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Contents
Chairman’s Statement
Chief Executive’s Report
Group Strategic Report
Report of the Directors
Report of the Independent Auditors
Consolidated Statement of Profit or Loss
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
Company Statement of Cash Flows
Notes to the Statements of Cash Flows
Notes to the Consolidated Financial Statements
Notice of Annual General Meeting
Company Information
01
02
03
07
15
17
17
18
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20
21
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24
25
43
IBC
ORACLE COALFIELDS PLC
ANNUAL REPORT 2015
Chairman’s Statement
For the year ended 31 December 2015
01
I am pleased to present the results for Oracle Coalfields PLC (the “Company” or “Oracle”) for the year ended 31 December 2015.
It has been a year of solid progress for our project, developing the Thar Coalfield Block VI, located in the Sindh Province of Pakistan. Notably,
we resolved the lease issues with the authorities; we placed £3.37 million of equity; our inclusion in the China-Pakistan Economic Corridor was confirmed;
we formally registered our power plant project and received a “No Objection” letter for power evacuation; our coal price petition was admitted and
agreement was reached with SEPCO, our Chinese partners, that they take a minimum 10% equity stake in the power plant.
The world environment for mining and for coal remains very gloomy, with continuing low prices and, consequently, a general slowing of activity. Our
project emerges from 2015 as one of the more exciting ones. The shortage of electricity in Pakistan remains acute, which is why the authorities are giving
considerable support to the development of indigenous coal, and why they are offering coal developers an attractive rate of return. As with any mining/
power project there are inherent risks, and their management is a key responsibility of the Board. I believe the progress mentioned above has reduced
some of these risks, which are described in the section on Risks and Uncertainties on pages 03 to 05.
Reflecting the position of the Company as one of project development now moving towards financial close, the consolidated financial results for
the year to 31 December 2015 show an operational loss after taxation for Oracle and its subsidiaries (“Group”) of £972,776 (2014: £709,749). The basic
loss per share was 0.12p (2014: loss 0.21p). At the end of 2015 the Group had cash and cash equivalents of £1,860,662 (2014: £383,063) and total assets
less current liabilities of £6.30 million (2014: £4.09 million). We will continue to report under the Guidelines of the Quoted Company Alliance.
With the objective of reaching financial close, we are working towards finalising a number of agreements and contracts, including the EPC term
sheet and contracts with SEPCO for the coal mine and power plant; we are also finalising the environmental and social impact assessments as well as
arrangements for resettlement of people affected by the project. The coal price and electricity tariff will be determined by the authorities; the power
purchase agreement, coal sales agreement and implementation agreement will then be executed. Financing arrangements with Sinosure and other
banks will be reached against this backdrop, and we have started discussions with potential investors to raise the necessary equity.
There will naturally be significant changes following financial close. We will be reviewing all appropriate governance processes to oversee the project
expenditure required to bring the project to fruition, currently estimated to be US$ 1,600 million. The Board of Directors will be strengthened. The
Company's business model is to create value through a balanced portfolio of energy assets at the various stages in the cycle. As we move forward,
we shall be mindful of the principles agreed in the Paris conference on Climate Change. The Board will be considering the detailed next steps for the
Company within this broader strategy without losing momentum on the Thar Block VI project.
We are among the leaders in a new business which will have a significant effect on Pakistan, inter alia, through the resulting improved power supply.
Inevitably, such ground breaking activity takes time and we are most grateful to all Government Authorities at both the Federal and Provincial levels
for their support to our project. They, and we, recognise that the development of Thar will be a significant part of a long term sustainable solution
to Pakistan's energy crisis.
I would like to thank my Board and management colleagues for their hard work in 2015, which resulted in the progress described earlier.
Above all I wish to thank our shareholders for their patience during the time consuming steps that the project development has necessitated,
and for their continued confidence and support.
Mr W Adrian Loader
Chairman
14 March 2016
02
Chief Executive’s Report
For the year ended 31 December 2015
The economic growth and overall development of Pakistan continues to be restricted because of electricity supply shortfalls throughout the country.
In its State of Industry Report 2014 NEPRA (The National Electricity Pricing and Regulatory Authority) projects that the existing shortfall in generating
capacity of 5,500MW will continue until at least 2020 despite new capacity coming on stream during this period as demand continues to rise.
The Government is committed to eradicating the shortfall and to supporting the development of indigenous fuel supplies for electricity generation.
In December 2014 the Government of Sindh enacted the Thar Coal Tariff Determination Rules which set out how the Thar Coal and Energy Board
will review and agree a coal tariff for developers in Thar incorporating the fiscal incentives for project developments. The Company submitted
its Tariff application in July 2015 and is currently going through the determination process. The Government has adopted a cost plus mechanism
for tariff determination with a review process over time as the projects proceed.
The Private Power and Infrastructure Board (PPIB) is the division of the Ministry of Water and Power, Government of Pakistan which regulates Independent
Power Producers (IPP) and approves applications to build, own and operate private power plants in Pakistan. The process entails agreeing an electricity
tariff with NEPRA and also a Power Purchase Agreement (PPA) with the Central Power Purchasing Authority (CPPA), a division of the National Transmission
and Despatch Company (NTDC) which owns and operates the high voltage transmission lines throughout the country. In addition to agreeing a PPA an
Implementation Agreement (IA) which guarantees payments under the PPA is provided by the Government of Pakistan to the IPP Developer.
Thar Electricity (Private) Limited (TEPL), a subsidiary of Oracle Coalfields PLC has registered the Thar Block VI Power Plant with PPIB for a plant up to
1,200MW capacity and has made the application to construct initially a 600MW plant at the site.
The Central Purchasing Agency issued a “Letter of No Objecton” for the 600MW power plant in November 2015 and NTDC also confirmed that power
from the project will be accommodated within the planned high voltage transmission line.
The next stage of the process is for PPIB to issue a Letter of Intent (LOI) for the project which then requires the PPA application to be made along with the
electricity tariff application. As part of the application the Company has entered into a Consortium Agreement with Shandong Electric Power Corporation
who have also agreed to take at least a 10% equity in TEPL. Work is continuing to complete the Environmental Impact Assessment (EIA) for the Power Plant
as part of the application process.
Following the signing of an Engineering, Procurement and Construction Framework Agreement with SEPCO for the development of a 4.0Mtpa mine
and the construction of an initial 600MW mine-mouth power plant, the Company is finalising the EPC Termsheet for the project which will then form
the basis for negotiating the full EPC Contract where we will continue to be assisted by our advisors Mott MacDonald for the power plant and Turner
and Townsend for the mine. Signing the Termsheet will enable detailed discussions on the financing through Sinosure and the Chinese banks.
The Block VI integrated project is in the approved list of the China-Pakistan Economic Corridor (CPEC). The CPEC is a bilateral arrangement between
China and Pakistan which has been set up to fast track Chinese financing of energy and infrastructure projects across Pakistan. The inclusion of our
project in the CPEC will assist in progressing the various approvals required both at Federal and Provincial level in Pakistan and also with the Chinese
financial institutions.
These are all exciting steps in furthering project development for the integrated coal and power development within the Block VI Lease area in Thar
and we will continue to work with the relevant authorities in Pakistan and with our Chinese partners to bring the project to full implementation.
Work is continuing on site in preparation for development in particular to establish land ownership so that land acquisition and resettlement can
be undertaken in accordance with the Resettlement Policy Framework published by the Sindh Coal Authority Energy Department in May 2015 which
has been written to conform to international best practice. In addition we are working to implement a Corporate Social Responsibility Programme (CSR)
to provide early benefits to the local community in terms of water, basic healthcare and veterinary support.
The work in 2016 will concentrate on formalising agreements and contracts to bring the project to full implementation along with securing all
the financing arrangements, including equity raise funding.
I am most grateful to both the Provincial Government of Sindh and the Federal Government of Pakistan for their continuing support for developments
in the Thar Coalfield and our Block VI project in particular which will be a major contributor to alleviating the electricity shortfall in the country.
The Company again extends its thanks to the shareholders for their continued patience and support.
Mr Shahrukh Khan
Chief Executive Officer
14 March 2016
ORACLE COALFIELDS PLCANNUAL REPORT 2015 03
Group Strategic Report
For the year ended 31 December 2015
The Directors present their strategic report of the Company and the Group for the year ended 31 December 2015.
PRINCIPAL ACTIVITY AND BUSINESS MODEL
The principal activity of the Group in the year under review was an energy project, based on the exploration for and development of coal,
and building a mine-mouth power station 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. The Group's business model is
to create value through a balanced portfolio of energy assets at the various stages in the value cycle, in the procurement of exploration leases,
exploration work, development of commercially viable discoveries, their implementation and operation. The Group will seek judiciously to enhance
value further through asset trade.
REVIEW OF THE BUSINESS
During the year the Group continued to utilise its funds to develop its 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 Statement of Profit or Loss and hence determine the loss for Oracle Coalfields PLC Group
of Companies after taxation of £972,776 (2014: £709,479).
The Chairman, in his statement, and the Chief Executive in his report, have fully described the activities of the Company during the financial year
and the further steps now required to take the Company through to financial close.
PRINCIPAL RISKS AND UNCERTAINTIES
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
an open-pit mine supplying a mine-mouth power plant. The principal strategic and operational risks and uncertainties facing the Group are described
below, together with the steps taken for their mitigation. Information on financial risk management is set out in the Financial Instruments section
in this report.
Environmental and social risk
Possible Occurence/Severe Impact
The Thar coal mine 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 Block VI mine
could negatively impact communities near its operation due to resettlements, population inflow and necessary infrastructure.
Mitigation
The “No Objection Certificate” was issued by SEPA. Work is proceeding to obtain an ESIA for the power plant with support from our Chinese partners.
