Zoltav Resources Inc.
Annual Report and Audited Consolidated Financial Statements
For the year ended 31 December 2013
Zoltav Resources Inc.
Corporate information
Board of Directors
Symon Drake-Brockman - Executive Chairman
Oliver Donagher - Non Executive Director (appointed 7 June 2013 resigned 19 June 2014)
John Grimshaw - Non Executive Director (appointed 19 March 2013 resigned 19 June 2014)
Michael Lombardi - Non Executive Director (appointed 19 March 2013)
Stephen Lowden - Non Executive Director
David Francis - Non Executive Director (resigned 7 June 2013)
Alastair Muir Ferguson (appointed 19 June 2014)
Marcus James Rhodes (appointed 19 June 2014)
Audit Committee
Marcus Rhodes (Chairman), Michael Lombardi and Stephen Lowden
Remuneration and Nomination Committee
Stephen Lowden (Chairman), Michael Lombardi and Alastair Ferguson
Company Secretary
Ogier Corporate Services (Jersey) Limited
Ogier House, The Esplanade, St Helier,
Jersey, JE4 9WG, Channel Islands
Corporate Administrator
Ogier Corporate Services (Jersey) Limited
Ogier House, The Esplanade, St Helier,
Jersey, JE4 9WG, Channel Islands
Bankers
Barclays Private Clients International
Limited
39-41 Broad Street, St Helier, Jersey, JE4
8PU, Channel Islands
Deutsche Bank International Limited
St Paul’s Gate, New Street, St Helier,
Jersey, JE4 8ZB, Channel Islands
Nominated Adviser
Shore Capital & Corporate Limited
Bond Street House,14 Clifford Street, London,
W1S 4JU, United Kingdom
Broker
Shore Capital Stockbrokers Limited
Bond Street House, 14 Clifford Street,
London, W1S 4JU, United Kingdom
Solicitors
Pinsent Mason
30 Crown Place, Earl Street, London,
EC2A 4ES, United Kingdom
Independent Auditor
PricewaterhouseCoopers LLP
1 Embankment Place, London WC2N 6RH
Registrar
Computershare Investor Services
(Cayman) Limited
R&H Trust Co. Ltd, Windward 1, Regatta
Office Park, West Bay Road, Grand Cayman
KY1-1103, Cayman Islands
Registered Office
89 Nexus Way, Camana Bay, Grand Cayman
KY1-9007, Cayman Islands
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Zoltav Resources Inc.
Chairman’s report for the year ended 31 December 2013
2013 was a transformational year for the Company. The acquisition of CenGeo Holdings (“CenGeo”) on 4 July
2013 and, with it, a 100 percent. interest in the Koltogor Licence in Western Siberia, marked the Company’s
transition from an investing company to an operating oil and gas company.
The Company has stated its commitment to continued growth through the acquisition of value-enhancing assets
and, shortly before year-end, on 13 December 2013, the Company announced its second major transaction: the
proposed acquisition of Royal Atlantic Energy (Cyprus) Limited (“RAECL”) which, through a wholly-owned
subsidiary, holds the Bortovoy Licence, a 3,215 square kilometre area in the Saratov Oblast (European Russia)
containing a number of gas fields, a processing plant and significant exploration prospectivity. The Company
expects to complete this acquisition by the end of the second quarter of 2014.
The Company is highly selective over the assets it considers for acquisition. The Company looks for assets
which are strategically located and which the Company believes, by leveraging its technical capabilities and in-
country knowledge, it can add considerable value to.
The Koltogor Licence is located in the Khantiy-Mansisk Autonomous Okrug, one of Russia’s most prolific oil
producing regions, responsible for approximately half of the country’s annual oil production. It contains an
undeveloped oil discovery and is located in close proximity to production-associated infrastructure, making its
development highly compelling. The field is surrounded by a number of producing oil fields.
The Bortovoy Licence, located in European Russia, is already producing gas, condensate and oil. The
Karpenskoye field in the western part of the licence produced 392.6 million cubic metres (approximately 13.9
billion cubic feet) of gas and 0.3 million barrels of condensate and oil in 2013 (an aggregate 2.8 million barrels of
oil equivalent). The Company believes it can generate considerable upside from a large number of undeveloped
prospects on the Bortovoy Licence.
Operational developments
Prior to completion of the acquisition of CenGeo in July, the Company commissioned an independent review of
the estimated reserves and resources contained within the areas covered by the Koltogor Licence to be carried
out by DeGolyer and MacNaughton, a leading international petroleum industry consulting firm. The report
attributed Proved plus Probable oil reserves of over 75 million barrels to the area. The full report and analysis of
the Company’s reserves and resources is available through the Company’s website (www.zoltav.com).
Shortly after CenGeo’s acquisition, the Company engaged Russia’s largest geophysical company, GEOTECH
Holding (“GEOTECH”), to acquire 466 square kilometres of 3D seismic and 71 kilometres of 2D seismic data
across the Koltogor Licence. This was a substantial undertaking which, in Western Siberia can only be carried
out during the winter months when the ground is firm. The programme began in November 2013 and ended on
21 April 2014.
The objective of the seismic acquisition programme was to better understand the characteristics of the Koltogor
field. Put simply, the programme will help the Company identify the ‘sweet spots’ for the drilling of appraisal wells
(which may become production wells) in the 2015/16 drilling season.
The data is now being processed and interpreted by LARGEO (a Moscow-based independent geoscience
company) before being analysed by the Company’s geological team under the leadership of Alexander Sokolov
(Director Exploration), whose knowledge of Koltogor dates back well over a decade.
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Zoltav Resources Inc.
In addition to the 3D seismic survey, the Company completed limited testing of Well 141 in the southernmost
part of the licence area. The testing of the Upper Jurassic Ju1-1 horizon was undertaken over a period of six
days. Once the well had been cleaned-up, it was tested on a 10 millimetre choke and flowed 32 cubic metres per
day of liquids of which 16 cubic metres per day (approximately 101 barrels) was a crude oil of 43 degrees API.
While the 3D seisimic programme is expected to help the Company identify more optimal well locations for future
production, the Well 141 test has established a base level of well productivity which further confirms the
commerciality of the field and corroborates previous testing data.
The Koltogor Licence (with Exploration and Production status) covers a contiguous area of 528 square
kilometres within the original footprint of the legacy Exploration Licences. On 31 December 2013 The Group
relinquished all but one of the remaining legacy Exploration Licence areas which surrounded the Koltogor
Licence and had expired but sought to retain Koltogor Exploration Licence 10 (“Koltogor 10”) which the
Company considers to be prospective. The Company was able to negotiate a zero cost extension to Koltogor 10,
a 167 square kilometer area immediately to the west of the Koltogor Licence, through to 31 December 2015.
Following completion of testing operations on Well 141 the work-over rig was moved to Koltogor 10 where it re-
opened Well 103 with an objective to test both the Upper Jurassic Ju1-1 horizon and the Bazhenov shale
formation. The well flowed 3.4 cubic metres of oil per day (approximately 21 barrels) from the Upper Jurassic
formation without stimulation. This discovery was made in the same formation as the neighbouring Koltogor
Exploration and Production Licence, however management believes the two fields are separated by a fault. The
Company will apply to the State Reserve Commission (“GKZ”) to register the discovery.
The Company also tested an interval of 2,670-2,700 metres deep in the Bazhenov shale formation and
successfully recovered oil (calculated flow of 1.34 cubic metres of oil per day (approximately 8 barrels)) with the
application of the instant depression method. This demonstrated the potential of the Bazhenov shale.
The Company is evaluating the best methods of testing and producing from the Bazhenov shale formation with
companies with applicable experience of developing unconventional oil plays.
Financial developments
The CenGeo acquisition received the support of the Company’s largest shareholder, ARA Capital (44.9 per
cent.), which agreed to invest US$20 million by way of a staged subscription (the “Subscription”) for Zoltav
ordinary shares, thus providing the Company with the financial resources to progress the work programme
described above. The first and second tranches of the Subscription, totalling US$15 million, were received by
the Company during the period with the remaining US$5 million received on 1 April 2014.
The convertible loan note provided to the Company by ARA Capital during 2012, totalling £500,000, was
converted (together with accrued interest) into Zoltav shares on 7 June 2013.
In order to facilitate additional working capital required by the Company to complete the acquisition of CenGeo,
ARA Capital provided the Company with an unsecured loan of £250,000 on 9 April 2013. This was repaid fully
(together with interest) following completion of the acquisition three months later.
The Company was still operating as an investing company throughout the first half of 2013 and its principal
activities were those associated with the acquisition of CenGeo, the proposed acquisition of RAECL and
execution of the work programme on the Koltogor Licence. Consequently, the Company continued to make an
operating loss. The loss for the period is set out in the consolidated condensed statement of comprehensive
income which follows in this report. The directors do not recommend a dividend for the period ended 31
December 2013 (period ended 31 December 2012: Nil). The directors confirm that this set of financial
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Zoltav Resources Inc.
statements has been prepared in accordance International Financial Reporting Standards (IFRS) as adopted by
the European Union.
RAECL Transaction
Shortly before the end of the period, on 13 December 2013, the Company signed a Sale and Purchase
Agreement with Bandbear Limited (the "Vendor"), currently a 29.1 per cent. shareholder in the Company, to
acquire RAECL (and with it the Bortovoy Licence described above) for US$180 million. The proposed acquisition
(which is expected to be completed by the end of the second quarter of 2014) will be satisfied through the issue
of 38,263,095 new Ordinary Shares at an effective price of US$1.60 (100 pence) per share (equivalent to
US$61.22 million); the payment of US$58.94 million in cash ( and the assumption of US$60.9 million of bank
debt.
Corporate and managerial developments
The Board is committed to ensuring the Company adheres to the highest standards of corporate governance. As
such the Company strengthened its Board with the appointments, in the first half of 2013, of Michael Lombardi,
John Grimshaw and Oliver Donagher as non-executive directors. Each of them brought relevant expertise to the
Board. Following the agreement to acquire RAECL the Company sought to add additional industry and Russian
experience to the board which it did through the appointment of Alastair Ferguson and Marcus Rhodes.
David Francis stepped down from the Board as a non-executive director on 7 June 2013 and Oliver Donnagher
and John Grimshaw stepped down on 19 May 2014. The Board is grateful for the extensive contribution made
by Messrs Francis, Donnagher and Grimshaw in the development of the Company.
I am delighted that the Company’s senior management team includes Dr Alexander Sokolov (Director
Exploration) and Dmitry Kamyshev (Director Russia) on the operational and geological side; together with
Alistair Stobie (Director Finance) heading up finance and transaction execution. We are building a team of
executives who are accomplished operators in Russia and who understand how to achieve the full potential from
our existing and future assets. I expect to continue to build out the executive team as The Group’s portfolio of
assets develops and we look forward to welcoming not only the other senior executives who will join the
Company as a result of the RAECL acquisition but also the entire team working on the Bortovoy Licence and
production facility.
Outlook
Our immediate corporate focus is on completing the acquisition of RAECL. As a result of a Management
Services Agreement in place with the Vendor, the Company has been actively steering developments at the
Bortovoy Licence since the Sale and Purchase Agreement was signed.
