REGISTERED NUMBER: 05867160 (England and Wales)
GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
FOR
ORACLE POWER PLC GROUP OF COMPANIES
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Company Information
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 Profit or Loss and Other
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
Page
1
2
3 to 4
5 to 12
13 to 22
23 to 26
27
28
29
30
31
32
33
34
35
Notes to the Consolidated Financial Statements
36 to 60
ORACLE POWER PLC GROUP OF COMPANIES
COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2019
Oracle Power PLC (formerly Oracle Coalfields PLC) is registered as a public company under English Law.
Its shares are quoted on the AIM market of the London Stock Exchange. Oracle Power PLC is incorporated
and domiciled in England and Wales and its registered number is 05867160.
DIRECTORS:
Mr M W Steed - Chairman
Ms N Memon – CEO (appointed NED 7 January 2019 appointed CEO
25 January 2019)
Mr A Migge
Mr G Lewis (appointed 18 March 2020)
Mr S Khan (resigned 16 July 2019)
SECRETARY:
Mr S Smith (resigned 19 September 2019)
Mr A Warden (appointed 19 September 2019)
REGISTERED OFFICE:
Tennyson House,
Cambridge Business Park,
Cambridge, CB4 0WZ.
REGISTERED NUMBER: 05867160 (England and Wales)
AUDITORS:
Price Bailey LLP
Chartered Accountants
& Statutory Auditors
Tennyson House,
Cambridge Business Park,
Cambridge, CB4 0WZ
A. F. Ferguson & Co
Chartered Accountants
State Life Building 1-C
I. I. Chundrigar Road
Karachi
Pakistan
NOMINATED ADVISER:
REGISTRAR:
BROKERS:
SOLICITORS:
BANKERS:
PUBLIC RELATIONS:
Strand Hanson Limited
26 Mount Row
London, W1K 3SQ
Neville Registrars Limited
18 Laurel Lane, Halesowen
West Midlands, B63 3DA
Brandon Hill Capital Limited
1 Tudor Street
London, EC4Y 0AH
Shard Capital Partners LLP
20 Fenchurch Street
London EC3M 3BY
Charles Russell Speechlys LLP Haider Mota BNR
D-79, Block No. 5,
5 Fleet Place
Karachi 75600, Pakistan
London, EC4M 7RD
Royal Bank of Scotland plc
1st Floor, Conqueror House
Vision Park, Histon
Cambridge, CB24 9NL
Habib Bank AG Zurich
Moorgate Branch, Habib House
42 Moorgate
London, EC2R 6JJ
Habib Metropolitan Bank
Habib Bank Plaza
I.I.Chundrigar Road
Karachi-75650, Pakistan
St Brides Partners Ltd
51 Eastcheap
London, EC3M 1JP
Page 1
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
I am pleased to present the results for Oracle Power Plc (the “Company” or “Oracle”) for the year ended
31 December 2019.
2019 has been an exciting year for Oracle. We have seen major changes in the management of our business
and, towards the end of the year, we were delighted to welcome His Highness Sheikh Ahmed Dalmook Juma
Al Maktoum, a senior member of the Dubai Royal Family, as a major investor in the Company. In addition, the
scope of the development of Block VI has substantially increased to encompass a coal to fertiliser project as
well as the coal to electricity project. Successful development of the former would assist in addressing
Pakistan’s food security issues, whilst the latter would help address Pakistan’s energy security issues.
Furthermore, by using an indigenous resource, we believe our project would contribute to a reduction in the
use of the country’s foreign exchange reserves, as a result of a decrease in demand for imported fuel. Our
Block VI is one of the largest, if not the largest, private projects in Pakistan and has priority status within the
China-Pakistan Economic Corridor (“CPEC”).
Shahrukh Khan, who started the Company from nothing and built it up into a multimillion-pound listed Plc,
decided that after nearly fifteen years he would step down and hand the reins to our new Chief Executive
Officer, Naheed Memon. My Board colleagues and I are profoundly appreciative of his invaluable contribution
to the development of Oracle over this time.
In order to re-invigorate the Company, we have changed many of our advisors, consultants and service
providers and will shortly be moving to a more cost-efficient office.
I am delighted to welcome Mr Glen Lewis to the Board as a non-executive director. Glen comes with a wealth
of knowledge of the coal mining industry and will be of great help with some of the more technical issues we
will face. His experience in the industry will be an important part in strengthening the Board.
The Board has recognised that, in order to bring the development of the Thar Block VI projects to fruition, the
major thrust of our operations needs to be based in Pakistan and not in London. Ms Memon has had a
distinguished career in both the private and public arenas in Pakistan and is uniquely qualified to push our
Company forward with the various government agencies in Pakistan.
Financially we are in good health. With the focus of our attention now in Pakistan we have managed to
substantially reduce our overhead costs in London. In 2019, we raised a further £1,835,000, which included
the £500,000 subscription from the private office of His Highness Sheikh Ahmed Dalmook Juma Al Maktoum,
all of which should comfortably cover our working capital requirements to the end of the year. We may,
however, seek to raise further funds to finance our contribution to the ongoing capital requirements of the
project.
We have been approached by a number of people who are involved in power related projects and feel that
Oracle would be a symbiotic partner. Whilst the Thar projects are, and should remain, our primary focus we
are conscious of the need to have projects that have a faster turnaround.
Operational highlights of 2019 are described in the Chief Executive’s Report. Our work in 2020 is concentrated
on formalising detailed agreements with our project partners (being the private office of His Highness Sheikh
Ahmed Dalmook Juma Al Maktoum and China National Coal Development Company Ltd. (“China Coal”),
including the formalisation of financing arrangements for their share of the requisite equity investment, as well
as all project debt. We will also ensure that all Government permissions, licences and other approvals are in
place, further details of which are described in the Chief Executive’s Report.
The Government of Imran Khan remains supportive of the development of Thar coal and of relations with
China. The broad parameters of security remain as last year: there have been no major incidents and, overall,
the army has maintained order.
We are most grateful to the Pakistani Authorities at both Federal and Provincial levels, to the Chinese
Authorities through China Coal and the Joint Cooperation Committee (JCC) of CPEC for the constructive way
in which they have all supported and continue to support our project.
Above all, I wish to thank our shareholders for their continued confidence, patience and support, enabling us
to move the project towards realisation.
Mark W Steed
Chairman
Page 2
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CHIEF EXECUTIVE'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
It has been a very busy first year for me, during which, much has been accomplished, and more avenues for
success and growth have opened up. Oracle Power’s project in Pakistan continued to receive more support
from government and investors, given its strategic importance, allowing us to progress key items on the path
towards reaching definitive agreements with our partners in the Thar Block VI project.
In the fiscal year 2019, Pakistan posted a growth rate of 3.3%, which was slightly lower than the International
Monetary Fund’s global growth estimate of 3.5%, and a core inflation of 5.9%, according to the Pakistan
Economic Survey. In view of falling income, rising inflation, a weakening currency, and an increased pressure
on currency reserves, the Government of Pakistan (“Government”), made a categorical decision to reduce
high import bills, of which oil and energy fuel is a large part. This decision provided even greater patronage to
the development of Block VI, and encouraged investors to come forward.
The population of Pakistan increased to 216 million taking the number of people with no access to electricity
to 65 million. The main reasons for this plight are a stark demand supply gap, inadequate transmission
infrastructure, and a dilapidated distribution system. Looking ahead, the demand supply gap is bound to
increase. Therefore, new power projects have been planned. Amongst these, those based on indigenous
resources, such as Thar coal, have been ranked higher, by the Government, in the merit order for dispatch.
The latest power base-load forecast, released by the Government of Pakistan, has estimated additional
demand that is attributed to the Governments’ new electric vehicle policy, which stipulates that 30% of vehicles
will run on electricity by the year 2030. The forecast also recognises the increased demand for power as a
result of the Prime Minister’s ‘Naya (new) Pakistan Housing Scheme’ initiative that plans for 5 million new
houses to be built. In addition, industrial demand in the country’s nine CPEC Special Economic Zones is also
expected to grow, as efforts to mobilize large scale industry are underway. The forecast estimates a peak
demand of 34,209 MWs by the year 2024-25. This requirement also accounts for the fact that almost 11,511
MWs of old furnace and diesel based generation will retire from the grid by 2047. In summary, the base case
result shows that to meet a demand of 43,820 MWs by the year 2030, a generation capacity of 76,391 MWs
is required.
In order to meet this demand by the year 2030, in line with the intent of increasing variable renewable energy
(VRE) in the mix, in excess of 20,000 MWs of wind and solar energy, is planned. However, in order to mitigate
the intermittency of VRE and to ensure substantial reserve provisioning, adequate base load energy is required
to be optimised using close to 5000 MWs from re-gasified liquefied natural gas (RLNG), 6,000 MWs from Thar
coal and more than 20,000 MWs of hydro power. Therefore, the latest energy capacity expansion plan is built
on inclusion of VREs, minimal reliance on imported fuels and increased share of local coal and hydropower.
Inclusion of VREs, hydro and Thar coal is aimed at making Pakistan energy secure and providing much needed
relief to the end consumers.
In the overall new energy mix of the Government’s plan, indigenous coal is set to increase from 3% in 2020 to
13% by the year 2030. Oracle’s planned 1,320 MWs coal-based power is a confirmed source of power in such
plans. Accordingly, our Company intends to progress its Thar Block VI project as expeditiously as possible in
order to capitalise on the opportunity of selling power to the Government of Pakistan, at an attractive price,
and contribute significantly towards addressing Pakistan’s energy crisis, which, ultimately, would generate
substantial value for our shareholders.
Currently, under the CPEC agreement a number of energy projects are in various stages of development
throughout the country. Oracle’s planned Block VI integrated coal mine and mine mouth power plant is on the
Priority List of Energy Projects in CPEC and continues to be supported by both the Pakistan and Chinese
governments, for development and financing.
The last 12 months have brought forth strong testaments of support and endorsement. The size and scale of
the project has been enhanced as a result being identified for coal chemistry initiatives. On 6 November 2019,
at the ninth JCC meeting on CPEC, Thar Block VI was included as a potential block for coal to gas to
urea/fertilizer production, alongside and in parallel with the integrated coal mine and mine mouth power plant
project.
Page 3
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CHIEF EXECUTIVE'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
Block VI is now the only block that is supported in CPEC for energy development as well as for oil and gas
projects. It was listed as a flagship block in Thar for coal to gas, as input for urea, in the November meeting.
Consequentially, the development of Oracle’s Thar project is now aligned with Pakistan’s energy and food
security programmes
In December 2019, we were delighted to announce that Oracle had entered into a Joint Development
Agreement (“JDA”) with Sheikh Ahmed Dalmook Al Maktoum Private Office One Person Company LLP and
China Coal (the “Consortium”), a subsidiary of China National Coal Group Corporation.
