REGISTERED NUMBER: 05867160 (England and Wales)
GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
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 2021
Company Information
Chairman's Statement
Chief Executive's Report
Group Strategic Report
Report of the Directors
Remuneration Report
Corporate Governance Report
Page
1
2
3 to 4
5 to 13
1
4 to
16
17
to
18
19
to
21
Statement of Director Responsibilities
Report of the Independent Auditors
22
23 to 27
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
28
29
30
31
32
33
34
35
Notes to the Statements of Cash Flows
36 to 37
Notes to the Consolidated Financial Statements
38 to 62
ORACLE POWER PLC GROUP OF COMPANIES
COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2021
Oracle Power 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
Mr A Migge
Mr D Hutchins
SECRETARY:
Mr N Lee
REGISTERED OFFICE:
Tennyson House
Cambridge Business Park
Cambridge CB4 0WZ
REGISTERED NUMBER:
05867160 (England and Wales)
AUDITORS:
Price Bailey LLP
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
and JOINT BROKER:
REGISTRAR:
SOLICITORS:
BANKERS:
PUBLIC RELATIONS:
Pitcher Partners
Level 11/12-14 The Esplanade
Perth WA 6000, Australia
Strand Hanson Limited
26 Mount Row
London W1K 3SQ
Neville Registrars Limited
18 Laurel Lane, Halesowen
West Midlands B63 3DA
Charles Russell Speechlys LLP
5 Fleet Place,
London EC4M 7RD
Haider Mota BNR
D-79, Block No. 5,
Karachi 75600, Pakistan
Habib Bank AG Zurich
Moorgate Branch,
Habib House,
42 Moorgate,
London EC2R 6JJ
Royal Bank of Scotland plc
1st Floor, Conqueror House
Vision Park, Histon
Cambridge CB24 9NL
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 2021
I am pleased to present the financial statements for Oracle Power PLC (“Oracle” or the “Company”) for the
year ended 31 December 2021.
Despite COVID-19 and the consequential limitations on travel, we have managed to grow the size and value
of our project portfolio.
During the year, we continued to progress our Thar Block VI project. Notwithstanding the general move
towards more environmentally friendly forms of power generation, with the advent of the conflict in Ukraine,
the cost of energy has risen dramatically and the global energy position has changed. Pakistan’s Minister of
Energy announced in a recent press conference that he wants the delayed Thar Block VI project developed.
The original Thar Block VI project plan was to build a mine with an associated 1,320 MW power station to
provide base load electricity to Pakistan. The project has now expanded to include production of coal to gas.
We are further exploring the possibility of using lignite to make a humic or organic material that enhances soil
health and can be used to turn barren land into fertile land. Interest in the whole Thar project has therefore
increased.
The two gold prospects in Western Australia (Jundee East and the Northern Zone projects), in which we
invested in 2019 are progressing. The geological surveys and test drilling reports are all looking encouraging,
and we have been approached by other mining companies in the area, which are looking to form joint ventures
to advance the projects.
In 2021, we started a project with the objective to manufacture a green hydrogen production facility in Pakistan.
To this end, we signed a non-exclusive co-operation agreement with PowerChina and, in March 2022, we
formed a new SPV called Oracle Energy Ltd specifically to develop this project. Oracle Energy Ltd is jointly
owned by Oracle Power PLC (30%) and by His Highness Sheikh Ahmed Dalmook Al Maktoum, through his
wholly owned company Kaheel Energy FZE (70%).
In terms of our funding position, just prior to the period end, the Company received £632,500 from the exercise
of warrants and then post year end, in April 2022, we raised an additional £800,000 before expenses through
an equity placing to finance the development of the green hydrogen project.
Operational highlights of 2021 are described in the Chief Executive’s Report.
As you will have read in the newspapers, Imran Khan has been replaced as Prime Minister of Pakistan by
Shebaz Sharif. The Pakistan Government remains supportive of the development of the Thar coal project 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, to the Chinese Authorities through China Coal and the Joint
Cooperation Committee (JCC) of CPEC for their support.
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 2021
I am pleased to present a report on the Company’s progress for the year ended 31 December 2021.
This year has been one of very significant and valuable progress for Oracle. During the early part of the
year, we mainly focused on the active development of the Company’s existing projects in Pakistan and in
Western Australia, and in both jurisdictions notable progress was achieved. Then, in the last quarter of 2021,
we launched our green hydrogen project, with the objective to become a developer of green and new energy
as well and as a result, further expanded our portfolio of projects.
In Pakistan, we continued to actively pursue the development of our Thar Block VI, for power as well as for
CTG/L (coal to gas/liquid). We maintained an active dialogue with the Power Division, Ministry of
Energy, throughout the year, to secure permission for development of the Company’s 1,320MW, coal to power
project under the China-Pakistan Economic Corridor (“CPEC”). In September 2021, the Government of
Pakistan published its annual Indicative Generation Capacity Expansion Plan (the “IGCEP”), a demand-supply
policy guidance chart for Pakistan. Although, demand from Oracle’s plant did not appear in the 2021 plan, the
power sector regulator, the National Electric Power Regulatory Authority (“NEPRA”), has ruled that the Thar
project of 1,320MW, should be included in the next annual review in 2022.
Furthermore, following subsequent discussions with government and regulators, consultants were engaged in
Q1 2021, to draft a government policy proposal for CTG/L, based on input received from China Coal. The draft
policy for CTG/L was then jointly submitted by Oracle and China Coal, to the Petroleum Division, Ministry of
Energy, for due consideration in March 2021.
We subsequently sponsored a consultative session for stakeholders, to discuss the policy draft, with a view to
finalising it, so that feasibilities could commence. The session held on 10 March 2021 in Karachi, was hosted
by the Petroleum Division, Ministry of Energy, Government of Pakistan, and presided over by the Energy
Minister of Sindh, Mr. Imtiaz Ahmed Shaikh and the Special Assistant to the Prime Minister for Petroleum, Mr.
Nadeem Babar. The Company continued to engage with the Petroleum Division for further action subsequent
to this meeting. In parallel, in order to mitigate CTG/L development risk, we also initiated discussions with other
potential off-takers.
By Q4 2021, the Company was in advanced talks with Sui Southern Gas Company Limited (“SSGC”), the semi
government public gas distribution company, based on the understanding that a buy back arrangement with
SSGC would trigger required government policy formulation, as well as provide necessary guarantees to
lenders. This arrangement was secured post period. Further, by the end of 2021, we had also set out the
scope and parameters of a detailed feasibility study for CTG/L in conjunction with China Coal, pending policy
announcement. I can also confirm that generally, Oracle received tremendous encouragement, and support
from the Government of Pakistan for an enhanced development plan at Block VI, during the course of 2021.
To this end, the Government of Pakistan has had extensive dialogue with us on different occasions, for
initiation of the feasibility study and mobilisation of CTG/L development, given Pakistan’s gas crisis.
I am also very pleased to report that despite all COVID-19 related challenges in West Australia, Oracle
continued to conduct active exploration at both the tenements. At the Company’s Northern Zone project, 25
km from Kalgoorlie, processing and interpretation of the available magnetic and induced polarisation (“IP”)
geophysical datasets was completed. The maiden drill programme targeting felsic intrusives porphyry bodies
commenced in September 2021 and was completed within the calendar year. The samples were submitted to
laboratories and significantly positive results were received post period end. In parallel, we were finally granted
the exploration licence for Jundee East in May 2021. We proceeded to conduct a more extensive geochemical
sampling survey and then planned a five target drilling programme based on the geophysical and extensive
geochemical investigations, which established the presence of an unrecognised greenstone belt similar to the
Jundee mine, one of Australia’s largest, a few kilometres away. By Q4 2021, we had secured clearance for
drilling at Jundee East, and sourced a rig, with drilling to commence post period end. The results of the work
on both tenements, established good prospects for gold systems and further work plans for 2022 were set out
at the year end 2021, subject to expected results post period. Given the low priced acquisition of the assets in
Western Australia, quick exploration work, and early signs of favourable mineralisation, we expect to realise a
significant increase in company value on account of the outcome of work undertaken in Western Australia.
Page 3
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CHIEF EXECUTIVE'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
In October 2021, Oracle launched its transformational pivot to green energy by signing a non-exclusive
co-operation agreement with PowerChina, to jointly develop the first green hydrogen production facility in
Pakistan. The signing ceremony held at the Energy Department, Government of Sindh in Karachi was
hosted by Pakistan’s Minister of Energy, Sindh, Mr. Imtiaz Ahmed Shaikh. Mr. Li Bijian, the Consul
General of China in Karachi, also witnessed the signing ceremony, providing assurance of the support of
Chinese government for this project. Soon after our project launched, we appointed Dr. Naveed Akhtar,
a hydrogen scientist as Chief Technology Officer for Hydrogen. Dr Akhtar is an expert in hydrogen fuel
cells with more than 20 years’ experience.
We also engaged land surveyors and consultants to identify suitable land in the designated wind corridor
in Sindh, for the development of a 400 MW capacity green hydrogen project with an annual production
capacity of 55,000 tonnes. Subsequent to land identification, we applied to the Government for allotment
of land for the development of the green hydrogen project. The process is expected to conclude in 2022
when we expect to start to progress of one of the larger green hydrogen projects in the region.