A Resettlement Action Plan (RAP) was produced in 2014 in accordance with national and international standards in consultation with the affected
communities and Oracle is developing a resettlement framework.
Technical risk
Possible Occurence/Moderate Impact
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 the operational phase. Both also depend on the construction of a high voltage transmission network to evacuate power
from Thar mine-mouth power plants and this also needs to be completed for the power plant to operate. The National Transmission and Despatch
Company are committed to this objective.
The mine must be de-watered prior to mine construction and during production. The water will be used for the mine and the power plant as well
as being available for the local community. Surplus water produced must be disposed of safely. Any deficiency in water supply for the power plant
will have to be met by the Sindh Government.
There are inherent risks in any mining project, such as stability of the mine excavation, poor availability of equipment, labour disputes, and expected
coal quality not being achieved.
Mitigation
The EPC term sheets for the mine and the power plant are to be entered with SEPCO. Having a single contractor on both aspects of the project
will minimise co-dependency risk.
The Government of Sindh's commitment to the supply and disposal of water will address the water risk.
Mining risks will be mitigated by using competent, established operators and working to best international practice.
ORACLE COALFIELDS PLCANNUAL REPORT 2015 04
Group Strategic Report
continued
Economic risk
Possible Occurence/Moderate Impact
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. Similarly the fiscal incentives for the
construction and operation of the power plant will need to be confirmed prior to contract finalisation.
Mitigation
EPC term sheets for the mine and power plant will be signed with SEPCO on the basis of earlier priced bids. The price adjustment mechanism for coal
and power is designed to take account of any variations in contract price. Finalisation of the fiscal regime is proceeding and any adjustments therein
should also be reflected in the price adjustment mechanism.
Infrastructure risk
Possible Occurence/Severe Impact
The relevant Federal and Provincial authorities need to fund and complete certain local infrastructure, including the power transmission line from the
power plant and water supply to Thar coalfield and in particularly Block VI.
Mitigation
The Sindh Government is investing heavily in extending local infrastructure to Thar Coalfield.
Financing risk
Possible Occurence/Severe Impact
The overall project is expected to cost in the region of US$ 1,600 million. The greater part of this will be covered by two EPC contracts with SEPCO, one for
the mine and one for the power plant. Sinosure have offered outline terms on the basis of which, subject to detailed agreement, they will securitise up to
85% of the two EPC contracts. The balance will be met by some additional borrowing, but mainly through equity. Some third party equity is anticipated,
but a significant portion will be from Oracle Coalfields PLC. The major risks are that the Company fails to come to final agreement with Sinosure and that
the Company has difficulty in raising the equity required for the project.
Mitigation
The Company will work to reach full agreement with Sinosure to assure the EPC debt financing, and will similarly work to attract and secure third party
equity. SEPCO has already committed to take 10% of the equity of the power plant under Consortium Agreement signed in 2015. The Company will
develop a strategy with its brokers, Brandon Hill and Peterhouse, to find the balance of equity through the LSE AIM market or other sources.
Political, legal and regulatory risk
Possible Occurence/Severe Impact
The Federal and Sindh Governments have demonstrated strong support for the integrated Thar coal mining and power plant development, but there
is always potential for the Group’s operations and financial results to be affected by changes to the legal, regulatory or fiscal frameworks in Pakistan, and,
as occurred in 2014, with the lease cancellation.
The key to the financial returns of this project is an undertaking by the Government of Pakistan to support an agreed rate of return of 20% (in US$) on
the mine and the power plant. This agreed return will effectively be implemented through the approved coal price and the electricity tariff in the Power
Purchase Agreement. This provision has the effect of minimising technical and economic risks in the project as cost variations are recoverable in the price
formulae, but the regulatory risk is thereby increased.
A coal price petition has been submitted to the Thar Coal and Energy Board and, following admission of the application, is currently under discussion.
The project has also been registered with the Private Power and Infrastructure Board, to allow it to issue a Letter of Intent (LOI) permitting the Company
to build, own and operate the power plant. This LOI would then allow the new subsidiary, Thar Electricity (Private) Ltd (TEPL), to enter into a Power
Purchase Agreement (PPA) with the National Transmission and Despatch Company (NTDC), the state utility which owns the national electricity grid and
is the seller of power to distribution companies within Pakistan. This LOI would lead to an Implementation Agreement with the Government
of Pakistan providing, inter alia, a Government guarantee for the payments by NTDC for electricity supplied to it by TEPL.
Within the price formulae the coal and power prices are subject to regular review to reflect the cost changes arising in the development of the project
including changes to the royalty and tax rates.
Mitigation
The Company maintains strong working relations with the key Government entities which regulate this sector including the federal authorities of the
Government of Pakistan, the PPIB and NTDC. It was through these relationships that the arbitrary cancellation of the Mining Lease was expeditiously
reversed. The Company also works closely with the Sindh Energy Department, Government of Sindh. The inclusion of the project in the China-Pakistan
Economic Corridor for priority development demonstrates the Government’s commitment to this project.
Pakistan is signatory to bilateral Investment Treaty with both the UK and China which, inter alia, offer protection against expropriation and against any
restriction on remittances out of Pakistan.
Pakistan is signatory to bilateral Investment Protection Treaties with UK and China which, inter alia, offer protection against expropriation and against
any restriction of remittances out of Pakistan.
ORACLE COALFIELDS PLCANNUAL REPORT 2015 05
Security risk
Possible Occurence/Severe Impact
The risk of terrorist attack or communal violence affecting the Company and its staff in Pakistan, or suppliers and customers, remains real and could
restrict the Company’s ability to manage at the site and the Karachi office.
Mitigation
Company personnel are instructed to take a range of security precautions and generally keep a low profile in the country. As the profile of the project
builds, the Company will implement further appropriate protection for its staff. Generally the Sindh Province has a low incidence of such attacks.
The Government authorities will provide an appropriate security force to protect the site and in addition provides special protection for all CPEC projects.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Objective: Oracle Coalfields PLC is a responsible corporate entity, and is continuing to apply international best practice to the Thar project. The Company
is aware of the key role it has to play in developing this pioneering project, in minimising the impact its operations can have on the natural and social
environment and in creating opportunities for the local community.
Environmental and Social Impact Assessment (ESIA)
The Company commissioned Wardell Armstrong International Ltd. (WAI) to produce an ESIA for the Block VI project. WAI is working with Hagler Bailly
Pakistan, a local environmental consultancy, based in Islamabad, to complete the ESIA to meet both national and international standards.
The ESIA was completed and submitted to the Sindh Environmental Protection Agency, Government of Sindh (SEPA) in April 2013.
A public hearing held on the site in June 2013 was attended by local people along with government representatives, SEPA, various non-governmental
organisations (NGOs) and its consultants as part of the public consultation process. The project along with its impacts and mitigation plans were
presented to the public who were given the opportunity to comment on the proposals and question the Company and the Government on all aspects
of the proposed development. There was overall support for the project and the Company will continue its consultation with the local people.
Early in July 2013 SEPA held a Technical Committee Hearing in Karachi to examine the technical aspects of the ESIA and to take on board concerns raised
at the public hearing which was attended by the Company and its consultants along with government representatives. All the technical queries raised
by the panel were addressed satisfactorily and the Company outlined how the Environmental Management Plan would be implemented and monitored
through the life of the project.
Following these meetings SEPA issued a “No Objection” Certificate giving formal approval for the ESIA in January 2014 which is another significant step
towards mine development.
An ESIA for the 600MW Power Plant is under preparation which will examine the impacts of the mine-mouth power plant along with proposed
mitigation measures. It will build on the already completed ESIA for the mine.
Community and Consultation
In addition to the environmental characterisation of the site and its environs, a comprehensive social data gathering campaign has been completed.
Background information on local demography, village structure, local culture, resources and socioeconomics has been collected. In addition, an ongoing
public consultation has been undertaken, to gather the views and opinions of local stakeholders (both at a local and national level), and to disseminate
information about the project.
Resettlement
Community response has generally been positive, with an interest in the project, and the associated community benefits that it will deliver. As a result
of the location of the lignite seams, and the requirement for associated infrastructure, some relocation of local communities currently residing within
the Block, will be required.
The Government of Sindh Thar Coal and Energy Board published the Resettlement Policy Framework in May 2014 which sets out the formal mechanism
for resettlement in Thar and is generally in line with international performance standards.
A Resettlement Framework and Resettlement Action Plan (RAP) was prepared and submitted to SEPA in April 2014 as required under the ESIA approval.
The RAP has been prepared in line with the Government‘s Resettlement Framework Policy. The RAP has been prepared to ensure that the process is
managed in line with best practice standards, and a full programme of consultation, specifically dealing with this issue is being instigated. Communities
will be resettled locally (i.e. within the Block area).
The next stage of the process is to carry out a detailed land ownership survey of the mine and power plant areas to identify the land owners and their
families, livestock, and agricultural assets prior to formal land acquisition procedures which will be instigated at the time of project implementation.
This process is underway and will be ongoing in 2016.
As part of the resettlement process, which will occur in full consultation with the affected communities and Project Affected Peoples, resettled
communities will be given equivalent, alternative land for their villages. Oracle intends to construct replacement villages, with full electricity, sanitation,
and potable water supply, and culturally appropriate places of worship, with opportunities for a local market area. The exact design of resettlement
villages will be decided in consultation with the affected communities.
ORACLE COALFIELDS PLCANNUAL REPORT 2015 06
Group Strategic Report
continued
Oracle Social Development Initiatives
Oracle Coalfields PLC has appointed a Community Liaison Officer (CLO) in 2012 to act as the local point of contact for stakeholders, and to receive
information from, and disseminate information to local community members. The CLO will also act as an intermediary, to represent the interests of
the local communities to Oracle. As part of Oracle's Corporate Social Responsibility initiatives, a strategy is being developed, to identify, and support
community development projects. This is an ongoing process and will continue as the project moves into implementation.