The Company’s operational focus is on increasing production from the Karpenskoye field and hooking up the
Zhdanovskoye field such that the plant on the Bortovoy Licence is operating at its full existing capacity of 1.4
million cubic metres of gas per day. Our geological and geophysical team is currently reviewing the data on the
Eastern part of the Bortovoy Licence with a view to developing a long-term exploration and appraisal
programme. We expect to expand on this later in the year.
At the same time, our geological team is working with the Company’s contractors on the processing,
interpretation and analysis of data acquired from the winter’s 3D seismic programme at Koltogor (and recent well
tests) to design both an appraisal drilling programme for the Koltogor Licence and an exploration and appraisal
strategy for Koltogor 10 in order to better define that asset.
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Zoltav Resources Inc.
I believe The Group’s expertise in operating in Russia, and in identifying attractive oil and gas assets in the
region, position it favourably to create value from a region which enjoys the largest energy reserves in the world.
I look forward to reporting on progress at Bortovoy and Koltogor over the coming months, as well as on further
asset acquisitions.
Symon Drake-Brockman
Chairman
Symon Drake-Brockman
Chairman
23 May 2014
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Zoltav Resources Inc.
The Board of Directors - Profiles
Symon Drake-Brockman - Executive Chairman
Symon Drake-Brockman, 52, has a wealth of experience from a long career in
finance covering both debt and equity markets. He was formerly chief
executive officer of RBS Global Banking and Markets in the Americas and
chief executive officer of RBS Greenwich Capital, global head of RBS' Debt
Markets division and Board member of RBS Global Banking and Markets. Mr
Drake-Brockman previously held senior positions with ING Barings and JP
Morgan in London, New York, Tokyo and Hong Kong. He is currently a Non
Executive on the Board of Nexus Energy in Australia, and the Managing
Partner of Pemberton, the London based Private Equity firm.
Michael Lombardi - Non Executive Director (appointed 19 March 2013)
Michael Lombardi, 57, was appointed as a non-executive director in March
2013. He qualified as a Jersey solicitor in 1994 and is a senior partner of
Ogier, a leading commercial law firm headquartered in Jersey. Michael is an
experienced commercial lawyer with particular expertise in alternative
investment funds and financial services law including fund authorizations,
issues of public securities and structured finance transactions. He joined
Ogier in 1991 and has been a partner since 1996. After training with Dundas
& Wilson in Edinburgh he qualified as a lawyer in Scotland, England, Hong
Kong, Bermuda and Jersey and has a Master of Laws degree in International
Business Law. Michael has been recognized by the International Bar
Association as a foremost legal practitioner in Jersey for investment funds
and was also named by Chambers Global as a leading individual for
corporate/commercial law in Jersey. He sits on the boards of a number of
investment companies, including Intermediate Capital Group Mezzanine
Funds and UBS Global Property Fund.
Stephen Lowden - Non Executive director
Stephen Lowden, 54, has over 25 years’ experience in the international oil
and gas industry across exploration, development, production and gas
liquefaction. Throughout his career in the oil and gas industry, Stephen
Lowden has worked around the world but has spent a considerable time
working on projects in the CIS. Stephen Lowden has previously held positions
with Premier Oil plc, including chief petroleum engineer, general manager for
development and production and an executive director of the board and, more
recently, at Marathon Oil Company as president of Marathon International,
head of corporate business development and an officer of the company.
Stephen Lowden is also involved with two private energy businesses.
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Zoltav Resources Inc.
Alastair Ferguson - Non Executive director
Alastair Ferguson, 56, has over 33 years experience in the oil and gas
industry. He is a non-executive director of JKX Oil and Gas plc, listed on the
London Stock Exchange with assets in Eastern and Central Europe, and
Kazmunaigaz Exploration and Production, an oil and gas exploration and
production company focussed on the Caspian region in Kazakhstan. Mr
Ferguson was an Executive Vice-President Gas & Power with TNK-BP
between 2003-2011 having successfully led its gas and power business in
Russia and Ukraine. He continues to work in Moscow as an independent
advisor on energy issues. Prior to that, he held a wide range of senior
positions with BP during his 33 year career in the oil and gas industry.
Marcus Rhodes - Non Executive director
Marcus Rhodes, 52, has served as a non-executive director and chairman of
the audit committee of QIWI plc since May 2013. He is also a non-executive
director and chairman of the audit committee for PhosAgro OJSC (since May
2011), Tethys Petroleum Limited (since September 2009), Cherkizovo Group
OJSC (since December 2009) and Rosinter Restaurants Holding OJSC (since
May 2008). From July 2008 until November 2012, Mr. Rhodes was a non-
executive director and chairman of the audit committee for Wimm-Bill-Dann
Foods OJSC, and from June 2010 until July 2012 for Ros Agro plc. Mr.
Rhodes was an audit partner for Ernst & Young from 2002 until 2008. Prior to
that, he was an audit partner for Arthur Andersen from 1998 until 2002. He
qualified as a chartered accountant in 1986 and is a member of the Institute of
Accountants in England & Wales (ICAEW). Mr. Rhodes graduated with a BA
(Hons) from Loughborough University in 1982 with a degree in economics.
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Zoltav Resources Inc.
Directors' report for the year ended 31 December 2013
The Directors of the Company present their annual report together with the audited consolidated financial
statements for the year ended 31 December 2013.
Principal activity
The principal activities of the Company and its subsidiaries (the “Group”) are the acquisition, exploration and
development of hydrocarbon assets and production of hydrocarbons in the Russian Federation.
Business review
A review of the business for the year and of future developments is given in the Chairman’s Report.
Results
The results of the Company are as shown on page 17.
Dividends
The Directors do not recommend the payment of a final dividend and no interim dividend was paid during the
year (2012: US$nil).
Share capital
Details of movements in the share capital of the Company during the year are set out in note 17 to the financial
statements. The Company’s policy in respect of capital and risk management is set out in note 26.
Directors
The membership of the Board who served during the year and up to the date of approving the financial
statements is set out on page 1.
Going concern
The Directors have prepared cash flow forecasts through to 31 December, which take account of the following:
•
•
•
On 13 December 2013 the Company signed a sale and purchase agreement with Bandbear Ltd to
acquire Royal Atlantic Energy (Cyprus) Ltd., and its wholly-owned subsidiary, Diall Alliance the owner of
the Bortovoy Licence. The transaction caused the Company to suspend its shares from trading prior to
the completion of the reverse takeover and publishing an Admission Document to Shareholders.
Once the transaction is complete the enlarged group will have sufficient working capital until 31
December 2015.
the acquisition constitutes a reverse takeover under the AIM Rules and therefore, trading in the
Company's shares has automatically been suspended under Rule 14. This does not have any impact
upon the going concern of the Company as it will be readmitted upon fulfilling specific requirements of
the Aim Rules.
The forecasts indicate sufficient cash balances remain throughout the period to 31 December 2015. For this
reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
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Zoltav Resources Inc.
Directors’ interests
Certain Directors have owned shares of the Company during the year ended 31 December 2013. Interests in
the ordinary shares of the Company are as follows:
31 December 2013
31 December 2012
Number of
ordinary
shares
Percentage of
existing share
capital
Number of
ordinary
shares
Percentage of
existing
share capital
Symon Drake-Brockman
Stephen Lowden
John Grimshaw (resigned
19 May 2014)
Michael Lombardi
Oliver
(resigned 19 May 2014)
David Francis
(resigned 7 June 2013)
Alastair Ferguson
Marcus Rhodes
Donagher
469,055
-
-
-
-
n/a
-
-
469,055
0.8%
-
-
-
-
n/a
-
-
0.8%
9,381,108
-
-
-
-
3,754,244
-
-
13,135,352
2.5%
-
-
-
-
1.0%
-
-
3.5%
Symon Drake-Brockman
Stephen Lowden
John Grimshaw (resigned
19 May 2014)
Michael Lombardi
Oliver
(resigned 19 May 2014)
David Francis
(resigned 7 June 2013)
Alastair Ferguson
Marcus Rhodes
Donagher
31 December 2013
Number of ordinary share
options
31 December 2012
Number of ordinary share
options
1,250,000
500,000
25,000,000
10,000,000
-
-
-
n/a
-
-
1,750,000
-
-
-
5,000,000
-
-
40,000,000
On 4 July 2013 the ordinary shares of the Company were consolidated such that 20 old ordinary shares with
nominal value of US$0.01 became 1 new ordinary share with nominal value of US$0.20.
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Zoltav Resources Inc.
Substantial shareholdings
The interests in excess of 3% of the issued share capital of the Company which have been notified to the
Company as at 31 December 2013 were as follows:
ARA Capital Limited
Bandbear Limited
Dmitry Kamyshev
Alexander Sokolov
Mark Tomkins
Number of ordinary
shares
Percentage of existing
share capital
23,184,111
17,979,981
3,406,734
2,271,155
2,255,000
49,096,981
40.6%
31.5%
6.0%
4.0%
3.9%
86.0%
Statement of Directors' responsibilities
The Directors are responsible for preparing the annual report and financial statements in accordance with
applicable law and regulations.
AIM Rules for Companies require the Directors to prepare financial statements for each financial year. Under
those Rules the Directors have elected to prepare the financial statements in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union. The financial statements are required
to give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that
period.
International Accounting Standard 1 requires that financial statements present fairly for each financial year the
Company's financial position, financial performance and cash flows. This requires the faithful representation of
the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria
for assets, liabilities, income and expenses set out in the International Accounting Standards Board's
‘Framework for the preparation and presentation of financial statements’. In virtually all circumstances, a fair
presentation will be achieved by compliance with all applicable IFRS. However, Directors are also required to:
•
•
•
•
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient
to enable users to understand the impact of particular transactions, other events and conditions on the
entity's financial position and financial performance; and
make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at
any time the financial position of the Company. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website.
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Zoltav Resources Inc.
Financial risk management objectives and policies
Details of the financial risk management objectives and policies are provided in note 26 to the financial
statements.
Independent Auditor
Deloitte LLP resigned as the Company's independent auditor on 2 April 2013 . PricewaterhouseCoopers LLP
were appointed as the Company's independent auditor on 2 April 2013 and have expressed their willingness to
continue in office.
For and on behalf of the Board
Symon Drake-Brockman
Chairman
23 May 2014
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Zoltav Resources Inc.
Corporate governance report for the year ended 31 December 2013
Introduction
The Board’s overriding objective is to ensure that the Group delivers long-term capital appreciation for its
shareholders.
Compliance
The Company seeks to comply with the UK Corporate Governance Code (“the Code”) albeit as an AIM-listed
company and Cayman Island incorporated company it is not required to. The Board of Directors is committed to
developing and applying high standards of corporate governance appropriate to the Company’s size and its
future prospects.
This statement sets out measures taken by the Board to apply the principles of the Code to the year ended 31
December 2013 and to the date of the Directors’ Report.