Further to the JDA, post period, in February 2020, Oracle entered into a Consortium Agreement (“CA”) and
submitted, to the Private Power Infrastructure Board (“PPIB”) credentials of the Consortium partners with
regard to building, owning and operating a 2x660 MW supercritical mine mouth plant in Block VI. It is expected
that PPIB will issue a Letter of Intent (“LOI”) soon.
On issuance of the LOI, the Consortium will proceed to apply to National Electric Power Regulatory Authority
for a cost plus tariff and generation licence.
However, before the project can be awarded a tariff, a project SPV will need to be incorporated in accordance
with the CA. The incorporation of an SPV would entail signing firm shareholder agreements with the
Consortium partners, and consequential recognition of Oracle’s investment in the development of this project
to date. Moving forward, the PPIB would then issue a Letter of Support so that the Power Purchase Agreement
(“PPA”) can be finalised with the Central Power Purchasing Authority, along with the Implementation
Agreement (“IA”). The IA guarantees payment under the PPA. All of this would enable the project SPV(s) to
achieve financial close.
With respect to the new and significant opportunity to develop coal for gas, Oracle will begin work on this in
collaboration with its Consortium partners once the coal to power phase of the project is underway. In the next
phase, China Coal will conduct technical and commercial viability studies for coal to gas in Block VI and the
Consortium will engage with the Government to establish mechanisms (such as pricing) to facilitate such a
project.
The Company is cognisant of other opportunities in the power and natural resource sector and intends to
capitalize on the experience of its team, to develop other commercially lucrative projects, with a quick
turnaround and high returns. Oracle Power’s management is committed to making the Company into a vibrant
platform which develops multimillion dollar projects, in the medium to long term.
Whilst I write this statement, the world is in the grips of a pandemic which has forced global economies to
come to a grinding halt. Wherever we are, we face an unparalleled health and economic emergency. Although,
the impact and intensity of COVID 19 is relatively less in Pakistan so far, legacy inefficiencies and economic
fragility may likely result in negative growth in the short term. In these conditions, Oracle project, centered on
the development of an indigenous asset, becomes more important as it can set up ways for Pakistan to become
self-sufficient in energy and even food. Further, in the post COVID world, as the drivers of globalisation are
negatively impacted, large domestic markets such as those of Pakistan, present relatively greater growth and
income opportunities. The Board of Oracle is also cognisant of imminent new industry, and opportunities in the
region and elsewhere, and remains focused on delivering higher value.
I remain grateful to both the Provincial Government of Sindh and the Federal Government of Pakistan for their
continuing support for the Block VI project, which we strongly believe will produce cheaper abundant power
and become an important feedstock for Pakistan’s agriculture sector in the future.
I also extend my greatest thanks to the shareholders for their support and belief in the Company, and for
placing their trust in its management.
Ms Naheed Memon,
Chief Executive Officer
Page 4
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
The Directors present their Strategic Report of the Company and the Group for the year ended 31 December
2019.
PRINCIPAL ACTIVITY AND BUSINESS MODEL
The principal activity of the Group in the year under review was that of an energy project, based on the
exploration and development of coal, and building a mine-mouth power plant 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 various stages in the value cycle, through the
procurement of exploration leases, exploitation work, development of commercially viable discoveries, and
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
Power PLC Group of Companies after taxation of £1,090,146 (2018: £879,996).
The Chairman, in his Statement, and the Chief Executive Officer in her Report, have fully described the
activities of the Company during the financial year.
SECTION 172(1) STATEMENT
The directors are well aware of their duty under section 172 of the Companies Act 2006 to act in the way which
they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its
members as a whole, and in doing so have regard (amongst other matters) to:
•
•
•
•
•
•
The likely consequences of any decision in the long term;
The interests of the Company’s employees;
The need to foster the Company’s business relationships with suppliers, customers and others;
The impact of the Company’s operations on the community and the environment;
The desirability of the Company maintaining a reputation for high standards of business conduct, and
The need to act fairly as between members of the Company (the “Section 172 (1) Matters”
Induction materials provided on appointment include an explanation of directors’ duties, and the board is
regularly reminded of the Section.172(1) Matters, including as a rolling agenda item at every main board
meeting.
Further information on how the directors have had regard to the Section.172(1) Matters can be found on pages
5 to 12. This information forms part of the Strategic report and has been approved for issue by the Board on
13 May 2020.
Section 172 Companies Act 2006
The board takes decisions with the long term in mind, and collectively and individually aims to uphold the
highest standards of conduct. Similarly, the board understands that the Company can only prosper over the
long term if it understands and respects the views and needs of its customers, distributors, employees,
suppliers and the wider community in which it operates.
A firm understanding of investor needs is also vital to the Company’s success along with a sustainable and
environmentally responsible culture. This is detailed on page 10. The directors are fully aware of their
responsibilities to promote the success of the Company in accordance with Section 172 of the Companies Act
2006. An in-depth review of these responsibilities and how the Company engages with its stakeholders was
considered at the Company’s board meeting on 22 June 2020. The text of Section 172 of the Companies Act
2006 has been sent out to each main board director.
Page 5
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
The board ensures that the requirements are met, and the interests of stakeholders are considered as referred
to elsewhere in this report and through a combination of the following:
•
A rolling agenda of matters to be considered by the board through the year, which includes an annual
strategy review meeting, where the strategic plan for the following year is developed;
Standing agenda points and papers presented at each future board meeting, which will report on
customers, employees and other colleagues, health and safety matters and investors;
A review of certain of these topics through the Audit Committee and the Remuneration Committee agenda
items referred to in this report;
•
•
• Detailed consideration is given to of any of these factors where they are relevant to any major decisions
taken by the board during the year.
Key board decisions taken during the year, all of which have long term implications for the ultimate success of
the Company, and the Section 172 and stakeholder considerations are set out below.
Key Board Decision Section 172 and Stakeholder Consideration
•
•
•
Appointment of St Brides PR – Better communication with all stakeholders;
Appointment of Glen Lewis -
Consortium Agreement - Long term feasibility of project fulfilment and execution.
direct and relevant mining experience and further executive oversight;
Relations with Shareholders
The Company’s principal means of communication with shareholders is through the Annual Report and
Financial Statements, the full-year and half-year announcements and the AGM. The board recognises that the
AGM is an important opportunity to meet private shareholders. Each substantially separate issue is the subject
of a separate resolution at the AGM and all shareholders have the opportunity to put questions to the board.
All board directors endeavour to attend AGMs and answer questions put to them which may be relevant to their
responsibilities. In addition, the directors are available to listen informally to the views of shareholders
immediately following the AGM. For each vote, the number of proxy votes received for, against and withheld is
announced at the meeting. The results of the AGM are published on the Company’s corporate website. In the
light of the continuing public health restrictions associated with Coronavirus this may not be possible at the
2020 AGM.
The board receives regular updates on the views of shareholders through briefings and reports from the
executive directors, the Company’s brokers and PR advisers. The Chief Executive Officer, the Chairman and
the other directors make presentations to institutional shareholders and participate in Investor Road Shows
both following the announcement of the full-year and half-year results and, at other times throughout the year.
Not every officer participates in every investor presentation. The Chairman will participate in these
presentations where appropriate and is always available to speak with shareholders.
Dialogue with individual institutional shareholders also takes place in order to understand and work with these
investors to seek to comply with their investor principles where practicable.
Investor queries may be addressed to the Company Secretary at info@oraclepower.co.uk. A range of corporate
information (including all Company announcements) is also available to shareholders, investors and the public
on the Company’s corporate website www.oraclepower.co.uk.
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.
Page 6
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
The principal risks and uncertainties for the Company are :
ISSUE
Likelihood of Issue
Arising
Impact
If Issue Arises
Financial Close
Project Completion
Operating
Economic
Financing
Political, Legal and Regulatory
Environment & Corporate Social Responsibility
COVID 19 Lockdown
Medium
Medium
Low
Low/Medium
Low
Medium
Low
High
High
High
Low/Medium
Low
High
Medium/High
High
Low
Following the signing of a new consortium agreement with China National Coal Development Company Ltd
and Sheikh Ahmed Dalmook Al Maktoum Private Office One Person Company LLC, the immediate challenge
for the Company is securing a new LOI and a binding Shareholder/JV Agreement to move to financial close
and project completion. There are risks following the signing of the Consortium Agreement and therefore of
not reaching financial close, principally in securing the further permission needed from the Pakistani Authorities
and securing of finance. Also it will be necessary to draw up EPC contracts for the mine and the power plant.
Economic risk is protected, including cost increase, through the Government of Pakistan’s cost-plus pricing
mechanism. However, the Government of Pakistan have nominated the project as a priority.
There remains political risk, such as a decline in relations between Pakistan and China leading to the pricing
mechanism, or overseas remittance of dividends and debt servicing not being honoured.
The risks are detailed below, along with the key measures taken for mitigation.
Financial Close Risk
Risk
Following the signing of the consortium agreement with China National Coal Development Company Ltd and
Sheikh Ahmed Dalmook Al Maktoum Private Office One Person Company LLC, the primary risk is
consummating a binding Shareholders or JV Agreement. The principal elements in reaching this stage relate
to a decision by the Company’s Chinese partner that the technical, legal and regulatory aspects of the project
are to their satisfaction.
In addition, higher authorities in China may decide not to proceed with activity in Pakistan and use the
opportunity, before binding commitments are made, arbitrarily to withdraw.
Mitigation
The Company has used world leading consultants in feasibility work, to ensure a fully technically sound project.
Recognising that major coal development is new for Pakistan, the Company has worked closely with the
regulatory bodies and with professional advisers within Pakistan to ensure an effective regulatory regime. The
immediately neighbouring Block II achieved delivery of their project. The developments at Block II so far
support the soundness of technical feasibility studies that have been carried out on Block VI. Also the
regulatory regime, as laid out, has been fully applied by the Pakistani Authorities. All this should be supportive
for the Consortium Parties in making their decision to enter into a binding Shareholders or JV Agreement.
Arbitrary withdrawal is considered by Oracle unlikely, given the high profile commitments made by China to
CPEC.
Page 7
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
Project Completion Risk
Risk
The Block VI development comprises both a mine and a power plant. Various factors could give rise to delay
in completion. These include:
• Delay in mine development either due to geological issues or project execution (e.g. equipment not
available as planned);
Lignite of lower quality than anticipated;
Power plant not developed as planned or fails performance tests;
•
•
• Dewatering of mine does not work as planned or excess water cannot be effectively disposed of;
•
•
Insufficient transmission line capacity; and
The risks are increased by the inter-dependence of the mine and the power plant; the mine needs the
power plant to be ready to commence full coal production and the power plant relies on coal from the mine
being available to commence power generation.