Benefits and Opportunities
Oracle is working with local groups to ensure that the Block VI project delivers sustainable benefits to the communities, and an overall improvement in
local living conditions, whilst also positively responding to the energy crisis in Pakistan. This project will result in direct and indirect benefits to the local
communities. Direct benefits will include employment at the mine and power plant, whilst indirect benefits may include revenues generated by local
supply of goods and services to the operations.
Benefits and Opportunities include:
– Improvements and extension of the existing government primary schools in Block VI:
– Training of literate male and female community members for teaching
– Extension of the buildings to support more students
– Supply of stationery and other provisions
– Bi-annual hygiene and healthcare awareness campaign in all Communities
– Setting up water filter systems in all Communities
– Awareness campaign on methods to improve livestock health and productivity in all Communities
– Construction of a road to connect local villages and communities to the mine site access road proposed under project
On behalf of the Board:
Mr W Adrian Loader
Director
14 March 2016
ORACLE COALFIELDS PLCANNUAL REPORT 2015 07
Report of the Directors
For the year ended 31 December 2015
The Directors present their report with the financial statements of the Company and the Group for the year ended 31 December 2015.
DIVIDENDS
No dividends will be distributed for the year ended 31 December 2015.
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
Mr S Khan
Mr A C R Scutt
Mr M R Stead
Chairman
Chief Executive
Senior Independent Non-executive Director
Non-executive Director
The beneficial interests of the Directors holding office on 31 December 2015 in the issued share capital of the Company were as follows:
Ordinary 0.1p shares
Mr S Khan
Mr W A Loader
Mr A C R Scutt
Mr M R Stead
31 December
2015
1 January
2015
33,824,713
5,097,661
1,686,595
1,425,410
33,081,153
4,321,992
1,173,857
1,040,857
In addition to the above, in his capacity as a joint honorary trustee, Mr Scutt also holds 424,000 shares for The Acumen Brigade Investment Club
and 315,000 shares for The Ridgeway Investors Group. Mr 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
ORACLE COALFIELDS PLCANNUAL REPORT 2015
08
Report of the Directors
continued
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.
He previously served on the boards of Shell Canada, Alliance-Boots and Candax Energy and Compton Petroleum, the last two as Chairman. Mr Loader
is currently a Director of LafargeHolcim, Sherritt International and Alderon Iron Ore. 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 the 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 Director
Mr Scutt is a qualified Chartered Secretary and a Certified Internal Auditor with the US Institute of Internal Auditors. He has over 30 years of financial
management experience with Shell International Petroleum and has 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.
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.
Simon Smith
Finance Manager
Mr Smith has a background in finance from a twenty-five year career in Shell, in a variety of posts. He was Finance Director in Sierra Leone and in Egypt
where he also deputised for the Chief Executive. He also worked in Shell's M&A unit, particularly on the sale of Billiton, Shell's Metals division, the sale of
Shell's agrochemical interests and Shell's early expansion into eastern Europe. Latterly he headed up Group Finance HR. Mr Smith has an MA in Economics
from the University of Cambridge and is a fellow of the Institute of Chartered Accountants in England and Wales.
Brian Rostron
Mining and Contracts Manager
Mr Rostron 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 been a Director of Miller Argent South Wales Ltd, H.J. Banks Mining, Scottish Coal Company, Coal Contractors
Ltd as well as the Director General of the Confederation of UK Coal Producers. Mr Rostron has a BSc in Combined Science (Geology and Economics) from
Sunderland Polytechnic and a MSc in Mining Engineering from the University of Newcastle-upon-Tyne. He is a member of the Institution of Materials,
Minerals and Mining, a fellow of the Geological Society, a Fellow of the Institute of Quarrying and a member of the Institute of Explosive Engineers.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
09
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.
GOING CONCERN
The Directors have considered the cashflow requirements of the Group over the next 12 months. It will be necessary to raise additional funds to bring
the project to financial close. 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 2015:
Power Equity Investments Ltd
OWG PLC
Generali Investments Europe
Nazario Consultancy Ltd
Brandon Hill Capital Ltd
Mr S Khan
Mr N Griffith
Mr P Richards
Sunvest Corporation Limited
Shareholding
% holding
153,846,154
76,923,059
72,553,846
62,159,230
43,846,154
33,630,482
31,181,232
30,000,000
30,000,000
15.4%
8.4%
7.96%
6.8%
4.8%
3.69%
3.42%
3.3%
3.3%
AUTHORITY TO ISSUE SHARES
At the Annual General Meeting held on 20 May 2015 the Directors’ authority to allot equity securities for cash up to a nominal value of £100,000 expired
and no resolution was proposed to extend the authority.
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.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
10
Report of the Directors
continued
REMUNERATION REPORT
This report has been prepared in accordance with the requirements of Schedule 2 Part 1 to the Companies Act 2006 (the Schedule) 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 senior management of the necessary calibre and to reward them for
enhancing value to shareholders. The performance measurement of the Chief Executive Officer 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.
The Chief Executive Officer is 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
Director undertakes additional assignments for the Company, Non-executive Director's fee will be agreed by the Company in respect of each assignment.
Aggregate Directors' remuneration
The remuneration paid to the Directors, inclusive of Employer National Insurance contributions, in accordance with the service contracts, during the year
ended 31 December 2015 was as follows:
Executive
Mr S Khan
Non-executive
Mr M R Stead
Mr A C R Scutt
Mr W A Loader
Salary
& fees
£
Bonuses
£
Pensions
£
Termination
benefits
£
Share based
payments
£
2015
Total
£
2014
Total
£
128,763
65,000
27,330
27,330
61,470
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
193,763
112,702
27,330
27,330
61,470
27,352
27,352
61,492
As part settlement of the above salaries, the Directors received 4,389,033 new ordinary shares of 0.1p each in lieu of cash remuneration of £28,529.
The settlement was on the same terms as a larger placement with the placing price of 0.65 pence per share.
Directors' service contracts
The Directors have contracts with a three year renewable term and a stated termination notice period.
Executive
Mr S Khan
Non-executive
Mr M R Stead
Mr A C R Scutt
Mr W A Loader
Date of appointment
Notice period
13.2.2007
1 month
1.11.2007
22.12.2006
1.8.2011
6 months
6 months
3 months
Performance evaluation
The Board undertakes a formal evaluation annually of its performance, and of its committees and individual Directors through a questionnaire
and interview process that is overseen by Mr Scutt, the Senior Independent Director.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
11
CORPORATE GOVERNANCE REPORT
During 2015 the Board continued its commitment to maintaining high standards of corporate governance, complying with the requirements of the
corporate governance guidelines (Guidelines) for smaller quoted companies issued by the Quoted Companies Alliance. The principles set out in the
Guidelines cover four areas: the Board, Directors' remuneration, accountability and audit, and relations with shareholders. With the exception of Directors‘
Remuneration (which is dealt with separately in the Remuneration Report), this statement sets out how the Board has applied such principles and the
Company's compliance with the specific provisions of the Guidelines.
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 2015 the Board consisted of four Directors
being the Chief Executive Officer, Mr S Khan; 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. All of these Directors have considerable experience in running quoted
companies and in the energy sector in general. Details of their previous roles are given in the Report of the Directors.
The Board has appointed Mr Scutt, one of the independent Non-executive Directors to be the Senior Independent Director to provide a sounding board
for the Chairman, and to serve as an intermediary for the other Directors when necessary. He is available to shareholders if they have concerns when
contact through the normal channels of Chairman or Chief Executive has failed to resolve issues or when such contact would be inappropriate.
The Board has considered the independence of Mr Scutt and Mr Stead and considers them to be fully independent, notwithstanding that they hold
equity and warrants in the Company. Indeed the Board is of the view that these interests serve to align their interests more closely with those
of the Company.
Details of Directors' service contracts are given in the Remuneration Report. None of the Board have any conflicts of interest arising from cross-directorships
or day-to-day involvement in running the business. All Directors are subject to election by shareholders at the first Annual General Meeting after their
appointment. All Directors are submitted for re-election after three years, subject to continued satisfactory performance.
All Directors had access throughout the year to the advice and services of the Company Secretary, Mr T Everitt, who is responsible for ensuring that Board
procedures and applicable regulations under the Company's Articles of Association or otherwise are complied with. Each Director is entitled, if necessary,
to seek independent professional advice at the Company's expense.
The Directors carried out an internal review of the effectiveness of the Board in 2015 and this process was repeated in early 2016.
Board meetings
The Board of Directors meets at least every two months and 13 meetings were held in 2015. There is 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.
Board Committees
The Board Committees are comprised of Non-executive Directors, except for the Nomination Committee which is chaired by the Chief Executive,
Mr S Khan, and the Tender Board which additionally comprises Mr B Rostron and Mr S Smith. They operate within defined terms of reference, details
of which are posted on the Company's website, and they report regularly to the Board. At this stage of the development of the Company the Board
Committees are also charged with advising the Boards and management of the subsidiary companies.
It is anticipated that, as the subsidiary companies grow in size with development of the project, the subsidiaries will eventually form Board Committees
of their own to advise the respective Boards. Such committees will include a Health, Safety and Environment Committee for each company based
in Pakistan.
