Registered number: 05867160
ORACLE POWER PLC
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
ORACLE POWER PLC
COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2022
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 D Hutchins
SECRETARY
Mr N Lee
REGISTERED OFFICE
Tennyson House
Cambridge Business Park
Cambridge CB4 0WZ
REGISTERED NUMBER
05876160 (England and Wales)
AUDITORS
Price Bailey LLP
Tennyson House
Cambridge Business Park
Cambridge CB4 0WZ
Pitcher Partners
Level 11/12-14 The Esplanade
Perth WA 6000, Australia
A. F. Ferguson & Co
Chartered Accountants
State Life Building 1-C
I. I. Chundrigar Road
Karachi Pakistan
NOMINATED ADVISOR AND BROKER
Strand Hanson Limited
REGISTRAR
26 Mount Row
London W1K 3SQ
Neville Registrars Limited
18 Laurel Lane, Halesowen
West Midlands B63 3DA
SOLICITORS
Charles Russell Speechlys LLP
Makhdoom & Co
5 Fleet Street
London EC4M 7RD
2nd Floor Imperial Building
Mt Khan Road, Karachi, Pakistan
BANKERS
Royal Bank of Scotland plc
Habib Bank AG Zurich
1st Floor, Conqueror House
Moorgate Branch,
Habib House,
42 Moorgate,
London EC2R 6JJ
Vision Park, Histon
Cambridge CB24 9NL
Habib Metropolitan Bank
Habib Bank Plaza,
I.I.Chundrigar Road,
Karachi-75650, Pakistan
Buchanan
107 Cheapside
London EC2V 6DN
PUBLIC RELATIONS
Page 1
ORACLE POWER PLC
CONTENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Chairman's Report
Chief Executive's Report
Group Strategic Report
Directors' Report
Remuneration Report
Governance Report
Directors' Responsibilities Statement
Independent Auditors' Report
Consolidated Statement of Profit or Loss
Consolidated Statement of Other Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Consolidated Financial Statements
Page
3 - 4
5 - 6
7 - 16
17 - 20
21 - 22
23 - 26
27
28 - 33
34
35
36
37
38 - 39
40 - 41
42
43
44 - 81
Page 2
ORACLE POWER PLC
CHAIRMAN'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
I am pleased to present the financial statements for Oracle Power PLC (“Oracle” or the “Company”) for the year
ended 31 December 2022.
In December 2022, Andreas Migge, one of our non-executive directors left the Company. It was then with
sadness that we learnt that he had died in February 2023. We would like to offer our condolences to his friends
and family.
The political tensions between the United States and China slowed down some progress in the development of
the mine and power project at Block VI in the Thar desert. However, during the course of the year the Company
continued to advance its initiatives for the development of Block VI. The Government of Pakistan established
demand for 1,320 MW of Thar coal-based power in 2027, allowing for potential development of the project.
Subsequently, post period we signed an agreement for potential offtake for 1,320 MW of coal generated power
as well as another agreement with PowerChina to develop, in parallel, a 1 GW solar farm at Thar.
During the year, we focused most of our attention on our Green Hydrogen project, which comprises the planned
construction of a 400MW plant producing 55,000 tonnes of green hydrogen per annum backed by 1,200MW of
hybrid solar/wind, green hydrogen/power plants.
This project is being developed through Oracle Energy Limited. This company is owned 70% by His Highness
Sheikh Ahmed Dalmook Al Maktoum through his wholly owned company Kaheel Energy FZE, and 30% by
Oracle Power Plc. Oracle will be primarily responsible for putting the project together and Kaheel Energy will use
its position and influence to facilitate market access and financing.
To that end, we have acquired a 7,000 acres site in the Thatta district in Southeast Pakistan. This lease for this
land has been granted to us by the Government of Sindh and is for an initial period of 30 years. This lease is
now fully paid for and registered to Oracle Energy Limited.
We have been issued with a Letter of Intent ("LOI") from the Directorate of Alternative Energy of the Government
of Sindh (the "Directorate of Alternative Energy"), relating to the establishment of a 1,200MW hybrid solar/wind,
green hydrogen/power project. In order to obtain formal approval of the LOI, we needed to provide a $600,000
performance guarantee bond which has now been put in place.
In addition to the above, we have an LOI from TUV SUD for the certification of the hydrogen output.
Thyssenkrupp Uhde is undertaking the various feasibility studies, and post period land and renewable power
studies have also been commenced.
In terms of our funding position, we raised £1,200,000 before expenses through two equity placings to finance
the development of the green hydrogen project.
The development of the green hydrogen project has advanced rapidly and it should not be long before the
project acheives bankability and Oracle can benefit from potential transactions with one or more energy or fuel
companies.
With regard to Western Australia, we decided not to carry out any more work on the Jundee East project as we
did not manage to find viable gold deposits. Post year end, we signed a "farm-in" agreement for the Northern
Zone with Riversgold Ltd, the details of which can be found in our RNS dated 9 May 2023. We will retain a
minority interest and be carried for the next phase of its development.
Operational highlights of 2022 are described in the Chief Executive’s Report.
The Pakistan Government remains supportive of both the development of the Thar coal project and the Green
Hydrogen project in Thatta. The broad parameters of security remain as last year: there have been no major
incidents and, overall, order has been maintained.
We are most grateful to the Pakistani Authorities, to the Chinese Authorities and the Joint Cooperation
Committee (JCC) of CPEC for their support.
Page 3
ORACLE POWER PLC
CHAIRMAN'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Above all, I wish to thank our shareholders for their continued confidence, patience and support, enabling us to
make progress on our projects.
Name Mark Steed
Chairman
Page 4
28 June 2023 ORACLE POWER PLC
CHIEF EXECUTIVE'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
I am pleased to present a report on the Company’s progress for the year ended 31 December 2022.
This year has been one of very notable progress for the Company. During the year, we focused on the
development of the Company’s significant Green Hydrogen (“GH”) project in Pakistan and also continued to
explore our Western Australia assets and develop our Thar asset. I am happy to say that we have made
significant progress, and I provide an overview below.
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 2022, the Government of Pakistan
published its annual Indicative Generation Capacity Expansion Plan (the “IGCEP”), a demand-supply policy
guidance chart for Pakistan and the demand for 1,320 MW of local coal fired power was stated as required in
2027. This inclusion which confirms demand for 1,320 MW coal-based power, allows for potential development
of the project, subject to financing and off-take. In 2022 Q4, and subsequent to the publication of the IGCEP, we
initiated dialogue with off takers other than the Government of Pakistan. We signed an MOU post period, for an
off-take with the largest private power utility, along with the Government of Sindh as a facilitator and potential
investor, preparing a pathway for the development of this important project.
Furthermore, following significant progress made in 2021 with respect to CTG/L, the Company signed an MOU
in January 2022, with Sui Southern Gas Company Limited (“SSGC”), the 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. I can also confirm that generally, Oracle
continued to receive encouragement and support from the Government of Pakistan for mobilisation of CTG/L
development, given Pakistan’s critical gas crisis.
In Western Australia, Oracle continued to conduct active exploration on both the tenements. We began an
extensive drilling programme at Jundee East (“JE”) in February 2022 which concluded in March 2022, covering
3830m in 54 holes. Subsequently complete geochemical analysis for downhole data was done to confirm gold
mineralisation which was then followed by geochemical analysis of surface data for lithium and rare earth
elements. The results obtained were not favourable and it was decided post period end not to undertake further
drilling at JE.
At the Company’s Northern Zone (“NZ”) project, 25 km from Kalgoorlie, the results from the maiden drill
programme targeting felsic intrusives porphyry bodies which had concluded in September 2021, were received in
January 2022. The results established a low grade but potentially large mineralisation across the tenement. The
Company carried out further metallurgical tests to confirm gold recovery rates. The results from these tests
which were received in June 2022, confirmed excellent gold recovery rate of up to 94.7%. The Company
proceeded to prepare a budget and plan for further drilling, opting for a diamond drilling programme to establish
a JORC resource at NZ. In parallel the Company also started dialogue with potential JV partners. A "farm-in"
agreement for NZ with an ASX listed company was entered into post period and work on NZ at minimum cost for
the Company is expected to commence post period.
In 2022, the Company accelerated the development of its GH project in the wind corridor in Thatta in Pakistan.
The project was launched in Q4 2021, and the Company has achieved major developmental milestones in 2022,
for the first GH project in Pakistan and one of the largest in the region. The Company set up a new company,
Oracle Energy Limited, for the development of the GH project in Pakistan in November 2021. In March 2022, the
Company signed a JV agreement between Oracle and Kaheel Energy, a company owned by HH Sheikh Ahmed
Dalmook Al Maktoum. The Company owns 30 percent of Oracle Energy with the balance owned by Kaheel
Energy. The Company has retained management and the project has made good progress. In May 2022, a pre-
feasibility study was completed by Power China International for 400 MW of GH production and 1.2 GW of hybrid
power generation. Oracle Energy was issued an LOI from the Government of Sindh for the production of 1.2 GW
of hybrid renewable power.
Page 5
ORACLE POWER PLC
CHIEF EXECUTIVE'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Subsequently, a lease for 7,000 acres (28.3 sq km) of land in the Gharo-Keti Wind Corridor was awarded to
Oracle Energy for the project. In November 2022, Oracle Energy commissioned Thyssenkrupp to undertake the
feasibility study for green hydrogen and green ammonia, endorsing faith in the project by introducing highly
reputable stakeholders. Results from this study are expected during the course of 2023. In parallel, Oracle
Energy forged a relationship with a highly credible certification company by signing an LOI with TUV SUD for
green hydrogen and green ammonia certification, across the entire production value chain. Post period end the
project has continued to move quickly. Land studies were commenced, and non-binding arrangements have
been initiated with potential off takers and investors.
In summary, the Company has strengthened its portfolio and undertaken significant development on all its
projects. We have achieved exceptional milestones especially for the GH project and concluded a joint
development agreement for one of our gold assets. We have also paved a way forward for potential
development of our Thar asset.