Mitigation
•
The Parties to the Consortium Agreement intend to bring leading EPC contractors into the running of the
project;
• Neighbouring Block II has proved that the lignite should be of the anticipated quality, supporting previous
•
studies on Block VI;
The Company is in close contact with the relevant Government authorities regarding water management
issues;
• Government takes responsibility for ensuring sufficient transmission line capacity through the Power
Purchase Agreement and the Implementation Agreement. There is a CPEC priority project to provide an
additional 4,000MW of transmission capacity for Thar, more than sufficient to meet all presently known
Thar projects;
The Company will take out the normal suite of insurance policies;
As noted above, to the extent that delays lead to increased cost, these would be recoverable through the
coal and electricity pricing mechanisms; and
The project is on the Priority List of CPEC.
•
•
•
Operating Risk
Risk
Technical issues, similar to those described under Project Completion Risk, may affect the operation of both
the mine and the power plant. Interdependence is also a key issue in the operational phase; failure to produce
coal as planned would constrain power generation and failure of the power plant to operate to the assumed
load factor will constrain coal production.
Water is an additional risk during production operations. Further hydrology work is planned before project
completion, from which the hydrology dynamics will become clearer. The mine will require dewatering, and
water is required for the power plant process. Whilst the mine water production is expected to meet the power
plant needs, the amount of dewatering needed and any imbalance in the water production and utilisation may
cause additional cost pressures.
Mitigation
•
As with Project Completion Risk:
the intention is for both the mine and the power plant to be operated by leading contractors;
the Company will take out the normal suite of insurance policies;
to the extent that operational issues give rise to cost increases, these should also be recoverable
through the coal and electricity pricing mechanisms; and
•
The company will ask the government to meet its obligations if more water is required.
Page 8
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
Economic Risk
Risk
The economic performance of the Company could be affected by movements in international markets. These
include:
•
Exchange rate movements, amongst the four currencies, US Dollar, Renmimbi, Pakistani Rupee, Pound
Sterling, that affect the Company;
Increased interest rates which, if arising during construction, would add to capital costs;
Fall in international energy prices encouraging importation of either coal, gas or oil; and
•
•
• US$ inflation, which could raise capital and operating costs.
The potential income streams of the mine and the power plant are based on two key agreements: the Coal
Sales Agreement for sales of coal to the power plant and the Power Purchase Agreement for sales of electricity
to NTDC, under which the Internal Rate of Return is guaranteed by the Pakistani Government in US Dollar
terms. Therefore at project level, the project will be protected against adverse currency movements, e.g. a
strengthening Renminbi, which would increase the cost of Chinese equipment. At corporate level, Oracle’s
potential flow of dividends will be protected in US$ terms, so there is a risk of loss or gain in £ Sterling terms.
The project would also be protected against adverse movements in interest rates and in US$ inflation.
Mitigation
• Cost variances resulting from exchange rate movements and US$ inflation should generally be
recoverable through the coal and electricity pricing mechanisms;
The risk posed by further importation of coal or oil for power generation is not considered to be high given
the large price differentials and the present lack of power plants. The savings in foreign exchange to the
country of import substitution through local energy production are clear; and
The development of indigenous coal in Pakistan increases the country’s security of energy supply.
•
•
Financing Risk
Risk
The Consortium Agreement signed with China National Coal Development Company Ltd and Sheikh Ahmed
Dalmook Al Maktoum Private Office One Person Company LLC, two well financed partners, envisages financial
(and political) support of the project from banks in the People’s Republic of China and the framework of CPEC.
Mitigation
The Consortium Agreement evisages that the Chinese partner will be responsible for arranging all debt and for
providing 73% of equity with Sheikh Ahmed Dalmook Al Maktoum Private Office One Person Company LLC 15%
and Oracle 12%. Oracle will negotiate to apply its historical costs against the share to be provided by Oracle.
Political, Legal, Regulatory and Fiscal Risks
Risk
The Federal and Sindh Governments have demonstrated strong support for the integrated Thar coal mining and
power plant development, and for maintaining the supportive regulatory and fiscal regime at present in place.
Risks arise from:
• Change in regime;
•
•
Shorter term, the funding and completion of local infrastructure;
Longer term, when investment has been made, adversely varying the fiscal regime, the lease terms or the
royalty and tax rates, making foreign exchange available to meet debt servicing requirements and dividend
payments;
Bureaucratic interpretation of regulations, including pricing mechanisms, also potentially leading to delay;
Security and terrorism, particularly as operations in Thar take on a higher profile;
Transfer of operatorship to Chinese partners and Oracle becoming a minority partner; and
•
•
•
• NGO activism.
Page 9
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
Mitigation
•
The Government have expressed their continued support for the development of indigenous coal and Thar.
The Board believes that the shortage of power and the imperative to develop Thar is likely to be clear to any
incoming government;
• Much of the planned major infrastructure is already in place;
•
Longer term, there are strong international forces to ensure that foreign investment is properly protected, i.e.
CPEC and Investment Treaties with China and the UK. The Company will consider whether political risk
insurance could be a cost effective mitigant;
• Oracle has a strong working relationship with all relevant levels of Government and will use these
•
relationships to address potential bureaucracy and delay;
The Government has set up a special force with overall responsibility for security in Thar. Oracle is putting
in place a comprehensive security plan which complements those of the Government agencies.
Environment & CSR
Risk
Energy projects of this nature have a major impact on the environment and impose significant corporate social
responsibility on a company. If environmental risks are not properly addressed and corporate social responsibility
mismanaged either of these can give rise to severe reputational damage and significant cost.
Mitigation
Oracle operates to international standards of environmental and social impact management and complies with
the Pakistan Environmental Protection legislation, which mirrors international standards. The Environmental and
Social Impact Assessment for the mine has been approved by the Sindh Environmental Protection Agency and
the No Objection Certificate (“NOC”) was issued in May 2013. For the power plant, the public hearing was held
in August 2017 and the NOC is awaited.
From the outset, Oracle has understood the need to act as an exemplary corporate citizen. Oracle has long
established a Community Liaison Officer and will continue to foster good relationships with local communities.
Oracle will work to ensure that it works with other developers of Thar Coal, for example Sindh Engro in Block II in
joining the Thar Foundation, set up to coordinate welfare initiatives.
COVID 19
Risk
Since the end of 2019 Coronavirus has had a dramatic effect on all aspects of life. With social distancing and
restriction on travel and person to person meetings, business has had to be carried out in a very different way
which can delay or stop critical decisions being made.
Mitigation
Oracle has been able to continue with aspects of the project despite the restrictions put in place to deal with the
pandemic and has been able to carry out internal functions as normal. The Directors will continue to monitor the
situation as it develops.
Page 10
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
CORPORATE SOCIAL RESPONSIBILITY ("CSR")
Objective: Oracle Power 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 that its operations can have on the natural and social environment and in creating
opportunities for the local community.
Environmental and Social Impact Assessment ("ESIA")
Oracle commissioned Wardell Armstrong International Ltd. (“WAI”) to produce an ESIA for the Block VI project.
WAI worked with Hagler Bailly Pakistan, a local group of environmental consultants, based in Islamabad, to
complete the ESIA to meet both national and international standards. The ESIA was completed and submitted in
April 2013 to the Sindh Environmental Protection Agency, Government of Sindh (“SEPA”). A public hearing was
held on site in June 2013, attended by the local people along with government representatives, SEPA, various
non-governmental organisations (“NGO”) and the Company's consultants as part of the public consultation
process. The project along with its impacts and mitigation plans were presented to the public and all 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 as the project moves into the implementation phase.
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 has issued the "No Objection" Certificate giving formal approval for the ESIA in
January 2014 which was another significant step towards mine development.
In 2016, Mott MacDonald were commissioned to prepare an ESIA for a 660MW mine mouth power plant which
was completed in March 2017 and submitted to SEPA for approval. A public hearing was held on the site in July
2017 and was attended by the local communities and other stakeholders and was well received. Also, in March
2017, the mine ESIA was updated and brought up to international standards by WAI and aligned with the power
plant ESIA. An update to the ESIAs will be required to reflect the larger mine and power plant.
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 socio-economics 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 Block VI, will be required. The
Government of Sindh, Thar Coal and Energy Board, published the Resettlement Policy Framework in May 2015
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. A full programme of consultation, specifically dealing with this issue is being
instigated. Communities will be resettled locally (i.e. within the Block area). In 2017 a census of the six local
villages within Block VI was undertaken by Mott MacDonald of the number of people and their livestock holding
along with a preliminary land ownership survey as required under the RAP.
Page 11
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
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 expected
to begin in 2020. 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 lands
for their villages. It is intended to construct replacement villages, with full electricity, sanitation, and potable
water supply together with 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 Social Development Initiatives
Oracle 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 also acts as an intermediary to represent the interests of the local communities to Oracle. As part of
Oracle's CSR 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.
Improvements and extension of the existing government primary schools in Block VI;
Benefits and Opportunities include:
-
- Training of literate male and female community members for teaching;
- Extension of the building 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; and
- Construction of a road to connect local villages and communities to the mine site access road
proposed under the project.
ON BEHALF OF THE BOARD:
Mark W Steed - Chairman
Date: 22 June 2020
Page 12
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2019
The Directors present their report with the financial statements of the Company and the Group for the year
ended 31 December 2019.
DIVIDENDS
No dividends will be distributed for the year ended 31 December 2019.
EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is given in the note 22 to the financial statements.
DIRECTORS
The Directors during the year under review and to the date of this report were:
Mr M Steed: Non-Executive Director and Chairman;
Ms Naheed Memon; appointed Non-Executive Director 7 January 2019; appointed Chief Executive Officer on
25 January 2019;
Mr A Migge: Non-Executive Director; Senior Independent Director;
Mr G Lewis : Non-Executive Director; appointed Independent Director 18 March 2020;
Mr S Khan: Chief Executive Officer until 25 January 2019; Executive Director thereafter until his resignation
on 16 July 2019.
The beneficial interests of the Directors holding office on 31 December 2019 in the issued share capital of the
company were as follows:
Ordinary 0.1p shares
31 December 2019
1 January 2019
Mr M Steed
Ms N Memon
Mr A Migge
Mr S Khan
18,100,000
16,000,000
*8,800,000
32,841,049
1,000,000
-
-
32, 841,049
*This includes 4,400,000 warrants exercised on 31 December but issued on 8 January 2020.
Ordinary shares of 0.1p each under option
The Directors held no share options during the year.
INFORMATION ON DIRECTORS AND SENIOR MANAGEMENT
Mark Steed
Chairman
Mr Steed has had a career in the field of international stock and commodity markets, the management of
offshore hedge funds, corporate finance and trading in securities in emerging economies. He has worked with
and set up various portfolio and fund management companies, in the roles of Chief Executive Officer, Chief
Financial Officer and Compliance Officer. Notably he has been involved in the setup of Amstel Securities LLP,
City Capital Securities Limited, Shard Capital Partners LLP and the Sion Hall Family Office. Within the
Company, Mr Steed, in addition to his role as Chairman, oversees corporate, financial and audit matters.