The meetings held in 2015 were as follows:
The Board
Nomination Committee
Remuneration Committee
Audit Committee
Number of
Meetings in 2015
Members (& attendance)
13
0
2
4
Mr Loader (all), Mr Khan (all), Mr Scutt (all), Mr Stead (all)
Mr Khan (–), Mr Scutt (–)
Mr Scutt (all), Mr Stead (all)
Mr Stead (all), Mr Scutt (absent twice)
ORACLE COALFIELDS PLCANNUAL REPORT 2015
12
Report of the Directors
continued
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 is also available to discuss
senior staff appointments. The Committee is chaired by Mr Khan and includes Mr Scutt and Mr Stead as members.
This Committee monitors the application of the Company policy on discrimination and encouraging diversity amongst the Company’s workforce.
No such issues were noted in 2015.
No meetings were needed during the year as matters were fully covered at Board Meetings.
Remuneration Committee
The Remuneration Committee met twice in 2015. The Committee consists of Mr Scutt as chair and Mr Stead. It is responsible for reviewing the remuneration,
bonuses and pension provision for Board members and senior executives of the Company. The Board has recently approved the introduction of a new
pension scheme from 2016 for employees. The Committee responsibility will extend to the review of the remuneration of Board members and senior
executives of the Pakistani subsidiaries at present the Directors of Sindh Carbon Energy Limited and Thar Electricity (Private) Ltd. are unpaid.
During 2015 the Committee consulted h2glenfern Ltd as advisers on Board and executive remuneration including performance bonuses and
retirement provisions.
It is policy that no individual participates in discussions or decisions concerning their own remuneration.
Audit Committee Report
The Audit Committee of the Board met four times in 2015. The Audit Committee is composed of Mr Stead, as Chairman, and Mr Scutt. Other Directors
and officers are invited to attend where appropriate, and Mr Smith, as Finance Manager, was in attendance at all the 2015 meetings.
The role of the Audit Committee is to monitor the integrity of the financial statements, and to review any significant financial reporting issues, especially
the consistency of, and changes to, accounting policy. The Committee also assesses the effectiveness of the Company's internal controls and risk
management systems. The Committee considers and makes recommendations to the Board, to be put to shareholders for approval at the AGM,
in relation to the appointment, re-appointment and replacement of the Company's external auditor. This extends to monitoring the effectiveness,
remuneration and independence of the external auditors.
Whilst the Audit Committee is composed of two Directors of Oracle Coalfields PLC it also has a role to advise the Boards of group subsidiary companies,
particularly Sindh Carbon Energy Ltd. and Thar Electricity (Private) Ltd.
The auditors of Oracle Coalfields PLC are Price Bailey who have served the Company since it was founded. The Committee view is that Price Bailey have
served the Company well and that their audit fee remains reasonable. The Committee has therefore concluded that with the limited size of this audit
the costs of retendering could not be justified at this stage. However, in line with good practice, a new audit partner, Paul Cullen, was appointed in 2014.
Mr Cullen will visit Pakistan to review operations on site in 2016. Price Bailey are presently advising the Company on setting up a workplace pension
scheme in the UK, which is not considered by the Committee as inconsistent with their role as auditors.
The Committee has recommended to the Board of Sindh Carbon Energy Ltd. the appointment of A.F. Ferguson & Co., the local affiliates in Karachi
of Price Waterhouse Coopers for the year 2014 as external auditors. During 2015 this mandate was extended to cover the audit of Thar Electricity
(Private) Ltd. This firm continues to advise the Group on Pakistani tax matters, which is considered by the Audit Committee to be compatible with
their role as auditors.
In December 2015 the Partner and Manager in charge of the audit in Price Bailey attended the Audit Committee meeting to consider the year end
timetable and discuss issues arising from the annual closing. Recent changes in accounting standards had been discussed with the auditors.
No substantial impact on the Group accounts has been noted.
The 'going concern' assumption was reviewed by the Committee. The carrying values of the assets do rely upon the successful raising of sufficient
finance to reach an investment decision and the Report and Annual Accounts reflect that judgement.
In the area of internal controls, the Committee monitors the internal control environment of the Group. It noted the appointment of Famco Associates,
a well-established firm in Pakistan, as bookkeepers to Sindh Carbon Energy Ltd. and Thar Electricity (Private) Ltd by the Boards of those companies.
Overall the Committee considers that internal controls are sound, both in Oracle Coalfields and in the subsidiary companies, given the scale
of current operations.
The Company Internal Control Manual was finalised in 2014 and minor amendments are currently being processed.
The risk assessment exercise for Oracle Coalfields is undertaken annually under the supervision of the Audit Committee. The results of the most recent
exercise are included in this Report in the section Principal Risks and Uncertainties (pages 03 to 05).
ORACLE COALFIELDS PLCANNUAL REPORT 2015
13
Management Committees
The meetings held in 2015 were as follows:
Tender Board
Management meetings
Number of
Meetings in 2015
5
5
Members (& attendance)
Mr Stead (all), Mr Rostron (all), Mr Smith (all)
Mr Loader (all), Mr Khan (all), Mr Scutt (all),
Mr Stead (all), Mr Rostron (all), Mr Smith (all)
Management Meetings
The Management meets regularly to discuss in detail project progress and all other aspects of the business and where appropriate put tables
recommendations to the Board for their consideration and approval.
Tender Board
The Tender Board is composed of Mr Stead as Chairman, Mr Smith as Finance Manager, and Mr Rostron as the Technical Manager. Ms Ridha serves
as Secretary to the Tender Board. Seven meetings were called in 2015.
The purpose of the Tender Board is to ensure the fair and objective consideration of bids received for services and goods of both capital
and revenue expenditure.
The Tender Board must be consulted on all contracts or purchases which could exceed £10,000.
The Tender Board will recommend contract awards to the individuals authorised to commit the Company. In the case of contracts of £100,000
or more the final decision will be ratified by the Company Board of Directors.
Matters to be referred to the Tender Board are:
– lists of proposed tenderers
– lists of proposed vendors
– proposals to negotiate rather than tender contracts
– opening and recording of sealed bids (which may be delegated to appropriate officers)
– proposals to award contracts
– variations, claims and over expenditure on contracts when these exceed 7% of the original price
– renewal of existing contracts
For all major contracts (over £100,000) it is required to submit to the Tender Board the list of contractors to be invited and the ‘invitation to tender’
documents. Arrangements for opening sealed bids and negotiating with contractors should be agreed with the Tender Board. Normally tenders
should be received in sealed envelopes directly by the Secretary of the Tender Board and filed securely.
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 Board and the Nominated Advisers.
Internal controls
The Directors have overall responsibility for ensuring that the Group maintains a system of internal controls 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 controls, 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 strengthened subsequently and are reflected in the Company Internal Control Manual.
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, makes interim presentations to shareholders as needed.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
14
Report of the Directors
continued
DIRECTORS' RESPONSIBILITIES STATEMENT
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 (IFRS) 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 AS TO 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:
Mr W Adrian Loader
Director
14 March 2016
ORACLE COALFIELDS PLCANNUAL REPORT 2015 15
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 2015 which comprise the
Consolidated Statement of Profit or Loss, 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 Statement of Cash Flows, the Company Statement of Cash Flows 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 Directors' Responsibilities Statement, 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 the Group Strategic Report and the Report of the
Directors to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. 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 2015 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.
Emphasis of matter – Going concern and Impairment of Exploration costs
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures made in note 9
to the financial statements concerning the valuation of the exploration costs. The Group has sufficient reserves to bring the exploration part of the
project to financial close, however to justify sufficient value to justify the carrying value of the intangible assets the Group needs to raise additional
finance, both debt and equity for the opening up of the mine and construction of the power plant. 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. The financial statements
do not include the adjustments that would be necessary if the Group was unable to raise these funds.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
16
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 Group Strategic Report and 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.
Paul Cullen FCCA (Senior Statutory Auditor)
for and on behalf of Price Bailey LLP
Chartered Accountants & Statutory Auditors
Richmond House
Ely
Cambridgeshire
CB7 4AH
17 March 2016
ORACLE COALFIELDS PLCANNUAL REPORT 2015
Consolidated Statement of Profit or Loss
For the year ended 31 December 2015
CONTINUING OPERATIONS
Revenue
Other operating income
Administrative expenses
OPERATING LOSS
Finance income
LOSS BEFORE INCOME TAX
Income tax
LOSS FOR THE YEAR
Loss attributable to:
Owners of the parent
Non-controlling interests
Earnings per share expressed in pence per share:
Basic and diluted (pence)
The notes form part of these financial statements.
17
Notes
2015
£
2014
£
2
4
5
6
8
–
768
(980,819)
–
491
(712,016)
(980,051)
7,275
(711,525)
2,046
(972,776)
–
(709,479)
–
(972,776)
(709,479)
(972,190)
(586)
(709,479)
–
(972,776)
(709,479)
-0.12
-0.21
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2015
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Item that will not be reclassified to profit or loss:
Exchange difference on consolidation taken to translation reserve
Income tax relating to item of other comprehensive income
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests
The notes form part of these financial statements.
2015
£
2014
£
(972,776)
(709,479)
11,572
–
(121,645)
–
11,572
(121,645)
(961,204)
(831,124)
(960,618)
(586)
(831,124)
–
(961,204)
(831,124)
ORACLE COALFIELDS PLCANNUAL REPORT 2015
18
Consolidated Statement of Financial Position
31 December 2015
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
The notes form part of these financial statements.
Notes
2015
£
2014
£
9
10
11
12
13
14
16
17
17
17
17
15
4,170,073
23,532
–
338,676
3,809,019
934
–
–
4,532,281
3,809,953
87,604
1,860,662
1,948,266
66,816
383,063
449,879
6,480,547
4,259,832
911,783
10,900,723
(132,534)
149,782
(5,534,399)
6,295,355
5,143
389,009
8,346,733
(144,106)
63,070
(4,562,209)
4,092,497
5,729
6,300,498
4,098,226
18
180,049
161,606
180,049
161,606
6,480,547
4,259,832
The financial statements were approved and authorised for issue by the Board of Directors on 14 March 2016 and were signed on its behalf by:
Mr Shahrukh Khan
Director
ORACLE COALFIELDS PLCANNUAL REPORT 2015
Company Statement of Financial Position
31 December 2015
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
The notes form part of these financial statements.