I remain grateful to all the relevant authorities in Pakistan and Western Australia for supporting our initiatives. I
am also thankful to the authorities in China for continuing to support projects in CPEC. I wish to also profoundly
thank the Company’s team in the UK, Pakistan and Australia, for their work and dedication. Above all I thank our
shareholders for their continued confidence, patience and support, enabling us to grow our company. The
Company remains committed to increasing shareholder value and to becoming a company of recognizable size
and repute.
Ms Naheed Memon,
Chief Executive Officer
Page 6
28 June 2023 ORACLE POWER PLC
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
INTRODUCTION
The Directors present their Strategic Report of the Company and the Group for the year ended 31 December
2022.
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 (WA); and the
development of a green hydrogen project in Pakistan.
The development work in Pakistan was primarily focused on acquiring land, arranging infrastructure and
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 high return projects and closing them out through commercially attractive joint venture or
sale transactions
BUSINESS REVIEW
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 2022 amounted to £1,289,658
(2021: £881,879).
The Chairman, in his Statement, and the Chief Executive Officer in her Report, have summarised the activities of
the Group during the financial year.
Page 7
ORACLE POWER PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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 8
to 16.
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.
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 15. 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;
Further development of the Company’s coal and power project in Pakistan; and
Commencement of the Company’s green hydrogen project in Pakistan.
Page 8
ORACLE POWER PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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 makes 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 9
ORACLE POWER PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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's projects 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
Medium
Low
Low/Medium
Low
Low
High
Medium
Low/Medium
Low
Medium
Low
Following the acquisition of the gold projects in Western Australia, the Company established adequate resource
estimates via exploratory work on both the tenements acquired. Similarly in Pakistan, the Company continues its
efforts to develop its coal to power plant given it has secured off take and potential equity partners including the
Government of Sindh, The Company also awaits appropriate 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
some risks related to obtaining viable tariffs for power and gas in order to maximise return. Economic risk,
however, including cost increases, is protected, through the Government of Pakistan’s cost-plus pricing
mechanism.
The Company has increased the potential of its Thar asset by seeking to develop a solar facility on the land at
Block VI Thar where it holds a lease. It has already conducted a preliminary study, obtained provisional consent
and secured a collaborative relationship with a large power company.
The Company has made significant progress on the green hydrogen project and continues to work on studies
and market access. The project faces risks in getting to production, price risk in relation to off take and cost of
production risk on account of supply and transport uncertainty. The Company has engaged experts for
technology and commercial support in order to further mitigate risks.
There remains political risk, on account of political uncertainty in Pakistan which may discourage investment.
However, Western Australia presents very limited political risk compared to Pakistan and so the development of
the projects there face commercial risk primarily.
The risks are detailed below, along with the key measures taken for mitigation.
Page 10
ORACLE POWER PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Financial Close Risk
Risk
In relation to the coal to power project, given that the
demand for coal to power has been established by the
government and off take was confirmed post period, the
principal risk is related to securing debt from banks and
Chinese Sinosure (China’s export financing plan). This
process can be delayed and banks and Chinese lenders
may only lend against export components.
In relation to the GH project, there may be delays in financial
close on account of the fact that commercial terms and a
market place for this commodity is under development.
Financiers will take exposure when contracts take a clearer
shape and long term prices are established in the near term.
Mitigation
The Company is assessing the most viable
development model and is working closely with
the CPEC planning bodies in Pakistan and in
China. If the Company receives positive support
for financing through CPEC, it can proceed to
enter into a binding shareholders or JV agreement
with the parties with who have signed the MOU for
off take and development.
Arbitrary withdrawal is considered by Oracle
unlikely, given the high profile commitments made
by China to CPEC. With respect to the GH project
we have initiated engagement with off takers for
long term contracts and are also in conversation
with multilaterals for financing in order to achieve
financial close in a timely fashion.
Project Completion Risk
Risk
Mitigation
The Block VI development plan in the first phase comprises
a power plant to be followed by CTG/L facilities in the future.
Delay in development could arise due to timely provision of
infrastructure by the government. Secondly the power plant
may fail tests and result in encashment of performance
guarantees.
In relation to WA gold exploration, there are risks associated
with drilling, topography conditions, and weather conditions.
In relation to the GH project there could be delays in
permitting, supply of electrolysers and delays in setting up
required storage and transport infrastructure.
The Company intends to engage well qualified
engineers and contractors for all its projects. In
the case of the coal power plant, neighboring
blocks have constructed and commissioned
power. The Company is in close contact with the
relevant Government authorities in relation to all
infrastructure requirements and continues
to
secure timely permissions for provision.
Page 11
ORACLE POWER PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Operating Risk
Risk
Technical issues, similar to those described under Project
Completion risk.
transmission
The availability of water,
infrastructure,
storage and transport are some issues which will be faced
by the project at Thar as well as the GH project. Although
the production of hydrogen is relatively risk free, the storage
and transportation of green hydrogen can present risks
associated with new technology.
Economic Risk
Risk
The economic performance of the Company could be
affected by movements in international markets. Exchange
rate volatility and interest rates increase will impact cost
during development and construction. Volatility
in
international energy prices, will introduce uncertainty in long
term prices and off take contracts. Change in the price of
gold and US$ inflation may also raise capital and operating
costs.
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 the end user.
Mitigation
to be constructed by
As with Project Completion Risk, the intention is
for projects
leading
contractors. The Company will take out the normal
suite of insurance policies and to the extent that
operational issues give rise to cost increases,
these should also be recoverable through pricing
mechanisms.
The Company is in the process of securing all
infrastructure provision commitments from the
Pakistan Government before commencement of
the project.
The Company has engaged the best engineering
company in the world for GH and will also
engage the best technology suppliers for storage
and transportation of green hydrogen.
Mitigation
Cost variances resulting from exchange rate
movements and US$ inflation should generally be
recoverable through pricing mechanisms. The
risks 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 and scarcity of energy in
Pakistan. The savings in foreign exchange to the
country of import substitution through local energy
production are clear, and the development of
power plants based on indigenous coal or use of
renewable power for the production of hydrogen
as fuel in Pakistan increases the country’s
security of energy supply and its balance of
payments
in export and
through
reduction in import.
Furthermore,
engage
contractors which have scale and cost advantage
to mitigate global shortages and transport costs.
the Company will
increase
Page 12
ORACLE POWER PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Financing Risk
Risk
The JV company set up for GH with HH Sheikh Ahmed
Dalmook Al Maktoum Private Office has brought in a very
well financed partner, and subsequently the MOU with the
world’s third largest company, State Grid, means that the
probability of achieving financial close is good, but there is
chance of delay based on the time it will take to secure off
take contracts and de risk project. Similarly, the farm-in
agreement to develop the Northern Zone gold project in WA,
with another listed entity, has introduced funding for further
exploration but the Company will need to invest further if it is
to maintain its share in the JV at a later stage.
The ability to secure financing for the coal to power project
depends on the support given by the Chinese government as
coal to power financing is not as readily available. The
Company will need to coordinate efforts with the planning
ministries in China and in Pakistan to mobilise debt.
Political, Legal, Regulatory and Fiscal Risks
Mitigation
For the GH project, partners and joint developers
sit in a place of immense influence and the
agreements signed divide responsibility of raising
equity and debt. In the case of the coal to power
plant,
the
the MOU signed also
Government of Sindh, which
increases the
possibility of Chinese support for debt.
The Company also plans to bring in first tier
lenders to attract finance from the market.
includes
Risk
Mitigation
The Government has demonstrated strong support for the
coal to power plant development. Risks could arise from a
reduction in domestic support and inability to provide the
required infrastructure. In the longer term, adverse changes
in the fiscal regime, lease terms, tax rates, availability of
foreign exchange to meet debt servicing and dividends,
would affect both the coal to power plant as well as the GH
project. Overall security conditions present a risk particularly
as operations by Chinese companies can be targeted if the
political conditions worsen.
The Government have expressed its continued
support for the development of indigenous coal
and Thar. The Company believes that the
shortage of base load power is likely to be clear
to any incoming government and support will be
forthcoming.
In relation to GH, there is already a strong
ongoing conversation and the government is
working on a national hydrogen strategy to
support the development of GH production
facilities. Pakistan has bilateral
Investment
Treaties with China and the UK in place, and
there is protection in every eventuality. The
Company will also consider whether political risk
insurance could be a cost effective mitigant.
Finally, Oracle has a strong working relationship
with all relevant levels of Government and will
use these relationships to address domestic
impediments. The Government has set up a
special
for
security in Thar and the location of the wind
corridor where GH is already very safe. Oracle
will be putting in place a comprehensive security
plan which
the
Government agencies at all project sites.
force with overall responsibility
complements
those of
Page 13
ORACLE POWER PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Environment & CSR
Risk
Energy projects of this nature have a major impact on the
impose significant corporate social
environment and
responsibility on a company. If environmental risks are not
properly addressed and corporate social responsibility
mismanaged either of these can give rise to severe
reputational damage and significant cost.
Mitigation
Oracle operates to international standards of
environmental and social impact management
and complies with the Pakistan Environmental
Protection legislation, which mirrors international
standards.
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.
and Social
The Environmental
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 work to ensure that
it works with other developers of Thar Coal, for
example Sindh Engro in Block II in joining the Thar
to coordinate welfare
Foundation, set up
initiatives.
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 14
ORACLE POWER PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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.
Page 15
ORACLE POWER PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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.
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
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.
Benefits and Opportunities include:
-
-
-
-
-
-
-
Improvements and extension of the existing government primary schools on all sites;
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.
-
This report was approved by the board on 28 June 2023 and signed on its behalf.
Mark Steed
Chairman
Page 16
ORACLE POWER PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors present their report and the financial statements for the year ended 31 December 2022.
RESULTS AND DIVIDENDS
The loss for the year, after taxation, amounted to £1,289,658 (2021 - loss £881,879).
No dividends will be distributed for the year ended 31 December 2022.
DIRECTORS
The directors who served during the year were:
Mark Wickham Steed, Non-executive Chairman
Naheed Memon, Chief Executive Officer
David James Hutchins, Independent Non-Executive Director
Andreas Migge Senior Independent Non-Executive Director (left on 13 December 2022)
The beneficial interests of the Directors, who held office during the year, in the Ordinary Shares of the Company
on 31 December 2022 were as follows:
Mr M Steed
Ms N Memon
Mr A Migge
Mr D Hutchins
The Directors held no share options during the year.