Naheed Memon
Chief Executive Officer
Ms Memon has had a career spanning public service and the private sector. Following a first degree in
Computing Science at the University of Karachi, she completed a MSc in Economics, including a Distinction
in Econometrics, at Birkbeck College, London and an MBA at Imperial College London. She has held various
roles in her family conglomerate, the Kings Group of Industries, Pakistan, including Director of Marketing and
Director of Information Systems. She was CEO of Advici Consulting Limited, a consulting practice based in
London advising in marketing and investor facilitation. She has been a Financial Advisor with Merrill Lynch,
Private Banking. She was CEO of Manzil Pakistan, a public policy think tank based in Karachi. She has served
the Sindh Board of Investment (Government of Sindh), as Vice Chair from 2013 - 2016, then as Chair until
August 2018.
Page 13
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2019
Andreas Migge
Senior Independent Director
Mr Migge has had a career in Investment Banking and Private Equity with a focus on energy and natural
resources. He has an international background, having worked in the US, Europe, Asia and the Middle East.
Mr Migge has considerable international transaction experience, notably leading the acquisition of the power
plants Lalpir and Pakgen in Pakistan, which was voted “Deal of the Year Asia”. In 2014, he was a founding
investor and member of the sponsor team for the Reata Prospect, an on-going shale oil exploration project in
the Permian Basin in the US. Mr Migge has also led investments in power projects in Iraq and coal mining
restructuring projects in the US. He served in the Special Forces of the German Air Force and holds an MBA
from Yale University. Within the Company, Mr Migge oversees technical and business development matters.
Glen Lewis
Independent Director
Mr Lewis is a senior Coal Mine Manager with a wealth of experience having worked in the coal industry since
the 1980s. Throughout his career he has focused on operational mine management. He has developed a
number of significant coal deposits, including United Colliery and Dartbrook Coal in the Hunter Valley in
Australia. He was the Operations Manager at Oceanic Coal following its acquisition by Xstrata Coal in
1999. Mr Lewis continued to hold a number of senior roles with the company, culminating in his appointment
as General Manager of Operations at Xstrata Coal in 2003. Here he held responsibility for six operating mines
and several projects under construction, until his departure from the company in 2008. He was appointed
Managing Director of NuCoal Resources Ltd (ASX:NCR) in 2010, overseeing the listing, capital raising,
exploration and feasibility studies for a number of mining projects in the Hunter Valley. Glen stepped down as
Managing Director in 2017 to focus on advisory opportunities in the public and private sector. He remains a
Non-executive Director of NuCoal.
Page 14
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2019
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.
The long-term viability of the Group at the moment depends on the successful delivery of the Thar project.
This includes finding partners who are able to provide the finance that the project requires, raising cash on
the London Stock Exchange, bringing the project to financial close, successfully constructing the mine and
the power plant, successful operations and addressing all of the risks outlined in this report (pages 5 to 12).
SIGNIFICANT 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 2019:
31 December 2019
Shareholding
% holding
Brandon Hill Capital Ltd
Sheikh Ahmed Bin Dalmook Al Maktoum
Private Office One Person Company LLC
Power Equity Investments Ltd
Dr K Laghari
InterTrader Ltd
Nazario Consultancy Ltd
212,819,800
200,000,000
153,846,154
95,652,174
90,132,257
62,159,230
12.09%
11.37%
8.74%
5.44%
5.12%
3.53%
Page 15
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2019
AUTHORITY TO ISSUE SHARES
Each year at the AGM the Directors may seek authority to allot shares, with the authority when granted lasting
until the next AGM. At the GM held on 20 December 2019 the shareholders gave authority until the next AGM
for the Directors to allot equity securities for cash up to an aggregate nominal value of £1,403,823 of which
£180,000 were issued in the placing and a further £4,400 at the year end and the shares issued on 8 January
2020.
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.
REMUNERATION REPORT
This report has been prepared in accordance with the requirements of Schedule 2 Part 1 of the Companies
Act 2006 (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 a resolution to approve
the report will be proposed at the Annual General Meeting of the Company at which the Financial Statements
are submitted for shareholder approval.
Remuneration Policy
The Remuneration Committee is focused on ensuring that the Group’s policies and procedures are effective
for the Group’s business and that executive remuneration packages are designed to attract, drive, motivate
and retain executive directors and senior management of the requisite calibre and expertise, and to reward
them appropriately for creating and enhancing long-term value for shareholders. The performance
measurement of the Chief Executive Officer and key members of the senior management team, and the
determination of their annual remuneration package is undertaken by the Remuneration Committee.
The remuneration of the Non-Executive Directors is determined by the Board within limits set by the Articles
of Association and in accordance with the general guidance principles adopted by the Quoted Companies
Alliance for small and mid-size quoted Companies.
Page 16
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2019
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, a fee
will be agreed by the Board 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 2019 was as follows:
Salary &
fees
£
86,420
118,381
23,238
Executive
Mr S Khan
Ms N Memon
Non-executive
Mr M W
Steed
Bonuses Pensions Termination
benefits
£
£
£
Share based
payments
£
£
2019
Total
2018
Total
£
-
-
-
-
7,655
-
100,000
-
- 194,075 145,300
-
- 118,381
2,406
-
-
-
-
25,644
28,001
-
25,833
25,000
Mr A Migge
25,833
Mr Khan was a director up to 16 July 2019
Directors' Service Contracts
The Directors have contracts with a two year term, renewable by mutual agreement and on an annual basis
thereafter. Termination notice period is stated.
Executive
Ms N Memon
Non-executive
Mr M Steed
Mr A Migge
Mr G Lewis
Date of appointment
Notice period
7 January 2019
12 months
12 July 2017
2 August 2017
18 March 2020
3 months
3 months
3 months
Page 17
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2019
Performance Evaluation
The Board undertakes annually a formal evaluation of its performance and of its committees through a
questionnaire and interview process involving individual Directors and Senior Managers that is overseen by
the Senior Independent Director, Mr Migge.
Executive Incentives
The Remuneration Committee will be preparing, before the project’s financial close, recommendations to the
Board for submission for shareholders’ approval in respect of performance bonus schemes and long term
incentives packages for directors and managers. These proposals will be formulated after consultation with
professional remuneration advisers and major shareholders.
CORPORATE GOVERNANCE REPORT
During 2019 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 10 principles set out in the Guidelines aim to assist
small and growing companies in ensuring good governance practices and communicating such practices with
shareholders and stakeholders. 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
2019 the Board consisted of three Directors being the Chief Executive Officer, Ms N Memon, the Non-executive
Chairman, Mr M Steed, and Non-executive Director Mr A Migge. Details of their careers are given in the Report
of the Directors. During 2019, there were some changes to the membership of the Board. On 7 January 2019
Ms N Memon was appointed a Non-executive Director and then on 25 January 2019 she became Chief
Executive Officer replacing Mr S Khan. On 16 July 2019 Mr S Khan resigned as an Executive Director. On 18
March 2020 Mr G Lewis was appointed as a Non-executive Director.
The Board has considered the independence of Mr Migge and Mr Lewis and considers them to be fully
independent.
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 S Smith,
who resigned on 19 September 2019 and replaced by Mr A Warden, who are 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.
Board Meetings
The Board of Directors meets approximately every three months and five meetings were held in 2019. 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
Remuneration Committee, issue of shares and warrants, appointment of a financial adviser, approval of
regulatory announcements to the market, and a final investment decision to proceed with project
implementation.
Page 18
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2019
Board Committees
The Board Committees are comprised of Non-Executive Directors. 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 2019 were as follows:
The Board
Nomination Committee
Remuneration Committee
Audit Committee
Tender Committee
Number of
Meeting in 2019
Members (& attendance during period of appointment)
5
2
1
3
0
Mr Steed (all), Ms Memon(all), Mr Khan (2), Mr Migge
(all)
Messrs Steed (all), Migge(all)
Mr Migge (all)
Mr Steed (all)
Mr Migge
Nomination Committee
The Nomination Committee was established post-admission to AIM 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 Committee also identifies and screens
candidates for recommendation to the Board for the Remuneration and Audit Committees. The Nomination
Committee also formulates proposals for succession planning of the Board and management. The Committee
consists of Mr Steed as chairman and Mr Migge. The Committee met twice in 2019. The Committee also
monitors the application of the Company policy on discrimination and encouraging diversity amongst the
Company's workforce. No such issues were noted in 2019.
Remuneration Committee
The Remuneration Committee met once in 2019. The Committee consists of Mr Migge as chairman. It is
responsible for reviewing the remuneration, performance bonuses, incentive schemes and pension provision
for Board members and executives of the Company. The Committee responsibility extends to the review of
the remuneration of the Company's appointees to the Boards of Sindh Carbon Energy Limited and Thar
Electricity (Private) Ltd. The Committee engages the services of remuneration consultants for advice on
policies concerning Board and executive remuneration, performance bonuses, incentive schemes and
pensions. 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 three times in 2019. The Committee is chaired by Mr Steed. Other
Directors and officers are invited to attend where appropriate.
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 Directors of Oracle Power PLC it also has a role to advise the
Boards of the subsidiary companies, Sindh Carbon Energy Ltd. and Thar Electricity (Private) Ltd.
Page 19
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2019
The auditors of Oracle Power PLC are Price Bailey who have served the Company since it was founded. Price
Bailey have regularly rotated the audit engagement partner. 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 re-tendering could not be justified at this stage.
A. F. Ferguson & Co., the local affiliates in Karachi of Price Waterhouse Coopers are auditors of Sindh Carbon
Energy Limited and of Thar Electricity (Private) Ltd. Price Waterhouse Coopers (London) advise the Group on
global tax matters and A. F. Ferguson & Co. advise the Group on Pakistani tax matters. These roles are
considered by the Audit Committee to be compatible with their role as auditors of the subsidiary companies. In
November 2019 the Partner and Manager in charge of the audit in Price Bailey attended the Audit Committee
meeting to consider the year end timetable, discuss issues arising from the annual closing and possible post-
balance sheet events. Recent changes in accounting standards were also discussed. 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 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 Audit Committee monitors the internal control environment of the Group.
The Committee also oversees the Group’s adherence to Market Abuse Regulations. The Committee considers
that internal controls are sound, both in Oracle Power PLC and in the subsidiary companies. The Committee
monitors the Company’s Internal Control Manual and makes amendments as they are needed.
The risk assessment exercise for the Company 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.
The Audit Committee noted that following any future signing of the Definitive Agreements, as foreseen in the
Consortium Agreement with China National Coal Development Company Ltd and Sheikh Ahmed Dalmook Al
Maktoum Private Office One Person Company LLC the Audit Committee may in the future have more restricted
access to the activities of Sindh Carbon Energy Limited and Thar Electricity (Private) Limited. At such time, the
Audit Committee suggests that an internal audit process should be put in place, overseen by the external
auditors or an internal auditor and also that one director appointed by Oracle who should participate in the audit
process.
