75p
1p
10p
56%
5 years
4%
Services
18.04.11
14.11p
1p
5p
67%
5 years
4%
Commission
14.04.11
Services
13.02.07
14.67p
0.0003p
1p
10p
67%
1p
5p
20%
5 years
5 years
4%
5%
The expected volatility was determined by reviewing the actual volatility of the company’s share price since its listing on
AIM to the date of granting the option. In calculating the fair value, consideration was given to the market trends at the
grant date of the option.
There is an expense of £nil (2011 - £33,482) for the year in respect of goods and services received, and share placement
commission of £nil (2011 - £29,588) in respect of equity-settled share-based payment transactions.
44
Company information
Oracle Coalfields plc is registered as a public limited company under English law. Its shares are listed on the
AIM market of the London Stock Exchange. Oracle Coalfields plc is incorporated and domiciled in England
and its registered number is 05867160.
Directors:
Mr W A Loader
Mr S Khan
Mr A C R Scutt
Mr M R Stead
Secretary:
Mr T Everitt
London Office:
22 Hanover Square
Mayfair
London W1S 1JP
Registered Office: Richmond House
Broad Street
Ely
Cambridgeshire
CB7 4AH
Auditors:
Price Bailey LLP
Chartered Accountants & Statutory Auditors
Richmond House
Ely
Cambridgeshire
CB7 4AH
NOMAD:
Registrar:
Brokers:
Solicitors:
Bankers:
Grant Thornton UK LLP
30 Finsbury Square
London
EC2P 2YU
Neville Registrars Limited
Neville House
18 Laurel Lane, Halesowen
West Midlands
B63 3DA
Novus Capital Markets Limited
29/30 Cornhill
London EC3V 3NF
Trowers & Hamlins LLP
Sceptre Court
40 Tower Hill
London
EC3N 4DX
Royal Bank of Scotland plc
1st floor, Conqueror House
Vision Park,
Histon
Cambridge
CB24 9NL
Oracle Coalfields PLC Group of Companies
Annual Report and Accounts 2012
22 Hanover Square
Mayfair
London W1S 1JP
Tel: +44 (0) 203 102 4805
Fax: +44 (0) 203 102 4601.
www.oraclecoalfields.com