Board of directors
Role of the Board
The Board’s role is to provide entrepreneurial leadership to the Group within a framework of prudent and
effective controls which enables risk to be assessed and managed. The Board sets the Group’s strategic aims
and ensures that the necessary financial and human resources are in place for the Group to meet its objectives,
and reviews management’s performance in meeting these objectives. The Board sets and monitors the Group’s
values and standards and ensures that the Group’s obligations to shareholders and other stakeholders are
understood and met.
The Board has a formal schedule of matters reserved for its approval, including:
•
•
•
•
•
•
•
•
Strategic and policy considerations
Annual budget, including capital expenditure
Interim and final financial statements
Management structure and appointments
Mergers, acquisitions, disposals
Capital raising
Significant changes in accounting policies
Appointment or removal of Directors or the Company Secretary
Board composition
The Board currently comprises one executive director and four non-executive directors all of whom three are
deemed to be independent:
•
•
•
•
•
Symon Drake-Brockman – Executive Chairman
Stephen Lowden – Independent Non-executive
Michael Lombardi – Independent Non-executive
Alastair Ferguson – Independent Non-executive
Marcus Rhodes – Independent Non-executive
There is a clear division of responsibilities between the executive and non-executive directors.
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Zoltav Resources Inc.
Board balance and independence
Under the provisions of the UK Corporate Governance Code as a Smaller Company the Company meets the
requirements to have at least two independent non-executives on the Board.
The Board meets at least quarterly to discuss opportunities available to the Company as a whole.
The Company maintains insurance for Directors and Officers of the Company.
The Chairman of the Board is an executive and is responsible for the leadership and effective running of the
Board, including the interaction between executive and non-executive members, and for ensuring that the Board
is kept appropriately informed about the business activities of the Company. The Chairman also seeks to ensure
effective communication with shareholders and other stakeholders.
The Board has access to the Company’s advisers to notify them on financial, governance and regulatory
matters. Any Director wishing to do so in the furtherance of his duties may take independent professional advice
at the Company’s expense. This also applies to any Director in his capacity as a member of the Audit,
Remuneration or Nomination committees. Through the Chairman the Directors also have access to the
Company Secretary, Ogier Corporate Services (Jersey) Limited.
The Board is supported by specialised committees ensuring that sound governance procedures are followed.
The Corporate Governance section of the Company’s website includes the terms of reference of the Audit,
Remuneration and Nomination Committees at www.zoltav.com.
Board Committees
The Audit Committee
The Audit Committee currently comprises Marcus Rhodes, Stephen Lowden and Michael Lombardi, with
Marcus Rhodes as Chairman. The Board is satisfied that collectively the Audit Committee has sufficient, recent
and relevant financial experience.
The duties of the Audit Committee are to review the financial information of the Company, to oversee the
Company’s financial reporting processes and internal control systems, and to manage the relationship with the
Company’s external auditor. The Audit Committee also has primary responsibility for making recommendations
on the appointment, re-appointment and removal of the external auditor, and for approving any significant non-
audit services provided by the external auditor to ensure that objectivity and integrity are safeguarded. The Audit
Committee reports its work, findings and recommendations to the Board after each meeting.
The Remuneration and Nomination Committee
The Remuneration and Nomination Committee currently comprises Stephen Lowden, Michael Lombardi and
Alastair Ferguson with Stephen Lowden and Chairman.
The principal functions of the Remuneration and Nomination Committee include recommending to the Board the
policy and structure for the remuneration of the Chairman, Non-Executive Directors and (as determined by the
Board) senior management, determining the remuneration packages of the Chairman, the Non-Executive
Directors and senior management,
remuneration and
compensation for loss or termination of office payable to Non-Executive Directors and senior management,
ensuring that no Director is involved in deciding his own remuneration and approving the service contracts of
Directors and senior management. And
reviewing and approving performance-based
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Zoltav Resources Inc.
The report on remuneration is set out on page 15.
leading the process for appointments to the Board and make recommendations to the Board based on their
evaluation of the balance of skills, knowledge and experience on the Board.
Attendance at Board and Committee Meetings
The table below sets out the number of meetings of the Board and its committees during the year and
attendance by members at those meetings.
Meetings held during the year
Meetings attended during the year:
Symon Drake-Brockman
Stephen Lowden
John Grimshaw
Oliver Donagher
Michael Lombardi
David Francis
Internal control
Board meetings
9
Audit committee
meetings
2
7
6
5
5
6
5
-
2
2
-
2
-
The Board is responsible for maintaining a strong system of internal control and risk management to safeguard
shareholders’ investments and the Company’s assets. The system of internal control is designed, taking into
account the Company’s business objectives and strategy, to provide reasonable, but not absolute, assurance
against material misstatement or loss.
The criteria the Board uses to assess the effectiveness of the system of internal control include:
•
•
•
•
•
the nature and extent of the risks facing the Company;
the extent and categories of risk that the Board regards as acceptable for the Company to bear;
the likelihood of the risks materialising and the financial impact of the risks;
the Company’s ability to reduce the incidence and impact on the business of risks that do materialise;
and
the costs of operating particular controls relative to the benefit thereby obtained.
The Board has considered the need for an internal audit function but has decided, after taking into account the
current status of the Company, such a function is not at present justified. This decision will be kept under review
once the acquisition of RAECL is completed.
Relations with Shareholders
The Company believes that effective communication with shareholders is of utmost importance. It has an
established cycle for communicating trading results at the interim and year end stages and, as appropriate, of
providing business updates via the Regulatory News Service and press releases.
The Company makes information available through regulatory announcements and its interim and annual
reports. Copies of all such communications can be found on the Company website, www.zoltav.com.
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Zoltav Resources Inc.
Report on remuneration
The Board recognises that Directors’ and employees’ remuneration is of legitimate concern to shareholders, and
is committed to following good practice and to ensuring that the interests of the Directors and employees are
aligned with those of shareholders.
Policy on remuneration
The Company aims to set levels of remuneration that are sufficient to attract, retain and motivate Directors and
senior management of the quality required to run the Company successfully, whilst ensuring that the interests of
Directors and employees are aligned with those of shareholders. The Company operates within a competitive
environment in which the Company’s performance depends on the individual contributions of the Directors.
When determining annual salaries and performance-based remuneration the Company takes into account the
following factors:
•
•
direct and indirect contribution towards the Company’s current profitability;
the development of businesses or transactions that may help achieve the Company’s objective in future
years;
the quality of earnings, in the context of market conditions, as well as the quantity of earnings;
vision and innovation;
remuneration levels and practices in other firms engaged in similar activities; and
incentive to continue to contribute to the Company’s objectives.
•
•
•
•
Directors’ remuneration
The remuneration of the Directors for the year ended 31 December 2013 is shown in the table below.
Symon Drake-
Brockman
Oliver
Donagher *2
John
Grimshaw *1
Michael
Lombardi*2
Stephen
Lowden
David
Francis*3
Total
US$
234,769
US$
26,936
US$
44,186
US$
44,186
US$
131,492
US$
56,389
US$
537,958
-
-
-
-
-
-
-
234,769
236,759
1,357,708
1,594,467
26,936
-
44,186
-
44,186
-
131,492
132,882
56,389
132,882
537,958
502,523
-
-
-
-
-
-
543,083
271,541
2,172,332
675,965
404,423
2,674,855
Salary
Share based
compensation
2013 Total
Salary
Share based
compensation
2012 Total
*1 Appointed 19 March 2013
*2 Appointed 7 June 2013
*3 Resigned 7 June 2013
Share price
During the year, the share price of the Company traded in the range of £0.70 to £1.76 pence. The share price on
11 November 2014, the last date prior to shares being temporarily suspended was £1.04.
15
Zoltav Resources Inc.
Independent auditors’ report to the directors of Zoltav
Resources Inc.
Report on the group financial statements
Our opinion
In our opinion the financial statements, defined below:
•
•
give a true and fair view of the state of the group’s affairs as at 31 December 2013 and of its loss and cash flows for the year
then ended; and
have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the
European Union.
This opinion is to be read in the context of what we say in the remainder of this report.
What we have audited
The non-statutory group financial statements (the “financial statements”), which are prepared by Zoltav Resources Inc., comprise:
•
•
•
•
•
the consolidated statement of financial position as at 31 December 2013;
the consolidated statement of comprehensive income for the year then ended;
the consolidated statement of cash flows for the year then ended;
the consolidated statement of changes in equity for the year then ended; and
the notes to the financial statements, which include a summary of significant accounting policies and other explanatory
information.
The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the
European Union.
In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect
of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.
Certain disclosures required by the financial reporting framework have been presented elsewhere in the Annual Report and Audited
Consolidated Financial Statements, rather than in the notes to the financial statements. These are cross-referenced from the
financial statements and are identified as audited.
What an audit of financial statements involves
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). An
audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an
assessment of:
• whether the accounting policies are appropriate to the group’s circumstances and have been consistently applied and
adequately disclosed;
the reasonableness of significant accounting estimates made by the directors; and
the overall presentation of the financial statements.
•
•
In addition, we read all the financial and non-financial information in the Annual Report and Audited Consolidated Financial
Statements to identify material inconsistencies with the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing
the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our
report.
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Statement of Directors' responsibilities set out on page 11, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK &
Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
16
Zoltav Resources Inc.
This report, including the opinion, has been prepared for and only for the company’s directors as a body to meet their reporting
obligations under the AIM rules for Companies issued by the London Stock Exchange in accordance with our engagement letter
dated 13 December 2013 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into whose hands it may come, including without limitation under
any contractual obligations of the company, save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
23 May 2014
17
Zoltav Resources Inc.
Consolidated statement of comprehensive income for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
Note
2013
2012
Other gains/(losses) - net
Operating expenses
Operating loss
Net finance income/(cost)
Loss before taxation
Taxation
Loss for the year
Other comprehensive income
Items that may be subsequently reclassified
to the income statement
Currency translation differences
Other comprehensive income for the year,
net of tax
13
6
8
10
30
(4,419)
(65)
(3,462)
(4,389)
(3,527)
23
(1)
(4,366)
(3,528)
42
-
(4,324)
(3,528)
493
493
-
-
Total comprehensive loss for the year
(3,831)
(3,528)
Loss per share attributable to owners of the
parent during the year:
Basic
19
Diluted
US cents
US cents
(6.70)
(6.38)
(0.94)
(0.87)
All the items dealt with in arriving at the result for the year relate to continuing activities.
The accompanying notes form an integral part of these consolidated financial statements.
18
Zoltav Resources Inc.
Consolidated statement of financial position as at 31 December 2013
(in '000s US dollars, unless otherwise stated)
Note
2013
2012
ASSETS
Non-current assets
Exploration and evaluation assets
Property, plant and equipment
Total non-current assets
Current assets
Other receivables
Financial assets at fair value through profit or loss
Cash and cash equivalents
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Share capital
Share premium
Other reserves
Accumulated losses
Translation reserve
Total equity
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Other taxes payable
Trade and other payables
Total current liabilities
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
11
12
15
13
16
17
21
22
14
23
38,099
5
38,104
828
307
7,265
8,400
46,504
11,432
42,975
44,350
(61,249)
493
38,001
-
4,383
3,923
8,306
25
172
197
8,503
46,504
-
-
-
44
404
108
556
556
3,752
8,892
44,411
(56,925)
-
130
345
-
-
345
-
81
81
426
556
The consolidated financial statements on pages 18 to 54 were approved by the Board of Directors and
authorised for issue on 23 May 2014.