19
Notes
2015
£
2014
£
9
10
11
12
13
14
2,936,843
–
899,706
1,705,815
2,721,660
–
868,631
1,181,214
5,542,364
4,771,505
172,537
1,824,114
1,996,651
135,545
382,510
518,055
7,539,015
5,289,560
16
17
17
17
911,783
10,900,723
149,782
(5,394,563)
389,009
8,346,733
63,070
(4,449,703)
6,567,725
4,349,109
18
971,290
940,451
971,290
940,451
7,539,015
5,289,560
The financial statements were approved and authorised for issue by the Board of Directors on 14 March 2016 and were signed on its behalf by:
Mr Shahrukh Khan
Director
ORACLE COALFIELDS PLCANNUAL REPORT 2015
20
Consolidated Statement of Changes in Equity
For the year ended 31 December 2015
Called up
share
capital
£
Retained
earnings
£
Share
premium
£
Translation
reserve
£
Share
scheme
reserve
£
Non-controlling
interests
£
Total
£
Total
equity
£
Balance at 1 January 2014
327,009
(3,852,730)
7,672,130
(22,461)
63,070
4,187,018
5,729
4,192,747
Loss for the year
Other comprehensive income
Exchange difference on consolidation
Total comprehensive income
Transactions with owners
Issue of share capital
Total transactions with owners
–
–
–
(709,479)
–
(709,479)
–
–
–
–
(121,645)
(121,645)
62,000
62,000
–
–
674,603
674,603
–
–
–
–
–
–
–
(709,479)
(121,645)
(831,124)
736,603
736,603
–
–
–
–
–
(709,479)
(121,645)
(831,124)
736,603
736,603
Balance at 31 December 2014
389,009
(4,562,209)
8,346,733
(144,106)
63,070
4,092,497
5,729
4,098,226
Loss for the year
Other comprehensive income
Exchange difference on consolidation
Total comprehensive income
–
–
–
(972,190)
–
(972,190)
–
–
–
–
11,572
11,572
–
–
–
(972,190)
(586)
(972,776)
11,572
–
11,572
(960,618)
(586)
(961,204)
Transactions with owners
Issue of share capital
Equity-settled share-based payment transactions
Total transactions with owners
522,774
–
522,774
–
–
–
2,640,702
(86,712)
2,553,990
–
–
–
–
86,712
3,163,476
–
86,712
3,163,476
–
–
–
3,163,476
–
3,163,476
Balance at 31 December 2015
911,783
(5,534,399) 10,900,723
(132,534)
149,782 6,295,355
5,143 6,300,498
The notes form part of these financial statements.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
Company Statement of Changes in Equity
For the year ended 31 December 2015
21
Balance at 1 January 2014
Loss for the year
Total comprehensive income
Transactions with owners
Issue of share capital
Total transactions with owners
Called up
share
capital
£
Retained
earnings
£
Share
premium
£
Share
scheme
reserve
£
Total
equity
£
327,009
(3,757,636)
7,672,130
63,070
4,304,573
–
–
(692,067)
(692,067)
–
–
62,000
62,000
–
–
674,603
674,603
–
–
–
–
(692,067)
(692,067)
736,603
736,603
Balance at 31 December 2014
389,009
(4,449,703)
8,346,733
63,070
4,349,109
Loss for the year
Total comprehensive income
Transactions with owners
Issue of share capital
Equity-settled share-based payment transactions
Total transactions with owners
–
–
(944,860)
(944,860)
–
–
–
–
(944,860)
(944,860)
522,774
–
522,774
–
–
–
2,640,702
(86,712)
2,553,990
–
86,712
86,712
3,163,476
–
3,163,476
Balance at 31 December 2015
911,783
(5,394,563)
10,900,723
149,782
6,567,725
The notes form part of these financial statements.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
22
Consolidated Statement of Cash Flows
For the year ended 31 December 2015
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
Purchase of financial 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
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
Cash and cash equivalents at end of year
The notes form part of these financial statements.
Notes
2015
£
2014
£
1
(958,952)
(655,341)
(958,952)
(655,341)
(351,000)
(22,975)
(332,116)
7,275
(200,746)
–
–
2,046
(698,816)
(198,700)
3,369,500
(234,553)
3,134,947
1,477,179
383,063
420
738,397
(42,419)
695,978
(158,063)
538,789
2,337
1,860,662
383,063
2
2
ORACLE COALFIELDS PLCANNUAL REPORT 2015
Company Statement of Cash Flows
For the year ended 31 December 2015
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 financial assets
Investment in subsidiary
Loans to subsidiaries
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
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The notes form part of these financial statements.
23
Notes
2015
£
2014
£
1
(936,319)
(669,708)
(936,319)
(669,708)
(215,183)
(332,116)
(31,075)
(185,925)
7,275
(118,162)
–
–
(45,000)
2,046
(757,024)
(161,116)
3,369,500
(234,553)
3,134,947
738,397
(42,419)
695,978
1,441,604
382,510
(134,846)
517,356
1,824,114
382,510
2
2
ORACLE COALFIELDS PLCANNUAL REPORT 2015
24
Notes to the Statements of Cash Flows
For the year ended 31 December 2015
1. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
Group
Loss before income tax
Depreciation charges
Shares issued in lieu of remuneration
Gain on foreign exchange movements
Finance income
Increase in trade and other receivables
Increase in trade and other payables
Cash generated from operations
Company
Loss before income tax
Depreciation charges
Shares issued in lieu of remuneration
Gain on foreign exchange movements
Finance income
Increase in trade and other receivables
Increase in trade and other payables
Cash generated from operations
2015
£
(972,776)
–
28,529
(6,560)
(7,275)
(958,082)
(20,735)
19,865
2014
£
(709,479)
165
36,603
–
(2,046)
(674,757)
(25,808)
45,224
(958,952)
(655,341)
2015
£
(944,860)
–
28,529
(6,560)
(26,609)
(949,500)
(17,658)
30,839
2014
£
(692,067)
165
36,603
–
(19,458)
(674,757)
(23,801)
28,850
(936,319)
(669,708)
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statements of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of
Financial Position amounts:
Year ended 31 December 2015
Cash and cash equivalents
Year ended 31 December 2014
Cash and cash equivalents
The notes form part of these financial statements.
31 December
2015
£
Group
1 January
2015
£
31 December
2015
£
Company
1 January
2015
£
1,860,662
383,063
1,824,114
382,510
31 December
2014
£
1 January
2014
£
31 December
2014
£
1 January
2014
£
383,063
538,789
382,510
517,356
ORACLE COALFIELDS PLCANNUAL REPORT 2015
25
Notes to the Consolidated Financial Statements
For the year ended 31 December 2015
1. ACCOUNTING POLICIES
Reporting entity
Oracle Coalfields PLC Group is a Group domiciled in United Kingdom. The parent is a public limited company with the registered office at 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 12 months. It will be necessary to raise additional funds to bring
the project to financial close. 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. 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.
ORACLE COALFIELDS PLCANNUAL REPORT 2015 26
Notes to the Consolidated Financial Statements
continued
1. ACCOUNTING POLICIES continued
Property, plant and equipment
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Fixtures & fittings
Motor vehicles
Computer equipment
– 15% on reducing balance
– 20% on reducing balance
– 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 statement of profit or loss.
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 performance bonds deposited in US Dollars 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.
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 locally.
Hire purchase and leasing commitments
Rentals paid under operating leases are charged to the statement of profit or loss 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 statement of profit or loss
over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each
statement of financial position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of 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 statement of profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the statement of profit or loss is charged with the fair value of goods
and services received.
Cash and cash equivalents
Cash and cash equivalents for the purpose of the cash flow statement comprise cash and bank balances.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
27
1. ACCOUNTING POLICIES continued
New standards and interpretations applied
In preparing these financial statements the Company has reviewed all new standards and interpretations.
New Standards, Interpretations and Amendments effective from 1 January 2015
The following new and revised Standards and Interpretations have been adopted in these financial statements but their adoption has not had
any significant impact on the amounts reported in these financial statements:
– IAS 16 Property, Plant and Equipment (amended 2013)
– IAS 19 Employee Benefits (amended 2013)
– IAS 24 Related Party Disclosures (amended 2013)
– IAS 38 Intangible Assets (amended 2013)
– IFRS 2 Share-based Payment (amended 2013)
– IFRS 3 Business Combinations (amended 2013)
– IFRS 8 Operating Segments (amended 2013)
– IFRS 13 Fair Value Measurement (amended 2013)
The other new and revised Standards and Interpretations are not considered to be relevant to the Company's financial reporting and operations
and are not detailed in these financial statements.