In December 2021, PowerChina completed a preliminary feasibility study for production of green
hydrogen, and the Company published an information memorandum for prospective investors. We also
initiated conversations with domestic and international off takers as well as technology suppliers and
lenders. By the end of 2021, I can confirm that significant progress had been achieved to date and we
expect to make quick progress on the ground with regard to this important project. I can also say with
confidence that the Government is fully supportive of this development, and is also working on a support
policy for green hydrogen production, and Oracle‘s views as a pioneer of this initiative in Pakistan, have
been taken into consideration, by those reviewing possible future policy mechanisms, and we remain a
part of this conversation.
During 2021, we remained well placed financially, and our cash balance was further enhanced on account
of the exercise of warrants by multiple shareholders, including His Highness Sheikh Ahmed Dalmook Al
Maktoum just prior to the period end.
The Company remains committed to all its projects, adding value through achieving target milestones.
The addition of our green hydrogen project to our portfolio places us in a very strong position as
developers of important global fuel and commodity projects, in strategic jurisdictions, with an ability to
mitigate commodity risk across our portfolio.
We would be unable to develop these projects without the commitment to our teams in the UK, Australia
and in Pakistan. I am thankful to them for their commitment to the Company. I would also like to express
my gratitude to all those who support Oracle in the UK, and help us to manage regulatory affairs, public
relations, accounting compliance, brokerage and market trading.
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 2021
The Directors present their Strategic Report of the Company and the Group for the year ended 31 December
2021.
PRINCIPAL ACTIVITY AND BUSINESS MODEL
The principal activity of the Group during the year under review was that of a project development company.
The Company is currently involved with three projects: an energy project, based on the development of coal,
and building a mine-mouth power plant in Pakistan; exploration for gold in Western Australia; and the
development of a green hydrogen project in Pakistan.
The development work in Pakistan was primarily focused on obtaining necessary permissions from the
government for the projects in Pakistan. The work done in WA involved exploration of the tenements and
developing plans for further resource estimation. Although the projects generally operate through SPVs, 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 development 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. Towards the end of the
period the Company launched a significant green hydrogen production project in Pakistan, making an
important addition to its portfolio with the objective of becoming a developer of a green energy.
REVIEW OF THE BUSINESS
During the year, the Group has used its funds to develop the Thar mine project in Pakistan and to drill and
develop its gold assets in Western Australia. 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. The loss for Oracle Power PLC after taxation for the year to 31 December 2021 amounted to £881,879
(2020: £1,011,151).
The Chairman, in his Statement, and the Chief Executive Officer in her Report, have summarised the activities
of the Group during the financial year.
SECTION 172(1) STATEMENT
The directors are well aware of their duty under Section 172(1) 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 13.
Section 172(1) 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.
Page 5
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
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 11. The directors are fully aware of their
responsibilities to promote the success of the Company in accordance with Section 172(1) of the Companies
Act 2006. The text of Section 172(1) of the Companies Act 2006 has been sent out to each main board director.
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;
At this stage, the directors consider that there are no financial KPIs that are specifically relevant to
assessing the business.
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(1) and stakeholder considerations are set out below.
Key Board Decision Section 172(1) and Stakeholder Considerations:
• Development of the Company’s gold projects in Western Australia;
•
• Commencement of the Company’s green hydrogen project in Pakistan.
Further development of the Company’s coal and power project in Pakistan; and
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.
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.
Page 6
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
PRINCIPAL RISKS AND UNCERTAINTIES
The Group is engaged in the development of three key projects which include:
-
a lignite coal resource in Block VI in the Thar Desert in the Sindh province in Pakistan through a mine
supplying a power plant and a coal to gas facility;
two gold assets in Western Australia: and
a green hydrogen production facility in Pakistan.
-
-
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.
The principal risks and uncertainties for the Company are:
ISSUE
Likelihood of Issue
Arising
Impact
If Issue Arises
Financing
Project Completion
Operating
Economic
Political, Legal and Regulatory
Environment & Corporate Social Responsibility
Medium/Low
Low
Low
Low/Medium
Low
Low
High
Medium
Low/Medium
Low
Medium
Low
Following the acquisition of the gold projects in Western Australia, it is important to establish adequate
resource estimates via exploratory work on both the tenements acquired. Similarly in Pakistan, the Company
continues its efforts to secure a letter of intent (“LOI”) for the power plant, given that it has already secured a
prospective investor in China. The Company also awaits adequate policy support to be announced, in order
to proceed with the development of a coal to gas (“CTG”) facility in conjunction with the power plant at Block
VI. There are risks related to obtaining adequately viable tariffs for both power as well gas, in order to maximise
return. Although economic risk, including cost increases, is protected, through the Government of Pakistan’s
cost-plus pricing mechanism. In addition, the recently launched green hydrogen project faces off take risk
overseas as well as financing risk will also need to be managed.
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. However, WA
presents very limited political risk compared to Pakistan and so the development of projects there face
commercial risk primarily.
In relation to the green hydrogen project, technology risks also need to be adequately mitigated and proven
technologies need to selected in accordance with applications.
The risks are detailed below, along with the key measures taken for mitigation.
Page 7
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Financial Close Risk
Risk
In relation to the coal to power project, assuming the LOI
is secured and a viable tariff obtained, 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, and
after consummating a binding Shareholders or JV
Agreement, the principal risk is related to securing debt
from banks and Chinese Sinosure (China’s export
financing plan).
There is also a risk that Oracle may not be able to raise
the necessary equity.
This process can be delayed and banks and lenders may
insert more stringent condition precedents.
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 compliance
to the 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.
Project Completion Risk
Risk
Mitigation
The Block VI development plan comprises a mine, a power
plant and CTG/L facilities in the future as well. Various
factors could give rise to delay in completion. These
include:
• Delay in mine development due to timely provision of
infrastructure by the government;
• Power plant failing tests and hence resulting in
encashment of performance guarantees; and
• Dewatering of mine does not work as planned or excess
water cannot be effectively disposed of.
In relation to WA gold exploration, the risks associated
with drilling, topography conditions, and weather
conditions exist.
• 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 required quality,
supporting previous studies on Block VI;
• The Company is in close contact with the
relevant Government authorities regarding
water management issues;
• Government
and
takes
Agreement
responsibility
for
ensuring capacity payments via the Power
Purchase
the
Implementation Agreement. There is a
CPEC HVDC priority project to provide an
additional 4,000MW
transmission
capacity for national power projects, more
than sufficient to meet all presently known
Thar projects;
of
• 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.
Page 8
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Operating Risk
Risk
Technical issues, similar to those described under Project
Completion risk.
Water availability and dewatering of mine, during
production operations are the key concerns 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.
The production of hydrogen is relatively risk free but the
storage and transportation of green hydrogen can
present risks associated with new technology.
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
these should also be
cost
recoverable through the coal and electricity
pricing mechanisms; and
increases,
the Pakistan Government will provide a
the
for water supply before
guarantee
commencement of the project.
The Company will engage the best technology
suppliers for storage and transportation of
green hydrogen.
Economic Risk
Risk
Mitigation
The economic performance of the Company could be
affected by movements in international markets. These
include:
•
Exchange rate movements, amongst the five
currencies, US Dollar, Renminbi, Pakistani Rupee, Pound
Sterling and Australian dollar, that affect the Company;
•
construction, would add to capital costs;
•
importation of either coal, gas or oil;
•
•
operating costs.
Change in the price of gold; and
US$ inflation, which could raise capital and
Fall in international energy prices encouraging
Increased interest rates which, if arising during
Cost
resulting
•
from
variances
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.
The price of renewable energy power components such
as turbines and photovoltaic panels can remain high on
account of shortages. Further, high transportation costs
will impact the selling price of hydrogen for end user.
The Company will engage contractors which
have scale and cost advantage to mitigate
global shortages and transport costs.
Page 9
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Financing Risk
Risk
Mitigation
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.
There is also a risk that Oracle may not be able to raise
the necessary equity.
responsible
The Consortium Agreement envisages that the
Chinese partner will be
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.
The ability to raise the appropriate funds to develop the
gold projects in Western Australia.
The ability to secure financing for green hydrogen
production as a predominantly B2B venture, presents
manageable risks.
The Company plans to bring in first tier lenders
to attract money from the market.
In WA, the Company will aim to secure co-
development arrangements as well.
Political, Legal, Regulatory and Fiscal Risks
Risk
Mitigation
of
the
term,
Longer
there are
planned major
•
The Government have expressed their
the development of
continued support for
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
infrastructure is already in place;
•
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;
•
strong working
Oracle
relationship with all
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
in place a
is putting
Thar. Oracle
comprehensive
which
plan
security
complements
the Government
agencies.
a
relevant
those of
has
for maintaining
Change in regime;
Shorter term, the funding and completion of local
The Federal and Sindh Governments have demonstrated
strong support for the integrated Thar coal mining and
the
power plant development, and
supportive regulatory and fiscal regime at present in place.