Symon Drake- Brockman
Chairman
The accompanying notes form an integral part of these consolidated financial statements.
19
Note
2013
2012
(4,389)
(3,528)
Zoltav Resources Inc.
Consolidated statement of cash flows for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
Cash flows from operating activities
Operating loss
Adjustments for:
Change in estimates of decommissioning and
environmental restoration provisions
Employee share-based compensation
Other gains/(losses) - net
Operating cash outflows before working capital
changes
(Increase)/decrease in other receivables
Increase/(decrease) in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Disposal of investment securities
Net cash acquired on acquisition of Cengeo
Capital expenditure in relation to exploration and
evaluation activities
Acquisition of office equipment
Net cash (used in)/generated from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Issue of ordinary shares
Net finance income
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Translation differences
Cash and cash equivalents at the beginning of the
year
8
13
13
12
21
17
-
(30)
(4,402)
(725)
107
(5,020)
127
82
(3,636)
(5)
(3,432)
777
(381)
15,000
12
15,408
6,957
200
108
Cash and cash equivalents at the end of the year
16
7,265
The accompanying notes form an integral part of these consolidated financial statements.
20
-
2,172
65
(1,290)
6
(49)
(1,333)
697
-
-
-
697
405
-
1
406
(231)
-
339
108
Zoltav Resources Inc.
Consolidated statement of changes in equity for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
Share capital
Share
premium
Capital
reserve
Note
Employee
share-based
compensation
reserve
Convertible
loan note
Accumulated
losses
Translation
reserve
Total equity
At 1 January 2012
3,752
8,892
40,444
1,734
-
(53,397)
Convertible loan note-equity
component
Employee share-based
compensation
Transactions with owners
Total comprehensive loss for the
year
20
-
-
-
-
-
-
-
-
-
-
-
-
-
2,172
2,172
-
At 31 December 2012
3,752
8,892
40,444
3,906
Issue of shares on conversion
21
Issue of ordinary shares
Transactions with owners
Translation reserve movements on
subsidiary
Loss for the year
218
7,462
7,680
545
33,538
34,083
-
-
-
-
-
-
-
-
-
-
-
-
-
-
At 31 December 2013
11,432
42,975
40,444
3,906
61
-
61
-
61
(61)
-
(61)
-
-
-
The accompanying notes form an integral part of these consolidated financial statements.
21
-
-
-
-
-
-
-
-
-
1,425
61
2,172
2,233
(3,528)
130
702
41,000
41,702
493
493
-
-
-
(3,528)
(56,925)
-
-
-
-
(4,324)
-
(4,324)
(61,249)
493
38,001
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
1
Background
1.1
The Company and its operations
The Zoltav Group (Group) comprises Zoltav Resources Inc. (Company), together with its
subsidiaries Zoltav Resources Holdings (Jersey) Limited and ZRI Services (UK) Ltd, CenGeo
Holdings Limited (hereinafter "CenGeo") and CJSC SibGeCo (hereinafter "SibGeCo").
The Company was incorporated in the Cayman Islands on 18 November 2003, which does not
prescribe the adoption of any particular accounting framework. The Board has therefore adopted
International Financial Reporting Standards (IFRS) issued by the International Accounting
Standards Board and as adopted by the European Union.
The principal activities of the Company and its subsidiaries (the "Group") are the acquisition,
exploration and development of hydrocarbon assets and production of hydrocarbons in the
Russian Federation. The Company's shares are listed on the AIM of London Stock Exchange.
The financial statements are prepared in United States Dollars.
CenGeo Holdings, incorporated in Cyprus, was acquired by Zoltav Resources Holdings (Jersey)
Limited on 4th July 2013. CenGeo Holdings has a 100% interest in SibGeCo, a company
incorporated in Russia, which holds the Koltogorsky production licence and the legacy
Koltogorsky exploration licences.
Zoltav Resources Holdings (Jersey) Limited was incorporated in Jersey as a private limited
company on 9 January 2013.
ZRI Services (UK) Ltd was incorporated in the United Kingdom as a private limited company on
29 January 2013.
1.2
Russian business environment
The Company's operations are located in the Russian Federation. Consequently, the Company is
exposed to the economic and financial markets of the Russian Federation which display
characteristics of an emerging market. The legal, tax and regulatory frameworks continue to
develop, but are subject to varying interpretations and frequent changes which, together with
other legal and fiscal aspects, contribute to the challenges faced by entities operating in the
Russian Federation. The historical financial information reflects management's assessment of the
impact of the Russian business environment on the operations and the financial position of the
Company. The future business environment may differ from management's assessment.
22
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
2
Significant accounting policies
2.1
Basis of preparation
The consolidated financial statements of The Group have been prepared in accordance with
International Financial Reporting Standards (IFRSs), as adopted by the European Union (EU),
International Financial Reporting Interpretations Committee (IFRIC) interpretations, and the
Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial
statements have been prepared under the historical cost convention, as modified by the
revaluation of financial assets and financial liabilities (including derivative instruments) at fair
value through profit or loss.
The preparation of financial statements in conformity with IFRSs requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed in Note 3.
2.2
Going concern
The consolidated financial statements have been prepared on the going concern basis as the
directors have concluded that the Group will continue to have access to sufficient funds in order
to meet its obligations as they fall due for at least the foreseeable future as explained further in
the Directors Report.
2.3
Disclosure of impact of new and future accounting standards
The accounting policies adopted are consistent with those of the previous financial year, except
for the following new and amended IFRS and IFRIC interpretations effective as of 1 January
2013:
(a)
Amendments early adopted by the Company
There were no standards, amendments and interpretations adopted early by the Company.
(b)
Standards, Amendment to Standards and Interpretations effective and relevant to
the Company's operations:
IAS 1 Presentation of Items of Other Comprehensive Income (Amendments)
The amendments to IAS 1 introduce a grouping of items presented in OCI. Items that will be
reclassified (‘recycled’) to profit or loss at a future point in time (e.g., net loss or gain on AFS
financial assets) have to be presented separately from items that will not be reclassified (e.g.,
revaluation of land and buildings). The amendments also require tax associated with items
presented before tax to be shown separately for each of the two groups of OCI items (without
changing the option to present items of OCI either before tax or net of tax).
23
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
IFRS 13 Fair Value Measurement
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements.
IFRS 13 does not change when an entity is required to use fair value, but rather provides
guidance on how to measure fair value under IFRS when fair value is permitted or required. In
general, the disclosure requirements in IFRS 13 are more extensive than those required by
current standards as entities are required to make various disclosures depending upon the nature
of the fair value measurement (e.g. whether it is recognised in the financial statements or merely
disclosed) and the level in which it is classified.
Adoption of these Accounting Standards and Interpretations in future periods will not have a
material impact on the operations of the Group.
(c)
New Standards, Amendment to Standards and Interpretations effective but not
relevant
IAS 1
IAS 19
IAS 28
IFRS 7
IFRS 1
IFRS 13
IFRIC 20
Financial Statement Presentation – Presentation of Items of Other
Comprehensive Income (Amendments)
Employee Benefits (Revised)
Investments in Associates and Joint Ventures (as revised in 2011)
Financial Instruments: Disclosures — Enhanced Derecognition
Disclosure Requirements (Amendments)
Government Loans (Amendments)
Fair value measurement
Stripping Costs in the Production Phase of a Surface Mine
Annual Improvements May 2012
Effective for annual
periods beginning or
after
01-Jul-12
01-Jan-13
01-Jan-13
01-Jan-13
01-Jan-13
01-Jan-13
01-Jan-13
01-Jan-13
(d)
New Standards, Amendment to Standards and Interpretations not yet effective and
relevant
IAS 27 Separate Financial Statements & IFRS 10 Consolidated Financial Statements effective for
periods beginning on or after 1 January 2014.
IFRS 10 replaces the portion of IAS 27 that addresses the accounting for consolidated financial
statements and the issues raised in SIC 12 Consolidation - Special Purpose Entities. IFRS 10
establishes a single control model that applies to all entities including special purpose entities.
The changes introduced will require management to exercise significant judgement to determine
which entities are controlled and therefore are required to be consolidated by a parent.
The Directors do not expect that the adoption of these Accounting Standards and Interpretations
in future periods will have a material impact on the operations of the Company.
24
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
(e)
Standards, Amendments and Interpretations not yet effective
IAS 32
IAS 36
IAS 39
IFRS 9
Various
IFRIC 21
Offsetting Financial Assets and Financial Liabilities (Amendments)
Recoverable Amount Disclosures for Non-Financial Assets
(Amendments)
Novation of Derivatives and Continuation of Hedge Accounting
(Amendments)
Financial Instruments - classification and measurement
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS
27)
Levies
Effective for annual
periods beginning or
after
01-Jan-14
01-Jan-14
01-Jan-14
01-Jan-18
01-Jan-14
01-Jan-14
The directors do not expect the new Standards, Amendments and Interpretations to have a
material impact on the financial statements.
2.4
Consolidation
The consolidated financial statements include the financial statements of the Company and its
subsidiaries. Subsidiaries are all entities in which the Group directly or indirectly owns more than
50 percent of the voting stock or otherwise has the power to govern the financial and/or operating
policies. Subsidiaries are fully consolidated from the date on which control is transferred to the
Group. They are de-consolidated from the date that control ceases.
The group uses the acquisition method of accounting to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the assets
transferred, the liabilities incurred and the equity interests issued by the group. The consideration
transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business combination are measured initially
at their fair values at the acquisition date. On an acquisition-by acquisition basis, the group
recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling
interest’s proportionate share of the acquiree’s net assets.
Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect
changes in consideration arising from contingent consideration amendments. Cost also includes
direct attributable costs of investment. The excess of the consideration transferred, the amount
of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous
equity interest in the acquiree over the fair value of the group’s share of the identifiable net assets
acquired is recorded as goodwill. If this is less than the fair value of the net assets of the
subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the
statement of comprehensive income. Inter-company transactions, balances and unrealised gains
on transactions between Group companies are eliminated; unrealized losses are also eliminated
unless the cost cannot be recovered.
25
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
The Company and its subsidiaries outside the Russian Federation maintain their financial
statements in accordance with IFRSs as adopted by the EU. The Russian subsidiaries of the
Group maintain their statutory accounting records in accordance with the Regulations on
Accounting and Reporting of the Russian Federation. The consolidated financial statements are
based on these statutory accounting records, appropriately adjusted and reclassified for fair
presentation in accordance with International Financial Reporting Standards as adopted by the
EU. A list of the Company’s subsidiaries is provided in Note 1.
2.5
Segment reporting
Segmental reporting follows the Group’s internal reporting structure.