Management Meetings
The Senior Management of the Company meet 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 was chaired by Mr Migge. No meetings were called in 2019. 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
Page 20
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2019
For all major contracts (over £100,000) it is required that the list of contractors to be invited and the invitation
to tender documents be submitted to the Tender Board. 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 announcements are
approved by the Chairman, the Board and the Nominated Adviser.
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.
The Board has delegated responsibility for the monitoring of internal control to the Audit Committee, and this
is covered in the Audit Committee Report. 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 regulatory announcements and through the website. The Chief Executive, supported by the
Group's brokers, makes interim presentations to shareholders as needed. St Brides Partners Ltd was
appointed during the year to act as the Company’s public relations consultants and are now the primary point
of contact.
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the
financial statements in accordance with applicable law and regulations. Company law requires the directors to
prepare financial statements for each financial year. Under that law the directors have elected to prepare the
financial statements in accordance with International Financial Reporting Standards as adopted by the
European Union. Under company law the directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit
or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgements and accounting estimates that are reasonable and prudent;
•
•
state that the financial statements comply with IFRS;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company's and the Group's transactions and disclose with reasonable accuracy at any time the financial
position of the company and the group and enable them to ensure that the financial statements comply with
the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Page 21
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2019
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.
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:
Mark W Steed Chairman
Date: 22 June 2020
Page 22
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ORACLE POWER PLC GROUP OF COMPANIES
Opinion
We have audited the financial statements of Oracle Power plc Group of Companies (the 'parent company')
and its subsidiaries (the 'group') for the year ended 31 December 2019 which comprise the Consolidated
Statement of Profit or Loss, the Consolidated Statement of Profit or Loss and Other 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, Notes to the Consolidated
Statement of Cash Flows, Notes to the Company Statement of Cash Flows, and Notes to the Financial
Statements, including a summary of significant accounting policies. The financial reporting framework that
has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
-
-
-
-
the financial statements give a true and fair view of the state of the group's and of the parent company's
affairs as at 31 December 2019 and of the group's loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by
the European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union and as applied in accordance with the provisions of the Companies Act
2006; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditors'
responsibilities for the audit of the financial statements section of our report. We are independent of the
group in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw attention to note 2 in the financial statements, which indicates that the Group will need to raise
additional funds to bring their project to financial close. Whilst the directors expect to meet funding
requirements, based upon the current economic environment there exists a material uncertainty which may
cast significant doubt as to whether the Group will be able to raise sufficient funds and therefore continue
as a going concern. Our opinion is not modified in respect of this matter.
Given the uncertainties noted above we considered going concern to be a Key Audit Matter. We have
assessed management’s forecasts and underlying assumptions. In doing so we considered factors such as
historical operating expenditure and the group’s ability to raise funding in the near future.
We found our results from the above and the disclosures in the financial statements in respect of the above
to be appropriate.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant addressed risks of
material misstatement (whether or not due to fraud) we identified, including those which had the greatest
effect on: overall audit strategy, the allocation of resources in the audit, the directing of efforts of the
engagement team. These matters were addressed in the context of our audit of the financial statements as
a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.
Page 23
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ORACLE POWER PLC GROUP OF COMPANIES
Carrying value of Exploration Assets and Project Feasibility
The group has substantial exploration assets on which the success of the group is underpinned.
As explained in Note 2 to the financial statements the assessment of whether there are indicators of impairment
in relation to exploration assets requires the exercise of significant judgement by management.
Given the significant value of the exploration assets the assessment of whether there are indicators of
impairment represented a key audit matter for our audit.
Directors have assessed whether there is an indicator of impairment of the project and have concluded this is
not the case.
Our procedures included:
Review of management’s assessment of indicators of impairment under IFRS6 in respect of the exploration
project.
Review of the status and validity of the exploration licences.
Challenge of the management’s assessment and consideration of evidence provided including a review of key
partner contracts and plans to take the project to financial close.
We evaluated the adequacy and appropriateness of the disclosures provided within the financial statements in
Notes 2 and 9.
Our application of materiality
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonably knowledgeable users that are taken on the basis of Financial Statements.
Materiality provides a basis for determining the nature and extent of our audit procedures.
We based materiality on net assets of the group and concluded materiality to be £420,000. We consider that
net assets provides us with the most relevant performance measure to stakeholders of the entity given the stage
of the Group’s activity and growth.
We apply the concept of materiality both in the planning and performance of the audit, and in evaluating the
effects of misstatements.
During the course of the audit we reassessed materiality from planning to reflect the final reported performance
of the group. There was no change made to our planning materiality.
Page 24
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ORACLE POWER PLC GROUP OF COMPANIES
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment. We determined
materiality and assessed the risk of material misstatement in the financial statements. In particular we looked at
where the directors had made subjective judgements within accounting estimates. We addressed the risk of
management override of internal controls including whether there was evidence of bias by the directors that
represented a risk of material misstatements due to fraud.
The group has operating entities based in Pakistan. We assessed there to be three significant components
being the Oracle Power Plc with operations in the UK and Sindh Carbon Energy Ltd and Thar Electricity (Private)
Ltd with operations in Pakistan.
The parent entity was subject to a full scope audit by the group auditor.
A full scope audit was performed on the significant components Sindh Carbon Energy Ltd and Thar Electricity
(Private) Ltd by A.F. Ferguson & Co., the local affiliates in Karachi of Price Waterhouse Coopers. Detailed group
reporting instructions for the testing of the significant areas were sent to the component auditor and we
discussed their findings with the component audit partner. The group audit team also performed the audit
procedures over the significant risk areas and consolidation.
Other information
The Directors are responsible for the other information. The other information comprises the information in the
Annual Report, other than the financial statements and our Report of the Auditors thereon.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
-
the information given in the 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; and
-
the Group Strategic Report and the Report of the Directors have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment
obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report
or the Report of the Directors.
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.
Page 25
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ORACLE POWER PLC GROUP OF COMPANIES
Responsibilities of Directors
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, and for such
internal control as the Directors determine necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the group's and the parent
company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors either intend to liquidate the group or
the parent company or to cease operations, or have no realistic alternative but to do so.
Our responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Report of the Auditors.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's
members those matters we are required to state to them in 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.
Martin Clapson FCA (Senior Statutory Auditor)
for and on behalf of Price Bailey LLP
Chartered Accountants & Statutory Auditors
Tennyson House
Cambridge Business Park
Cambridge
CB4 0WZ
Date: 22 June 2020
Page 26
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2019
CONTINUING OPERATIONS
Revenue
Administrative expenses
OPERATING LOSS
Finance costs
Finance income
LOSS BEFORE INCOME TAX
Income tax
LOSS FOR THE YEAR
Loss attributable to:
Owners of the parent
Non-controlling interests
Loss per share expressed
in pence per share:
Basic
Diluted
Notes
-
5
5
6
7
8
2019
£
-
(1,087,623)
(1,087,623)
(4,220)
1,697
2018
£
(881,041)
(881,041)
(602)
1,647
(1,090,146)
(879,996)
-
-
(1,090,146)
(879,996)
(1,090,146)
-
(1,090,146)
(879,996)
-
(879,996)
(0.08)
(0.08)
(0.08)
(0.08)
The notes form part of these financial statements
Page 27
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
LOSS FOR THE YEAR
(1,090,146)
(879,996)
2019
£
2018
£
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit or loss:
Exchange difference on consolidation
Income tax relating to items of other comprehensive
income
OTHER COMPREHENSIVE
INCOME/(LOSS) FOR THE YEAR, NET
OF INCOME TAX
TOTAL COMPREHENSIVE
INCOME/(LOSS) FOR THE YEAR
Total comprehensive income/(loss) attributable to:
Owners of the parent
Non-controlling interests
(184,991)
(251,214)
-
-
(184,991)
(251,214)
(1,275,137)
(1,131,210)
(1,275,137)
-
(1,275,137)
(1,131,210)
-
(1,131,210)
The notes form part of these financial statements
Page 28
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2019
ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
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
TOTAL EQUITY
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
Notes
9
10
12
13
14
15
16
16
16
16
17
2019
£
4,633,022
9,845
393,723
5,036,590
141,208
413,858
555,066
2018
£
4,742,818
12,278
391,843
5,146,939
70,689
48,899
119,588
5,591,656
5,266,527
1,759,751
15,512,025
(532,235)
190,653
(11,512,373)
1,141,822
14,538,219
(347,244)
22,839
(10,422,227)
5,417,821
4,933,409
173,835
173,835
333,118
333,118
TOTAL EQUITY AND LIABILITIES
5,591,656
5,266,527
The financial statements were approved and authorised for issue by the Board of Directors on 22 June
2020 and were signed on its behalf by:
.................................................................
Mark W Steed Chairman
The notes form part of these financial statements
Page 29
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
COMPANY STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2019
Notes
9
10
11
12
13
14
15
16
16
16
17
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
2019
£
3,332,126
2,782
3,702,847
1,604,275
8,642,030
285,901
384,058
669,959
2018
£
3,312,816
1,756
3,702,947
1,527,134
8,544,653
198,414
45,248
243,662
9,311,989
8,788,315
1,759,751
15,512,025
190,653
(9,067,436)
1,141,822
14,538,219
22,839
(8,001,171)
8,394,993
7,701,709
916,996
916,996
9,311,989
1,086,606
1,086,606
8,788,315
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
£1,066,265 (2018 – loss of £848,762).