31 December
2022
1 January
2021
24,724,939
24,236,502
112,448,589 108,748,186
-
9,045,423
790,282
152,238
Page 17
ORACLE POWER PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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.
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.
Page 18
ORACLE POWER PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
FINANCIAL INSTRUMENTS
The Group's financial instruments comprise cash and cash equivalents, loan investments and financial assets
and various items such as trade receivables, trade payables, accruals and prepayments that arise directly from
its operations.
The main purpose of these financial instruments is to finance the Group's operations. The Board regularly
reviews and agrees policies for managing the level of risk arising from the Group's financial instruments which
are summarised as follows:
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group's policy throughout the year has been to ensure that it has adequate liquidity to meet its liabilities when
due by careful management of its working capital.
Credit Risk
The Group's principal financial assets are the cash and cash equivalents and taxation receivable as recognised
in the statement of financial position, and which represent the Group's maximum exposure to credit risk in
relation to financial assets.
Capital Management
The Company's capital consists wholly of ordinary shares. The Board's policy is to preserve a strong capital base
in order to maintain investor, creditor and market confidence and to safeguard the future development of the
business, whilst balancing these objectives with the efficient use of capital.
Market Risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates, interest
rates and equity prices will affect the Group's and Company's income or value of its holdings in financial
instruments.
GOING CONCERN
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 Company's
ordinary shares as at 27 June 2023:
His Highness Sheikh Ahmed Bin Dalmook Al Maktoum
Brandon Hill Capital
Barclays Bank plc
Naheed Memon
Shareholding
% of ISC
540,000,000
173,300,000
138,461,539
114,295,788
14.40
4.64
3.71
3.06
Page 19
ORACLE POWER PLC
DIRECTORS REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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: 28 June 2023
Page 20
ORACLE POWER PLC
REPORT ON REMUNERATION
FOR THE YEAR ENDED 31 DECEMBER 2022
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 2022 was as follows:
Executive
Ms N Memon
Non- Executive
Mr M W Steed
Mr A Migge
Mr D Hutchins
Mr G Lewis
2022
Salary and
fees
£
2022
2022
2021
Pensions
£
Total
£
Total
£
150,000
-
150,000
150,000
30,000
27,500
29,583
-
1,200
-
888
-
31,200
27,500
30,471
-
31,200
30,433
21,396
2,083
237,083
2,088
239,171
235,112
Mr G Lewis resigned on 21 December 2020, Mr A Migge left the Company on 13 December 2022.
Page 21
ORACLE POWER PLC
REPORT ON REMUNERATION (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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 D Hutchins
Date of
appointment
Notice period
7 January
2019
12 months
12 July 2017
3 March 2021
3 months
3 months
Performance Evaluation
The Board undertakes annually a formal evaluation of its performance and of its committees involving individual
Directors and Senior Managers.
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.
This report was approved by the board on 28 June 2023 and signed on its behalf.
Mark Steed
Chairman
Page 22
ORACLE POWER PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
During 2022 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
2022, the Board consisted of three Directors being the Chief Executive Officer, Ms N Memon, the Non-executive
Chairman, Mr M Steed, and Non-executive Director Mr D Hutchins. Details of their careers are given in the
Report of the Directors.
The Board has considered the independence of Mr Hutchins and considers him 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 seek to meets approximately every three months, however, more regular discussions
took place between directors during the period. Also, where necessary relevant matters were approved by the
Board electronically . 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.
Page 23
ORACLE POWER PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The meetings held in 2022 were as follows:
The Board
Nomination Committee
Remuneration Committee
Audit Committee
Tender Committee
Members (and
attendance
during period
of
appointment)
Number of
Meetings in
2022
4
0
1
2
1
All
n/a
All
All
All
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 comprised of Mr Migge as chairman up
to when he left the Company and Mr Steed. The Committee did not meet in 2022. 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 2022.
Remuneration Committee
The Remuneration Committee met once in 2022. 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 twice in 2022. 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 LLP 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. 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
Page 24
ORACLE POWER PLC
CORPORATE GOVERNANCE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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.
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 Hutchins as chairman. One meeting was held in 2022. 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
Page 25
ORACLE POWER PLC
CORPORATE GOVERNANCE REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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 Steed Chairman
Date: 28 June 2023
Page 26
ORACLE POWER PLC
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors are responsible for preparing the Group Strategic Report, Directors' Report and the consolidated
financial statements, in accordance with applicable law.
Company law requires the directors to prepare consolidated financial statements for each financial year. Under
that law they have elected to prepare the consolidated financial statements in accordance with International
Financial Reporting Standards (IFRS) as adopted by the UK.
Under company law the directors must not approve the consolidated financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit
or loss of the Group for that period. In preparing the consolidated financial statements, the directors are required
to:
select suitable accounting policies and then apply them consistently;
make judgments and estimates that are reasonable and prudent;
state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any
material departures disclosed and explained in the financial statements;
assess the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Group or the Company
or to cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of
the parent Company and enable them to ensure that the financial statements comply with the Companies Act
2006. They are responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to
prevent and detect 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 Steed Chairman
Date: 28 June 2023
Page 27
ORACLE POWER PLC
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORACLE POWER PLC
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 2022 which comprise the Consolidated Statement
of Profit or Loss, the Consolidated Statement of 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, , and Notes to the Financial
Statements, including 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 2022 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 and the parent Company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the United
Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Page 28
ORACLE POWER PLC
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORACLE POWER PLC (CONTINUED)
MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
We draw attention to Notes 2 and 11 in the financial statements, which explain that 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. As stated in Notes 2
and 11, this condition, along with other matters as set forth in Notes 2 and 11, 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.
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.
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
Page 29
ORACLE POWER PLC
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORACLE POWER PLC (CONTINUED)
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.
Key Audit Matter
Project feasibility and its impact on carrying value of
intangibles,
investments and
recoverability of intercompany loans
the valuation of
the
The group has substantial exploration assets on which
the success of the group is underpinned.
As explained in Notes 2 and 11 to the financial
there are
the assessment of whether
statements
indicators of impairment in relation to exploration assets
requires
judgement by
management.
the exercise of significant
Given the significant value of the exploration assets the
assessment of whether
indicators of
impairment and the results of the impairment reviews
represent a key audit matter for our audit.
there are
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. Indicators were identified for
the Jundee East project, which has been impaired in
full. No impairment indicators have been identified for
the Northern Zone and the directors have determined
that no impairment is required.
Additionally, the company has intercompany loans due
from Sindh Carbon Energy Limited, Thar Electricity
(Private) Limited, Oracle Gold Pty Limited, and Oracle
Energy 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 14.
Further, the carrying value of the investments are reliant
on the projects becoming successful and generating
revenues for the group.
The recoverability of
loans and
carrying value of investments are therefore also reliant
on the feasibility of the projects.
intercompany
the
How our scope addressed this matter
Review of management’s
for
Pakistan under IAS36, including the feasibility report
prepared by an expert, and the company’s plans for
financing and progressing the project.
impairment review
Review of management’s assessment of indicators of
impairment under IFRS6 in respect of the Australia
project, and the basis for the impairment of Jundee
East in line with the geologist reports indicating
insufficient potential gold levels in this tenement.
Review of the status and validity of the exploration
licences.
Challenge of the management’s assessment and
consideration of evidence provided including a review
of key partner contracts and plans to take the project
to financial close.
We evaluated the adequacy and appropriateness of
the disclosures provided within
financial
statements in Notes 2, 11 and 14.
the
Page 30
ORACLE POWER PLC
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORACLE POWER PLC (CONTINUED)
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 £313,000, with performance
materially of £156,000. We consider that net assets provides us with the most relevant performance measure to
stakeholders of the entity given the stage of the Group’s activity and growth.
We apply the concept of materiality both in the planning and performance of the audit, and in evaluating the
effects of misstatements.
During the course of the audit we reassessed materiality from planning to reflect the final reported performance
of the group. There was no change made to our planning materiality.
OTHER INFORMATION
The other information comprises the information included in the Annual Report, other than the financial
statements and our auditors' 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 Directors' Report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable
legal requirements.
Page 31
ORACLE POWER PLC
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORACLE POWER PLC (CONTINUED)
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 Directors' Report.
We have nothing to report in respect of the following matters in relation to which 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 on page 17 - 27, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and the parent
Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group or the
parent Company or to cease operations, or have no realistic alternative but to do so.
AUDITORS' 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 auditors' 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:
Page 32
ORACLE POWER PLC
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORACLE POWER PLC (CONTINUED)
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. We sent legal requests to the company’s lawyers to confirm if there were any legal matters which
we should be aware of, none were identified.
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.
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.
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
auditors' report.
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.
Adam Norman FCCA (Senior Statutory Auditor)
for and on behalf of
Price Bailey LLP
Tennyson House
Cambridge Business Park
Cambridge
CB4 0WZ
28 June 2023
Page 33
ORACLE POWER PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2022
CONTINUING OPERATIONS
Administrative expenses
LOSS FROM OPERATIONS
Finance income
Amounts written off and p/l on disposals
LOSS BEFORE TAX
Note
2022
£
2021
£
(1,311,012)
(881,973)
(1,311,012)
(881,973)
14,592
6,762
94
-
(1,289,658)
(881,879)
LOSS FOR THE YEAR
(1,289,658)
(881,879)
EARNINGS PER SHARE ATTRIBUTABLE TO THE ORDINARY EQUITY
HOLDERS OF THE PARENT
PROFIT OR LOSS
Basic
Diluted
The notes on pages 44 to 81 form part of these financial statements.