Operating segments are defined as components of the Group where separate financial
information is available and reported regularly to the chief operating decision maker (“CODM”),
which is determined to be the Board of Directors of the Company. The Board of Directors which
decide how to allocate resources and assesses operational and financial performance using the
information provided.
The CODM receives monthly IFRS-based financial information for the Group and its development
and production entities. The Group has other entities that engage as either head office or in a
corporate capacity or as holding companies. Management has concluded that due to application
of the aggregation criteria that separate financial information for segments is not required. No
geographic segmental information is presented as all of the companies operating activities are
based in the Russian Federation.
Management has determined therefore that the operations of the Group comprise one class of
business, being oil and gas exploration, development and production and the Group operates in
only one geographic area - the Russian Federation.
2.6
Foreign currency translation
(a)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (“the functional
currency”). The consolidated financial statements are presented in US dollars, which is the
Company’s functional and the Group’s presentation currency.
The functional currency of the Group’s subsidiaries that are incorporated in the Russian
Federation is the Russian Rouble (“RUR”). It is the Management’s view that the RUR best
reflects the financial results of its Cyprus subsidiaries because they are dependent on entities
based in Russia that operate in an RUR environment in order to recover their investments. As a
result, the functional currency of the Cypriot and Russian subsidiaries continues to be the RUR.
26
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
(b)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in the statement
of comprehensive income. Translation differences on non-monetary financial assets and liabilities
are reported as part of the fair value gain or loss. Foreign exchange gains and losses that relate
to cash and cash equivalents, borrowings and other foreign exchange gains and losses are
presented in the statement of comprehensive income within operating expenses
(c)
Group companies
The results and financial position of all the Group entities (none of which has the currency of a
hyper-inflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
(i)
(ii)
assets and liabilities for each balance sheet presented are translated at
the closing rate at the date of that balance sheet;
income and expenses are translated at average exchange rates (unless
this average is not a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which case income and
expenses are translated at the rate on the dates of the transactions); and
(iii)
all resulting exchange differences are recognised in other comprehensive
income.
The major exchange rates used for the revaluation of the closing balance sheet at 31 December
2013 were:
US$ 1: RUR32.7292 (2012: US$ 1: RUR.30. 4769)
The accounting policies set out below have been applied consistently to all years presented in the
historical financial information, and have been applied consistently by the Company.
27
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
2.7
Exploration and evaluation assets
The Company and its subsidiaries apply the successful efforts method of accounting for
Exploration and Evaluation (“E&E”) costs, in accordance with IFRS 6 “Exploration for and
Evaluation of Mineral Resources”. Costs are accumulated on a field-by-field basis. Costs directly
associated with an exploration well, including certain geological and geophysical costs, and
exploration and property leasehold acquisition costs, are capitalised until the determination of
reserves is evaluated. If it is determined that a commercial discovery has not been achieved,
these costs are charged to expense after the conclusion of appraisal activities. Exploration costs
such as geological and geophysical that are not directly related to an exploration well are
expensed as incurred.
Capital expenditure is recognised as property, plant and equipment or intangible assets in the
financial statements according to the nature of the expenditure and the stage of development of
the associated field, i.e. exploration, development, production. Once commercial reserves are
found, exploration and evaluation assets are tested for impairment and transferred to
development property, plant and equipment and intangible assets. No depreciation or
amortisation is charged during the exploration and evaluation phase.
(a)
Impairment – exploration and evaluation assets
Exploration and evaluation assets are tested for impairment prior to reclassification to
development property, plant and equipment or intangible assets, or whenever facts and
circumstances indicate that an impairment condition may exist. An impairment loss is recognised
for the amount by which the exploration and evaluation assets’ carrying amount exceeds their
recoverable amount. The recoverable amount is the higher of the exploration and evaluation
assets’ fair value less costs to sell and their value in use. For the purposes of assessing
impairment, the exploration and evaluation assets subject to testing are grouped with existing
cash-generating units of production fields that are located in the same geographical region.
(b)
Decommissioning
Provision is made for the cost of decommissioning assets at the time when the obligation to
decommission arises. Such provision represents the estimated discounted liability (the discount
rate used currently being at 10% per annum) for costs which are expected to be incurred in
removing production facilities and site restoration at the end of the producing life of each field. A
corresponding item of property, plant and equipment is also created at an amount equal to the
provision. This is subsequently depreciated as part of the capital costs of the production facilities.
Any change in the present value of the estimated expenditure attributable to changes in the
estimates of the cash flow or the current estimate of the discount rate used are reflected as an
adjustment to the provision and the property, plant and equipment. The unwinding of the discount
is recognised as a finance cost.
28
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
2.8
Financial instruments
Financial assets and financial liabilities are recognised when and only when, the Company
becomes a party to the contractual provisions of the instrument. Financial assets and financial
liabilities are initially measured at fair value. 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 the statement of comprehensive income.
(a)
Financial assets
The Company classifies its financial assets into one of the following categories: financial assets at
fair value through profit or loss and loans and receivables.
Regular purchases of financial assets are recognised on the trade date. Management determines
the classification of its financial assets at initial recognition depending on the purpose for which
the financial assets were acquired and where allowed and appropriate, re-evaluates this
designation at every reporting date. The accounting policies adopted for each category are:
(b)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and
financial assets designated upon initial recognition at fair value through profit or loss. Financial
assets are classified as held for trading if they are acquired for the purpose of selling in the near
term, or it is part of a portfolio of identified financial instruments that are managed together and
for which there is evidence of a recent pattern of short-term profit-taking.
Financial assets may be designated at initial recognition as at fair value through profit or loss if
the following criteria are met:
•
•
the designation eliminates or significantly reduces the inconsistent treatment that would
otherwise arise from measuring the assets or recognising gains or losses on them on a
different basis; or
the assets are part of a group of financial assets which are managed and their
performance is evaluated on a fair value basis, in accordance with a documented risk
management strategy and information about the Company of financial assets is provided
internally on that basis to the key management personnel.
Subsequent to initial recognition, the financial assets included in this category are measured at
fair value with changes in fair value recognised in the statement of comprehensive income. Fair
value is determined by reference to active market transactions or using a valuation technique
where no active market exists. Fair value gains or losses do not include any dividend or interest
earned on these financial assets. Dividend and interest income is recognised in on an accruals
basis.
29
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
(c)
Other receivables
Other receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are initially measured at fair value and subsequently
measured at amortised cost using the effective interest method, less any impairment losses.
Amortised cost is calculated taking into account any discount or premium on acquisition and
includes fees that are an integral part of the effective interest rate and transaction cost.
Impairment losses on other receivables are provided for when objective evidence is received that
the Company will not be able to collect amounts due to it in accordance with the original terms of
the receivables. The amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows, excluding future credit
losses that have not been incurred, discounted at the financial asset’s original effective interest
rate (i.e. the effective interest rate computed at initial recognition). The amount of the loss is
recognised in the statement of comprehensive income for the period in which the impairment
occurs.
Objective evidence of impairment of individual financial assets includes observable data that
comes to the attention of the Company about one or more of the following loss events:
•
•
•
•
significant financial difficulty of the debtor;
a breach of contract, such as default or delinquency in interest or principal payments;
it becoming probable
reorganisation; and
significant changes in the technological, market, economic or legal environment that have
an adverse effect on the debtor.
the debtor will enter bankruptcy or other
financial
that
Loss events in respect of a Company of financial assets include observable data indicating that
there is a measurable decrease in the estimated future cash flows from the Company of financial
assets. Such observable data includes but not limited to adverse changes in the payment status
of debtors in the Company and, national or local economic conditions that correlate with defaults
on the assets in the Company.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed to the extent that it does not result in a carrying amount of
the financial asset exceeding what the amortised cost would have been had the impairment not
been recognised at the date the impairment is reversed.
The amount of the reversal is recognised in the statement of comprehensive income in the period
in which the reversal occurs.
(d)
Financial liabilities and equity
Financial liabilities and equity instruments issued by the Company are classified according to the
substance of the contractual arrangements entered into and the definitions of a financial liability
30
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
and an equity instrument. An equity instrument is any contract that evidences a residual interest
in the assets of the Company after deducting all of its liabilities. The accounting policies adopted
in respect of financial liabilities and equity instruments are set out below.
(e)
Other financial liabilities
Other financial liabilities include trade and other payables and are recognised initially at fair value
and subsequently measured at amortised cost, using the effective interest method.
(f)
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct
issue costs.
(g)
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the assets expire
or, the financial assets are transferred and the Company has transferred substantially all the risks
and rewards of ownership of the financial assets. On derecognition of a financial asset, the
difference between the asset’s carrying amount and the sum of the consideration received and
the cumulative gain or loss that had been recognised directly in equity is recognised in the
statement of comprehensive income.
For financial liabilities, they are removed from the balance sheet when the obligation specified in
the relevant contract is discharged, cancelled or expires. The difference between the carrying
amount of the financial liability derecognised and the consideration paid is recognised in the
statement of comprehensive income.
2.9
Acquisitions, asset purchases and disposals
Acquisitions of oil and gas properties are accounted for under the purchase method where the
target meets the definition of a business combination.
Transactions involving the purchases of an individual field interest, or a group of field interests,
that do not qualify as a business combination are treated as asset purchases, irrespective of
whether the specific transactions involved the transfer of the field interests directly or the transfer
of an incorporated entity. Accordingly, no goodwill or deferred tax gross up arises. The purchase
consideration is allocated to the assets and liabilities purchased on an appropriate basis.
Proceeds on disposal are applied to the carrying amount of the specific intangible asset or
development and production assets disposed of and any surplus is recorded as a gain on
disposal in the statement of comprehensive income.
31
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
2.10 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and amounts repayable on demand with
banks and short-term highly liquid investments which are readily convertible into known amounts
of cash without notice and are subject to an insignificant risk of changes in value and which were
within three months of maturity when acquired.
2.11 Share capital
Ordinary shares are classified as equity. Share capital is determined using the nominal value of
shares that have been issued. Any transaction costs associated with the issuing of shares are
deducted from share premium (net of any related income tax benefit) to the extent they are
incremental costs directly attributable to the equity transaction. Any discount on the issue of
ordinary shares is deducted from the share premium account.
The capital reserve arose in prior periods on the application of the reverse acquisition accounting
when the Company made its first acquisition.
2.12 Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the
statement of comprehensive income, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case the tax is also recognized in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at end of the reporting period in the countries where the Company’s subsidiaries operate
and generate taxable income. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated
financial statements. However, the deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the
time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantively enacted by the
end of the reporting period and are expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
32
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a
net basis.
2.13 Employee benefits
(a)
Retirement benefit schemes
No pension contributions were payable in the year. In 2010, the Company participated only in
defined contribution pension schemes and paid contributions to independently administered funds
on a mandatory or contractual basis. The assets of these schemes are held separately from
those of the Company in independently administered funds. The retirement benefit schemes are
generally funded by payments from employees and by the relevant Company. The Company has
no further payment obligations once the contributions have been paid. The contributions are
recognised as an employee benefit expense on an accruals basis.
(b)
Share-based employee compensation
The Company operates equity-settled share-based compensation plans to remunerate its
Directors and key management.