The financial statements were approved and authorised for issue by the Board of Directors on 22 June 2020
and were signed on its behalf by:
Mark W Steed - Chairman
The notes form part of these financial statements
Page 30
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
Balance at 1 January 2018
Loss for the year
Other comprehensive income
Exchange difference on consolidation
Total comprehensive loss
Called up
share
capital
£
961,884
Retained
earnings
£
Share
premium
£
(7,355,072) 11,622,166
Translation
reserve
£
(96,030)
-
-
-
(879,996)
-
(879,996)
-
-
-
-
(251,214)
(251,214)
Share
scheme
reserve
£
-
-
-
-
Total
£
5,132,948
Non-controlling
interests
£
12,841
(879,996)
(251,214)
(1,131,210)
-
-
-
Total
equity
£
5,145,789
(879,996)
(251,214)
(1,131,210)
Transactions with owners
Issue of share capital
Share warrants granted
Arising on acquisition of non-controlling interest
179,938
-
-
-
-
(2,187,159)
2,916,053
-
-
Total transactions with owners
179,938
(2,187,159)
2,916,053
-
-
-
-
-
22,839
-
3,095,991
22,839
(2,187,159)
-
-
(12,841)
3,095,991
22,839
(2,200,000)
22,839
931,671
(12,841)
918,830
Balance at 31 December 2018
1,141,822
(10,422,227) 14,538,219
(347,244)
22,839
4,933,409
Loss for the year
Other comprehensive income
Exchange difference on consolidation
Total comprehensive loss
Transactions with owners
Issue of share capital
Share warrants granted
-
-
-
(1,090,146)
-
(1,090,146)
-
-
-
-
(184,991)
(184,991)
-
-
-
(1,090,146)
(184,991)
(1,275,137)
Total transactions with owners
617,929
617,929
-
-
-
973,806
-
973,806
-
-
-
-
167,814
1,591,735
167,814
167,814
1,759,549
Balance at 31 December 2019
1,759,751
(11,512,373) 15,512,025
(532,235)
190,653
5,417,821
The notes form part of these financial statements
Page 31
-
-
-
-
-
-
-
-
4,933,409
(1,090,146)
(184,991)
(1,275,137)
1,591,735
167,814
1,759,549
5,417,821
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
Called up
share
capital
£
Retained
earnings
Share
premium
£
£
Share
scheme
reserve
£
Balance at 1 January 2018
961,884
(7,152,409) 11,622,166
Total
equity
£
5,431,641
(848,762)
(848,762)
3,095,991
-
-
-
-
22,839
22,839
Loss for the year
Total comprehensive loss
Transactions with owners
Issue of share capital
Share warrants expired
Share warrants granted
-
-
(848,762)
(848,762)
-
-
179,938
-
-
2,916,053
-
-
-
-
-
-
Total transactions with owners
179,938
2,916,053
22,839
3,118,830
Balance at 31 December 2018
1,141,822
(8,001,171) 14,538,219
22,839
7,701,709
-
-
(1,066,265)
(1,066,265)
-
-
-
-
(1,066,265)
(1,066,265)
Loss for the year
Total comprehensive loss
Transactions with owners
Issue of share capital
Share warrants granted
Total transactions with owners
617,929
617,929
-
-
-
-
973,806
-
-
167,814
1,591,735
167,814
973,806
167,814
1,759,549
Balance at 31 December 2019
1,759,751
(9,067,436) 15,512,025
190,653
8,394,993
The notes form part of these financial statements
Page 32
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
Notes to the
Statement of Cash Flows
Cash flows from operating activities
Cash generated from operations
Interest paid
1
Net cash from operating activities
Cash flows from investing activities
Purchase of intangible fixed assets
Purchase of tangible fixed assets
Proceeds from disposal of fixed assets
Interest received
Net cash from investing activities
Cash flows from financing activities
Proceeds of share issue
Issue of loans
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 2
Cash and cash equivalents at end of
year
2
2019
£
(1,320,826)
(4,220)
(1,325,046)
(70,949)
(1,524)
941
1,696
(69,836)
1,759,851
-
1,759,851
364,959
48,899
-
413,858
2018
£
(834,162)
(602)
(834,764)
(154,115)
-
1,647
(152,468)
909,953
-
909,953
(77,279)
126,178
-
48,899
The notes form part of these financial statements
Page 33
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
Notes to the
Statement of Cash Flows
Cash flows from operating activities
Cash generated from operations
Interest paid
1
Net cash from operating activities
Cash flows from investing activities
Purchase of intangible fixed assets
Purchase of tangible fixed assets
Investment in subsidiary
Interest received
Net cash from investing activities
Cash flows from financing activities
Proceeds of share issue
Issue of loans
2019
£
(1,397,684)
(4,220)
(1,401,904)
(19,310)
(1,524)
-
1,697
(19,137)
1,759,851
-
2018
£
(910,059)
(602)
(910,661)
(65,219)
-
-
1,647
(63,572)
909,953
Net cash from financing activities
1,759,851
909,953
Increase/(Decrease) in cash and cash equivalents
Cash and cash equivalents at
beginning of year
Effect of foreign exchange rate changes
2
Cash and cash equivalents at end of
year
2
338,810
45,248
-
384,058
(64,280)
109,528
-
45,248
The notes form part of these financial statements
Page 34
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
1.
RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM
OPERATIONS
Group
Loss before income tax
Depreciation charges
Gain on foreign exchange movement
Finance costs
Finance income
Profit on disposal of tangible assets
Non-cash share based payments
(Increase)Decrease in trade and other receivables
(Decrease)/Increase in trade and other payables
Cash generated from operations
Company
Loss before income tax
Depreciation charges
Gain on foreign exchange movement
Finance costs
Finance income
Non-cash share based payments
(Increase)/Decrease in trade and other receivables
(Decrease)/Increase in trade and other payables
Increase in loans to subsidiaries
2019
£
(1,090,146)
498
(2,184)
4,220
(1,697)
(673)
-
2018
£
(879,996)
692
(25,051)
602
(1,647)
8,876
(1,089,982)
(120,631)
(110,213)
(896,524)
4,207
58,155
(1,320,826)
(834,162)
2019
£
(1,066,265)
498
(2,184)
4,220
(19,102)
-
(1,082,833)
(120,080)
(119,510)
(75,261)
2018
£
(848,762)
692
(25,051)
602
(19,286)
8,876
(882,929)
4,772
37,351
(69,253)
Cash generated from operations
(1,397,684)
(910,059)
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 Statements of Financial Position amounts:
Year ended 31 December 2019
Cash and cash equivalents
Year ended 31 December 2018
Cash and cash equivalents
Group
Company
31/12/19
£
413,858
1/1/19
£
48,899
31/12/19
£
384,058
1/1/19
£
45,248
31/12/18
£
48,899
1/1/18
£
126,178
31/12/18
£
45,248
1/1/18
£
109,528
Page 35
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
1.
STATUTORY INFORMATION
Oracle Power PLC is a public company, limited by shares and registered and domiciled in England and
Wales. It is the ultimate holding company of the Oracle Power Plc Group. The Group is primarily involved
in an energy project, based on the exploration and development of coal and building a mine-mouth
power plant in Pakistan. The presentation currency of the financial statements is the Pound Sterling
(£).The company's registered number and registered office address can be found on the General
Information page.
2.
ACCOUNTING POLICIES
Going concern
The Directors have considered the cashflow requirements of the Group over the next 12 months and
believe there are sufficient existing funds to meet overhead requirements. 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.
The Directors have also considered the COVID-19 global pandemic and whether any adjustments are
required to reported amounts in the financial statements. As at the reporting date no global pandemic
had been declared. Subsequent to the reporting date with social distancing and restrictions on travel
and in person meetings business has had to be carried out in a very different way which can delay or
stop critical decisions being made.
The Directors have been able to continue with aspects of the project despite the restrictions put in place
to deal with the pandemic. They have been able to carry out all internal functions as normal and progress
the project.
Compliance with accounting standards
These financial statements have been prepared in accordance with International Financial Reporting
Standards as adopted by the European Union 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 principal risk and uncertainty of the intangible assets (exploration assets) is that the Group may not
reach financial close – as disclosed in Note 9. The board have tested the intangible assets for
impairment and concluded that no impairment provision is required.
The Group determines whether there is any impairment of intangible assets on an annual basis.
At the balance sheet date the intangible assets are carried forward at their cost of £4,633,022.
Page 36
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
2.
ACCOUNTING POLICIES - continued
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.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation. Depreciation
is provided at the following annual rates in order to write off each asset over its estimated useful life.
Fixtures and 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. Investments in subsidiaries are fully consolidated
within the Group financial statements.
Page 37
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
2.
ACCOUNTING POLICIES - continued
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
- Receivables denominated in foreign currency are retranslated at the balance sheet date
- 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.
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.
Leasing commitments
All leases held are either short-term leases or are for low value assets. The rentals paid are charged to
the statement of profit or loss on a straight line basis over the period of the lease.
Employee benefit costs
The group operates a defined contribution pension scheme. Contributions payable to the group's
pension scheme are charged to the income statement in the period to which they relate.
Share-based payment transactions
Where equity settled share warrants are awarded to employees, the fair value of the warrants 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 warrants that eventually vest. Market vesting conditions are
factored into the fair value of all warrants 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.
Page 38
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
2.
ACCOUNTING POLICIES - continued
Where terms and conditions of warrants are modified before they vest, the increase in the fair value of
the warrants, 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.
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 2019
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:
- IFRS 16 Leases (issued January 2016)
- IAS 19 Employee Benefits (amended 2018)
- IFRS 3 Business Combinations (amended 2018)
- IFRS 11 Joint Operations (amended 2014)
- IFRS 9 Financial Instruments (amended 2017)
- IAS 12 Income Tax (amended 2016)
- IAS 32 Borrowing Costs (amended 2011)
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.
IFRS 16 Leases
In the context of the transition to IFRS 16, the Group has decided not to apply the new guidance to
leases whose term will end within twelve months of the date of initial application. In such cases the
leases will be accounted for as short-term leases and the lease payments associated with them will be
recognised as an expense from short-term leases. The following reconciliation to the opening balance
for the lease liabilities as at 1 January 2019 is based upon the operating lease obligations as at 31
December 2018:
Operating lease obligations as at 31 December 2018
Short-term leases
Lease liabilities at 1 January 2019
1 January 2019
£
105,212
(105,212)
-
The group has applied the short-term lease exemption in IFRS 16 and expensed lease payments rather
than recognising a right of use asset and a lease liability. Details of the lease payments expensed as a
result of this expedient is included in Note 18.
Page 39
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
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 2019 and have not been applied in preparing these
financial statements:
- IAS 1 Presentation of Financial Statements (amended 2018)
- IAS 8 Accounting Policies (amended 2018)
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.
3.
SEGMENTAL REPORTING
The principal activity of the Group is an energy project, based on the exploration and development of
coal mining and building a mine-mouth power plant in Pakistan. All expenditure is in respect of this one
activity and the £4,633,022 (2018: £4,742,818) intangible non-current assets of the Group are wholly
attributable to the project in Pakistan.
To-date the Group has raised a total £18.4m and spent £17.6m on this project, Thar Block VI.
Page 40
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
4.
EMPLOYEES AND DIRECTORS
Wages and salaries
Social security costs
Pension contributions to money purchase schemes
Compensation for loss of office
2019
£
373,375
31,724
17,289
147,000
2018
£
397,500
40,118
10,683
12,500
569,388
460,801
The average monthly number of employees of the Company during the year was as follows:
Directors
Administration and production
Directors' remuneration
Company contributions to Directors’ pension money purchase schemes
Compensation to director for loss of office
2019
2018
4
1
5
4
3
7
2019
£
253,872
10,061
100,000
2018
£
187,500
5,708
12,500
The number of Directors to whom retirement benefits were accruing was as follows:
Money purchase schemes
1
1
Information regarding the highest paid director is as follows:
Remuneration
Company Pension contributions to money purchase schemes
Compensation to director for loss of office
2019
£
86,420
7,655
100,000
2018
£
125,000
4,900
-
Details of remuneration for each Director are included in the Report of the Directors.
5.