2022
Pence
2021
Pence
9
9
(0.04)
(0.04)
(0.04)
(0.04)
Page 34
ORACLE POWER PLC
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
LOSS FOR THE YEAR
2022
£
2021
£
(1,289,658)
(881,879)
ITEMS THAT WILL OR MAY BE RECLASSIFIED TO PROFIT OR
LOSS:
Exchange gains arising on translation on foreign operations
(178,459)
(130,361)
OTHER COMPREHENSIVE LOSS FOR THE YEAR, NET OF TAX
(178,459)
(130,361)
TOTAL COMPREHENSIVE LOSS
(1,468,117)
(1,012,240)
(178,459)
(130,361)
The notes on pages 44 to 81 form part of these financial statements.
Page 35
ORACLE POWER PLC
REGISTERED NUMBER: 05867160
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Investments in equity-accounted associates
Loans and other financial assets
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
NET ASSETS
ISSUED CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE PARENT
Share capital
Share premium reserve
Foreign exchange reserve
Share scheme reserve
Retained earnings
Note
2022
£
2021
£
10
11
13
14
15
25
3,885
5,856
5,023,296
5,403,066
668,782
580,079
-
369,390
6,276,042
5,778,312
45,069
150,905
50,108
872,000
195,974
922,108
6,472,016
6,700,420
18
203,034
170,321
203,034
170,321
203,034
170,321
6,268,982
6,530,099
16
3,078,297
2,650,325
18,632,040
17,853,012
(995,125)
58,179
(816,666)
66,733
(14,504,409)
(13,223,305)
6,268,982
6,530,099
TOTAL EQUITY
6,268,982
6,530,099
The financial statements were approved and authorised for issue by the board of directors on 28 June 2023 and were signed on its behalf
by:
Mark Steed
Chairman
The notes on pages 44 to 81 form part of these financial statements.
Page 36
ORACLE POWER PLC
REGISTERED NUMBER: 05867160
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Investments in equity-accounted associates
Investments
Loans and other financial assets
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
NON-CURRENT LIABILITIES
CURRENT LIABILITIES
Trade and other liabilities
TOTAL LIABILITIES
NET ASSETS
ISSUED CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE PARENT
Share capital
Share premium reserve
Share scheme reserve
Retained earnings
TOTAL EQUITY
Note
10
11
13
13
14
2022
£
2021
£
274
3,665,622
668,782
2,898,531
2,605,218
479
3,978,851
-
3,703,047
1,985,987
9,838,427
9,668,364
15
25
40,731
137,291
230,070
850,442
178,022
1,080,512
10,016,449
10,748,876
18
175,961
909,763
175,961
909,763
175,961
909,763
9,840,488
9,839,113
16
3,078,297
2,650,325
18,632,040
17,853,012
58,179
66,733
(11,928,028)
(10,730,957)
9,840,488
9,839,113
The Company's loss for the year was £1,205,625 (2021 - £794,779).
The financial statements were approved and authorised for issue by the board of directors on 28 June 2023 and were signed on its behalf
by:
Mark Steed
Chairman
The notes on pages 44 to 81 form part of these financial statements.
Page 37
ORACLE POWER PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Share
capital
£
Share
premium
£
Share
scheme
reserve
£
Foreign
exchange
reserve
£
Retained
earnings
£
Total
attributable
to equity
holders of
parent Total equity
£
£
AT 1 JANUARY 2022
2,650,325
17,853,012
66,733
(816,666)
(13,223,305)
6,530,099
6,530,099
COMPREHENSIVE INCOME FOR THE YEAR
Loss for the year
Other comprehensive income
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
CONTRIBUTIONS BY AND DISTRIBUTIONS TO OWNERS
Issue of share capital
Transfer to/from retained earnings
-
-
-
-
-
-
427,972
779,028
-
-
-
-
-
-
(8,554)
TOTAL CONTRIBUTIONS BY AND DISTRIBUTIONS TO
OWNERS
427,972
779,028
(8,554)
-
(1,289,658)
(1,289,658)
(1,289,658)
(178,459)
-
(178,459)
(178,459)
(178,459)
(1,289,658)
(1,468,117)
(1,468,117)
-
-
-
-
1,207,000
1,207,000
8,554
-
-
8,554
1,207,000
1,207,000
AT 31 DECEMBER 2022
3,078,297
18,632,040
58,179
(995,125)
(14,504,409)
6,268,982
6,268,982
The notes on pages 44 to 81 form part of these financial statements.
Page 38
ORACLE POWER PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Share
capital
£
Share
premium
£
Share
scheme
reserve
£
Foreign
exchange
reserve
£
Retained
earnings
£
Total
attributable
to equity
holders of
parent Total equity
£
£
AT 1 JANUARY 2021
2,146,862
16,908,975
180,229
(686,305)
(12,454,922)
6,094,839
6,094,839
COMPREHENSIVE INCOME FOR THE YEAR
Loss for the year
Other comprehensive income
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
CONTRIBUTIONS BY AND DISTRIBUTIONS TO OWNERS
Issue of share capital
Transfer to/from retained earnings
-
-
-
-
-
-
503,463
944,037
-
-
-
-
-
-
(113,496)
TOTAL CONTRIBUTIONS BY AND DISTRIBUTIONS TO
OWNERS
503,463
944,037
(113,496)
-
(881,879)
(130,361)
-
(881,879)
(130,361)
(881,879)
(130,361)
(130,361)
(881,879)
(1,012,240)
(1,012,240)
-
-
-
-
1,447,500
1,447,500
113,496
-
-
113,496
1,447,500
1,447,500
AT 31 DECEMBER 2021
2,650,325
17,853,012
66,733
(816,666)
(13,223,305)
6,530,099
6,530,099
The notes on pages 44 to 81 form part of these financial statements.
Page 39
ORACLE POWER PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Share
capital
£
Share
premium
£
Share
scheme
reserve
£
Retained
earnings Total equity
£
£
AT 1 JANUARY 2022
2,650,325
17,853,012
66,733
(10,730,957)
9,839,113
COMPREHENSIVE INCOME FOR
THE YEAR
Loss for the year
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
CONTRIBUTIONS BY AND
DISTRIBUTIONS TO OWNERS
Issue of share capital
Share warrants exercised
TOTAL CONTRIBUTIONS BY AND
DISTRIBUTIONS TO OWNERS
-
-
-
-
427,972
779,028
-
-
-
(1,205,625)
(1,205,625)
(1,205,625)
(1,205,625)
-
1,207,000
-
-
(8,554)
8,554
-
427,972
779,028
(8,554)
8,554
1,207,000
AT 31 DECEMBER 2022
3,078,297
18,632,040
58,179
(11,928,028)
9,840,488
The notes on pages 44 to 81 form part of these financial statements.
Page 40
ORACLE POWER PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Share
capital
£
Share
premium
£
Share
scheme
reserve
£
Retained
earnings Total equity
£
£
AT 1 JANUARY 2021
2,146,862
16,908,975
180,229
(10,049,674)
9,186,392
COMPREHENSIVE INCOME FOR
THE YEAR
Loss for the year
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
CONTRIBUTIONS BY AND
DISTRIBUTIONS TO OWNERS
Issue of share capital
Share warrants exercised
TOTAL CONTRIBUTIONS BY AND
DISTRIBUTIONS TO OWNERS
-
-
-
-
503,463
944,037
-
-
-
(794,779)
(794,779)
(794,779)
(794,779)
-
1,447,500
-
-
(113,496)
113,496
-
503,463
944,037
(113,496)
113,496
1,447,500
AT 31 DECEMBER 2021
2,650,325
17,853,012
66,733
(10,730,957)
9,839,113
The notes on pages 44 to 81 form part of these financial statements.
Page 41
ORACLE POWER PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year
ADJUSTMENTS FOR
Depreciation of property, plant and equipment
Impairment losses on intangible assets
Impairment loss recognised on loans to associates
Finance income
Gain on disposal of subsidiary undertaking
Net foreign exchange loss/(gain)
Income tax expense
MOVEMENTS IN WORKING CAPITAL:
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
CASH GENERATED FROM OPERATIONS
Note
2022
£
2021
£
(1,289,658)
(881,879)
10
11
205
579,728
25,785
(14,592)
(6,762)
10,300
-
1,942
-
-
(94)
-
(7,206)
46
(694,994)
(887,191)
(38,025)
25,305
(45,174)
(110,943)
(707,714)
(1,043,308)
NET CASH USED IN OPERATING ACTIVITIES
(707,714)
(1,043,308)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Australia exploration fixed assets
Purchase of Pakistan project fixed assets
Payments for investments in associates
Issue of loans
Interest received
11
11
13
(238,245)
(140,718)
(668,782)
(184,929)
14,592
(190,599)
(94,317)
-
-
94
NET CASH USED IN INVESTING ACTIVITIES
(1,218,082)
(284,822)
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of ordinary shares
16
1,207,000
647,500
NET CASH FROM FINANCING ACTIVITIES
1,207,000
647,500
NET CASH DECREASE IN CASH AND CASH EQUIVALENTS
(718,796)
(680,630)
Cash and cash equivalents at the beginning of year
Exchange loss on cash and cash equivalents
872,000
1,554,424
(2,299)
(1,794)
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
25
150,905
872,000
The notes on pages 44 to 81 form part of these financial statements.
Page 42
ORACLE POWER PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year
ADJUSTMENTS FOR
Depreciation of property, plant and equipment
Amortisation of intangible fixed assets
Impairment loss recognised on other receivables
Forgiveness of other loan
Finance income
Loss on sale of discontinued operations, net of tax
Net foreign exchange loss/(gain)
MOVEMENTS IN WORKING CAPITAL:
Increase in trade and other receivables
Decrease in trade and other payables
Decrease in loans to subsidiaries
Note
2022
£
2021
£
(1,205,625)
(794,779)
10
11
205
313,229
301,462
(804,516)
(66,938)
804,516
47,944
205
-
20,070
-
(17,058)
-
(7,242)
(609,723)
(798,804)
(665)
(733,801)
78,228
(6,173)
(162,136)
(365,704)
CASH GENERATED FROM OPERATIONS
(1,265,961)
(1,332,817)
NET CASH USED IN OPERATING ACTIVITIES
(1,265,961)
(1,332,817)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for investments in associates
Interest received
NET CASH (USED IN)/FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of ordinary shares
NET CASH FROM FINANCING ACTIVITIES
(668,782)
14,592
(654,190)
-
94
94
1,207,000
647,500
1,207,000
647,500
NET CASH DECREASE IN CASH AND CASH EQUIVALENTS
(713,151)
(685,223)
Cash and cash equivalents at the beginning of year
850,442
1,535,665
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
25
137,291
850,442
The notes on pages 44 to 81 form part of these financial statements.