New standards, interpretations and amendments that are not yet effective and have not been adopted early
The following new and revised Standards and Interpretations are relevant to the Company but not yet effective for the year commencing 1 January 2015
and have not been applied in preparing these financial statements:
– IAS 1 Presentation of Financial Statements (amended 2014)
– IAS 7 Statement of Cash Flows (amended 2016)
– IAS 12 Income Taxes (amended 2016)
– IAS 16 Property, Plant and Equipment (amended 2014)
– IAS 19 Employee Benefits (amended 2014)
– IAS 27 Separate Financial Statements (amended 2014)
– IAS 38 Intangible Assets (amended 2014)
– IFRS 7 Financial Instruments Disclosures (amended 2011, 2013 and 2014)
– IFRS 9 Financial Instruments (amended 2014)
– IFRS 10 Consolidated Financial Statements (amended 2014)
– IFRS 12 Disclosure of Interests in Other Entities (amended 2014)
– IFRS 16 Leases (issued 2016)
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 expenditure is in respect of this one activity
and the £4,170,073 (2014: £3,809,019) intangible non-current assets of the Group are wholly attributable to the project in Pakistan.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
28
Notes to the Consolidated Financial Statements
continued
3. EMPLOYEES AND DIRECTORS
Wages and salaries
Social security costs
The average monthly number of employees during the year was as follows:
Directors
Administration and production
Directors' remuneration
Information regarding the highest paid Director is as follows:
Emoluments etc
4. NET FINANCE INCOME
Finance income:
Deposit account interest
5. LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging/(crediting):
Hire of plant and machinery
Other operating leases
Depreciation – owned assets
Auditors' remuneration
Foreign exchange differences
2015
£
517,301
61,567
578,868
2014
£
378,989
42,228
421,217
2015
2014
4
3
7
2015
£
4
3
7
2014
£
276,250
205,000
2015
£
2014
£
171,250
100,000
2015
£
2014
£
7,275
2,046
2015
£
922
61,560
646
13,275
(6,130)
2014
£
908
41,550
410
11,250
–
The depreciation charges shown above include £646 (2014: £245) which have been capitalised as exploration costs by the subsidiary company in
accordance with the accounting policy.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
29
6. INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2015 nor for the year ended 31 December 2014.
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
in the UK of 20.250% (2014: 21.500%)
Effects of:
Inter company items eliminated
Potential deferred taxation on losses for year
Expenditure not eligible for tax relief
Tax expense
2015
£
2014
£
(972,776)
(709,479)
(196,987)
(152,538)
3,940
192,794
253
–
3,744
148,794
–
–
The main rate of UK corporation tax changed from 23% to 21% on 1 April 2014 and from 21% to 20% on 1 April 2015 giving an effective rate for
the year of 20.25% (2014: 21.50%).
The Group and Company has estimated UK excess management charges of £4,863,507 (2014: £3,919,897) to carry forward against future income.
The overseas subsidiaries have losses of £59,959 (2014: £51,498) which will be carried forward to offset future profits. There is no charge for foreign
taxation for the year (2014: nil).
7. 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 £944,860 (2014: £692,067).
ORACLE COALFIELDS PLCANNUAL REPORT 2015
30
Notes to the Consolidated Financial Statements
continued
8. 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. In addition to the weighted average number of shares, the weighted average potentially dilutive instruments amounted to 29,722,831
(2014: 10,796,666). No adjustment is made where the effect would be to dilute the loss attributable to the ordinary shareholders.
Reconciliations are set out below.
Basic EPS
Earnings attributable to ordinary shareholders
Effect of dilutive securities
Diluted EPS
Adjusted earnings
Basic EPS
Earnings attributable to ordinary shareholders
Effect of dilutive securities
Diluted EPS
Adjusted earnings
There is no difference between basic and diluted loss per share.
Earnings
£
Weighted
average
number
of shares
(972,190) 824,857,193
–
–
2015
Per-share
amount
pence
-0.12
–
(972,190) 824,857,193
-0.12
Earnings
£
Weighted
average
number
of shares
(709,479)
–
345,014,973
–
(709,479)
345,014,973
2014
Per-share
amount
pence
-0.21
–
-0.21
ORACLE COALFIELDS PLCANNUAL REPORT 2015
9. INTANGIBLE ASSETS
Group
COST
At 1 January 2015
Additions
Exchange differences
At 31 December 2015
NET BOOK VALUE
At 31 December 2015
Group
COST
At 1 January 2014
Additions
Exchange differences
At 31 December 2014
NET BOOK VALUE
At 31 December 2014
31
Exploration
costs
£
3,809,019
351,388
9,666
4,170,073
4,170,073
Exploration
costs
£
3,755,014
180,981
(126,976)
3,809,019
3,809,019
The Group exploration costs of £4,170,073 are currently being carried forward at cost in the financial statements. The Group will need to raise funds
to reach financial close. Also, financial close involves the raising of finance, both debt and equity for the opening up of the mine and the construction
of the power plant. If the Group is unable to raise this finance, some of the assets may require impairment.
Company
COST
At 1 January 2015
Additions
At 31 December 2015
NET BOOK VALUE
At 31 December 2015
Company
COST
At 1 January 2014
Additions
At 31 December 2014
NET BOOK VALUE
At 31 December 2014
The impairment of exploration costs is charged to administration and included within the statement of profit or loss as an expense.
Exploration
costs
£
2,721,660
215,183
2,936,843
2,936,843
Exploration
costs
£
2,632,542
89,118
2,721,660
2,721,660
ORACLE COALFIELDS PLCANNUAL REPORT 2015
32
Notes to the Consolidated Financial Statements
continued
10. PROPERTY, PLANT AND EQUIPMENT
Group
COST
At 1 January 2015
Additions
Exchange differences
At 31 December 2015
DEPRECIATION
At 1 January 2015
Charge for year
Exchange differences
At 31 December 2015
NET BOOK VALUE
At 31 December 2015
Group
COST
At 1 January 2014
Exchange differences
At 31 December 2014
DEPRECIATION
At 1 January 2014
Charge for year
Exchange differences
At 31 December 2014
NET BOOK VALUE
At 31 December 2014
Company
COST
At 1 January 2015 and 31 December 2015
DEPRECIATION
At 1 January 2015 and 31 December 2015
NET BOOK VALUE
At 31 December 2015
Company
COST
At 1 January 2014 and 31 December 2014
DEPRECIATION
At 1 January 2014
Charge for year
At 31 December 2014
NET BOOK VALUE
At 31 December 2014
Motor
vehicles
£
Computer
equipment
£
Totals
£
6,064
22,975
307
868
385
8
1,261
29,346
806
96
3
905
5,130
646
38
5,814
5,196
22,590
299
28,085
4,324
550
35
4,909
23,176
356
23,532
Motor
vehicles
£
4,685
511
5,196
3,703
218
403
4,324
872
Computer
equipment
£
832
36
868
586
192
28
806
62
Totals
£
5,517
547
6,064
4,289
410
431
5,130
934
Computer
equipment
£
497
497
–
Computer
equipment
£
497
332
165
497
–
ORACLE COALFIELDS PLCANNUAL REPORT 2015
11. INVESTMENTS
Company
COST
At 1 January 2015
Additions
At 31 December 2015
NET BOOK VALUE
At 31 December 2015
Company
COST
At 1 January 2014 and 31 December 2014
NET BOOK VALUE
At 31 December 2014
33
Shares in Group
undertakings
£
868,631
31,075
899,706
899,706
Shares in Group
undertakings
£
868,631
868,631
The Group or the Company's investments at the Statement of Financial Position date in the share capital of companies include the following:
Subsidiaries
Sindh Carbon Energy Limited
Country of incorporation: Pakistan
Nature of business: Coal exploration and mining
Class of shares:
Ordinary shares of Rs. 10 each
Aggregate capital and reserves
Loss for the year
%
holding
80.00
2014
£
28,646
–
2015
£
19,176
(2,929)
The subsidiary company was incorporated in Pakistan on 23 January 2007 for the exploration and future extraction of coal in Pakistan. Oracle Coalfields
PLC agreed to acquire 80% of the ordinary share capital of the Company at par, fully paid by cash.
The investment in share capital for the 80% holding amounted to £64,115.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
34
Notes to the Consolidated Financial Statements
continued
11. INVESTMENTS continued
Company
Revive Financial Limited
Country of incorporation: United Kingdom
Nature of business: Administration and financial support
Class of shares:
Ordinary shares of 1p each
Aggregate capital and reserves
The Company was incorporated on 8 October 2013.
%
holding
100.00
2014
£
2015
£
804,516
804,516
The Company was acquired under the terms of a share exchange agreement whereby shares in Oracle Coalfields PLC were allotted to the shareholders
of Revive Financial Limited in exchange for their shareholdings in Revive Financial Limited. The Company became a subsidiary of Oracle Coalfields PLC
upon the completion of the share exchange on 18 October 2013.
Following the share for share exchange, Revive Financial Limited made a loan of £804,516 to Oracle Coalfields PLC. The loan of £804,516 (2014: £804,516)
which remains outstanding is interest free and has no fixed terms for repayment.
The investment in share capital for the 100% holding amounted to £804,516.
Company
Thar Electricity (Private) Limited
Country of incorporation: Pakistan
Nature of business: Energy production
Class of shares:
Ordinary shares of Rs. 10 each
Aggregate capital and reserves
Loss for the year
%
holding
100.00
2015
£
25,543
(5,532)
The subsidiary company was incorporated in Pakistan on 17 June 2015 for the future generation of electricity in Pakistan. Oracle Coalfields PLC agreed
to acquire 100% of the ordinary share capital of the Company at par, fully paid by cash.
The investment in share capital for the 100% holding amounted to £31,075.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
12. LOANS AND OTHER FINANCIAL ASSETS
Group
Financial assets
35
2015
£
338,676
2014
£
–
The financial asset of £338,676 represents a performance guarantee for US$ 500,000 issued in favour of Director General, Coal Mines Development
Department to cover Company obligations under the mining lease. The guarantee is valid up to the earliest of the date commercial operations begin,
three years from the date of issue, or 2 February 2018. This performance guarantee is secured by a deposit by Oracle Coalfields PLC in the issuing bank.
Sindh Koela Limited holds 20% of the issued shares of Sindh Carbon Energy Limited and these shares are funded by a loan from Oracle Coalfields PLC.