NET FINANCE COSTS
Finance income:
Deposit account interest
Finance costs:
Loan interest
2019
£
2018
£
1,697
1,647
(4,220)
(602)
Net finance income/(costs)
(2,523)
1,045
Page 41
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
6.
LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging/(crediting):
Depreciation - owned assets
Auditors' remuneration
Foreign exchange differences
2019
£
2,437
18,831
(2,184)
2018
£
3,568
18,879
(25,051)
The depreciation charges shown above include £1,939 (2018:£2,876) which have been capitalised as
exploration costs by the subsidiary company in accordance with the accounting policy.
7.
INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose for the year ended 31 December 2019 nor for the year ended
31 December 2018.
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 before income tax
2019
£
(1,090,146)
2018
£
(879,996)
Loss multiplied by the standard rate of corporation tax in the UK of
19% (2018 - 19%)
(207,128)
(167,199)
Effects of:
Inter company items eliminated
Potential deferred taxation on losses for year
3,307
(210,480)
3,352
163,847
Tax expense
-
-
The Group and Company has estimated UK excess management charges of £8,688,609 (2018:
£7,622,334) to carry forward against future income. The overseas subsidiaries have losses of £107,226
(2018: £100,746) which will be carried forward to offset future profits. There is no charge for foreign
taxation for the year (2018: nil).
Page 42
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
8.
LOSS 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 235,938,530
(2018: 3,825,604). No adjustment is made where the effect would be to dilute the loss attributable to
the ordinary shareholders.
Reconciliations are set out below.
2019
Weighted
average
number
of
shares
Earnings
£
Basic EPS
Earnings attributable to ordinary shareholders
Effect of dilutive securities -
(1,090,146) 1,334,995,596
-
Diluted EPS
Adjusted earnings (1,090,146) 1,334,995,596
2018
Weighted
average
number
of
shares
Earnings
£
Basic EPS
Earnings attributable to ordinary shareholders
Effect of dilutive securities
(879,996) 1,101,312,862
-
-
Diluted EPS
Adjusted earnings (879,996) 1,101,312,862
There is no difference between the basic and diluted loss per share.
Per-share
amount
pence
(0.08)
-
(0.08)
Per-share
amount
pence
(0.08)
-
(0.08)
Page 43
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
9.
INTANGIBLE ASSETS
Group
COST
At 1 January 2019
Additions
Exchange differences
At 31 December 2019
NET BOOK VALUE
At 31 December 2019
COST
At 1 January 2018
Additions
Exchange differences
At 31 December 2018
NET BOOK VALUE
At 31 December 2018
Exploration
costs
£
4,742,818
70,949
(180,745)
4,633,022
4,633,022
Exploration
costs
£
4,839,316
160,630
(257,128)
4,742,818
4,742,818
The Group exploration costs of £4,633,022 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 2019
Additions
At 31 December 2019
NET BOOK VALUE
At 31 December 2019
Exploration
costs
£
3,312,816
19,310
3,332,126
3,332,126
Page 44
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
9.
INTANGIBLE ASSETS - continued
Company
COST
At 1 January 2018
Additions
At 31 December 2018
NET BOOK VALUE
At 31 December 2018
10.
PROPERTY, PLANT AND EQUIPMENT
Group
Exploration
costs
£
3,247,597
65,219
3,312,816
3,312,816
COST
At 1 January 2019
Additions
Disposals
Exchange differences
Fixtures
and
fittings
£
1,385
-
-
-
Motor
vehicles
£
24,651
-
(4,263)
(3,010)
Computer
equipment
£
4,285
1,524
-
(90)
Totals
£
30,321
1,524
(4,263)
(3,100)
At 31 December 2019
1,385
17,378
5,719
24,482
DEPRECIATION
At 1 January 2019
Charge for year
Depreciation on disposal
Exchange differences
At 31 December 2019
NET BOOK VALUE
At 31 December 2019
647
74
-
-
721
14,236
1,909
(4,004)
(1,762)
3,160
454
(77)
18,043
2,437
(4,004)
(1,839)
10,379
3,537
14,637
664
6,999
2,182
9,845
Page 45
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
10.
PROPERTY, PLANT AND EQUIPMENT - continued
Group
COST
At 1 January 2018
Additions
Exchange differences
Fixtures
and
fittings
£
1,385
-
-
Motor
vehicles
£
29,249
-
(4,598)
Computer
equipment
£
4,410
-
(125)
Totals
£
35,044
-
(4,723)
At 31 December 2018
1,385
24,651
4,285
30,321
DEPRECIATION
At 1 January 2018
Charge for year
Exchange differences
At 31 December 2018
462
185
-
647
13,802
2,826
(2,392)
2,704
557
(101)
16,968
3,568
(2,493)
14,236
3,160
18,043
NET BOOK VALUE
At 31 December 2018 738
10,415
1,125
12,278
Company
COST
At 1 January 2019
Additions
Fixtures
and
fittings
£
1,385
-
Computer
equipment
£
3,615
1,524
Totals
£
5,000
1,524
At 31 December 2019
1,385
5,139
6,524
DEPRECIATION
At 1 January 2019
Charge for year
At 31 December 2019
NET BOOK VALUE
At 31 December 2019
647
74
721
2,597
424
3,244
498
3,021
3,742
664
2,118
2,782
Page 46
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
10.
PROPERTY, PLANT AND EQUIPMENT - continued
Company
COST
At 1 January 2018
Additions
Fixtures
and
fittings
£
1,385
-
Computer
equipment
£
3,615
-
Totals
£
5,000
-
At 31 December 2018
1,385
3,615
5,000
DEPRECIATION
At 1 January 2018
Charge for year
At 31 December 2018
NET BOOK VALUE
At 31 December 2018
11.
INVESTMENTS
Company
COST
At 1 January 2019
Disposals
At 31 December 2019
NET BOOK VALUE
At 31 December 2019
COST
At 1 January 2018
Additions
At 31 December 2018
NET BOOK VALUE
At 31 December 2018
462
185
647
2,090
507
2,552
692
2,297
3,244
738
1,018
1,756
Shares in
group
undertakings
£
3,702,947
(100)
3,702,847
3,702,847
Shares in
group
undertakings
£
1,502,947
2,200,000
3,702,947
3,702,947
Page 47
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
11.
INVESTMENTS - continued
Company
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
Registered office: 44/2, Street B-6, Phase V, Off Khyaban e Shaheen, Defense Housing Authority,
Karachi, Pakistan.
Nature of business: Coal exploration and mining.
Class of shares:
Ordinary shares of Rs. 10 each
Aggregate capital and reserves
Profit/(Loss) for the year
%
holding
100.00 (2018: 100.00)
2019
£
617,279
336
2018
£
616,943
(3,920)
The subsidiary company was incorporated in Pakistan on 23 January 2007 for the exploration and future
extraction of coal in Pakistan. Oracle Power PLC agreed to acquire 80% of the ordinary share capital
of the company at par, fully paid by cash.
On 14 March 2016 Oracle Power PLC took up a rights issue to acquire a further 9,000,000 ordinary
shares of the company at par for consideration of £603,141. The acquisition was settled through a
reduction of the inter-company loan and increased the holding in the subsidiary to 98%.
On 12 March 2018 Oracle Power PLC acquired the remaining 2% of Sindh Carbon Energy Limited. This
was acquired via a share for share exchange where Oracle Power PLC issued 95,652,174 shares in
exchange for the remaining 199,999 ordinary shares of Sindh Carbon Energy Limited.
The investment in share capital for the 100% holding amounts to £2,867,256 (2018: £2,867,256).
Revive Financial Limited
Registered office: Tennyson House, Cambridge Business Park, Cambridge, CB4 0WZ
Nature of business: Administration and financial support
Class of shares:
Ordinary shares of 1p each
Aggregate capital and reserves
%
holding
100.00
2019
£
804,516
2018
£
804,516
The company was incorporated on 8 October 2013 but has not yet commenced trading and has no
profit or loss for the year (2018: Nil).
The company was acquired under the terms of a share exchange agreement whereby shares in Oracle
Power 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 Power 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
Power PLC. The loan of £804,516 (2018: £804,516) which remains outstanding is interest free and is
repayable within 30 days of giving written notice of demand for repayment.
The investment in share capital for the 100% holding amounted to £804,516.
Page 48
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
11.
INVESTMENTS - continued
Company
Thar Electricity (Private) Limited
Registered office: PIA Building, 3rd Floor, 49, Blue Area, Fazlul Haq Road, Islamabad, 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
2019
£
(9,579)
(6,804)
2018
£
(2,769)
(9,675)
The subsidiary company was incorporated in Pakistan on 17 June 2015 for the future generation of
electricity in Pakistan. Oracle Power 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.
12.
LOANS AND OTHER FINANCIAL ASSETS
Group
Financial assets
2019
£
393,723
2018
£
391,843
The financial asset of £393,723 (2018: 391,843) 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 was originally valid up to the earliest of the date
commercial operations begin, three years from the date of issue, or 2 February 2018. This has been
further extended to 31 January 2021. This performance guarantee is secured by a deposit by Oracle
Power PLC with the issuing bank.
Page 49
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
12.
LOANS AND OTHER FINANCIAL ASSETS - continued
Company
At 1 January 2019
New in year
At 31 December 2019
At 1 January 2018
New in year
At 31 December 2018
Loans to
group
undertakings
£
1,135,291
75,261
1,210,552
Loans to
group
undertakings
£
1,066,038
69,253
1,135,291
Other financial assets were as follows:
Financial assets
2019
£
393,723
2018
£
391,843
In addition to the items disclosed for the Group, during the period Oracle Power PLC made loans to its
subsidiaries totalling £33,800 (2018: £48,600) to Sindh Carbon Energy Limited and £40,024 (2018:
£20,653) to Thar Electricity (Private) Limited.
The amounts outstanding at the statement of financial position date were £1,078,473 (2018:
£1,044,673) due from Sindh Carbon Energy Limited and £132,079 (2018: £90,618) due from Thar
Electricity (Private) Limited, of which £32,408 is denoted in USD of $42,980. 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.
Page 50
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
13.
TRADE AND OTHER RECEIVABLES
Group
2019
£
2018
£
Company
2019
£
2018
£
Current:
Other receivables
VAT
Prepayments and accrued income
118,138
18,806
4,264
25,242
7,159
38,288
262,831
18,806
4,264
152,967
7,159
38,288
141,208
70,689
285,901
198,414
14. CASH AND CASH EQUIVALENTS
Bank deposit account
Bank accounts
Group
Company
2019
£
365,845
48,013
2018
£
35,248
13,651
2019
£
365,845
18,213
2018
£
35,248
10,000
413,858
48,899
384,058
45,248
Page 51
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
15. CALLED UP SHARE CAPITAL
Allotted, issued and fully paid
1,755,350,959 (2018: 1,141,821,582) Ordinary shares of 0.1p each
1,759,751
1,141,822
2019
£
2018
£
In February 2019, 117,647,052 ordinary shares of 0.1p each were allotted at .425p per share as fully
paid for cash at a premium to nominal value of 0.325p per share during the year.