Page 43
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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
2.1 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. Post year end in February 2023 and June 2023 the Company raised £500,000 and
£363,000 supporting that cash requirement. 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.
2.2
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.
Page 44
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.
ACCOUNTING POLICIES (CONTINUED)
2.3
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 11. 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 other than for the
Jundee East Tenement in Western Australia that has been determined to be uneconomic to develop
further..
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 £5,603,024 (2021:
£5,403,066) less impairment of £579,728
2.4
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.
Page 45
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.
ACCOUNTING POLICIES (CONTINUED)
2.5
Intangible assets
(i) 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:
such costs are expected to be recouped through successful development and exploration of the
a)
area of interest or alternatively by its sale;
exploration activities have not yet reached a stage that permits a reasonable assessment of the
b)
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 when specific facts and circumstances
indicate that an impairment test is required, such as:
(1) the period for which the entity has the right to explore in the specific area has expired during the period
or will expire in the near future, and is not expected to be renewed.
(2) substantive expenditure on further exploration for and evaluation of mineral resources in the specific
area is neither budgeted nor planned.
(3) exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the entity has decided to discontinue such
activities in the specific area.
(4) sufficient data exist to indicate that, although a development in the specific area is likely to proceed,
the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from
successful development or by sale.
In any such case, or similar cases, the entity shall perform an impairment test in accordance with IAS 36.
Any impairment loss is recognised as an expense in accordance with IAS 36
Australia exploration costs are carried at cost less any provision for impairment.
(ii) 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
The Pakistan project costs are tested annually for impairment by comparing the carrying amount to the
recoverable amount Pakistan project costs are carried at cost less any provision for impairment.
2.6
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
Page 46
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.
ACCOUNTING POLICIES (CONTINUED)
2.7
Investments
Investments in subsidiaries 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.
2.8
Investments in associates
An associate is an entity over which the Group has significant influence. Significant influence is the power
to participate in the financial and operating policy decisions of the investee but is not control or joint control
over those policies.
The results and assets and liabilities of associates are incorporated in these consolidated financial
statements using the equity method of accounting, except when the investment, or a portion thereof, is
classified as held for sale, in which case it is accounted for in accordance with IFRS 5. Under the equity
method, an investment in an associate or a joint venture is initially recognised in the consolidated
statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit
or loss and other comprehensive income of the associate or joint venture. When the Group's share of
losses of an associate exceeds the Group's interest in that associate or joint venture (which includes any
long-term interests that, in substance, form part of the Group's net investment in the associate, the Group
discontinues recognising its share of further losses. Additional losses are recognised only to the extent
that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.
An investment in an associate is accounted for using the equity method from the date on which the
investee becomes an associate or a joint venture. On acquisition of the investment in an associate , any
excess of the cost of the investment over the Group's share of the net fair value of the identifiable assets
and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the
investment. Any excess of the Group's share of the net fair value of the identifiable assets and liabilities
over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the
period in which the investment is acquired.
The requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment
loss with respect to the Group's investment in an associate or joint venture. When necessary, the entire
carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36
Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and
fair value less costs of disposal) with its carrying amount. Any impairment loss recognised forms part of
the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance
with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.
The Group discontinues the use of the equity method from the date when the investment ceases to be an
associate or joint venture, or when the investment is classified as held for sale. When the Group retains
an interest in the former associate or joint venture and the retained interest is a financial asset, the Group
measures the retained interest at fair value at that date and the fair value is regarded as its fair value on
initial recognition in accordance with IFRS 9. The difference between the carrying amount of the associate
or joint venture at the date the equity method was discontinued, and the fair value of any retained interest
and any proceeds from disposing of a part interest in the associate or joint venture is included in the
determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group
accounts for all amounts previously recognised in other comprehensive income in relation to that
associate or joint venture on the same basis as would be required if that associate or joint venture had
directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in
other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the
disposal of the related assets or liabilities, the Group reclassified the gain or loss from equity to profit or
loss (as a reclassification adjustment) when the equity method is discontinued.
Page 47
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.
ACCOUNTING POLICIES (CONTINUED)
2.8
Investments in associates (continued)
The Group continues to use the equity method when an investment in an associate becomes an
investment in a joint venture or an investment in a joint venture becomes an associate.There is no
remeasurement to fair value upon such changes in ownership interests.
When the Group reduces its ownership interest in an associate or a joint venture but the Group continues
to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had
previously been recognised in the other comprehensive income relating to that reduction in ownership
interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or
liabilities.
When a group entity transacts with an associate or a joint venture of the Group, profits and losses
resulting from the transactions with the associate or joint ventures are recognised in the Group's
consolidated financial statements only to the extent of interests in the associate or joint venture that are
not related to the Group.
2.9
Leasing
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.
2.10 Foreign currency
In preparing the financial statements of each individual group entity, transactions in currencies other than
the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at
the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value
that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair
value was determined. Non-monetary items that are measured in terms of historical cost in a foreign
currency are not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise
except for exchange differences on foreign currency borrowings relating to assets under construction for
future productive use, which are included in the cost of those assets when they are regarded as an
adjustment to interest costs on those foreign currency borrowings;
For the purposes of presenting these consolidated financial statements, the assets and liabilities of the
Group's foreign operations are translated into pounds using exchange rates prevailing at the end of each
reporting period. Income and expense items are translated at the average exchange rates for the period,
unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the
dates of the transactions are used. Exchange differences arising, if any, are recognised in other
comprehensive income and accumulated in equity (and attributed to non-controlling interests as
appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation,
a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal
of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained
interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of
that operation attributable to the owners of the Company are reclassified to profit or loss.
Page 48
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.
ACCOUNTING POLICIES (CONTINUED)
2.10 Foreign currency (continued)
In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not
result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange
differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all
other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the
Group losing significant influence or joint control), the proportionate share of the accumulated exchange
differences is reclassified to profit or loss.
Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through
acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and
translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences
arising are recognised in other comprehensive income.
2.11 Employee benefits
Retirement benefit costs and termination benefits
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.
2.12 Share-based payments
Share-based payment transactions of the Company
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.
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.
2.13 Financial instruments
Financial assets and financial liabilities are recognised in the Group’s statement of financial position when
the Group becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value, except for trade receivables
that do not have a significant financing component which are measured at transaction price. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value through profit or loss) are added to or
deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Page 49
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.
ACCOUNTING POLICIES (CONTINUED)
2.13 Financial instruments (continued)
Financial Assets:
The Group classifies its financial assets other than investments in subsidiaries and associates as financial
assets at amortised cost, at fair value through other comprehensive income (FVOCI) or at fair value
through profit or loss (FVTPL). The classification depends on the purpose for which the financial assets
were acquired. Management determines the classification of its financial assets at initial recognition.
A financial asset is measured at amortised cost if it is held within a business model whose objective is to
collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
A financial asset is measured at FVOCI if it is held within a business model whose objective is achieved
by collecting contractual cash flows and selling financial assets and its contractual terms give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding.
A financial asset is measured at FVTPL if it is not measured at amortised cost or at FVOCI.
All of the group financial assets are currently classified as at amortised cost.
Financial assets at amortised cost are subsequently measured at amortised cost using the effective
interest method. The amortised cost id reduced by impairment losses. They are included in current assets,
except for maturities greater than 12 months after the balance sheet date. These are classified as non-
current assets.
Trade receivables, with standard payment terms of between 30 to 65 days, are recognised and carried at
the lower of their original invoiced and recoverable amount.
A loss allowance is recognised on initial recognition of financial assets held at amortised cost, based on
expected credit losses, and is re-measured annually with changes appearing in profit or loss. Where there
has been a significant increase in credit risk of the financial instrument since initial recognition, the loss
allowance is measured based on lifetime expected losses. In all other cases, the loss allowance is
measured based on 12-month expected losses. For assets with a maturity of 12 months or less, including
trade receivables, the 12-month expected loss allowance is equal to the lifetime expected loss allowance.
The Group’s financial assets are disclosed in notes 14 and 15.
Financial Liabilities:
The Group classifies its financial liabilities as at amortised cost or at FVTPL. A financial liability is
measured at FVTPL if it is classified as held for trading, it is a derivative or it is designated as such on
initial recognition, otherwise it is classified as at amortised cost.
All of the group financial liabilities are currently classified as at amortised cost.
Financial liabilities at amortised cost are subsequently measured at amortised cost using the effective
interest method. They are classified as non-current when the payment falls due greater than 12 months
after the year end date.
Page 50
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.
ACCOUNTING POLICIES (CONTINUED)
2.14 Cash and cash equivalents
Cash and cash equivalents for the purpose of the cash flow statement comprise cash and bank balances.
2.15 New Standards and Interpretations applied
There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year
beginning 1 January 2022 that would be expected to have a material impact on the Group.
New and revised standards not yet effective
Certain new accounting standards and interpretations have been issued but have not been applied by
the Group in preparing these financial statements as they are not as yet effective. These standards are
not expected to have a material impact on the Group in the current or future periods and on foreseeable
future transactions.
3.
SEGMENT INFORMATION
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 which is an energy project, based on the exploration and development
of coal mining and building a mine-mouth power plant in Pakistan ("Pakistan Energy Project");
2) an investment in Western Australia for the exploration and future extraction of gold ("Australia Gold
Project"); and
3) a green hydrogen project in Pakistan ("Pakistan Green Hydrogen Project").
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. The Pakistan Green Hydrogen Project is
carried out through the Company's investment in associates which is not included in the analysis below.
To-date the Group has raised a total £23.2m and spent £18.0m on Thar Block VI and £0.5m on the
Western Australia gold project net of impairment of £0.6m.
The following is an analysis of the Group's results by reportable segment in the year under review:
Page 51
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3.