The loan accrues interest on a daily basis at a rate of 9% per annum. The loan is unsecured and repayable from 50% of dividends due to Sindh Koela
Limited from Sindh Carbon Energy Limited, when the project starts to generate revenues, or is 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 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.
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 (2014: £25,000) from Oracle Coalfields PLC to Sindh Koela Limited. The loan is interest
free, unsecured and is not due for repayment until the project starts to generate revenues.
At the statement of financial position date there is a loan of PKR 3,000,000 from Sindh Carbon Energy Limited to Sindh Koela Limited. The loan is interest
free, unsecured and is not due for repayment until the project starts to generate revenues
A full impairment provision has been made against the above loans of PKR 5,000,000 and £25,000 (2014: PKR 5,000,000 and £25,000) and a full
impairment provision of £5,904 (2014: £5,904) has been made against the accrued interest, No interest has been provided for this or the previous year
although it is legally payable and will be charged in the future if the impairment provision is reversed.
Company
At 1 January 2015
New in year
At 31 December 2015
At 1 January 2014
New in year
At 31 December 2014
Company
Other financial assets were as follows:
Financial assets
Loans to Group
undertakings
£
1,181,214
185,925
1,367,139
Loans to Group
undertakings
£
1,136,214
45,000
1,181,214
2015
£
338,676
2014
£
–
In addition to the items disclosed for the Group, during the period Oracle Coalfields PLC made loans to its subsidiaries totalling £182,000 (2014: £45,000)
to Sindh Carbon Energy Limited and £3,925 (2014: nil) to Thar Electricity (Private) Limited. The amounts outstanding at the statement of financial position
date were £1,363,214 (2014: £1,181,214) and £3,925 (2014: nil) respectively. Interest accrues on a daily basis at a rate of 1% over the Bank of England base
rate. The loans are unsecured and although they are repayable on demand, they are unlikely to be repaid until the project becomes successful and the
subsidiaries start to generate revenues.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
36
Notes to the Consolidated Financial Statements
continued
13. TRADE AND OTHER RECEIVABLES
Current:
Other receivables
VAT
Prepayments and accrued income
14. CASH AND CASH EQUIVALENTS
Cash in hand
Bank deposit account
Bank accounts
15. NON-CONTROLLING INTERESTS
2015
£
6,180
22,789
58,635
87,604
Group
2014
£
3,272
13,930
49,614
66,816
2015
£
96,641
22,789
53,107
Company
2014
£
74,413
13,930
47,202
172,537
135,545
2015
£
–
1,814,128
46,534
Group
2014
£
2015
£
227
372,283
10,553
–
1,814,128
9,986
1,860,662
383,063
1,824,114
Company
2014
£
227
372,283
10,000
382,510
The non-controlling interest representing 20% of the capital and reserves of the subsidiary Sindh Carbon Energy Limited is held by Sindh Koela Limited.
There were no pre-acquisition reserves or goodwill.
16. CALLED UP SHARE CAPITAL
Allotted, issued and fully paid
911,783,126 (2014: 389,009,493) Ordinary shares of 0.1p each
2015
£
2014
£
911,783
389,009
513,384,600 Ordinary shares of 0.1p each were allotted as fully paid for cash at a premium of 0.55p per share during the year.
4,389,033 Ordinary shares of 0.1p each were allotted to Directors and senior managers as fully paid in lieu of cash remuneration, at a premium of 0.55p
per share during the year.
The number of shares in issue are as follows:
At 1 January 2015
Issued during the year
At 31 December 2015
2015
No.
2014
No.
389,009,493
522,773,633
327,009,493
62,000,000
911,783,126
389,009,493
ORACLE COALFIELDS PLCANNUAL REPORT 2015
37
17. RESERVES
The following is a description of each of the reserve accounts that comprise equity shareholders' funds:
Share capital
Share premium
Share scheme reserve
Translation reserve
Accumulated losses
The share capital comprises the issued ordinary shares of the Company at par.
The share premium comprises the excess value recognised from the issue of ordinary shares at par.
Cumulative fair value of options charged to the statement of comprehensive income net of transfers to the profit
and loss reserve on exercised and cancelled/lapsed options
Cumulative gains and losses on translating the net assets of overseas operations to the presentation currency.
Accumulated losses comprise the Group's cumulative accounting profits and losses since inception.
18. TRADE AND OTHER PAYABLES
Current:
Trade payables
Amounts owed to Group undertakings
Social security and other taxes
Other payables
Accruals and deferred income
2015
£
114,973
–
18,844
4,421
41,811
180,049
Group
2014
£
62,190
–
3,557
56,094
39,765
2015
£
114,973
804,516
18,844
4,421
28,536
161,606
971,290
Company
2014
£
62,190
804,516
3,557
56,094
14,094
940,451
19. LEASING AGREEMENTS
Future minimum lease payments under non-cancellable operating leases fall due as follows:
Group
Within one year
Between one and five years
Company
Within one year
Between one and five years
Non-cancellable
operating leases
2014
£
50,384
111,860
162,244
2014
£
50,384
111,860
162,244
2015
£
83,165
63,858
147,023
2015
£
80,048
63,858
143,906
ORACLE COALFIELDS PLCANNUAL REPORT 2015
38
Notes to the Consolidated Financial Statements
continued
20. FINANCIAL RISK MANAGEMENT
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 as follows:
At 31 December 2015
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Derivative financial assets
Financial liabilities
Trade and other payables
At 31 December 2014
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Derivative financial assets
Financial liabilities
Trade and other payables
Designated fair
value through
profit and loss
£
Held at
amortised
cost
£
Fair value
through other
comprehensive
income
£
–
–
–
338,676
1,860,662
6,180
–
–
338,676
1,866,842
–
–
119,394
119,394
Designated fair value
through profit
and loss
£
–
–
–
–
–
–
–
Held at
amortised
cost
£
383,063
3,272
–
–
386,335
118,284
118,284
–
–
–
–
–
–
–
Fair value
through other
comprehensive
income
£
–
–
–
–
–
–
–
Total
£
1,860,662
6,180
–
338,676
2,205,518
119,394
119,394
Total
£
383,063
3,272
–
–
386,335
118,284
118,284
ORACLE COALFIELDS PLCANNUAL REPORT 2015
39
20. FINANCIAL RISK MANAGEMENT continued
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 as summarised below.
a) 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 income or value of its holdings in financial instruments.
i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures. The Group is exposed to currency risk
on cash and cash equivalents, loans, receivables and payables that are denominated in currencies other than sterling which is the functional currency
of the Group.
The Group's net exposure to foreign currency risk at the reporting date is as follows:
Pakistan Rupee
US Dollar
2015
£
36,548
338,676
375,224
2014
£
(22,540)
–
(22,540)
Sensitivity analysis
A 10% strengthening of sterling against the Pakistan Rupee and US Dollar at 31 December 2015 would have increased/(decreased) equity and
profit and loss by the amounts shown below:
Pakistan Rupee
US Dollar
2015
£
(3,655)
(33,868)
Equity
2014
£
2,254
–
2015
£
–
33,868
Profit and loss
2014
£
–
–
A 10% weakening of sterling against the Pakistan Rupee at 31 December 2015 would have an equal but opposite effect on the amounts
shown above.
ii) Interest rate risk
The Group is exposed to interest rate risk on its interest bearing bank accounts and loans.
Cash and cash equivalents
Loans
Weighted
average
interest rate
%
0.52
1.50
2015
£
1,404,801
–
1,404,801
Weighted
average
interest rate
%
0.56
1.50
2014
£
367,099
–
367,099
Sensitivity analysis
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit and loss by £21,394 (2014: £5,717).
ORACLE COALFIELDS PLCANNUAL REPORT 2015
40
Notes to the Consolidated Financial Statements
continued
20. FINANCIAL RISK MANAGEMENT continued
b) 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 unsecured loans to its subsidiaries of £1,363,214 (2014: £1,181,214) to Sindh Carbon Energy Limited and £3,925 to Thar Electricity
(Private) Limited. Although they are repayable on demand, they are unlikely to be repaid until the project becomes successful and the subsidiaries start
to generate revenue.
c) 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:
Maturity up to one year:
Trade and other payables
Tax liabilities
2015
£
2014
£
119,394
18,844
138,238
118,284
3,557
121,841
d) Fair values of financial assets and liabilities
The Group measures the fair value of its financial assets and liabilities in the statement of financial position in accordance with the fair value hierarchy.
This hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial
assets and liabilities. The fair value hierarchy has the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities;
Level 2:
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices); and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 3:
The Group holds derivative financial assets of US$ 500,000 (2014: nil) requiring revaluation to sterling at the Statement of Financial Position date.
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.
21. CONTINGENT LIABILITIES
On 3 February 2015 a performance guarantee for US$ 500,000 was issued in favour of Director General, Coal Mines Development Department to cover
Company obligations under the mining lease. The guarantee is valid up to the earliest of the date commercial operations begin, three years from the date
of issue, or 2 February 2018. This performance guarantee is secured by a deposit by Oracle Coalfields in the issuing bank.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
41
22. RELATED PARTY DISCLOSURES
During the year Oracle Coalfields PLC accrued interest of £19,317 (2014: £17,412) in respect of loans totalling £1,363,214 (2014: £1,181,214) made to
Sindh Carbon Energy Limited and £17 (2014: nil) in respect of loans totalling £3,925 (2014: nil) made to Thar Electricity (Private) Limited. At the Statement
of Financial Position date the total interest outstanding amounted to £90,624 (2014: £71,307) for Sindh Carbon Energy Limited and £17 (2014: nil) for
Thar Electricity (Private) Limited.