In August 2019, 200,000,000 ordinary shares of 0.1p each were allotted at 0.25p per share as fully paid
for cash at a premium to nominal value of 0.15p per share during the year.
In November 2019, 100,000,000 ordinary shares of 0.1p each were allotted at 0.25p per share as fully
paid for cash at a premium to nominal value of 0.15p per share during the year
In December 2019, 180,000,000 ordinary shares of 0.1p each were allotted at 0.25p per share as fully
paid for cash at a premium to nominal value of 0.15p per share during the year.
In December 2019, 15,882,325 ordinary shares of 0.1p each were allotted at 0.85p per share as fully
paid for cash at a premium to nominal value of 0.75p per share.
In December 2019, 4,400,000 ordinary shares of 0.1p each were allotted at 0.5p per share as fully paid
for cash at a premium to nominal value of 0.4p per share.
The number of shares in issue are as follows:
At 1 January
Issued during the year
At 31 December
2019
No.
2018
No.
1,141,821,582 961,883,698
617,929,377 179,937,884
1,759,750,959 1,141,821,582
In February 2019, 117,647,052 investor warrants with exercise price 0.85p per warrant and a vesting
period of 2 years were issued, and 5,822,352 broker warrants with exercise price 0.425p and a vesting
period of 3 years were issued.
In August 2019, 200,000,000 investor warrants with exercise price 0.5p per warrant and a vesting period
of 2 years were issued, and 10,000,000 broker warrants with exercise price 0.25p and a vesting period
of 2 years were issued.
In December 2019, 420,000,000 investor warrants with exercise price 0.25p per warrant and a vesting
period of 2 years were issued, and 14,000,000 broker warrants with exercise price 0.25p and a vesting
period of 2 years were issued.
At 31 December 2019 the total warrants in issue were 759,772,857.
Page 52
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
16. RESERVES
The following is a description of each of the reserve accounts that comprise equity shareholders' funds:
Share capital
The share capital comprises the issued ordinary shares of the company at
par.
Share premium
The share premium comprises the excess value recognised from the issue
of ordinary shares at par.
Translation reserve
Cumulative gains and losses on translating the net assets of overseas
operations to the presentation currency.
Share scheme reserve Cumulative
fair value of warrants charged
the statement of
comprehensive income net of transfers to the profit and loss reserve on
exercised and cancelled/lapsed warrants
to
Retained earnings
Retained earnings comprise the group's cumulative accounting profits and
losses since inception.
17.
TRADE AND OTHER PAYABLES
Current:
Trade payables
Amounts owed to group undertakings
Social security and other taxes
Other payables
Accruals and deferred income
Group
Company
2019
£
105,633
-
-
474
67,728
2018
£
167,714
-
36,073
77,226
52,105
2019
£
87,480
804,516
-
-
25,000
2018
£
147,537
804,616
36,073
76,702
21,678
173,835
333,118
916,996
1,086,606
Page 53
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
18.
LEASING AGREEMENTS
Expense incurred under leasing agreements
Group
Short term leases
Low value assets
Company
Short term leases
Low value assets
Minimum lease payments fall due as follows:
Group
Within one year
Between one and five years
After five years
Future minimum lease payments fall due as follows:
Company
Within one year
Between one and five years
After five years
2019
£
93,117
717
2018
£
92,878
-
93,834
92,878
2019
£
93,117
717
2018
£
92,878
-
93,834
92,878
2019
£
34,192
1,720
-
2018
£
90,212
15,000
-
35,912
105,212
2019
£
34,192
1,720
-
2018
£
90,212
15,000
-
35,912
105,212
The Company renegotiated its three year lease surrendering some office space early for a reduced
monthly rent of £3,629 and extended the end to 31 August 2020.
Page 54
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
19.
FINANCIAL RISK MANAGEMENT
The carrying value of the group’s financial assets and liabilities are recognised at the balance sheet
date of the years under review are categorised as follows:
Financial assets – at amortised cost
Cash and bank balances
Loans and receivables
Receivables denominated in foreign currency
Financial liabilities – at amortised cost
Trade and other payables
2019
£
413,858
118,138
393,723
2018
£
48,899
25,242
391,843
106,107
244,940
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.
Page 55
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
19.
FINANCIAL RISK MANAGEMENT - continued
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:
2019
£
2018
£
Pakistan Rupees
US Dollars
39,800
393,723
3,651
391,843
433,523
395,494
Sensitivity analysis
A 10 percent strengthening of sterling against the Pakistan Rupee and US Dollar at 31 December 2019
would have increased/(decreased) equity and profit and loss by the amounts shown below:
Equity
2019
£
2018
£
Profit and loss
2019
£
2018
£
Pakistan Rupees
US Dollars
(3,980)
(39,372)
(365)
(39,187)
-
(39,372)
-
(39,187)
A 10 percent weakening of sterling against the Pakistan Rupee and US Dollar at 31 December 2019
would have an equal but opposite effect on the amounts shown above.
Differences that arise from the translation of these foreign currency cash equivalents and loans to
sterling at the year-end rates are recognised in other comprehensive income in the year and the
cumulative effect as a separate component in equity. The Group does not hedge this translation
exposure in profits and equity.
ii) Interest Rate Risk
The Group has no interest bearing accounts and therefore no interest rate risk.
Page 56
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
19.
FINANCIAL RISK MANAGEMENT - continued
b) Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Group. The maximum exposure to credit risk at the reporting date to recognised
financial assets is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements. The Group does
not hold any collateral. Credit risk in relation to cash held with financial institutions is considered low,
given the credit rating of these institutions.
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 £1,078,473 (2018: £1,044,673) to Sindh
Carbon Energy Limited and £98,235 (2018: £90,618) 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
2019
£
2018
£
105,633
-
244,940
36,073
105,633
281,013
d) Fair Values of Financial Assets and Liabilities
The carrying value of all financial assets and liabilities in the financial statements approximate their fair
values.
Capital Management
The Company's capital consists wholly of ordinary shares, together with their associated share
premium. 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.
Page 57
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
20. 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 was originally valid up to the earliest of the date commercial operations begin, three years
from the date of issue, or 2 February 2018. This has been extended to 31 January 2021. This
performance guarantee is secured by a deposit by Oracle Power PLC with the issuing bank.
21. RELATED PARTY DISCLOSURES
During the year Oracle Power PLC accrued interest of £18,611 (2018: £16,349) in respect of loans
totalling £1,078,473 (2018: £1,044,673) made to Sindh Carbon Energy Limited and £3,529 (2018:
£1,293) in respect of loans totalling £132,079 (2018: £90,618) made to Thar Electricity (Private) Limited.
At the Statement of Financial Position date the total interest outstanding amounted to £147,784 (2018:
£132,613) for Sindh Carbon Energy Limited and £4,087 (2018: £1,852) for Thar Electricity (Private)
Limited.
Oracle Power PLC owes £804,516 (2018: £804,516) to its subsidiary Revive Financial Limited in respect
of a loan. The loan is interest free and is repayable within 30 days of receiving a written notice
demanding repayment.
Key management personnel compensation
The Directors and key management personnel of the Group during the year were follows:
Mr M W Steed (Non-Executive Director and Chairman)
Ms Naheed Memon (Non-Executive then Chief Executive Officer)
Mr A Migge (Non-Executive Director)
Mr S Khan (Chief Executive Officer, then director until resigned 16 July 2019)
Mr S Smith (Company Secretary and Finance Manager, resigned 19 September 2019)
Mr B Rostron (Mining and Contracts Manager, resigned 19 July 2019)
The aggregate compensation made to key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Termination benefits
2019
£
379,776
15,176
147,000
2018
£
347,500
8,683
12,500
541,952
368,683
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 are disclosed in the Directors Report.
Page 58
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
22.
EVENTS AFTER THE REPORTING PERIOD
Subsequent to the reporting date the existence of the infectious disease COVID-19 (Coronavirus) has
become widely known and begun to rapidly spread throughout the world including the UK. The Group
consider this to be a non-adjusting event after the reporting date. Since the reporting date this has
caused increasing disruption to populations, to business and economic activity. As this situation
continues to develop it is not yet practicable to estimate the potential impact this may have on the Group.
See note 2 to the consolidated financial statements.
Since the reporting date the group has issued the following shares:
Date
Number
Price per share
Gross Fund raise
8 January 2020
15 January 2020
15 January 2020
20 January 2020
31 January 2020
27 February 2020
12 March 2020
4,400,000
38,162,192
6,000,000
10,000,000
16,000,000
10,000,000
29,000,000
0.50p
0.50p
0.25p
0.50p
0.25p
0.25p
0.25p
22,000
190,810
15,000
50,000
40,000
25,000
72,500
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.
Page 59
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2019
23.
SHARE-BASED PAYMENT TRANSACTIONS
The Company has a share warrant programme that entitles the holders to purchase shares in the
Company with the warrants exercisable at the price determined at the date of granting the warrant. The
terms and conditions of the grants active in the year are as follows; there are no vesting conditions to
be met and all warrants are to be settled by the issue of shares:
Grant date
3 April 2018
2 August 2018
23 October 2018
21 February 2019
12 August 2019
23 December 2019
Number of
instruments
Contractual life
of warrants
1,712,143
2,250,000
8,563,662
5,882,352
10,000,000
14,000,000
3 years
3 years
5 years
3 years
2 years
2 years
The number and weighted average exercise prices of share warrants is as follows:
Outstanding at 1 January
Granted during the period
Expired during the period
Exercised during the period
Weighted
average
exercise
price 2019
2.42p
0.28p
Number of
warrants 2019
12,525,805
29,882,352
-
-
Weighted
average
exercise
price 2018
2.42p
Number of
warrants 2018
-
12,525,805
-
-
Outstanding at 31 December
0.92p
42,408,157
2.42p
12,525,805
During the year no relevant share warrants were exercised (2018: Nil) and no share warrants expired
during the year (2018: Nil).
The fair value of commission on share payments cannot be measured directly, so has been measured
indirectly using a Black-Scholes model with the following inputs
Fair value grant date
21 February 2019
12 August 2019
23 December 2019
Share price
Exercise price
Expected volatility
Warrant life
Risk-free interest rate
1p
0.425p
48.04%
3 years
0.88%
1p
0.25p
19.75%
2 years
0.33%
1p
0.25p
59.85%
2 years
0.55%
The expected volatility was determined by reviewing actual volatility of the Company’s share price since
its listing on AIM to the date of granting the warrant. In calculating the fair value, consideration was
given to the market trends at the grant date of the warrant.
There is no expense for the year (2018: 22,839) for services received in respect of equity settled share-
based payment transactions as the figure is not material.
Page 60