Risks arise from:
•
•
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;
•
regulations,
including pricing mechanisms, also potentially leading to
delay;
•
in Thar take on a higher profile;
•
Oracle becoming a minority partner; and
•
Transfer of operatorship to Chinese partners and
Security and terrorism, particularly as operations
NGO activism.
interpretation
Bureaucratic
of
Page 10
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Environment & CSR
Risk
Mitigation
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.
Oracle operates to international standards of
environmental and social impact management
and complies with the Pakistan Environmental
Protection
mirrors
legislation,
international standards.
which
However, by launching its green hydrogen
project, the Company plans to offset the
possible negative impact its coal to power
project would have on its environment.
At the same time, all exploration activities in
WA are done after due clearance from the
Department of Mines, Industry Regulation and
Safety, is obtained and strictest measures are
put in place to safeguard the environment and
workers.
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.
Further, in relation to the green hydrogen
project, the Company is already in
conversation with certifiers to obtain a green
certificate upon commencement of project
construction.
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
it works with other
work
developers of Thar Coal, for example Sindh
Engro in Block II in joining the Thar Foundation,
set up to coordinate welfare initiatives.
to ensure
that
The Company has also made commitments to
the Government of Sindh to ensure that local
communities settled in the wind corridor area,
where the green hydrogen project will be
housed, are provided livelihood and housing.
Page 11
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE SOCIAL RESPONSIBILITY ("CSR")
Oracle Power PLC is a responsible corporate entity and is continuing to apply international best practice to all
its projects. The Company is aware of the key role it has to play in developing its pioneering projects in
Pakistan, in minimising the impact that its operations may have on the natural and social environment and in
creating opportunities for the local community. In Western Australia, it remains fully compliant with regard to
all environmental and social protocols.
Environmental and Social Impact Assessment ("ESIA")
In relation to the Thar project, 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. 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.
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.
In relation to the green hydrogen project in the wind corridor in Sindh, Pakistan, we are in in conversation with
TUV Rheinland, which will issue a green certificate for plans, before the construction commences.
In Australia, before the commencement of any exploration activity, clearances are secured from the Department
of Mines, Industrial Safety and Regulation, Government of Western Australia.
Community and Consultation
At Thar, in addition to the environmental characterisation of the site, 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. A similar exercise is intended at the green hydrogen project site, post
allotment of land. In Western Australia, we pay fees towards the protection of the communities, in accordance
with government programmes and policy.
Resettlement
Community response in relation to Thar, 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 Resettlement Policy Framework of May 2015 sets out the formal mechanism for
resettlement in Thar and is generally in line with international performance standards. Such a
Resettlement Framework and Resettlement Action Plan (“RAP”) was prepared and has been submitted to SEPA
in April 2014 as required under the ESIA approval and has been recorded for action.
At the green hydrogen project site, a similar resettlement plan will be undertaken in accordance with Pakistan’s
Renewable Power Policy post acquisition. In Western Australia, the laws governing aboriginal settlement and
protection are enforced, and the Company is fully compliant.
Page 12
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE SOCIAL RESPONSIBILITY ("CSR") Continued
The next stage of the process at both the project sites in Pakistan will be to carry out detailed surveys to identify
landowners in the case of Thar, and settled communities on both sites, taking into account families, livestock,
and agricultural assets prior to commencement of projects. 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 has carried out a census at Thar and already done surveys in conjunction
with local authorities at the green hydrogen site, and is well prepared to begin this work.
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. A similar resource will be hired for the green hydrogen project and full support will be offered to the
local communities in the area.
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.
In WA, we have already generated both direct and indirect jobs, and as we continue to develop our two
projects there, we anticipate greater contribution to the national output, will be made.
Improvements and extension of the existing government primary schools on all sites;
Benefits and Opportunities include:
-
- Training of literate male and female community members for teaching;
- Extension of the existing school buildings to support more students;
- Supply of stationery and other provisions;
- Bi-annual hygiene and healthcare awareness campaign in all communities;
- Setting up water filter systems in all communities;
- Awareness campaign on methods to improve livestock health and productivity in all communities; and
- Construction of a road to connect local villages and communities to highways and other amenities.
ON BEHALF OF THE BOARD:
Mark W Steed - Chairman
Date: 23 June 2022
Page 13
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2021
The Directors present their report with the financial statements of the Company and the Group for the year
ended 31 December 2021.
DIVIDENDS
No dividends will be distributed for the year ended 31 December 2021.
EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is given in the note 23 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 Chairman;
Ms N Memon: Chief Executive Officer;
Mr A Migge: Senior Independent Non-Executive Director;
Mr D Hutchins: Independent Non-Executive Director; appointed on 3 March 2021.
The beneficial interests of the Directors, who held office during the year, in the Ordinary Shares of the Company
on 31 December 2021 were as follows:
31 December 2021
1 January 2021
Mr M Steed
Ms N Memon
Mr A Migge
Mr D Hutchins
24,236,502
108,748,186
9,045,423
152,238
18,100,000
16,000,000
8,800,000
-
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 14
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2021
INFORMATION ON DIRECTORS AND SENIOR MANAGEMENT (continued)
Andreas Migge
Senior Independent Non -Executive 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.
David Hutchins
Independent Non -Executive Director
Mr Hutchins is a highly experienced corporate mining and commodities professional with more than 30 years
in the industry. During his career he has held several executive roles for both listed and private companies.
Mr Hutchins is a member of the FTSE Gold Mines Index Committee and a past Chairman.
Most notably, Mr Hutchins has held a range of senior roles within fund management, including various senior
positions at M&G Group. In addition, he was a Fund Manager of Resources Investment Trust plc which was
listed on the London Stock Exchange. He was also a Director and Founder of www.minesite.com, a mining
industry specific news website which is now part of Master Investor. He currently sits on the Board of
Wishbone Gold Plc (AIM: WSBN), a gold specialist company operating in exploration, mining and bullion
trading, which, like Oracle, has gold exploration projects in Australia.
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.
Page 15
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2021
GOING CONCERN
During the year under review, the Group experienced net cash outflows from operating activities which it
financed from existing cash resources held at the start of the year and cash received from the issue of new
equity share capital. The Directors have considered the cash flow requirements of the Group over the next 12
months and believe that additional funding will be required to meet the Group’s cash requirements over that
period. This additional cash requirement creates a material uncertainty that may cast significant doubt on the
Company’s ability to continue as a going concern. However, the Directors expect to be able to meet the
funding requirements for the Group to continue as a going concern for at least 12 months from the date of the
approval of these financial statements, and consequently, the Directors consider it appropriate to adopt the
going concern basis in the preparation of the financial statements.
SIGNIFICANT SHAREHOLDINGS
The Directors have been notified of the following interests, directly or indirectly, in 3% or more of the Group's
ordinary shares as at 23 June 2022:
His Highness Sheikh Ahmed Bin Dalmook Al Maktoum
Brandon Hill Capital
Barclays Bank plc
Naheed Memon
Dr K Laghari
500,000,000
173,300,000
138,461,539
110,238,075
95,652,174
17.26
5.98
4.78
3.81
3.30
Shareholding
% of ISC
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.
ENERGY AND CARBON REPORTING
Streamlined Energy and Carbon Reporting is required by large companies where energy consumption
exceeds 40,000kWh. The Company can confirm that its consumption is less than 40,000kWh and therefore
there is no requirement to provide a details of the Company’s greenhouse gas emissions, energy consumption
and energy efficiencies.
ON BEHALF OF THE BOARD:
Mark W Steed - Chairman
Date: 23 June 2022
Page 16
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT ON REMUNERATION
FOR THE YEAR ENDED 31 DECEMBER 2021
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.
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 2021 was as follows:
Salary
and fees
£
Pensions
2021
Total
2020
Total
£
£
£
150,000
-
150,000 212,500
30,000
30,433
20,833
2,083
1,200
-
563
-
31,200
30,433
21,396
2,083
49,475
47,500
-
19,755
Executive
Ms N Memon
Non-Executive
Mr M W Steed
Mr A Migge
Mr D Hutchins
Mr G Lewis
Mr G Lewis resigned on 21 December 2020.
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 D Hutchins
Date of appointment
Notice period
7 January 2019
12 months
12 July 2017
2 August 2017
3 March 2021
3 months
3 months
3 months
Page 17
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
REPORT ON REMUNERATION
FOR THE YEAR ENDED 31 DECEMBER 2021
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 Non-Executive Director, Mr Migge.
Executive Incentives
The Remuneration Committee intends to prepare, recommendations to the Board in respect of performance
bonus schemes and long-term incentive packages for directors and managers. These proposals will be
formulated after consultation with professional remuneration advisers and major shareholders.
ON BEHALF OF THE BOARD:
Mark W Steed
Chairman
Date: 23 June 2022
Page 18
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
During 2021 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
2021, the Board consisted of four Directors being the Chief Executive Officer, Ms N Memon, the Non-executive
Chairman, Mr M Steed, and Senior Independent Non-executive Director Mr A Migge and Non-executive
Director Mr D Hutchins. Details of their careers are given in the Report of the Directors.
The Board has considered the independence of Mr Migge and Mr Hutchins 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 N Lee, who
is responsible for ensuring that Board procedures and applicable regulations under the Company's Articles of
Association or otherwise are complied with. Each Director is entitled, if necessary, to seek independent
professional advice at the Company's expense.