SEGMENT INFORMATION (CONTINUED)
Pakistan Energy Project
Australia Gold Project
Total
Central administration costs
Finance income
Other gains and losses
Profit before tax
2022
£
(9,318)
(630,945)
(640,263)
2021
£
(5,277)
(78,168)
(83,445)
(670,749)
(798,528)
14,592
6,762
94
-
(1,289,658)
(881,879)
The accounting policies of the reportable segments are the same as the Group’s accounting policies
described in note 2. Segment profit represents the profit earned by each segment without allocation of
the share of profits of associates and joint ventures, central administration costs including directors’
salaries, finance income, non-operating gains and losses in respect of financial instruments and finance
costs, and income tax expense. This is the measure reported to the Group’s Chief Executive for the
purpose of resource allocation and assessment of segment performance.
.
Segment assets
Pakistan Energy Project
Australia Gold Project
Total segment assets
Unallocated assets
Consolidated total assets
2022
£
2021
£
4,529,390
4,593,369
493,906
5,023,296
809,697
5,403,066
3,885
5,856
5,027,181
5,408,922
For the purposes of monitoring segment performance and allocating resources between segments the
Group’s Chief Executive monitors the tangible, intangible and financial assets attributable to each
segment. All assets are allocated to reportable segments with the exception of investments in associates,
and other financial assets.
Page 52
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
3.
SEGMENT INFORMATION (CONTINUED)
.
Other segment information
Depreciation & Amortisation Additions to non-current*
assets*
2021
£
2021
£
2022
£
2022
£
Pakistan Energy Project
Australia Gold Project
1,133
-
1,737
-
140,718
238,225
97,762
186,919
1,133
1,737
378,943
284,681
*The amounts exclude additions to financial instruments.
In addition to the depreciation and amortisation reported above, impairment losses of £579,727 (2021:
£nil) were recognised in respect of non-current assets. These impairment losses were all attributable to
the Australia Gold Project.
Page 53
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
4.
EMPLOYEE BENEFITS EXPENSES
Group
EMPLOYEE BENEFIT EXPENSES (INCLUDING DIRECTORS)
COMPRISE:
Wages and salaries
National insurance
Defined contribution pension cost
2022
£
2021
£
300,500
296,467
6,858
3,738
714
3,673
311,096
300,854
All employee benefit expenses relate to key management personnel Key management personnel are
those persons having authority and responsibility for planning, directing and controlling the activities of
the Group, including the directors of the Company listed on page 21 , and the Financial Controller of the
Company.
The monthly average number of persons, including the directors, employed by the Group during the year
was as follows:
Directors
Administration and production
2022
No.
2021
No.
4
3
7
4
3
7
Page 54
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
4.
EMPLOYEE BENEFITS EXPENSES (CONTINUED)
Company
EMPLOYEE BENEFIT EXPENSES (INCLUDING DIRECTORS)
COMPRISE:
Wages and salaries
National insurance
Defined contribution pension cost
2022
£
2021
£
300,500
296,467
6,858
3,738
714
3,673
311,096
300,854
The monthly average number of persons, including the directors, employed by the Company during the
year was as follows:
Directors
Administration and production
2022
No.
2021
No.
4
1
5
4
1
5
Page 55
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
5.
DIRECTORS' REMUNERATION
Directors' emoluments
Group contributions to pension schemes
During the year, 0 directors (2021 - 2 directors) exercised share options.
The highest paid director's emoluments were as follows:
Total emoluments and amounts receivable under long-term incentive
schemes (excluding shares)
2022
£
2021
£
237,083
233,350
2,088
1,763
239,171
235,113
2022
£
2021
£
150,000
150,000
150,000
150,000
The highest paid director exercised nil share options during the year (2021: 24,000,000).
6.
FINANCE INCOME AND EXPENSE
Recognised in profit or loss
2022
£
2021
£
Finance income
INTEREST ON:
- Bank deposits
TOTAL INTEREST INCOME ARISING FROM FINANCIAL ASSETS
MEASURED AT AMORTISED COST
Share of associates' interest receivable
TOTAL FINANCE INCOME
12,467
12,467
2,125
14,592
NET FINANCE INCOME RECOGNISED IN PROFIT OR LOSS
14,592
94
94
-
94
94
Page 56
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
7.
LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging / (crediting):
Depreciation - owned assets
Auditors' remuneration
Foreign exchange differences
2022
£
205
37,046
(55,551)
2021
£
205
19,979
(3,737)
In addition to the depreciation charges shown above, the Group incurred charges of £1,133 (2021:
£1,737) which have been capitalised as exploration costs by the subsidiary company in accordance with
the accounting policy.
8.
INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose for the year ended 31 December 2022 nor for the year ended 31
December 2021.
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
Loss multiplied by the standard rate of corporation tax in the UK of 19%
(2021 - 19%)
Effects of:
Foreign losses of subsidiaries
Inter-company items eliminated
Disallowed expenses
Potential deferred taxation on losses for year
2022
£
2021
£
(1,289,658)
(881,879)
(245,035)
(167,557)
-
62,136
7,493
115,087
60,319
-
17,139
3,223
39
147,156
-
-
The Group and Company has estimated UK excess management charges of £11,082,658 (2021:
£10,484,116) to carry forward against future income. The overseas subsidiaries have losses of £248,369
(2021: £186,233) which will be carried forward to offset future profits. There is no charge for foreign
taxation for the year (2021: nil).
Page 57
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
9.
EARNINGS PER SHARE
(i) Basic earnings per share
From continuing operations attributable to the ordinary equity holders
of the Company
TOTAL BASIC EARNINGS PER SHARE ATTRIBUTABLE TO THE
ORDINARY EQUITY HOLDERS OF THE COMPANY
(ii) Diluted earnings per share
From continuing operations attributable to the ordinary equity holders
of the Company
TOTAL DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO
THE ORDINARY EQUITY HOLDERS OF THE COMPANY
(iii) Reconciliation of earnings used in calculating earnings per share
LOSS ATTRIBUTABLE TO THE ORDINARY EQUITY HOLDERS OF THE
COMPANY USED IN CALCULATING BASIC EARNINGS PER SHARE:
From continuing operations
2022
Pence
(0.04)
(0.04)
2022
Pence
(0.04)
(0.04)
2021
Pence
(0.04)
(0.04)
2021
Pence
(0.04)
(0.04)
2022
£
2021
£
(1,289,658)
(881,879)
(1,289,658)
(881,879)
LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO THE
ORDINARY EQUITY HOLDERS OF THE COMPANY:
Used in calculating basic earnings per share
(1,289,658)
(881,879)
USED IN CALCULATING DILUTED EARNINGS PER SHARE
(1,289,658)
(881,879)
LOSS ATTRIBUTABLE TO THE ORDINARY EQUITY HOLDERS OF THE
COMPANY USED IN CALCULATING DILUTED EARNINGS PER SHARE
(1,289,658)
(881,879)
Page 58
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
9.
EARNINGS PER SHARE (CONTINUED)
(iv) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES AND
POTENTIAL ORDINARY SHARES USED AS THE
DENOMINATOR IN CALCULATING DILUTED EARNINGS PER
SHARE
2022
Number
2021
Number
2,902,488,933
2,257,793,111
2,902,488,933
2,257,793,111
10.
PROPERTY, PLANT AND EQUIPMENT
Group
Cost or valuation
At 1 January 2021
Foreign exchange movements
At 31 December 2021
Foreign exchange movements
Motor
vehicles
£
Computer
equipment
£
16,165
(1,288)
14,877
(1,924)
4,763
(258)
4,505
(385)
Total
£
20,928
(1,546)
19,382
(2,309)
At 31 December 2022
12,953
4,120
17,073
Page 59
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
10.
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
ACCUMULATED DEPRECIATION AND IMPAIRMENT
At 1 January 2021
Charge owned for the year
Exchange adjustments
At 31 December 2021
Charge owned for the year
Exchange adjustments
Motor
vehicles
£
Computer
equipment
£
10,957
1,028
(943)
11,042
729
(1,489)
1,682
915
(113)
2,484
609
(187)
Total
£
12,639
1,943
(1,056)
13,526
1,338
(1,676)
At 31 December 2022
10,282
2,906
13,188
Net book value
At 31 December 2021
At 31 December 2022
Company
Cost or valuation
At 1 January 2021
At 31 December 2021
At 31 December 2022
3,835
2,671
2,021
1,214
5,856
3,885
Computer
equipment
£
1,524
1,524
1,524
Page 60
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
10.
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
ACCUMULATED DEPRECIATION AND IMPAIRMENT
At 1 January 2021
Charge owned for the year
At 31 December 2021
Charge owned for the year
At 31 December 2022
Net book value
At 31 December 2021
At 31 December 2022
11.
INTANGIBLE ASSETS
Group
COST
At 1 January 2021
Additions - external
Foreign exchange movement
At 31 December 2021
Additions - external
Foreign exchange movement
Computer
equipment
£
840
205
1,045
205
1,250
479
274
Australia
Exploration
Costs
£
Pakistan
Project
Costs
£
Total
£
626,458
186,919
4,629,855
5,256,313
97,762
284,681
(3,680)
(134,248)
(137,928)
809,697
238,225
26,318
4,593,369
5,403,066
140,718
378,943
(204,697)
(178,379)
At 31 December 2022
1,074,240
4,529,390
5,603,630
Page 61
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
11.
INTANGIBLE ASSETS (CONTINUED)
ACCUMULATED AMORTISATION AND IMPAIRMENT
Impairment charge
Foreign exchange movement
At 31 December 2022
Net book value
At 1 January 2021
At 31 December 2021
At 31 December 2022
Australia
Exploration
Costs
£
Pakistan
Project
Costs
£
579,727
607
580,334
-
-
-
Total
£
579,727
607
580,334
626,458
809,697
493,906
4,629,855
4,593,369
4,529,390
5,256,313
5,403,066
5,023,296
During the 2022 financial year, the Directors reviewed the Australia Exploration costs asset and
concluded that the costs relating to the Jundee East tenemant were no longer economically viable and
should be impaired in full. Following the receipt of geology reports commissioned for the Company which
indicated insufficient potential gold levels in the tenement, the Company determined the recoverable
amount of the exploration costs on this project to be zero based on the expectation of no cash inflows.