All services received in exchange for the grant of any share-based compensation are measured
at their fair values. These are indirectly determined by reference to the fair value of the share
options and warrants awarded. Their value is appraised at the grant date and excludes the impact
of any non-market vesting conditions.
All share-based compensation is ultimately recognised as an expense in the statement of
comprehensive income unless it qualifies for recognition as an asset, with a corresponding credit
to employee share-based compensation reserve in equity. If vesting periods or other vesting
conditions apply, the expense is allocated over the vesting period, based on the best available
estimate of the number of share options expected to vest. Non-market vesting conditions are
included in assumptions about the number of options that are expected to become exercisable.
Estimates are subsequently revised, if there is any indication that the number of share options
expected to vest differs from previous estimates. No adjustment to expense recognised in prior
periods is made if fewer share options ultimately are exercised than vested.
Upon exercise of share options or warrants the proceeds received net of any directly attributable
transaction costs up to the nominal value of the shares issued are allocated to share capital and
the amount previously recognised in employee share-based compensation reserve will be
transferred out with any excess being recorded as share premium.
When the share options or warrants have vested and then lapsed, the amount previously
recognised in the employee share-based compensation reserve is transferred to the retained
earnings or accumulated losses.
33
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
(c)
Bonus plans
The Company recognises a liability and an expense for bonuses where contractually obliged or
where there is a past practice that has created a constructive obligation.
(d)
Social obligations
Wages, salaries, contributions to the Russian Federation state pension and social insurance
funds, paid annual leave, sick leave and bonuses are accrued in the year in which the associated
services are rendered by the employees of the Group.
2.14 Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as
a result of a past event, and it is probable that an outflow of economic benefits will be required to
settle the obligation and a reliable estimate of the amount of the obligation can be made. Where
the time value of money is material, provisions are stated at the present value of the expenditure
expected to settle the obligation.
All provisions are reviewed at each reporting date and adjusted to reflect the current best
estimate.
Where it is not probable that an outflow of economic benefits will be required, or the amount
cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the
probability of outflow of economic benefits is remote. Possible obligations, whose existence will
only be confirmed by the occurrence or non-occurrence of one or more future uncertain events
not wholly within control of the Company are also disclosed as contingent liabilities unless the
probability of outflow of economic benefits is remote.
Provisions for environmental restoration, restructuring costs and legal claims are recognised
when: the group has a present legal or constructive obligation as a result of past events; it is
probable that an outflow of resources will be required to settle the obligation; and the amount has
been reliably estimated. Restructuring provisions comprise lease termination penalties and
employee termination payments. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any one item included in the same
class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to
settle the obligation using a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the obligation. The increase in the provision due to
passage of time is recognised as interest expense.
34
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
3
Critical accounting estimates and judgements
The preparation of the historical financial information in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the year in which the estimate are revised and in any
future years affected. The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year
are discussed below:
3.1
Income taxes
The Group is subject to income and other taxes. Significant judgement is required in determining
the provision for income tax and other taxes due to complexity of the tax legislation of the
Russian Federation. The taxation system in the Russian Federation continues to evolve and is
characterised by frequent changes in legislation official pronouncements and court decisions
which are sometimes contradictory and subject to varying interpretation by different tax
authorities. Taxes are subject to review and investigation by a number of authorities which have
the authority to impose severe fines penalties and interest charges. A tax year remains open for
review by the tax authorities during the three subsequent calendar years; however under certain
circumstances a tax year may remain open longer.
Deferred tax assets are recognised to the extent that it is probable the Group will generate
enough taxable profits to utilise deferred income tax recognised. Significant management
judgement is required to determine the amount of deferred tax assets recognised, based upon
the likely timing and the level of future taxable profits. Management prepares cash-flow forecasts
to support recoverability of deferred tax assets. Cash flow models are based on a number of
assumptions relating to oil prices, operating expenses, production volumes, etc. These
assumptions are consistent with those, used by independent reserve engineers. Management
also takes into account uncertainties related to future activities of the company and going concern
considerations. When significant uncertainties exist, deferred tax losses are not recognised even
if recoverability of these is supported by cash flow forecasts. Refer to further details in note 14.
3.2
Provision for decommissioning and environmental restoration
This provision is significantly affected by changes in technology, laws and regulations which may
affect the actual cost of decommissioning and environmental restoration to be incurred at a future
date. The estimate is also impacted by the discount rates used in the provisioning calculations.
The discount rates used are the Russian Government Bond Rates.
35
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
As at 31 December 2013 the provision has been estimated using a discount rate of 8.43% (31
December 2012: 7.3%, 31 December 2011: 6.4%; 31 December 2010: 5.0%) and a core inflation
rate of 3.4% as at 31 December 2013 (2012: 4.4%).
3.3
Impairment of assets
(a)
Exploration:
An impairment exercise will be performed at the end of the exploration and evaluation process.
When, at the end of the exploration and evaluation stage, commercial reserves are determined to
exist in respect of a particular field the Company will perform an impairment test in relation to
costs capitalised. Where reserves are determined in sufficient quantity to justify development, the
associated assets are transferred to property plant and equipment. Until conclusion of the
exploration phase, there can be no certainty that commercial reserves exist. Where commercial
reserves are determined not to exist, capitalised E&E expenditure is expensed.
3.4
Valuations of share options or warrants granted
The fair value of share options or warrants granted was calculated using the Black-Scholes
Pricing Model which requires the input of highly subjective assumptions, including the volatility of
the share price. Because changes in subjective input assumptions can materially affect the fair
value estimate, in the opinion of the Directors of the Company, the existing model will not always
necessarily provide a reliable single measure of the fair value of the share options. Details of the
inputs are set out in note 20 to the financial statements.
4
Acquisition of CenGeo
In July 2013, the Group purchased 100% of the share capital of CenGeo.
The acquisition of CenGeo by the Group was determined to be an asset acquisition due to
CenGeo having no significant processes or outputs. The consideration paid by the Group was
$26million settled by the issue of ordinary shares in the Company.
On acquisition, the Group acquired net liabilities of US$8million and with a value of $34million
attributed to the acquired evaluation and exploration assets.
5
Determination of fair value
A number of the Company's accounting policies and disclosures require the determination of fair
value, for both financial and non-financial assets and liabilities. Fair values have been determined
for measurement and / or disclosure purposes based on the following methods. When applicable,
further information about the assumptions made in determining fair values is disclosed in the
notes specific to that asset or liability.
36
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
5.1
Other receivables
The fair value of other receivables is estimated as the present value of future cash flows,
discounted at the market rate of interest at the reporting date. This fair value is determined for
disclosure purposes.
5.2
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value
of future principal and interest cash flows, discounted at the market rate of interest at the
reporting date. The book value of the non derivative financial assets is equal to their fair value.
6
Operating expenses
Directors' fees and salaries
Share-based compensation
Accountancy, consulting and other advisory
fees
Currency translation differences
Other expenses
2013
1,121
-
1,872
(11)
1,437
4,419
2012
503
2,172
383
-
404
3,462
7
Employee benefit expenses (including directors' remuneration)
Salaries, allowances and benefits in kind
Share-based compensation
2013
1,121
-
1,121
2012
503
2,172
2,675
Six Directors served during the current year. The remuneration of the highest paid Director was
US$234,769 (2012: US$1,594,467). Details of Directors’ benefit expense are disclosed in the
report on remuneration on page 15.
37
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
8
Net finance income/(costs)
Interest on borrowings
Interest on deposits
Unwinding of the discount on decommissioning and
environmental restoration provision
Total
9
Loss before taxation
Loss before taxation is arrived at after charging:
Auditors’ remuneration:
Fee payable to the Company’s auditor for the audit of the
Company’s financial statements
Fees payable to the Company’s auditors’ for other services:
- Other assurance services
- Tax advisory and compliance
Employee benefits expenses (including Directors’
remuneration)
2013
(5)
17
11
23
2012
(1)
-
-
(1)
2013
2012
75
45
969
30
1,121
-
-
2,675
10
Taxation
The Company is subject to Jersey income tax at the rate of 0% (2012 0%).
The Company has significant unrelieved tax losses, the utilisation of which is uncertain and
consequently no deferred tax asset has been recognised.
One of the subsidiaries, SibGeCo, is subject to income tax on its losses as detailed below:
Income tax benefit
Deferred income tax benefit
- Origination and reversal of temporary differences
Income tax benefit
2013
2012
42
42
-
-
38
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
11
Exploration and evaluation assets
Exploration,
evaluation and
other property,
plant and
equipment
Licences and
other
intangibles
Decommissioning
asset
Construction
work in
progress
Total
Additions on acquisition
of Cengeo
Additions subsequent to
acquisition
Change in the estimates
of decommissioning
provision
Exchange difference
Balance at 31 December
2013
17,499
15,497
1,862
-
34,858
1,784
-
(71)
-
-
(287)
-
1,852
3,636
(18)
(16)
-
(3)
(18)
(3,77)
19,212
15,210
1,828
1,849
38,099
There are no opening balances as the exploration and evaluation assets were acquired through
the acquisition of Cengeo.
12
Property, plant and equipment
Cost
Additions
At 31 December 2013
Accumulated depreciation and impairment
Charge for 2013
At 31 December 2013
Net book value at 31 December 2012
Net book value at 31 December 2013
Office
equipment
5
5
-
-
-
5
39
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
13
Financial assets at fair value through profit or loss
Listed securities:
Equity securities - USA
Equity securities - United Kingdom
Fair value of listed securities
2013
2012
-
307
307
1
403
404
The movement in financial assets at fair value through profit or loss during the year is as follows:
At 1 January
Disposals during the year
Unrealised loss on financial assets at fair value through
profit or loss
Realised gain on disposal of financial assets at fair value
through profit or loss
At 31 December
2013
404
(127)
(35)
65
307
2012
1,166
(697)
(100)
35
404
13.1 Fair value measurements recognised in the statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to
initial recognition at fair value, grouped into level 1 to 3 based on the degree to which the fair
value is observable:
•
•
•
level 1 fair value measurements are those derived from quoted prices (unadjusted) in
active markets for identical assets and liabilities;
level 2 fair value measurements are those derived from inputs other than quoted prices
included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
level 3 fair value measurements are those derived from valuation techniques that include
inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
31 December 2013
Financial assets at FVPL
31 December 2012
Financial assets at FVPL
Level 1 Level 2
Level 3
Total
307
404
-
-
-
-
307
404
There were no transfers between level 1, 2 and 3 during the year (2012: none).
40
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
14
Deferred tax assets and liabilities
Movements in temporary differences during the year:
31 December
2013
Recognised
in profit or
loss
Exchange
difference
Acquired on
acquisition of
Cengeo
Exploration and evaluation asset
Borrowings
Deferred tax liabilities
(3,923)
-
(3,923)
42
-
42
16
-
16
(3,897)
-
(3,897)
There are no opening balances as the deferred tax assets and liabilities were acquired through
the acquisition of Cengeo.
Deferred income tax assets are not recognised for tax losses carried forward to the extent that
the realisation of the related tax benefit through future taxable profits are not probable. The Group
has not recognised deferred income tax assets of $9,637,810.