Board Meetings
The Board of Directors meets approximately every three months and three meetings were held in 2021. 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.
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.
The meetings held in 2021 were as follows:
The Board
Nomination Committee
Remuneration Committee
Audit Committee
Tender Committee
Number of Meeting
in 2021
3
Members (and attendance during period of
appointment)
Mr Steed (all), Ms Memon (all), Mr Migge (all), Mr
Hutchins (all)
0
1
3
2
Mr Steed (all), Mr Hutchins (all)
Mr Steed (all)
Mr Migge (all), Mr Hutchins (all)
Page 19
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
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
comprises of Mr Migge as chairman and Mr Steed. The Committee did not meet in 2021. 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 2021.
Remuneration Committee
The Remuneration Committee met once in 2021. The Committee consists of Mr Steed as chairman and Mr
Hutchins. It is responsible for reviewing the remuneration, performance bonuses, incentive schemes and
pension provision for Board members and executives of the Company and new joiners. It is policy that no
individual participates in discussions or decisions concerning their own remuneration.
Audit Committee
The Audit Committee of the Board met three times in 2021. 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.
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 affiliate of Price Waterhouse Coopers, is based in Karachi and is the auditors
of Sindh Carbon Energy Limited and of Thar Electricity (Private) Ltd. Pitcher Partners are the local affiliate of
Baker Tilly, are based in Perth and are the auditors of Oracle Gold Pty Limited. Price Waterhouse Coopers
(London) advise the Group on global tax matters and A. F. Ferguson & Co. and Pitcher Partners advise the
Group on local tax matters.
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.
Page 20
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
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 Committee
The Tender comprises Mr Migge as chairman and Mr Hutchins. Two meetings were held in 2021. The purpose
of the Tender Committee 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 include:
•
•
•
•
•
•
•
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
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 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.
ON BEHALF OF THE BOARD:
Mark W Steed Chairman
Date: 23 June 2022
Page 21
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER:05867160)
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
FOR THE YEAR ENDED 31 DECEMBER 2021
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 UK adopted international accounting standards. 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.
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: 23 June 2022
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 2021 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 UK adopted international accounting standards 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 2021 and of the group's loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK adopted
international accounting standards;
the parent company financial statements have been properly prepared in accordance with UK adopted
international accounting standards 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 as applied to listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Our approach to the 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 and Australia. We assessed there to be four significant
components being the Oracle Power Plc with operations in the UK, Sindh Carbon Energy Ltd and Thar
Electricity (Private) Ltd with operations in Pakistan, and Oracle Gold Pty Limited with operations in Australia.
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, and Oracle
Gold Pty Limited by Pitcher Partners, a Baker Tilly network member. Detailed group reporting instructions for
the testing of the significant areas were sent to the component auditors 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.
Page 23
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ORACLE POWER PLC GROUP OF COMPANIES
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 the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
How our scope addressed this matter
impairment
Review of management’s
review for Pakistan under IAS36, including
the feasibility report prepared by an expert.
Review of management’s assessment of
indicators of impairment under IFRS6 in
respect of the Australia project.
Review of the status and validity of the
exploration licences.
of
Challenge
management’s
the
assessment and consideration of evidence
provided including a review of key partner
contracts and plans to take the project to
financial close.
evaluated
We
and
the
appropriateness of the disclosures provided
within the financial statements in Notes 2, 9
and 12.
adequacy
Key audit matters
Project feasibility and its impact on carrying value of
intangibles and recoverability of intercompany loans
The group has substantial exploration assets on
which the success of the group is underpinned.
As explained in Notes 2 and 9 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 and the results of the impairment reviews
represent a key audit matter for our audit.
For the primary project in Pakistan, the Directors
have performed an impairment review based on the
financial feasibility of the project, comparing the
carrying value to the recoverable amount, and have
determined that no impairment is required.
For the Australia project, as it is in an earlier stage,
the Directors have assessed whether there is an
indicator of impairment of the project and have
concluded this is not the case.
Additionally, the company has intercompany loans
due
from Sindh Carbon Energy Limited, Thar
Electricity (Private) Limited, and Oracle Gold Pty
Limited. These are repayable on demand however
are unlikely to be repaid until the respective projects
become successful and the subsidiaries start to
generate revenues, as explained in Note 12.
The recoverability of the intercompany loans is
therefore also reliant on the feasibility of the projects.
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 £488,000, with performance
materially of £244,000. 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.
Page 24
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ORACLE POWER PLC GROUP OF COMPANIES
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.
Material uncertainty relating to going concern
We draw attention to Notes 2 and 9 in the financial statements, which explain that during the year under review,
the Group experienced net cash outflows from operating activities. The Group met the working capital
requirements by utilising existing cash held at the start of the year and cash received from an issue of new
equity share capital. The Directors have considered the cash flow requirements of the Group over the next 12
months and believe additional funding will be required to meet the Group’s cash requirements. As stated in
Notes 2 and 9, this condition, along with other matters as set forth in Notes 2 and 9, indicate that a material
uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
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.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the entity’s ability to continue to adopt the going concern basis
of accounting included review of forecasts covering at least 12 months after signing of the accounts, review of
management accounts after the year end, and consideration of available funding.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information contained
within the annual report. 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. 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
course of 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 this gives rise to a material
misstatement in the financial statements themselves. 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.
Page 25
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ORACLE POWER PLC GROUP OF COMPANIES
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
-
-
adequate accounting records have not been kept by the parent company, or returns adequate for
our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and
returns; or
-
certain disclosures of Directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement, 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 an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
We obtained an understanding of the legal and regulatory framework applicable to the group and the parent
company and the industry in which it operates and considered the risk of non-compliance with the applicable
laws and regulations including fraud, in particular those that could have a material impact on the financial
statements.
This included those regulations directly related to the financial statements, including financial reporting, tax
legislation and distributable profits. In relation to the industry this included employment laws and health and
safety.
The risks were discussed with the audit team and we remained alert to any indications of non-compliance
throughout the audit. We carried out specific procedures to address the risks identified. These included the
following:
Reviewing minutes of Board meetings and Audit Committee meetings, correspondence with their regulators,
agreeing the financial statement disclosures to underlying supporting documentation, enquiries of
management including those responsible for the key regulations for any instances of actual, suspected or
alleged fraud or non-compliance.
To address the risk of management override of controls, we carried out testing of journal entries and other
adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the
normal course of business. We also assessed management bias in relation to the accounting policies
adopted and in determining significant accounting estimates.
Page 26
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ORACLE POWER PLC GROUP OF COMPANIES
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This
risk increases the more that compliance with a law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.
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: 23 June 2022
Page 27
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2021
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
2021
£
-
(881,973)
(881,973)
-
94
2020
£
-
(1,011,531)
(1,011,531)
-
380
(881,879)
(1,011,151)
-
-
(881,879)
(1,011,151)
(881,879)
-
(881,879)
(0.04)
(0.04)
(1,011,151)
-
(1,011,151)
(0.05)
(0.05)
The notes form part of these financial statements
Page 28
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 2021
Notes
2021
£
2020
£
LOSS FOR THE YEAR
(881,879)
(1,011,151)
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
(130,361)
(154,070)
-
-
OTHER COMPREHENSIVE LOSS FOR THE YEAR,
NET OF INCOME TAX
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
Total comprehensive income/(loss) attributable to:
Owners of the parent
Non-controlling interests
(130,361)
(154,070)
(1,012,240)
(1,165,221)
(1,012,240)
-
(1,012,240)
(1,165,221)
-
(1,165,221)
The notes form part of these financial statements
Page 29
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2021
Notes
9
10
12
13
14
15
16
16
16
16
17
18
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
Borrowings
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
2021
£
5,403,066
5,856
369,390
5,778,312
50,108
872,000
922,108
6,700,420
2020
£
5,256,313
8,288
365,949
5,630,550
32,520
1,554,424
1,586,944
7,217,494
2,650,325
17,853,012
(816,666)
66,733
(13,223,305)
2,146,862
16,908,975
(686,305)
180,229
(12,454,922)
6,530,099
6,094,839
170,321
-
170,321
6,700,420
322,655
800,000
1,122,655
7,217,494
The financial statements were approved and authorised for issue by the Board of Directors on 23 June
2022 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)
COMPANY STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2021
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
Borrowings
TOTAL LIABILITIES
Notes
9
10
11
12
13
14
15
16
16
16
17
18
2021
£
3,978,851
479
3,703,047
1,985,987
9,668,364
230,070
850,442
1,080,512
2020
£
3,978,851
684
3,703,047
1,640,353
9,322,935
199,691
1,535,665
1,735,356
10,748,876
11,058,291
2,650,325
17,853,012
66,733
(10,730,957)
2,146,862
16,908,975
180,229
(10,049,674)
9,839,113
9,186,392
909,763
-
909,763
1,071,899
800,000
1,871,899
TOTAL EQUITY AND LIABILITIES
10,748,876
11,058,291
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
£794,779 (2020 – loss of £1,050,840).