An impairment charge of £579,727 (2021: £nil) was recognised in the year.
The Group’s remaining Australia Exploration costs of £493,906 and Pakistan Project Costs of £4,529,390
are currently being carried forward at net book value 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.
Company
COST
At 1 January 2021
At 31 December 2021
At 31 December 2022
Australia
Exploration
Costs
£
Pakistan
Project
Costs
£
Total
£
626,458
3,352,393
3,978,851
626,458
3,352,393
3,978,851
626,458
3,352,393
3,978,851
Page 62
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
11.
INTANGIBLE ASSETS (CONTINUED)
ACCUMULATED AMORTISATION AND IMPAIRMENT
Impairment charge
At 31 December 2022
Net book value
At 1 January 2021
At 31 December 2021
At 31 December 2022
Australia
Exploration
Costs
£
Pakistan
Project
Costs
£
313,229
313,229
-
-
Total
£
313,229
313,229
626,458
626,458
313,229
3,352,393
3,352,393
3,352,393
3,978,851
3,978,851
3,665,622
During the 2022 financial year, the Directors reviewed the Australia Exploration costs asset and
concluded that the costs relating to the Jundee East tenemant were no longer economically viable and
should be impaired in full. Following the receipt of geology reports commissioned for the Company which
indicated insufficient potential gold levels in the tenement, the Company determined the recoverable
amount of the exploration costs on this project to be zero based on the expectation of no cash inflows.
An impairment charge of £313,229 (2021: £nil) was recognised in the year in the Company.
The Company’s remaining Australia Exploration costs of £313,229 and Pakistan Project Costs of
£3,352,393 are currently being carried forward at net book value 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 63
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
12.
INVESTMENTS
Company
Cost and Net Book Value
At 1 January 2021 and 31 December 2021
Disposals
At 31 December 2022
Shares in
group
undertakings
3,703,047
(804,516)
2,898,531
The Company's investments at the Statement of Financial Position date in the share capital of companies
include the following:
Subsdiaries
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
(2021:100)
2022
£
2021
£
617,279
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 (2021: £2,867,256).
Page 64
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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
0 (2021:
100%)
2022
£
2021
£
-
804,516
Revive Financial Limited (“Revive”) was incorporated on 8 October 2013 but never traded and had no
profit or loss for the year (2021: 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 £nil
(2021: £804,516) was interest free and is repayable within 30 days of giving written notice of demand for
repayment. During the year, 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 £nil (2021: £804,516).
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 (2021:
100)
2022
£
(150,639)
(9,318)
2021
£
(90,174)
(5,276)
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 (2021: £31,075).
Page 65
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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
% holding
100 (2021:
100)
2022
£
100
2021
£
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 (2021: Nil).
The investment in share capital for the 100% holding amounted to £100 (2021 £100).
The Company has guaranteed all outstanding liabilities of the subsidiary company as at 31 December
2022, this provides the subsidiary company with an exemption from audit under Section 479C of the
Companies Act 2006.
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
% holding
100 (2021:
100)
2022
£
100
2021
£
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 (2021: Nil).
The investment in share capital for the 100% holding amounted to £100 (2021 £100).
The Company has guaranteed all outstanding liabilities of the subsidiary company as at 31 December
2022, this provides the subsidiary company with an exemption from audit under Section 479C of the
Companies Act 2006.
Page 66
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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 (2021:
100)
2022
£
(408,685)
(317,715)
2021
£
(84,779)
(78,167)
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 (2021: £0.56).
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
30 (2021: 100)
2022
£
-
-
2021
£
(6,309)
(6,309)
The associate company was incorporated in Pakistan on 19 November 2021 for the future generation of
power. During the year 70% of the share capital was issued to another party and the Company no longer
had control of the subsidiary. A gain on loss of control of £6,309 (2021:nil) was recognised in the profit
and loss.
Page 67
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
13.
INVESTMENTS IN ASSOCIATES
Company
Cost
At 1 January 2021 and 31 December 2021
Additions
Shares in
associate
undertakings
£
-
668,782
668,782
The Company's investments at the Statement of Financial Position date in the share capital of associate
companies include the following:
Associates
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 year
% holding
30 (2021:100)
2022
£
2,130,313
(3,945)
2021
£
(6,309)
(6,309)
The associate company was incorporated in Pakistan on 19 November 2021 for the future generation of
power.
The associate company was a subsidiary in the prior period but the Company lost control during the year
under review. The investment in share capital for the 30% holding amounted to £662,007 (2021: 100%
£4,192).
Page 68
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
13.
INVESTMENTS IN ASSOCIATES (CONTINUED)
Oracle Energy FZCO Limited
Registered office: FD-172.0, Floor No. 18, Sheikh Rashid Tower, Dubai World Trade Centre, Dubai,
United Arab Emirates
Nature of business: Energy production
Class of shares
Ordinary shares of AED 1,000 each
Aggregate capital and reserves
Loss for year
% holding
30 (2021: 0%)
2022
£
22,626
(42)
2021
£
-
-
The associate company was incorporated on 5 October 2022..
The investment in share capital for the 30% holding amounted to £6,788 (2021: £nil).
Summarised financial information in respect of each of the Group’s material associates is set out below.
The summarised financial information below represents amounts in associates’ financial statements
prepared in accordance with IFRS Accounting Standards.
Oracle
Energy Ltd
Oracle
Energy Ltd
2022
£
2021
£
Current assets
Non-current assets
Current liabilities
1,996,832
133,482
(17,078)
2,113,236
Equity attributable to owners of the associate
1,451,229
Non-controlling interest
Profit / (loss) for the year
662,007
2,113,236
(3,945)
-
-
-
-
-
-
-
-
Oracle
Energy
FZCO Ltd
2022
£
3,316
369,693
(350,383)
22,626
15,838
6,788
22,626
40
Oracle
Energy
FZCO Ltd
2021
£
-
-
-
-
-
-
-
-
The non-controlling interest shown in the table above comprise's the Group's interest in the associated
undertaking.
There is no significant restriction on the ability of associates to transfer funds to the Group in form of
cash dividends, or to repay loans or advances made by the Group.
Page 69
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
14.
LOANS AND OTHER FINANCIAL ASSETS
Group
Financial assets
Loans to associate undertakings
2022
£
425,070
155,009
580,079
2021
£
369,390
-
369,390
The financial asset of £425,070 (2021: £369,390) 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 2024. This performance guarantee is secured by a deposit by Oracle with the issuing bank.
Group
At 1 January 2021 and 2022
New in year
Impairment
At 31 December 2022
Company
Loans to group undertakings
Loans to associate undertakings
Financial assets
Loans to
associate
undertakings
£
-
180,794
(25,785)
155,009
2022
£
2021
£
2,035,196
1,616,597
144,952
425,070
-
369,390
2,605,218
1,985,987
Page 70
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
14.
LOANS AND OTHER FINANCIAL ASSETS (CONTINUED)
Company
At 1 January 2022
New in year
Impairment
Exchange differences
31 December 2022
Company
Financial assets
Loans to
group
undertakings
£
Loans to
associate
undertakings
£
1,616,597
681,928
(275,677)
12,348
-
170,737
(25,785)
-
2,035,196
144,952
2022
£
2021
£
425,070
369,390
Included in the loans to group undertakings shown above, during the period Oracle Power PLC made
loans to its subsidiaries totalling £157,094 (2021: £65) to Sindh Carbon Energy Limited, £203,677 (2021:
£111,049) to Thar Electricity (Private) Limited and £321,156 (2021: £251,249) to Oracle Gold Pty Limited.
Included in the loans made was a reclassifcation of interest from current assets of £240,225 (2021: £nil).
The amounts outstanding at the statement of financial position date were £1,282,266 (2021: £1,021,173)
due from Sindh Carbon Energy Limited, £535,675 (2021: £358,185) due from Thar Electricity (Private)
Limited, of which £31,753 is denoted in USD of $42,980 and £584,654 (2021: £237,239) 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 £275,677 (2021: £20,070) was recognised in the year.
Page 71
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
15.
TRADE AND OTHER RECEIVABLES
Current:
Other receivables
VAT
Prepayments and accrued income
16.
CALLED UP SHARE CAPITAL
Allotted, issued and fully paid
3,078,297,740 (2021: 2,650,325,712)
The shares issued during the year were as follows:
Group
2022
£
127
17,156
27,786
Group
2021
£
Company
2022
£
Company
2021
£
985
20,264
28,859
-
15,233
25,498
187,879
15,960
26,231
45,069
50,108
40,731
230,070
2022
£
2021
£
3,078,297
2,650,325
Date issued
Class of
shares
allotted
Number of
shares allotted
Nominal value of
each share
Amount paid (including
share premium) on each
share
7 April 2022
Ordinary
246,153,846
11 August 2022
Ordinary
181,818,182
0.1p
0.1p
0.325p
0.275p
The number of shares in issue are as follows:
At 1 January
Issued during the year
At 31 December
2022
No.
2021
No.
2,650,325,712 2,146,862,217
427,972,028
503,463,495
3,078,297,740 2,650,325,712
At 31 December 2022, the total warrants in issue were 250,000,000 (2021: 298,739,495) comprising
warrants issued to investors.
Page 72
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
17.
RESERVES
The following is a description of each of the reserve accounts that comprise equity shareholders' funds:
Share premium
The share premium comprises the excess value recognised from the issue of ordinary shares at par.
Share scheme reserve
Cumulative fair value of warrants charged to the statement of comprehensive income net of transfers to
the profit and loss reserve on exercised and cancelled/lapsed warrants.
Foreign exchange reserve
Cumulative gains and losses on translating the net assets of overseas operations to the presentation
currency.
Retained earnings
Retained earnings comprise the group's cumulative accounting profits and losses since inception.
18.
TRADE AND OTHER PAYABLES
Current
Trade payables
Amounts owed to group undertakings
Other payables
Accruals and deferred income
GROUP
2022
£
GROUP COMPANY COMPANY
2021
£
2022
£
2021
£
118,808
92,182
113,560
-
12,329
71,897
-
7,138
71,001
-
12,091
50,310
62,050
804,616
6,751
36,346
203,034
170,321
175,961
909,763
Page 73
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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
2022
£
35,584
-
2021
£
14,281
3,665
35,584
17,946
-
35,584
-
-
13,688
3,665
35,584
17,353
20.