The deferred tax liabilities expire in 2018-2023.
15
Other receivables
VAT receivable
Other taxes prepaid
Advances / prepayments
Total
2013
662
39
127
828
2012
-
-
44
44
16
Cash and cash equivalents
Cash and cash equivalents are represented by cash at bank and the majority of cash held is
denominated in USD.
The Company's exposure to credit risk and impairment losses related to cash and cash
equivalents are disclosed in Note 26.
17
Share capital
At 31 December 2013
Authorised
(par value of US$0.20 each)
Number of
ordinary shares
Value
250,000,000
50,000
41
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
Issued and fully paid
(par value of US$0.20 each)
At 31 December 2012
Authorised
(par value of US$0.01 each)
Issued and fully paid
(par value of US$0.01 each)
57,161,189
11,432
5,000,000,000
50,000
375,244,344
3,752
On 7 June 2013 21,846,635 ordinary shares of US$0.01 each were issued on conversion of the
Loan Note (see note 21).
On 3 July 2013 the 5,000,000,000 ordinary shares of US$0.01 each in the authorised share
capital (whether issued or otherwise) of the Company (being US$50,000,000 in aggregate) were
consolidated and divided into 250,000,000 ordinary shares with a par value of US$0.20.
On the date of consolidation, there were 397,090,979 shares of US0.01 in issue which were
converted to an equivalent of 19,854,548 ordinary shares of US$0.20 each.
On 5 July 2013 11,828,935 ordinary shares of US$0.20 each were issued for consideration of
US$13,000,000.
On 5 July 2013 23,657,870 ordinary shares of US$0.20 each were issued for consideration of
US$26,000,000, being the acquisition price of Cengeo.
On 30 December 2013, 1,819,836 shares of US$0.20 were issued for a consideration of
US$2,000,000.
18
Dividends
In accordance with the relevant legislation applicable to the Group, the Group's distributable
reserves are limited to the balance of retained earnings as recorded in the Group's statutory
financial statements prepared in accordance with International Accounting Standards. For all
comparable years the Group had accumulated losses in accordance with the statutory financial
statements and therefore no dividends could be declared or paid.
19
Loss per share
Basic loss per share is calculated by dividing the loss attributable to owners of the Company by
the weighted average number of ordinary shares in issue during the year.
42
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. The Company has two
categories of dilutive potential ordinary shares: convertible loans and share options/warrants.
Loss attributable to owners of the Company - Basic
Loss attributable to owners of the Company - Diluted
Weighted average number of shares for calculating basic loss
per share
Effect of dilutive potential ordinary shares - warrants
Effect of dilutive potential ordinary shares - share options
Effect of dilutive potential ordinary shares - convertible loan
Weighted average number of shares for calculating diluted loss
per share
Basic loss per share
Diluted loss per share
2013
2012
(3,831)
(3,831)
(3,528)
(3,527)
Number of
Shares
Number of
Shares
57,161,189 375,244,344
527,500 10,550,000
14,016,667
3,623,188
2,367,500
-
60,056,189 403,434,199
US cents
US cents
(6.70)
(0.94)
(6.38)
(0.87)
The diluted loss per share for 2013 is US Cents 6.38 taking into account the existing warrants,
share options and in the previous year, the convertible Loan Note (2012: US Cents 0.87).
20
Share-based payments
20.1 Share options
At 31 December 2013, the Company had a total of 2,367,500 outstanding share options (2012:
47,350,000). The only movement in share options was a result of the share consolidation which
took place during the year.
Options which are lapsed or are cancelled prior to their exercise date are deleted from the
register of outstanding options and are available for re-use.
Date of grant
Number
Option
exercise price
(pence)
Number
Option
exercise price
(pence)
2013
2012
43
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
11 January 2005
23 March 2006
23 February 2007
11 January 2008
31 October 2012
117,500
10,000
7,500
232,500
2,000,000
2,367,500
423
1904
653
445
20
2,350,000
200,000
150,000
4,650,000
40,000,000
47,350,000
21.15
95.20
32.65
22.25
1.00
No share options were granted during the year ended 31 December 2013. On 3 July 2013 the
authorised ordinary share capital of the Company was consolidated and divided into 250,000,000
ordinary shares with a par value of $0.20. As such the share options have been adjusted
accordingly.
During the year ended 31 December 2012 a total of 40,000,000 share options were issued to the
current Directors of the Company.
20.2
Initial Share Options
The Company adopted an employee Share Option Scheme on 4 March 2005 (Share Option
Scheme) in order to incentivise key management and staff. The following share options were
granted to the former employees and directors of the Company under the Initial Share Option
Scheme adopted on 4 March 2005 (Initial Share Options) and are still in existence:
2013
2012
Number
Outstanding at 1 January
Share consolidation
Outstanding at 31 December
7,350,000
(6,982,500)
367,500
Weighted
average
exercise price
(pence)
24.11
482.20
Number
7,350,000
-
7,350,000
Weighted
average
exercise price
(pence)
24.11
24.11
Share options granted under the Initial Share Option scheme were exercisable as follows:
•
•
•
the first 30% of the options between the first and tenth anniversary of the date of grant;
the next 30% of the options between the second and tenth anniversary of the date of
grant; and
the remaining options between the third and tenth anniversary of the date of grant.
Equity-settled share-based payments are measured at fair value (excluding the effect of non-
market-based vesting conditions) as determined through use of the binomial option pricing model,
at the date of grant. The fair value determined at the grant date of the equity-settled share-based
44
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
payments is expensed on a straight-line basis over the vesting period, based on the Company’s
estimate of shares that will eventually vest. The options vested immediately.
The binomial option pricing model applied to the grant of share options in respect of calculating
the fair values. Key inputs to the model are as follows:
Share options
11 January
2005
23 March
2006
23 February
2007
11 January
2008
Share price at grant
Option exercise price
Expected life of option
Expected volatility
Expected dividend yield
20.75p
21.15p
10 years
60 - 65%
5.0%
93.25p
95.20p
10 years
60 - 65%
5.0%
36.25p
32.65p
10 years
60 - 65%
5.0%
22.25p
22.25p
10 years
60 - 65%
5.0%
Volatility has been based on the historical trading performance of the Company and comparable
companies. The risk free rate has been determined based on 10 year government bonds.
Total fair value as considered in the employee share-based compensation reserve for Initial
Share Options was US$1,235,000 (2012 US$1,235,000).
20.3 Directors Share Options
Share options granted to the current Directors of the Company on 31 October 2012 (Directors
Share Options) were exercisable at any time between the commencement of the option period
and third anniversary of the date of grant. Share options granted under this scheme were as
follows:
2013
2012
Number
Weighted
average
exercise price
(pence)
Number
Weighted
average
exercise price
(pence)
Outstanding at 1 January
Issued in the year
Share consolidation
Outstanding at 31 December
40,000,000
-
(38,000,000)
2,000,000
1.00
-
-
40,000,000
20.00
40,000,000
-
1.00
1.00
Equity-settled share-based payments are measured at fair value (excluding the effect of non-
market-based vesting conditions) as determined through use of the Black-Scholes technique, at
the date of grant. The fair value determined at the grant date of the equity-settled share-based
45
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
payments is expensed on a straight-line basis over the vesting period, based on the Company’s
estimate of shares that will eventually vest. The options vested immediately.
The Black-Scholes formula is the option pricing model applied to the grant of share options in
respect of calculating the fair values. Key inputs to the model are as follows:
Share price at grant
Option exercise price
Expected life of option
Expected volatility
Expected dividend yield
Risk free rate
Fair value per share option
Exchange rate used (USD:GBP)
Share options
31 October
2012
3.45p
1.00p
3 years
216.1%
0.0%
0.49%
3.342p
1.61529
Volatility has been based on the Company’s trading performance from 1 January 2011. The risk
free rate has been determined based on 5 year government bonds.
Total fair value as considered in the employee share-based compensation reserve for Directors
Share Options was US$2,172,332 (2012: US$2,172,332).
20.4 Warrants
In August 2011, the Company granted 10,550,000 warrants with an exercise price of 5.0 pence,
vesting from 2 August 2011 to 2 August 2014. These were issued to the following:
Peter Bayard Moss
Robert John Richard Owen
ECK Partners Holdings Limited
Old Church Street Holdings Limited
2013
Number
(after share
consolidation)
12,500
15,000
250,000
250,000
527,500
2012
Number
250,000
300,000
5,000,000
5,000,000
10,550,000
All shares issued in respect of the warrants rank pari-passu in all respects with the ordinary
shares. Following the share consolidation on 3 July 2013, there was no mechanism for the
46
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
adjustment of the warrants in issue. The warrant holders gave their consent for adjustment as
shown above.
Equity-settled share-based payments are measured at fair value (excluding the effect of non-
market-based vesting conditions) as determined through use of the Black-Scholes technique, at
the date of grant. The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based on the Company’s
estimate of shares that will eventually vest. The options vested immediately.
The Black-Scholes formula is the option pricing model applied to the grant of warrants in respect
of calculating the fair values. Key inputs to the model are as follows:
Share price at grant
Warrant exercise price
Expected life of warrants
Expected volatility
Expected dividend yield
Risk free rate
Fair value per share warrant
Exchange rate used (USD:GBP)
Share
warrants
2 August 2011
3.85p
5.00p
3 years
217.5%
0%
5.3%
3.075p
1.54
Volatility has been based on the Company’s trading performance from 1 January 2011. The risk
free rate has been determined based on 5 year government bonds.
Total fair value as considered in the employee share-based compensation reserve for warrants
was US$498,943 (2012: US$498,943).
20.5 Total share options and warrants
Total fair value for both share options and warrants as considered in the employee share-based
compensation reserve was US$3,906,275 (2012: US$3,906,275).
US$ nil of the employee share-based compensation is included in the statement of
comprehensive income for 2013 (2012: US$2,172,332).
No liabilities were recognised due to share-based payment transactions.
47
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
21
Borrowings
21.1 Non-current borrowings
Borrowings
Convertible loan note
Total current debt
2013
-
-
2012
345
345
The Company's exposure to liquidity risk related to borrowings is disclosed in Note 26.
Convertible loan note
The Company issued an unsecured 1.0% interest bearing convertible loan note (Loan Note), at
the par amount of £500,000 on 15 September 2012 (Issue Date) to be drawn down in two
tranches of £250,000 each. The Loan Note matures three years from the issue date at the
nominal value of £500,000 or at any time during the life of the Loan Note, can be converted into
shares at the holder's option at the rate of 1 share per £0.023. The values of the liability
component and the equity conversion component were determined at the issuance of the Loan
Note.
The fair value of the liability component, included in non-current borrowings, was calculated using
a market interest rate for an equivalent non-convertible loan note. The residual amount,
representing the value of the equity conversion option, is included in shareholders' equity in other
reserves.
The first tranche of £250,000 was drawn down during the year ended 31 December 2012, and the
second tranche of £250,000 was drawn down in the six month period ended 30 June 2013. The
Loan Note together with accrued interest totalling £502,473 ($763,127) was converted into
21,846,635 ordinary shares on 7 June 2013.