The financial statements were approved and authorised for issue by the Board of Directors on 23 June
2022 and were signed on its behalf by:
.................................................................
Mark W Steed - Chairman
The notes form part of these financial statements
Page 31
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Called up
share
capital
£
1,759,751
Retained
earnings
Share
premium
£
(11,512,373)
£
15,512,025
Translation
reserve
£
(532,235)
Share
Scheme
reserve
Total
Non-
controlling
interests
Total
equity
Balance at 1 January 2020
Loss for the year
Other comprehensive income
Exchange difference on consolidation
Total comprehensive loss
Transactions with owners
Issue of share capital
Share warrants exercised
Share warrants granted
-
-
-
(1,011,151)
-
(1,011,151)
-
-
-
-
(154,070)
(154,070)
387,111
-
-
-
68,602
-
1,396,950
-
-
£
190,653
£
5,417,821
£
-
-
-
-
(68,602)
58,178
(1,011,151)
(154,070)
(1,165,221)
1,784,061
-
58,178
(10,424)
1,842,239
-
-
-
-
Total transactions with owners
387,111
68,602
1,396,950
Balance at 31 December 2020
2,146,862
(12,454,922)
16,908,975
(686,305)
180,229
6,094,839
Loss for the year
Other comprehensive income
Exchange difference on consolidation
Total comprehensive loss
Transactions with owners
Issue of share capital
Share warrants exercised/lapsed
-
-
-
(881,879)
-
-
-
-
(130,361)
(881,879)
-
(130,361)
-
-
-
(881,879)
(130,361)
(1,012,240)
503,463
-
-
113,496
944,037
-
-
-
-
(113,496)
1,447,500
-
Total transactions with owners
503,463
(768,383)
944,037
(130,361)
(113,496)
435,260
Balance at 31 December 2021
2,650,325
(13,223,305)
17,853,012
(816,666)
66,733
6,530,099
The notes form part of these financial statements
Page 32
£
5,417,821
(1,011,151)
(154,070)
(1,165,221)
1,784,061
-
58,178
1,842,239
6,094,839
(881,879)
(130,361)
(1,012,240)
1,447,500
-
435,260
6,530,099
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Called up
share
capital
£
Retained
earnings
£
Share
premium
£
Share
Scheme
reserve
£
Total
equity
£
Balance at 1 January 2020
1,759,751
(9,067,436)
15,512,025
190,653
8,394,993
Loss for the year
Total comprehensive loss
Transactions with owners
Issue of share capital
Share warrants exercised
Share warrants granted
-
-
(1,050,840)
(1,050,840)
-
-
-
-
(1,050,840)
(1,050,840)
387,111
-
-
-
68,602
-
1,396,950
-
-
-
(68,602)
58,178
1,784,061
-
58,178
Total transactions with owners
387,111
68,602
1,396,950
(10,424)
1,842,239
Balance at 31 December 2020
2,146,862
(10,049,674)
16,908,975
180,229
9,186,392
Loss for the year
Total comprehensive loss
Transactions with owners
Issue of share capital
Share warrants exercised
-
-
(794,779)
(794,779)
-
-
-
-
(794.779)
(794,779)
503,463
-
-
113,496
944,037
-
-
(113,496)
1,447,500
-
Total transactions with owners
503,463
(681,283)
944,037
(113,496)
652,721
Balance at 31 December 2021
2,650,325
(10,730,957)
17,853,012
66,733
9,839,113
The notes form part of these financial statements
Page 33
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
Cash flows from operating activities
Cash generated from operations
Interest paid
Notes
2021
£
2020
£
1
(1,043,308)
-
(807,883)
-
Net cash from operating activities
(1,043,308)
(807,883)
Cash flows from investing activities
Purchase of Australia exploration fixed assets
Purchase of Pakistan project fixed assets
Purchase of tangible fixed assets
Interest received
Net cash from investing activities
Cash flows from financing activities
Proceeds of share issue
Proceeds from borrowings
Net cash from financing activities
(190,599)
(94,317)
-
94
(129,740)
(90,030)
(2,513)
380
(284,822)
(221,903)
647,500
-
1,370,811
800,000
647,500
2,170,811
(Decrease) / Increase in cash and cash equivalents
(680,630)
1,141,025
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
Cash and cash equivalents at end of year
2
2
1,554,424
(1,794)
413,858
(459)
872,000
1,554,424
The notes form part of these financial statements
Page 34
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
Cash flows from operating activities
Cash generated from operations
Interest paid
Notes
2021
£
2020
£
1
(1,332,817)
(909,288)
Net cash from operating activities
(1,332,817)
(909,288)
Cash flows from investing activities
Purchase of Australia exploration fixed assets
Purchase of Pakistan project fixed assets
Interest received
Net cash from investing activities
Cash flows from financing activities
Proceeds of share issue
Proceeds from borrowings
Net cash from financing activities
-
-
94
94
(90,030)
(20,266)
380
(109,916)
647,500
-
1,370,811
800,000
647,500
2,170,811
(Decrease) / Increase in cash and cash equivalents
(685,223)
1,151,607
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
Cash and cash equivalents at end of year
2
2
1,535,665
-
384,058
-
850,442
1,535,665
The notes form part of these financial statements
Page 35
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
1.
RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM
OPERATIONS
Group
Loss before income tax
Depreciation charges
(Gain) / Loss on foreign exchange movement
Finance costs
Finance income
Taxes paid
Loss/(Profit) on disposal of tangible assets
(Increase) / Decrease in trade and other receivables
(Decrease) / Increase in trade and other payables
2021
£
(881,879)
1,942
(7,206)
-
(94)
46
-
2020
£
(1,011,151)
336
27,871
-
(380)
-
1,761
(887,191)
(981,563)
(45,174)
(110,943)
57,387
116,293
Cash generated from operations
(1,043,308)
(807,883)
Company
Loss before income tax
Depreciation charges
Impairment of loans
(Gain) / Loss on foreign exchange movement
Finance income
(Profit) / Loss on disposal of tangible assets
(Increase) / Decrease in trade and other receivables
(Decrease) / Increase in trade and other payables
Increase in loans to subsidiaries
2021
£
(794,779)
205
20,070
(7,242)
(17,058)
-
2020
£
(1,050,840)
336
71,652
30,258
(19,542)
1,761
(798,804)
(966,375)
(6,173)
(162,136)
(365,704)
86,210
89,703
(118,826)
Cash generated from operations
(1,332,817)
(909,288)
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 2021
Cash and cash equivalents
Year ended 31 December 2020
Cash and cash equivalents
Group
Company
31/12/21
£
872,000
31/12/20
£
1,554,424
1/1/21
£
1,554,424
1/1/20
£
413,858
31/12/21
£
850,442
31/12/20
£
1,535,665
1/1/21
£
1,535,665
1/1/20
£
384,058
Page 36
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
3.
RECONCILIATION OF CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
Group
Balance at 1 January 2020
Trade and
other
payables
£
173,835
Borrowings
£
-
Total
£
173,835
Cash flows
148,820
800,000
948,820
Balance at 31 December 2020
322,655
800,000
1,122,655
Cash flows
(152,334)
-
(152,334)
Non-cash changes
Issue of share capital
-
(800,000)
(800,000)
Balance at 31 December 2021
170,321
-
170,321
Company
Balance at 1 January 2020
Trade and
other
payables
£
112,480
Amounts
owed to
group
undertakings
£
804,516 916,996
Total
£
Borrowings
£
-
Cash flows
154,703
800,000
200 954,903
Balance at 31 December 2020
267,183
800,000
804,716 1,871,899
Cash flows
(162,036)
-
(100) (162,136)
Non-cash changes
Issue of share capital
-
(800,000)
- (800,000)
Balance at 31 December 2021
105,147
-
804,616 909,763
Page 37
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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 Group also has two gold prospects in Western Australia and a green
hydrogen project 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
During the year under review, the Group experienced net cash outflows from operating activities which
it financed from existing cash resources held at the start of the year and cash received from the issue
of new equity share capital. The Directors have considered the cash flow requirements of the Group
over the next 12 months and believe that additional funding will be required to meet the Group’s cash
requirements over that period. This additional cash requirement creates a material uncertainty that may
cast significant doubt on the Company’s ability to continue as a going concern. However, the Directors
expect to be able to meet the funding requirements for the Group to continue as a going concern for at
least 12 months from the date of the approval of these financial statements, and consequently, the
Directors consider it appropriate to adopt the going concern basis in the preparation of the financial
statements.
Compliance with accounting standards
These financial statements have been prepared in accordance with UK adopted International Financial
Reporting Standards and IFRIC interpretations and with those parts of the Companies Act 2006
applicable to reporting groups under IFRS.
The financial statements have been prepared under the historical cost convention.
Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the amounts reported for revenues and expenses during the year and the
amounts reported for assets and liabilities at the statement of financial position date. However, the
nature of estimation means that the actual outcomes could differ from those estimates.
The key sources of estimation uncertainty that have a significant risk of causing material adjustment to
the carrying amounts of assets and liabilities within the next financial year are the measurement of any
impairment on intangible assets and the estimation of share-based payment costs.
The 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. For this test, the board considered market values of the assets (where applicable); results
from technical and feasibility studies and reports; and the possibility of future project options available.