FINANCIAL RISK MANAGEMENT
The carrying value of the group's financial assets and liabilities at the balance sheet date of the years
under review are categorised as follows:
Financial assets - at amortised cost
Cash and bank balances
Receivables denominated in foreign currency
Financial liabilties - at amortised cost
Trade and other payables
2022
£
2021
£
150,905
425,070
872,000
369,390
125,913
99,320
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:
Page 74
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
20.
FINANCIAL RISK MANAGEMENT (CONTINUED)
Pakistan Rupees
US Dollars
Australian Dollars
2022
£
(6,756)
413,169
(4,751)
2021
£
(18,609)
369,390
(20,555)
401,662
330,226
The Directors have reviewed historical exchange rates and consider that a 10 percent weakening of
sterling against the US Dollar or Australian Dollar would be a reasonable basis for sensitiity analysis. By
the same method the Directors consider that a 50% weakening of steling against the Pakistan Rupee
would be a reasonable basis for sensitiity analysis. A 10% weakening of sterling against the US Dollar or
Australian Dollar at 31 December 2022 and a 50% weakening against the Pakistan Rupee would
increase net profit before tax by circa £40,000 (2021: £33,000).
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 £12,467 (2021: £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) 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
2022
£
2021
£
131,137
99,320
c) Fair Values of Financial Assets and Liabilities
The carrying value of all financial assets and liabilities in the financial statements approximate their fair
values.
Page 75
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
.
Loss allowance
d) 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 £150,905 (2021: £872,000) cash and
cash equivalents; £425,070 (2021: £369,390) other financial assets held with financial institutions; and
£17,284 (2021: £20,264) taxation receivable. The Group’s financial assets are considered to be of a high
credit rating.
At year end, the Company held £137,291 (2021: £850,442) cash and cash equivalents; £425,070 (2021:
£369,390) other financial assets held with financial institutions; and £15,233 (2021: £15,959) taxation
receivable. These financial assets are considered to be of a high credit rating.
The Company has made unsecured loans to its subsidiaries of £1,282,266 (2021: £1,021,173) to Sindh
Carbon Energy Limited, £535,675 (2021: £383,185) to Thar Electricity (Private) Limited and £584,654
(2021: £237,239) to Oracle Gold Pty Limited. During the 2022 financial year, interest previously reported in
current assets was reclassifed against the loans and shown in the balances above, total £240,225 (2021:
£nil). 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 £275,677
(2021: £20,070) was recognised in the year.
The Company has made unsecured loans to its associates of £168,613 (2021: £nil) to Oracle Energy
FZCO Limited. Although the loan is repayable on demand, it is unlikely to be repaid until the project
becomes successful and the associate starts to generate revenue. The Company considers the loan is of
a lower credit rating. The loan was assessed for impairment and an impairment charge of £25,785 (2021:
£nil) was recognised in the year.
The Company assessed impairment by considering a range of future interest rates between 1% and
5.25%, 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 3.13% and a 5-year repayment period (2021:
1.1% and 5 years). The movement in the loss allowance in the year was an increase of £301,462 from
£91,722 in 2021 to £393,184 in 2022. The reason for the increase in the provision was due to the
increase in size of the loans and an increase in the Bank of England Base Rate..
Gross carrying value
Opening loss allowance
Movement in allowance for period
Closing loss allowance
Assessed interest rate risk
Years until cash realised
2022
£
2021
£
2,573,333
91,722
301,462
1,708,319
79,940
11,782
393,184
91,722
3.38%
5
1.1%
5
Page 76
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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 2024. This performance
guarantee is secured by a deposit by Oracle Power PLC with the issuing bank.
22.
RELATED PARTY DISCLOSURES
During the year, Oracle Power PLC accrued interest of £27,414 (2021: £11,998) in respect of loans
totalling £1,078,588 (2021: £1,021,173) made to Sindh Carbon Energy Limited, £11,930 (2021: £3,667) in
respect of loans totalling £513,427 (2021: £358,185) made to Thar Electricity (Private) Limited and
£13,001 (2021: £1,298) in respect of loans totalling £570,355 (2021: £237,239) made to Oracle Gold Pty
Limited, and £2,125 (2021: £nil) in respect of loans totalling £178,669 to its associated undertaking Oracle
Energy FZCO Limited.
At the Statement of Financial Position date, the total interest outstanding amounted to £196,089 (2021:
£176,263) for Sindh Carbon Energy Limited, £22,248 (2021: £10,317) for Thar Electricity (Private) Limited
and £14,299 (2021: £1,298) for Oracle Gold Pty Limite, and £2,125 (2021: £nil) for Oracle Energy FZCO
Limited. The loans due from Sindh Carbon Energy Limited, Thar Electricity (Private) Limited, Oracle Gold
Pty Limited, and Oracle Energy FZCO Limited were reviewed for impairment and an impairment charge
of £301,462 (2021: £20,070) was recognised in the year. Total impairment charge to date amounts to
£393,184 (2021: £91,722).
Oracle Power PLC owes £nil (2021: £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. 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) (left on 13 December 2022)
Mr D Hutchins (Non-Executive Director)
Mr N Lee (Company Secretary)
Page 77
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
22.
RELATED PARTY DISCLOSURES (CONTINUED)
The aggregate compensation made to key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
2022
£
2021
£
294,171
291,749
-
4,387
294,171
296,136
Details of key management personnel compensation are disclosed in the Remuneration Report included
in the Directors Report.
Key management personnel equity holdings
Details of key management personnel beneficial interests in the fully paid ordinary shares of the Company
are disclosed in the Directors Report.
Page 78
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
23.
SHARE BASED PAYMENT TRANSACTIONS
The Company has a share warrant programme that entitles the holders to purchase shares in the
Company with the warrants exercisable at the price determined at the date of granting the warrant. The
terms and conditions of the grants active in the year are as follows; there are no vesting conditions to be
met and all warrants are to be settled by the issue of shares:
The number and weighted average exercise prices of share warrants are as follows:
Outstanding at 1 January
Expired during the period
Exercised during the period
Outstanding at 31 December
Exercisable at 31 December
Weighted
average
exercise
price 2022
Number of
warrants
2022
Weighted
average
exercise
price 2021
0.43p
0.43p
5,882,352
(5,882,352)
-
-
-
0.92p
1.46p
0.25p
0.43p
0.43p
Number of
warrants 2021
42,408,157
(22,525,805)
(14,000,000)
5,882,352
5,882,352
The weighted average contractual life remaining at year end was 0 years (2021:0.16 years). There were
no outstanding warrants at year end, the warrants outstanding at 31 December 2021 were all exercisable
at 0.43p.
During the year no relevant share warrants were exercised (2021:14,000,000) and 5,882,352 share
warrants expired during the year (2021: 22,525,805).
There is no expense for the year (2021: nil) for services received in respect of equity settled share-based
payment transactions.
24.
EVENTS AFTER THE REPORTING PERIOD
Since the reporting date, the Company has entered into the following reportable transactions.
On 6 February 2023 the Company announced a £500,000 placing of 294,117,647 new ordinary shares of
0.1p each in the Company ("Ordinary Shares") (the "Placing Shares") at a price of 0.17p per Ordinary
Share.
On 9 May 2023 the Company announced a farm out agreement in relation to the Australian Northern Zone
Gold project. The key terms were an immediate cash consideration of A$50,000 payable to the Company
and a commitment by the counterparty to not less than A$600,000 into the project over the next two years.
In addition, post year end the Company has signed several strategic Memoranda of Understandings in
relation to its projects further details of which can be found in the Chairman's statement on page 3.
On 22 June 2023 the Company announced the appointment of a joint broker: Global Investment Strategy
UK Limited, and a £363,000 in aggregate placing of 323,000,000 new ordinary shares of 0.1p and a
subscription for 40,000,000 new Ordinary Shares (the "Subscription") both at a price of 0.1p per Ordinary
Share.
Page 79
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
25.
NOTES SUPPORTING STATEMENT OF CASH FLOWS
Group
Cash at bank available on demand
Short-term deposits
CASH AND CASH EQUIVALENTS IN THE STATEMENT OF FINANCIAL
POSITION
2022
£
2021
£
32,795
118,110
34,378
837,622
150,905
872,000
CASH AND CASH EQUIVALENTS IN THE STATEMENT OF CASH
FLOWS
150,905
872,000
Company
Cash at bank available on demand
Short-term deposits
CASH AND CASH EQUIVALENTS IN THE STATEMENT OF FINANCIAL
POSITION
2022
£
2021
£
19,181
118,110
12,820
837,622
137,291
850,442
CASH AND CASH EQUIVALENTS IN THE STATEMENT OF CASH
FLOWS
137,291
850,442
26.
RECONCILIATION OF CHANGES IN LIABILITIES
ARISING FROM FINANCING ACTIVITIES
Group
Balance at 1 January 2021
Cash flows
Non-cash changes
Issue of share capital
Balance at 31 December 2021
Cash flows
Balance at 31 December 2022
Trade and
other
payables Borrowings
£
£
Total
£
322,655
800,000
1,122,655
(152,334)
-
(152,334)
-
(800,000)
(800,000)
170,321
32,713
203,034
-
-
-
170,321
32,713
203,034
Page 80
ORACLE POWER PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
RECONCILIATION OF CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
26.
(CONTINUED)
Company
Trade and
other
payables Borrowings
Amounts
owed to
group
undertakings
£
£
£
Total
£
Balance at 1 January 2021
267,183
800,000
804,716
1,871,899
Cash flows
(162,036)
-
(100)
(162,136)
Non-cash changes
Issue of share capital
Balance at 31 December 2021
Cash flows
Forgiveness of debt
Balance at 31 December 2022
-
(800,000)
-
(800,000)
105,147
70,814
175,961
-
-
-
804,616
-
909,763
70,814
(804,616)
(804,616)
-
175,961
Page 81