The Loan Note was recognised in the statement of financial position as follows:
Face value of Loan Note
Equity component
Liability component on initial recognition
Interest expense
Liability component
2013
2012
-
-
-
-
-
405
(61)
344
1
345
The fair value of the liability component of the Loan Note at 31 December 2013 amounted to
US$nil (2012: US$345,583). The fair value was calculated using cash flows discounted at a rate
based on the borrowings rate of 6.64%.
48
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
22
Decommissioning and environmental restoration provision
The decommissioning and environmental restoration provision represents the net present value
of the estimated future obligations for abandonment and site restoration costs which are expected
to be incurred at the end of the production lives of the oil fields which is estimated to be in excess
of 20 years.
Provision as at 1 January
Assumed in acquisition of CenGeo
Unwinding of discount
Change in estimate of decommissioning and
environmental restoration provision
Exchange difference
Provision as at 31 December
2013
-
4,358
(18)
(18)
61
4,383
This provision has been created based on the Company's internal estimates of the liability
assumed in the acquisition of CenGeo Holdings. Assumptions, based on the current economic
environment, have been made which the directors believe are a reasonable basis upon which to
estimate the future liability. These estimates are reviewed regularly to take into account any
material changes to the assumptions. However, actual decommissioning costs will ultimately
depend upon future market prices for the necessary dismantlement works required which will
reflect market conditions at the relevant time. Furthermore, the timing is likely to depend on when
the fields cease to produce at economically viable rates. This in turn will depend upon future oil
prices and future operating costs which are inherently uncertain.
The provision reflects two liabilities: one is to dismantle the property, plant and equipment assets
and the other is to restore the environment. The decommissioning part of the provision is
reversed when an oil well is abandoned and corresponding capitalised costs are expensed .The
environmental part of the provision is reversed when the expenses on restoration are actually
incurred.
The reversal of provision arises when the corresponding capitalised costs directly attributable to
an exploration and evaluation asset are expensed as it is determined that a commercial discovery
has not been achieved and the restoration of the corresponding environment has been made.
The discount rates used to determine the Decommissioning and environmental restoration
provision is based on the Russian Government Bond Rates. The provision has been estimated
using a discount rate of 8.43% (31 December 2012: 7.3%; 31 December 2011: 6.4%). The
change is estimate above is solely as a result of the change in the discount rates.
49
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
23
Trade and other payables
Accrued expenses
Trade payables
Payables to employees
Total
24
Operating leases
2013
145
11
16
172
2012
81
-
-
81
The Company had no operating lease commitments at 31 December 2013 (2012: none).
25
Capital commitments
The Company had no material capital commitments at 31 December 2013 (2012: none).
26
Financial risk management
26.1 Overview
The Company has exposure to the following risks from its use of financial instruments:
•
•
•
•
liquidity risk
foreign currency risk
Credit risk
Capital risk
This note presents information about the Company's exposure to each of the above risks, the
Company's objectives, policies and processes for measuring and managing risk, and the
Company's management of capital. Further quantitative disclosures are included throughout this
historical financial information.
The Company's risk management policies deal with identifying and analysing the risks faced by
the Company, setting appropriate risk limits and controls, and monitoring risks and adherence to
limits. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Company's activities. The Company, through its internal policies, aims to
develop a disciplined and constructive control environment in which all employees understand
their roles and obligations.
26.2
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they
fall due. The Company monitors the risk of cash shortfalls by means of current liquidity planning.
The Company's approach to managing liquidity is to ensure, as far as possible, that it will always
50
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
have sufficient liquidity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
This approach is used to analyse payment dates associated with financial assets, and also to
forecast cash flows from operating activities. The contractual maturities of financial liabilities
presented including estimated interest payments.
Under the terms of the Koltogor licence, the Company has already undertaken all obligations
required for 12 months from the date of approval of these financial statements.
Financial liabilities as at 31
December 2013
Trade and other payables
Total
Financial liabilities as at 31
December 2012
Unsecured borrowings
Trade and other payables
Total
Contractual
amount
Less than 1
year
1-2 years
Over 5 years
197
197
197
197
-
-
-
-
Contractual
amount
Less than 1
year
1-2 years
Over 5 years
345
81
426
-
81
81
-
-
-
345
-
345
There is no material difference between the carrying value and fair value of financial liabilities.
26.3 Foreign exchange rate risk
The Company does not have any significant exposure to foreign currency risk as no significant
sales, purchases and borrowings are denominated in a currency other than the functional
currency of SibGeCo, which is the RUB.
The Group's main operations are within the Russian Federation when all of its costs and
financing are denominated in RUB. The Company is exposed to foreign exchange movements to
the extent that its US$ holdings become mismatched with its RUB commitments.
The Group does not currently enter into forward exchange contracts or otherwise hedge its
potential foreign exchange exposure.
51
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
26.4 Credit risk
Credit risk arises principally from the Group’s financial investments, trade and other receivables
and cash and cash equivalents. It is the risk that the value of the Group’s investments will not be
recovered and the risk that the counterparty fails to discharge its obligation in respect of the
Company’s trade and other receivables and cash balances. The maximum exposure to credit risk
equals the carrying value of these items in the financial statements.
Credit risk with cash and cash equivalents is reduced by placing funds with banks with acceptable
credit ratings and indicated government support where applicable.
26.5 Capital risk
The Company considers its capital and reserves attributable to equity shareholders to be the
Company’s capital. In managing its capital, the Company’s primary long-term objective is to
provide a return for its equity shareholders through capital growth. Going forward the Company
may seek additional investment funds and also maintain a gearing ratio that balances risks and
returns at an acceptable level and also to maintain a sufficient funding base to enable the
Company to meet its working capital needs. Details of the Company’s capital is disclosed in the
statement of changes in equity.
There have been no other significant changes to the Company’s management objectives, policies
and processes in the year nor has there been any change in what the Company considers to be
capital.
The Company is not subject to externally imposed capital requirements.
27
Commitments and contingents
27.1
Insurance
The insurance industry in the Russian Federation is in a developing state and many forms of
insurance protection common in other parts of the world are not generally available. The
Company does not have full coverage for its business interruption or third party liability in respect
of property or environmental damage arising from accidents on Company property or relating to
Company operations. Until the Company obtains adequate insurance coverage there is a risk that
the loss or destruction of certain assets could have a material adverse effect on the Company's
operations and financial position.
27.2
Litigation
The Company was involved in the number of court procedures (both as a plaintiff and as a
defendant) arising in the course of business. In the opinion of management there are no current
legal proceedings or other claims outstanding which could have a material adverse effect on the
results of operation financial position or cash flows of the Company and which have not been
accrued or disclosed in this historical financial information.
52
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
27.3 Taxation contingencies
The taxation system in the Russian Federation continues to evolve and is characterised by
frequent changes in legislation official pronouncements and court decisions which are sometimes
contradictory and subject to varying interpretation by different tax authorities. Taxes are subject to
review and investigation by a number of authorities which have the authority to impose severe
fines penalties and interest charges. A tax year remains open for review by the tax authorities
during the three subsequent calendar years; however under certain circumstances a tax year
may remain open longer. Recent events within the Russian Federation suggest that the tax
authorities are taking a more assertive and substance-based position in their interpretation and
enforcement of tax legislation.
These circumstances may create tax risks in the Russian Federation that are substantially more
significant than in other countries. Management believes that it has provided adequately for tax
liabilities based on its interpretations of applicable Russian tax legislation official pronouncements
and court decisions. However the interpretations of the relevant authorities could differ and the
effect on this historical financial information if the authorities were successful in enforcing their
interpretations could be significant.
27.4 Environmental matters
The Group's operations are in the upstream oil industry in the Russian Federation and its
activities may have an impact on the environment. The enforcement of environmental regulations
in the Russian Federation is evolving and the enforcement posture of government authorities is
continually being reconsidered. The Group periodically evaluates its obligation related thereto.
The outcome of environmental liabilities under proposed or future legislation, or as a result of
stricter interpretation and enforcement of existing legislation, cannot reasonably be estimated at
present, but could be material.
Under the current levels of enforcement of existing legislation, management believes there are no
significant liabilities in addition to amounts which are already accrued and which would have a
material adverse effect on the financial position of the Group.
28
Related party transactions
28.1 Control relationships
Related parties include shareholders, affiliates and entities under common ownership and control
with the Company and key management personnel.
53
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
28.2 Management remuneration
There are no transactions or balances with key management and their close family members,
except for remuneration in the form of salary and bonuses.
Due to the small organisational structure of the Company all salaries expenses are related to the
key management personnel (refer to Note 7).
28.3 Other related parties
The Company’s largest shareholder, ARA Capital subscribed for additional shares totalling
US$15 million during the year.
The convertible loan note provided to the Company by ARA Capital during 2012, totalling
£500,000, was converted (together with accrued interest) into Zoltav shares on 7 June 2013.
ARA Capital also provided the Company with an unsecured loan of £250,000 on 9 April 2013.
This was repaid fully (together with interest) following completion of the Cengeo acquisition three
months later.
On 16 December 2013 the Company signed a Sale and Purchase Agreement with Bandbear
Limited, currently a 32.5 per cent shareholder in Zoltav, to acquire Royal Atlantic Energy (Cyprus)
Limited ("Royal Atlantic Energy") which, through a wholly-owned subsidiary, holds the Bortovoy
Licence (the "Licence"), a 3,215 square kilometre licence in the Saratov Oblast of the Russian
Federation. The licence contains a number of gas fields, a processing plant located in the West of
the Licence and significant exploration prospectivity in the East of the Licence
There were no other related party transactions during the period.
29
Events after reporting date
Proceeds of equity issue
On 31 March 2014, Zoltav received $5 million related to the third tranche of the subscription
agreement entered with ARA Holdings at the time of the Company’s readmission to AIM following
the acquisition of SibGeCo.
On 13 December 2013, the Company signed a Sale and Purchase Agreement with Bandbear
Limited (the "Vendor"), currently a 29.1 per cent. shareholder in the Company, to acquire RAECL
(and with it the Bortovoy Licence described above) for US$180 million. The proposed acquisition
(which is expected to be completed by the end of the second quarter of 2014) will be satisfied
through the issue of 38,263,095 new Ordinary Shares at an effective price of US$1.60 (100
pence) per share (equivalent to US$61.22 million); the payment of US$58.94 million in cash ( and
the assumption of US$60.9 million of bank debt.
54
Zoltav Resources Inc.
Notes to the consolidated financial statements for the year ended 31 December 2013
(in '000s US dollars, unless otherwise stated)
30
Date of approval of financial statements
The financial statements were approved by the Board of Directors on 23 May 2014.
31
Availability of annual report and financial statements and General Meeting
Copies of the Company's annual report and financial statements will be sent to Registered
Shareholders but will not be sent to holders of Depository Interests. The annual report and
financial statements will be available for inspection at the Company’s registered office and may
also be viewed at the Company's website at: www.zoltav.com. Notice of a General Meeting will
be sent to shareholders in due course.
55