Based on this, the board have 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 £5,403,066.
Page 38
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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 – Australia 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 gold 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.
Australia exploration costs are carried at cost less any provision for impairment.
Intangible fixed assets – Pakistan project costs
Expenditure on the Pakistan project to achieve final project approval prior to the start of mine operations
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
An annual impairment review is carried out by the Directors to consider whether the project costs have
suffered impairment in value where the commercial outlook for the project is assessed to have
deteriorated. Pakistan project 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 39
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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 40
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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 2021
The following new and revised Standards and Interpretations have been adopted in these financial
statements but their adoption has not had any significant impact on the amounts reported in these
financial statements:
- IAS 37 Provisions, Contingent Liabilities and Contingent Assets (amended 2020)
- IFRS 9 Financial Instruments (amended August 2020)
- IFRS 7 Financial Instruments: Disclosures (amended 2020)
- IFRS 16 Leases (amended August 2020)
The other new and revised Standards and Interpretations are not considered to be relevant to the
Company's financial reporting and operations and are not detailed in these financial statements.
New Standards, Interpretations and Amendments that are not yet effective and have not been
adopted early
The following new and revised Standards and Interpretations are relevant to the Company but not yet
effective for the year commencing 1 January 2022 and have not been applied in preparing these
financial statements:
- IFRS 3 Business Combinations (amended 2021)
- IAS 1 Presentation of Financial (amended 2021)
- IAS 37 Provisions, contingent liabilities and contingent assets (amended 2021)
- Property, plant and equipment (amended 2021)
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
Based on risks and returns, the Directors consider that the primary business reporting format is by
business segment which are currently 1) 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;
and 2) an investment in Western Australia for the exploration and future extraction of gold. The
segments are not yet revenue generating and the primary financial reporting metrics are the value of
intangible assets relating to the projects and total spend to date.
Group intangible non-current assets of £4,593,369 (2020: £4,629,855) are attributable to the project in
Pakistan. The remaining Group intangible non-current assets of £809,697 (2020: £626,458) relate to
an investment in Western Australia for the exploration and future extraction of gold.
To-date the Group has raised a total £22m and spent £17.9m on Thar Block VI and £0.8m on the
Western Australia gold project.
Page 41
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
4.
EMPLOYEES AND DIRECTORS
Wages and salaries
Social security costs
Pension contributions to money purchase schemes
2021
£
2020
£
296,467 326,270
-
2,475
714
3,673
The average monthly number of employees of the Company during the year was as follows:
300,854 328,745
Directors
Administration and production
Directors
Directors' remuneration
Company contributions to Directors’ pension money purchase schemes
2021
2020
4
3
7
4
4
8
2021
£
2020
£
233,350 327,255
2,475
1,763
The number of Directors to whom retirement benefits were accruing was as follows:
Money purchase schemes
The number of Directors who exercised share options was as follows:
2
2
1
-
Information regarding the highest paid director is as follows:
Remuneration
150,000 212,500
The highest paid director exercised 24,000,000 share options during the year (2020: nil).
Details of remuneration for each Director are included in the Report of the Directors.
5.
NET FINANCE INCOME
Finance income:
Deposit account interest
Finance costs:
Loan interest
Net finance income
2021
£
2020
£
94
380
-
-
94
380
Page 42
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
6.
LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging/(crediting):
Depreciation - owned assets
Auditors' remuneration
Foreign exchange differences
2021
£
1,942
19,979
(3,737)
2020
£
2,116
22,550
27,871
The depreciation charges shown above include £1,737 (2020: £1,779) 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 2021 nor for the year ended
31 December 2020.
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
2021
£
2020
£
(881,879)
(1,011,151)
Loss multiplied by the standard rate of corporation tax in the UK of
19% (2020 - 19%)
(167,557)
(192,119)
Effects of:
Foreign losses of subsidiaries
Inter company items eliminated
Disallowed expenses
Potential deferred taxation on losses for year
Tax expense
17,139
3,223
39
147,156
2,909
3,641
13,826
171,743
-
-
The Group and Company has estimated UK excess management charges of £10,484,116 (2020:
£9,592,519) to carry forward against future income. The overseas subsidiaries have losses of £186,233
(2020: £122,539) which will be carried forward to offset future profits. There is no charge for foreign
taxation for the year (2020: nil).
Page 43
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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 654,728,717
(2020: 729,890,563). No adjustment is made where the effect would be to dilute the loss attributable to
the ordinary shareholders.
Reconciliations are set out below.
Earnings
£
Per-share
amount
pence
2021
Weighted
average
number of
shares
Basic EPS
Earnings attributable to ordinary shareholders
Effect of dilutive securities -
(881,879) 2,257,793,111
-
Diluted EPS
Adjusted earnings (881,879) 2,257,793,111
Earnings
£
2020
Weighted
average
number of
shares
Basic EPS
Earnings attributable to ordinary shareholders
Effect of dilutive securities -
(1,011,151) 1,954,623,146
-
Diluted EPS
Adjusted earnings (1,011,151) 1,954,623,146
There is no difference between the basic and diluted loss per share.
(0.04)
-
(0.04)
Per-share
amount
pence
(0.05)
-
(0.05)
Page 44
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
9.
INTANGIBLE ASSETS
Group
COST
At January 2021 as restated
Additions
Exchange differences
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
COST
At 1 January 2020 as previously stated
Prior period adjustment
At 1 January 2020 as restated
Additions
Exchange differences
Australia
Exploration
Costs
£
626,458
186,919
(3,680)
Pakistan
Project
Costs
£
4,629,855
97,762
(134,248)
Total
£
5,256,313
284,681
(137,928)
809,697
4,593,369
5,403,066
809,697
4,593,369
5,403,066
Australia
Exploration
Costs
£
4,633,022
(4,633,022)
-
626,458
-
Pakistan
Project
Costs
£
-
4,633,022
4,633,022
147,311
(150,478)
Total
£
4,633,022
-
4,633,022
773,769
(150,478)
At 31 December 2020 as restated
626,458
4,629,855
5,256,313
NET BOOK VALUE
At 31 December 2020 as restated
626,458
4,629,855
5,256,313
In the 2021 financial year, the Directors reviewed intangible assets and have renamed the existing
single category of Exploration costs as Australia Exploration Costs and created an additional class of
Pakistan Project Costs. A prior period adjustment was made to reclassify the opening intangible assets
at 1 January 2020 as Pakistan Project Costs in accordance with the updated accounting policy.
The Group’s Australia Exploration costs of £809,697 and Pakistan Project Costs of £4,569,369 are
currently being carried forward at cost in the financial statements. The Group will need to raise funds to
reach financial close on both projects. Also, financial close involves the raising of finance, both debt
and equity for the opening up of the mines and the construction of the power plant. If the Group is
unable to raise this finance, some of the assets may require impairment.
Page 45
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
9.
INTANGIBLE ASSETS - continued
Company
COST
At January 2021 as restated
Additions
Australia
Exploration
Costs
£
Pakistan
Project
Costs
£
626,458
186,919
4,629,855
97,762
Total
£
5,256,313
284,681
At 31 December 2021
809,697
4,593,369
5,403,066
NET BOOK VALUE
At 31 December 2021
809,697
4,593,369
5,403,066
COST
At 1 January 2020 as previously stated
Prior period adjustment
At 1 January 2020 as restated
Additions
Australia
Exploration
Costs
£
3,332,126
(3,332,126)
-
626,458
Pakistan
Project
Costs
£
-
3,332,126
3,332,126
20,267
Total
£
3,332,126
-
3,332,126
646,725
At 31 December 2020 as restated
626,458
3,352,393
3,978,851
Page 46
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
10.
PROPERTY, PLANT AND EQUIPMENT
Group
COST
At 1 January 2021
Additions
Disposals
Exchange differences
At 31 December 2021
DEPRECIATION
At 1 January 2021
Charge for year
Depreciation on disposal
Exchange differences
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
Group
COST
At 1 January 2020
Additions
Disposals
Exchange differences
At 31 December 2020
DEPRECIATION
At 1 January 2020
Charge for year
Depreciation on disposal
Exchange differences
At 31 December 2020
NET BOOK VALUE
At 31 December 2020
Motor
vehicles
£
Computer
equipment
£
16,165
-
-
(1,288)
4,763
-
-
(258)
Total
£
20,928
-
-
(1,546)
14,877
4,505
19,382
10,958
1,027
-
(943)
1,682
915
-
(113)
12,640
1,942
-
(1,056)
11,042
2,484
13,526
3,835
2,021
5,856
Fixtures and
fittings
£
Motor
vehicles
£
Computer
equipment
£
1,385
-
(1,385)
-
17,378
-
-
(1,213)
5,719
2,882
(3,615)
(223)
Total
£
24,482
2,882
(5,000)
(1,436)
-
16,165
4,763
20,928
721
-
(721)
-
10,379
1,391
-
(812)
3,537
725
(2,518)
(62)
14,637
2,116
(3,239)
(874)
-
10,958
1,682
12,640
-
5,207
3,081
8,288
Page 47
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
10.