Following the decision in 2013 to make a full impairment provision against loans and interest owed by Sindh Koela Limited, Oracle Coalfields PLC accrued
no interest in the year (2014: nil) in respect of the loans totalling £41,029 (2014: £41,029). At the Statement of Financial Position date the total interest
accrued amounted to £5,904 (2014: £5,904). Full provision was made in 2013 for these outstanding loans and the accrued interest as the Directors
consider their recovery to be in doubt.
Oracle Coalfields PLC owes £804,516 (2014: £804,516) to its subsidiary Revive Financial Limited in respect of a loan. The loan is interest free and has
no fixed terms for repayment.
During the year the Directors participated in a placing of new ordinary shares of 0.1 pence each at a placing price of 0.65 pence per share. Within this
placement the Directors received 4,389,033 shares in lieu of cash remuneration of £28,529.
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 S Smith (Finance Manager)
Mr B Rostron (Mining and Contracts Manager)
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
2015
£
518,960
–
–
–
518,960
2014
£
384,440
–
–
–
384,440
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
The Company has subscribed to shares in a rights issue of its subsidiary, Sindh Carbon Energy Limited (SCEL), and will meet the payment for these
shares (£600,000) through the conversion of the equivalent amount of the inter-company loan between the Company and SCEL. As a consequence,
its interest in SCEL will rise from 80% to 98%.
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 affect:
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.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
42
Notes to the Consolidated Financial Statements
continued
24. 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
2 March 2015
The number and weighted average exercise prices of share options is as follows:
Outstanding at 1 January
Expired during the period
Granted during period
Outstanding at 31 December
Exercisable at 31 December
Number of
instruments
Contractual life
of options
8,080,000
200,000
600,000
250,000
1,000,000
23,076,920
10 years
10 years
5 years
6 years
5 years
3 years
Weighted
average
exercise price
2015
Number of
options
2015
Weighted
average
exercise price
2014
5.73p
4.80p
0.65p
10,796,666
(666,666)
23,076,920
2.31p
33,206,920
2.31p
33,206,920
5.73p
–
–
5.73p
5.73p
Number of
options
2014
10,796,666
–
–
10,796,666
10,796,666
No share options were exercised during the year, but 666,666 share options expired unexercised (2014: nil). The options outstanding at
31 December 2015 have an exercise price in the range of 0.65p to 10p (2014: 4.8p to 10p) and a weighted average remaining contractual life of
1.81 years (2014: 2.03 years).
The fair value of commission on share placements, 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
2 March 2015
0.825p
1p
0.65p
55%
3 years
1.089%
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 commission on share placements of £86,712 (2014: nil) charged to share premium account in respect of equity-settled share-based payment
transactions.
ORACLE COALFIELDS PLCANNUAL REPORT 2015
Notice of Annual General Meeting
43
Notice is hereby given that the Annual General Meeting (Meeting) of Oracle Coalfields PLC (the Company) will be held at
23 Hanover Square, Mayfair, London, W1S 1JB on Wednesday 20 April 2016 at 2.30pm to transact the following business:
As ordinary business
To consider and if thought fit, to pass the following resolutions which will be proposed as ordinary resolutions:
1. To receive and adopt the Company’s audited report and accounts for the period from 1 January 2015 to 31 December 2015 and the
Directors’ and auditors’ reports thereon;
2. To consider and approve the Remuneration Report as detailed on page 10 of the Company's Annual Report and Financial statements;
3. To re-elect William Adrian Loader as a Director of the Company;
4. To re-elect Shahrukh Khan as a Director of the Company;
5. To re-appoint Price Bailey LLP as auditors to hold office from the conclusion of the meeting to the conclusion of the next meeting at which
the accounts are laid before the Company and authorise the Directors to fix the auditors’ remuneration.
As special business
To consider and if thought fit, to pass the following resolutions, of which resolution 6 will be proposed as an ordinary resolution and resolution 7
will be proposed as a special resolution:
6. THAT, for the purposes of section 551 of the Companies Act 2006 (the Act) the Directors of the Company be and are hereby generally and
unconditionally authorised to exercise all powers of the Company to allot equity securities (within the meaning of section 560 of the Act) up to
an aggregate nominal amount of £150,000 provided that this authority shall expire (unless previously renewed, varied or revoked by the Company
in general meeting) at the conclusion of the next Annual General Meeting of the Company, save that the Company may before such expiry make
an offer or agreement which would or might require relevant securities to be allotted after such expiry and the Directors of the Company may allot
relevant securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired. This authority is in substitution
for any and all authorities previously conferred upon the Directors for the purposes of section 551 of the Act, without prejudice to any allotments
made pursuant to the terms of such authorities.
7. THAT, subject to the passing of resolution 6 above the Directors of the Company be and are hereby empowered pursuant to section 570 of the Act
to allot equity securities (within the meaning of section 560 of the Act) pursuant to the authority conferred by resolution 6 above as if section 561
of the Act did not apply to any such allotment provided that the power conferred by this resolution shall be limited to:
7.1. the allotment of equity securities for cash in connection with an issue or offer of equity securities (including, without limitation, under a rights
issue, open offer or similar arrangement) to holders of equity securities in proportion (as nearly as may be practicable) to their respective holdings
of equity securities subject only to such exclusions or other arrangements as the Directors of the Company may consider necessary or expedient
to deal with fractional entitlements or legal or practical problems under the laws of any territory, or the requirements of any regulatory body
or stock exchange in any territory; and
7.2. the allotment (otherwise than pursuant to resolution 7.1) of equity securities for cash up to an aggregate nominal value of £150,000.
The power conferred by this resolution 7 shall expire (unless previously renewed, revoked or varied by the Company in general meeting), at such
time as the general authority conferred on the Directors of the Company by resolution 6 above expires, except that the Company may at any time
before such expiry make any offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors
of the Company may allot equity securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired.
By order of the Board
Tony Everitt
Company secretary
Oracle Coalfields PLC
Richmond House
Broad Street
Ely
Cambridgeshire
CB7 4AH
ORACLE COALFIELDS PLCANNUAL REPORT 2015 44
Notice of Annual General Meeting
continued
Appointment of proxies
1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those members registered on the
Company’s register of members at 2.30pm on Monday 18 April 2016 or, if this Annual General Meeting is adjourned, 48 hours (excluding bank
holidays and weekends) prior to the time fixed for the adjourned meeting, shall be entitled to attend and vote at the Annual General Meeting.
2. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting and
you should have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out in these notes and
the notes to the proxy form.
3. A proxy does not need to be a member of the Company but must attend the Annual General Meeting to represent you. Details of how to appoint the
Chairman of the Annual General Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish
your proxy to speak on your behalf at the Annual General Meeting you will need to appoint your own choice of proxy (not the Chairman) and give
your instructions directly to them.
4. 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, please contact the Company’s Registrars, Neville
Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA to obtain another hard copy form.
5. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution.
If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting)
as he or she thinks fit in relation to any other matter which is put before the Annual General Meeting.
6. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote. To appoint a proxy using
the proxy form, the form must be completed and signed, sent or delivered to the Company’s Registrars, Neville Registrars Limited, Neville House,
18 Laurel Lane, Halesowen, West Midlands B63 3DA by no later than 2.30pm on Monday 18 April 2016. Completion and return of the form of proxy
will not preclude a member from attending and voting in person at the Annual General Meeting.
In the case of a member which is a Company, the proxy form 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 proxy form is signed (or a duly certified
copy of such power or authority) must be included with the proxy form.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most
senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of
members in respect of the joint holding (the first-named being the most senior).
7.
8.
9. 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. Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions
using another hard-copy proxy form, please contact the Company’s Registrars, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen,
West Midlands B63 3DA. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt
of proxies will take precedence.
ORACLE COALFIELDS PLCANNUAL REPORT 2015 Company Information
For the year ended 31 December 2015
Oracle Coalfields PLC is registered as a public 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.
SOLICITORS
BANKERS
Trowers & Hamlins LLP
40 Tower Hill
London
EC3N 4DX
HaiderMota BNR
D-79, Block No. 5
Karachi-75600
Pakistan
Royal Bank of Scotland plc
1st Floor, Conqueror House
Vision Park, Histon
Cambridge
CB24 9NL
Habib Bank AG Zurich
Moorgate Branch
42 Moorgate
London
EC2R 6JJ
Habib Metroplolitan Bank
Habib Bank Plaza
I.I.Chundrigar Road
Karachi-75650
Pakistan
PUBLIC
RELATIONS
Blythe Weigh
4-5 Castle Street
London
EC3V 9DL
Forbridge Consultancy
61 Monkton Street
London
SE11 4TX
DIRECTORS
Mr S Khan
Mr A C R Scutt
Mr M R Stead
Mr W A Loader
SECRETARY
Mr T Everitt
LONDON
OFFICE
REGISTERED
OFFICE
23 Hanover Square
Mayfair
London
W1S 1JB
Richmond House
Broad Street
Ely
Cambridgeshire
CB7 4AH
REGISTERED
NUMBER
05867160
(England and Wales)
AUDITORS
NOMINATED
ADVISOR
REGISTRAR
BROKERS
Price Bailey LLP
Chartered Accountants &
Statutory Auditors
Richmond House
Ely
Cambridgeshire
CB7 4AH
Grant Thornton UK LLP
30 Finsbury Square
London
EC2P 2YU
Neville Registrars Limited
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
Brandon Hill Capital Ltd
1 Tudor Street
London
EC4Y 0AH
Peterhouse Corporate
Finance Limited
15 Eldon Street
London
EC2M 7LD
Design & Production
www.carrkamasa.co.uk
ORACLE COALFIELDS PLC
23 Hanover Square
Mayfair
London
W1S 1JB
T: +44 (0)203 102 4807
F: +44 (0)203 102 4601
www.oraclecoalfields.com