PROPERTY, PLANT AND EQUIPMENT - continued
Company
COST
At 1 January 2021
Additions
At 31 December 2021
DEPRECIATION
At 1 January 2021
Charge for year
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
Company
COST
At 1 January 2020
Additions
Disposals
At 31 December 2020
DEPRECIATION
At 1 January 2020
Charge for year
Depreciation on disposal
At 31 December 2020
NET BOOK VALUE
At 31 December 2020
Computer
equipment
£
Total
£
1,524
-
1,524
-
1,524
1,524
840
205
840
205
1,045
1,045
479
479
Fixtures and
fittings
£
Computer
equipment
£
1,385
-
(1,385)
5,139
-
(3,615)
Total
£
6,524
-
(5,000)
-
1,524
1,524
721
-
(721)
3,021
337
(2,518)
3,742
337
(3,239)
-
-
840
840
684
684
Page 48
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
11.
INVESTMENTS
Company
COST
At 1 January 2021 and 31 December 2021
NET BOOK VALUE
At 1 January 2021 and 31 December 2021
Company
COST
At 1 January 2020
Additions
At 31 December 2020
NET BOOK VALUE
At 31 December 2020
Shares in
group
undertakings
£
3,703,047
3,703,047
Shares in
group
undertakings
£
3,702,847
200
3,703,047
3,703,047
Page 49
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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
%
holding
100.00 (2020: 100.00)
2021
£
617,279
2020
£
617,279
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 (2020: £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 (2020: 100.00)
2021
£
804,516
2020
£
804,516
Revive Financial Limited (“Revive”)was incorporated on 8 October 2013 but has not yet commenced
trading and has no profit or loss for the year (2020: Nil).
Revive was acquired under the terms of a share exchange agreement whereby shares in Oracle were
allotted to the shareholders of Revive in exchange for their shareholdings in Revive. Revive became a
subsidiary of Oracle upon the completion of the share exchange on 18 October 2013.
Following the share for share exchange, Revive made a loan of £804,516 to Oracle. The loan of
£804,516 (2020: £804,516) which remains outstanding is interest free and is repayable within 30 days
of giving written notice of demand for repayment. Post year end, Revive forgave its loan to Oracle and
was voluntarily dissolved on 26 April 2022.
The investment in share capital for the 100% holding amounted to £804,516.
Page 50
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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 (2020: 100.00)
2021
£
(90,174)
(5,276)
2020
£
(16,586)
(6,999)
The subsidiary company was incorporated in Pakistan on 17 June 2015 for the future generation of
electricity in Pakistan. Oracle 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.
Company
Oracle Gold Limited
Registered office: Tennyson House, Cambridge Business Park, Cambridge, England, CB4 0WZ
Nature of business: Administration and financial support
Class of shares:
Ordinary shares of £1 each
Aggregate capital and reserves
Loss for the year
%
holding
100.00 (2020: 100.00)
2021
£
100
-
2020
£
100
-
The subsidiary company was incorporated on 29 October 2020 but has not yet commenced trading and
has no profit or loss for the year (2020: Nil).
The investment in share capital for the 100% holding amounted to £100.
The Company has guaranteed all outstanding liabilities of the subsidiary company as at 31 December
2021, this provides the subsidiary company with an exemption from audit under Section 479C of the
Companies Act 2006.
Page 51
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
11.
INVESTMENTS - continued
Company
Oracle Gold Resources Limited
Registered office: Tennyson House, Cambridge Business Park, Cambridge, England, CB4 0WZ
Nature of business: Administration and financial support
Class of shares:
Ordinary shares of £1 each
Aggregate capital and reserves
Loss for the year
%
holding
100.00 (2020: 100.00)
2021
£
100
-
2020
£
100
-
The subsidiary company was incorporated on 29 October 2020 but has not yet commenced trading and
has no profit or loss for the year (2020: Nil).
The investment in share capital for the 100% holding amounted to £100.
The Company has guaranteed all outstanding liabilities of the subsidiary company as at 31 December
2021, this provides the subsidiary company with an exemption from audit under Section 479C of the
Companies Act 2006.
Company
Oracle Gold Pty Limited
Registered office: Suite 23, 513 Hay Street, Subiaco, WA 6008
Nature of business: Gold exploration and mining
Class of shares:
Ordinary shares of AUD $1 each
Aggregate capital and reserves
Loss for the year
%
holding
100.00 (2020: 100.00)
2021
£
(84,779)
(78,167)
2020
£
(8,521)
(8,522)
The subsidiary company was incorporated in Australia on 16 November 2020 for the exploration and
future extraction of gold. On the same date, Oracle acquired licences to operate two gold projects in
Western Australia. These projects will be managed and operated by the company. The acquisition of
the projects was satisfied by a payment of £90,000 in cash by the parent company, Oracle and the
issue of 42,857,143 new ordinary shares of 0.1 pence and warrants to subscribe for further 42,857,143
Ordinary Shares in Oracle exercisable at a price of 1.1p.
The investment in share capital for the 100% holding amounted to £0.56.
Page 52
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
11.
INVESTMENTS - continued
Company
Oracle Energy Limited
Registered office: House No 91, Shahrah-E-Iran, Block 5 Clifton, Karachi, Saddar Town, Karachi South,
Sindh
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 (2020:nil)
2021
£
(6,309)
(6,309)
2020
£
-
-
The subsidiary company was incorporated in Pakistan on 19 November 2021 for the future generation
of power.
The investment in share capital for the 100% holding amounted to £4,192.
12.
LOANS AND OTHER FINANCIAL ASSETS
Group
Financial assets
2021
£
369,390
2020
£
365,949
The financial asset of £369,390 (2020: 365,949) 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 2023. This performance guarantee is secured by a deposit by Oracle
with the issuing bank.
Company
At 1 January 2021
New in year
Impairment
Exchange differences
At 31 December 2021
Loans to
group
undertakings
£
1,274,404
362,263
(20,070)
-
1,616,597
Page 53
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
12.
LOANS AND OTHER FINANCIAL ASSETS - continued
At 1 January 2020
New in year
Impairment
Exchange differences
At 31 December 2020
Other financial assets were as follows:
Company
Financial assets
Loans to
group
undertakings
£
1,210,552
137,891
(71,651)
(2,388)
1,274,404
2021
£
369,390
2020
£
365,949
In addition to the items disclosed for the Group, during the period Oracle Power PLC made loans to its
subsidiaries totalling £65 (2020: £nil) to Sindh Carbon Energy Limited, £111,049 (2020: £137,891) to
Thar Electricity (Private) Limited and £251,249 (2020: £nil) to Oracle Gold Pty Limited.
The amounts outstanding at the statement of financial position date were £1,078,588 (2020:
£1,078,523) due from Sindh Carbon Energy Limited, £378,581 (2020: £267,532) due from Thar
Electricity (Private) Limited, of which £31,457 is denoted in USD of $42,980 and £251,249 (2020: £nil)
due from Oracle Gold Pty Limited. 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. The loans were reviewed for impairment and an impairment charge of £20,070 (2020:
£71,651) was recognised in the year.
13.
TRADE AND OTHER RECEIVABLES
Current:
Other receivables
VAT
Prepayments and accrued income
14. CASH AND CASH EQUIVALENTS
Bank deposit account
Bank accounts
Group
2021
£
2020
£
Company
2021
£
2020
£
985
20,264
28,859
1,346
12,246
18,928
187,879 170,904
11,394
17,393
15,960
26,231
50,108
32,520
230,070 199,691
Group
2021
£
2020
£
Company
2021
£
2020
£
837,621 1,515,144
39,280
34,379
837,621 1,515,144
20,521
12,821
872,000 1,554,424
850,442 1,535,665
Page 54
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – continued
FOR THE YEAR ENDED 31 DECEMBER 2021
15. CALLED UP SHARE CAPITAL
Allotted, issued and fully paid
2,650,325,712 (2020: 2,146,862,217) Ordinary shares of 0.1p each
2,650,325
2,146,862
The shares issued during the year were as follows:
Number of
Date issued
shares allotted
Class of shares
allotted
Nominal value
of each share
Amount paid (including share
premium) on each share
2021
£
2020
£
12 January 2021
Ordinary
22 February 2021 Ordinary
16 April 2021
Ordinary
Ordinary
19 August 2021
8 September 2021 Ordinary
23 September 2021 Ordinary
Ordinary
12 October 2021
Ordinary
26 October 2021
29 November 2021 Ordinary
13 December 2021 Ordinary
23 December 2021 Ordinary
21,820,720
6,000,000
20,838,542
30,242,545
31,281,281
34,581,733
36,513,674
69,185,000
200,000,000
9,000,000
44,000,000
0.1p
0.1p
0.1p
0.1p
0.1p
0.1p
0.1p
0.1p
0.1p
0.1p
0.1p
The number of shares in issue are as follows:
0.46p
0.25p
0.48p
0.33p
0.32p
0.29p
0.27p
0.25p
0.25p
0.25p
0.25p
At 1 January
Issued during the year
At 31 December
2021
No.
2020
No.
2,146,862,217 1,759,750,959
503,463,495 387,111,258
2,650,325,712 2,146,862,217
At 31 December 2021 the total warrants in issue were 298,739,495 (2020: 832,467,835) comprising
warrants issued to brokers and investors.
Page 55
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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
Other payables
Accruals and deferred income
Group
2021
£
2020
£
Company
2021
£
2020
£
92,182 126,621
-
420
71,001 195,614
-
7,138
62,050 101,463
804,616 804,716
-
36,346 165,720
6,751
170,321 322,655
909,763 1,071,899
Page 56
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
18. BORROWINGS
Current:
Other loans
Group
2021
£
2020
£
Company
2021
£
2020
£
- 800,000
- 800,000
- 800,000
- 800,000
In the prior year, the Company entered into a financing facility comprising a share subscription deed for
new ordinary shares of 0.1 pence each in the Company. Investment under the Subscription Deed was
made by way of prepayment for new ordinary shares to be issued. The amounts outstanding in the prior
year comprised of amounts invested not yet settled by new ordinary share issue. During the year the
outstanding loan amount was settled by issue of new ordinary shares, as such, the loan amount at the
year end was nil.
19.
LEASING AGREEMENTS
Expense and net cash outflow incurred under leasing agreements:
Group
Short term leases
Low value assets
Company
Short term leases
Low value assets
2021
£
14,281
3,665
2020
£
18,638
1,345
17,946
19,983
2021
£
13,688
3,665
2020
£
18,171
1,345
17,353
19,516
Page 57
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
20.
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
Borrowings
2021
£
2020
£
872,000
-
369,390
1,554,424
1,346
365,949
99,320
-
127,041
800,000
The main purpose of these financial instruments is to finance the Group's operations. The Board
regularly reviews and agrees policies for managing the level of risk arising from the Group's financial
instruments as summarised below.
a) Market Risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates,
interest rates and equity prices will affect the Group's income or value of its holdings in financial
instruments.
i) Foreign Exchange Risk
The Group operates internationally and is exposed to foreign exchange risk arising from currency
exposures. The Group is exposed to currency risk on cash and cash equivalents, loans, receivables
and payables that are denominated in currencies other than sterling which is the functional currency of
the Group.
The Group's net exposure to foreign currency risk at the reporting date is as follows:
2021
£
2020
£
Pakistan Rupees
US Dollars
Australian Dollars
(18,609)
369,390
(20,555)
(24,459)
365,949
(8,520)
330,226
332,970
Page 58
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
20.
FINANCIAL RISK MANAGEMENT - continued
Sensitivity analysis
The sensitivity analysis has been undertaken using an assumption of a 10 percent movement on the
exchange rates. A 10 percent strengthening of sterling against the Pakistan Rupee, US Dollar and
Australian Dollar at 31 December 2021 would have increased/(decreased) equity and profit and loss by
the amounts shown below:
Pakistan Rupees
US Dollars
Australian Dollars
Equity
2021
£
Profit and loss
2020
£
2021
£
2020
£
1,692
(33,581)
539
2,223
(33,268)
775
-
(33,581)
-
-
(33,268)
-
A 10 percent weakening of sterling against the Pakistan Rupee, US Dollar or Australian Dollar at
31 December 2021 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 interest bearing accounts and have earned interest income of £94 in the year. Given
the level of interest income earned in the year, interest rate risk is not considered to be material to the
Group.
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. At year end the Group held £872,000 (2020: £1,554,424)
cash and cash equivalents; £369,390 (2020: £365,949) other financial assets held with financial
institutions; and £20,264 (2020: £12,246) taxation receivable. The Group’s financial assets are
considered to be of a high credit rating.
At year end, the Company held £850,442 (2020: £1,535,665) cash and cash equivalents; £369,390
(2020: £365,949) other financial assets held with financial institutions; and £15,959 (2020: £11,394).
These financial assets are considered to be of a high credit rating.
The Company has made unsecured loans to its subsidiaries of £1,078,588 (2020: £1,078,523) to Sindh
Carbon Energy Limited, £383,151 (2020: £267,532) to Thar Electricity (Private) Limited and £251,149
(2020: £nil) to Oracle Gold Pty 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. The
Company considers the loans are of a lower credit rating. The loans were assessed for impairment and
an impairment charge of £20,070 (2020: £71,651) was recognised in the year.
Page 59
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
20.
FINANCIAL RISK MANAGEMENT - continued
b) Credit Risk – continued
The Company assessed impairment by considering a range of future interest rates between 1% and
1.75%, and potential periods until the loans are able to be repaid between 1 and 10 years. The Directors
considered the most likely scenario was an interest rate of 1.1% and a 5-year repayment period which
were the same assumptions in 2020. The movement in the impairment provision in the year was an
increase of £20,070 from £71,651 in 2020 to £91,721 in 2021. The reason for the increase in the
provision was due to the increase in size of the loans.
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
2021
£
2020
£
99,320
126,621
99,320
126,621
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.
21. CONTINGENT LIABILITIES
On 3 February 2015, a performance guarantee for US$500,000 was issued in favour of Director
General, Coal Mines Development Department to cover company obligations under the mining lease.
The guarantee 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 2023. This
performance guarantee is secured by a deposit by Oracle Power PLC with the issuing bank.
Page 60
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
22. RELATED PARTY DISCLOSURES
During the year, Oracle Power PLC accrued interest of £11,998 (2020: £16,477) in respect of loans
totalling £1,078,588 (2020: £1,078,523) made to Sindh Carbon Energy Limited, £3,667 (2020: £2,557)
in respect of loans totalling £378,581 (2020: £267,532) made to Thar Electricity (Private) Limited and
£1,298 (2020: £nil) in respect of loans totalling £251,249 (2020: £nil) made to Oracle Gold Pty Limited.
At the Statement of Financial Position date, the total interest outstanding amounted to £176,263 (2020:
£164,261) for Sindh Carbon Energy Limited, £10,317 (2020: £6,643) for Thar Electricity (Private)
Limited and £1,298 (2020: £nil) for Oracle Gold Pty Limited. The loans due from Sindh Carbon Energy
Limited, Thar Electricity (Private) Limited and Oracle Gold Pty Limited were reviewed for impairment
and an impairment charge of £20,070 (2020: £71,651) was recognised in the year. Total impairment
charge to date amounts to £91,722 (2020: £71,651).
Oracle Power PLC owes £804,516 (2020: £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. Post year end, Revive Financial Limited forgave its loan to Oracle and was
voluntarily dissolved on 26 April 2022.
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 N Memon (Chief Executive Officer)
Mr A Migge (Non-Executive Director)
Mr D Hutchins (Non-Executive Director)
Mr N Lee (Company Secretary)
The aggregate compensation made to key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Termination benefits
2021
£
291,749
4,387
-
2020
£
326,270
2,475
-
296,136
328,745
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.
23.
EVENTS AFTER THE REPORTING PERIOD
Since the reporting date, the Company has entered into the following reportable transactions.
On 22 January 2022, the $500,000 performance guarantee referred to in Note 21 was extended to 31
January 2023.
Page 61
ORACLE POWER PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2021
23.
EVENTS AFTER THE REPORTING PERIOD continued
On 24 January 2022, the Company entered into a non-binding Memorandum of Understanding ("the
MoU") with Sui Southern Gas Company Limited ("SSGC"), a publicly listed company on the Pakistan
Stock Exchange, which is majority-owned by the Government of Pakistan, relating to the joint
development of a synthetic natural gas (syngas) project utilising coal from Thar.
On 30 March 2022, the Company announced that it had entered into a joint venture with the Private
Office of His Highness Sheikh Ahmed Dalmook Al Maktoum (represented through Kaheel Energy FZE,
a wholly owned free zone company incorporated under the laws of Dubai, UAE ("Kaheel Energy")), with
the objective of advancing the Company's green hydrogen project in Pakistan.
On 1 April 2022, the Company announced that it had raised gross proceeds of £800,000 by way of a
placing of 246,153,846 new ordinary shares of 0.1p each in the Company. The net proceeds of the
Placing are expected to be primarily applied to support the advancement of the Company's green
hydrogen project through the joint venture with His Highness Sheikh Ahmed Dalmook Al Maktoum.
24.
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
21 February 2019
Number of
instruments
Contractual life
of warrants
5,882,352
3 years
The number and weighted average exercise prices of share warrants is as follows:
Weighted
average
exercise
price 2021
Weighted
average
exercise
price 2020
Number of
warrants 2021
Number of
warrants 2020
Outstanding at 1 January
Granted during the period
Expired during the period
Exercised during the period
0.92p
1.46p
0.25p
42,408,157
-
(22,525,805)
(14,000,000)
0.92p
42,408,157
-
-
-
Outstanding at 31 December
0.43p
5,882,352
0.92p
42,408,157
Exercisable at 31 December
0.43p
5,882,352
0.92p
42,408,157
The weighted average contractual life remaining at year end was 0.16 years (2020:1.22 years). The
outstanding warrants at year end were all exercisable at 0.43p (2020:0.25p-3p).
During the year 14,000,000 relevant share warrants were exercised (2020: nil) and 22,525,805 share
warrants expired during the year (2020: nil).
There is no expense for the year (2020: nil) for services received in respect of equity settled share-
based payment transactions.
Page 62