TIDMTOM
RNS Number : 8943Y
TomCo Energy PLC
04 December 2014
4 December 2014
TomCo Energy plc
("TomCo" or "the Company")
Full year results for the year ended 30 September 2014
TomCo Energy plc (AIM: TOM), the oil shale exploration and
development company focused on using innovative technology to
unlock unconventional hydrocarbon resources in the United States,
is pleased to announce its full year results for the year ended 30
September 2014.
The annual report and accounts are available on the Company's
website.
Enquiries:
For further information, please visit www.tomcoenergy.uk.com or
contact:
TomCo Energy plc Tel: +44 20 7917 6822
Paul Rankine, CEO / Miikka Haromo, CFO
Shore Capital (Nomad & Broker) Tel: +44 20 7408 4090
Nominated Adviser
Pascal Keane / Edward Mansfield
Corporate Broking
Jerry Keen
Tavistock Communications (Financial PR & IR) Tel: +44 20 7920 3150
Ed Portman / Jos Simson
Report of the Directors
The Directors submit their report and the financial statements
of the Company and of the Group for the year ended 30 September
2014.
Principal activity
The principal activity of the Group is that of developing oil
shale leases for future production.
Risk assessment
The Group's oil and gas activities are subject to a range of
financial and operational risks which can significantly impact on
its performance.
Operational risk
The Group has obtained resource assessments in relation to its
oil shale leases, the latest of which shows 126 million barrels of
oil in surface mineable JORC Measured Resource.
TomCo has entered into a license with Red Leaf Resources Inc
("Red Leaf"), which developed and owns the patents to the
EcoShale(TM) extraction process, to use this unique and
environmentally sensitive technology to extract oil from the
Group's leases. Having built and tested a pilot plant in 2008 and
completed its permitting for the Seep Ridge project, Red Leaf has
started construction of a one-off Early Production System ("EPS")
capsule, which is 75% of the planned full scale commercial capsules
used to produce 9,800 barrels of oil per day (bopd), to demonstrate
scalability of the process and economic viability of its Utah
projects. The technology produced by Red Leaf is currently unique
within the marketplace and until extraction commences, the
viability of this technology will not be determinable. Once the
viability of this technology has been determined, the Group intends
to build and operate a similar EcoShale(TM) plant on its Holliday
Block lease in Utah.
Environmental, health and safety and other regulatory
standards
The Group's future extraction activities are subject to various
federal and state laws and regulations relating to the protection
of the environment including the obtaining of appropriate permits
and approvals by relevant environmental authorities. Such
regulations typically cover a wide variety of matters including,
without limitation, prevention of waste, pollution and protection
of the environment, labour regulations and worker safety.
Furthermore, the future introduction or enactment of new laws,
guidelines and regulations could serve to limit or curtail the
growth and development of the Group's business or have an otherwise
negative impact on its operations. The Group ensures it complies
with the relevant laws and regulations in force in the
jurisdictions in which it operates.
Liquidity and interest rate risks
The Group is ultimately dependent on sources of equity or debt
funding to develop its exploration assets and meet its day to day
capital commitments. Cash forecasts identifying the liquidity
requirements of the Group are produced frequently. These are
reviewed regularly by management and the Board to ensure that
sufficient financial headroom exists for at least a twelve month
period. This strategy will continually be reviewed in the light of
developments with existing projects and new project opportunities
as they arise.
Currency risk
Due to the limited income and expenses denominated in foreign
currencies, it was not considered cost effective to manage
transactional currency exposure on an active basis. However, as the
financial statements are reported in sterling, any movements in the
exchange rate of foreign currencies against sterling may affect the
Group's statements of comprehensive income and financial position.
The Group holds some cash in US dollars to mitigate the foreign
exchange risk.
Financial instruments
The Group holds an investment in Red Leaf. There is a risk that
in the future this investment falls in value and the Group is
unable to realise its accounting value. TomCo continues to monitor
the progress of Red Leaf and in the event that the value is deemed
by the Group to have declined, an impairment will be recognised. No
such impairment has occurred to date. Further details can be found
in Note 12.
It was not considered an appropriate policy for the Group to
enter into any hedging activities or trade in any financial
instruments. Further information can be found in Note 20.
Results and dividends
The statement of comprehensive income is set out on page 8. The
Directors do not propose the payment of a dividend (2013:
GBPNil).
The Group made no charitable or political donations in the year
(2013: GBPNil).
Review of the key events during the year
Oil Shale
In January 2014, the Group submitted its Large Mining Operations
("LMO") application to the Utah Division of Oil, Gas and Mining
("DOGM"). The final details required by DOGM were submitted during
the reporting period. Post the reporting period, the Group's Notice
of Intention to Commence LMO was tentatively approved by DOGM. The
approval is another important step in the environmental permitting
process and a requirement under Utah State law to take the Group's
Holliday Project into commercial production. The tentative permit
was subject to 30-day public consultation period which finished on
20 November 2014. DOGM is currently reviewing the comments
received.
In February 2014, the Group submitted its Ground Water Discharge
Permit ("GWDP") application to the Utah Division of Water Quality
("DWQ"). DWQ indicated that it required additional information on
14 points, of which two required some additional work. TomCo is in
the process of submitting these outstanding details to DWQ, so DWQ
will be in a position to consider making a decision to tentatively
approve TomCo's GWDP and request a public comment period.
TomCo's technology suppliers, Red Leaf, are progressing well in
their move into the full construction phase of their EPS capsule on
their licence area 15 miles west of TomCo's Holliday Block. The
Board believes that Red Leaf intends to begin the EPS capsule
heating in late 2015 and produce approximately 350,000 barrels of
oil in 2016. Under the licence agreement entered into between Red
Leaf and TomCo in March 2010 the Group will be able to leverage off
Red Leaf's implementation experience from construction of their EPS
capsule. If the Group progresses its Holliday Block project to the
development phase further funding would be required.
Financing
In September 2014, the Group appointed Shore Capital and
Corporate Limited as Nominated Adviser and Shore Capital
Stockbrokers Limited as sole broker and raised gross proceeds of
GBP1.0 million (before expenses) through the conditional placing
(the "Placing") of 200,000,000 new ordinary shares of 0.5p in the
capital of the Company with new and existing investors at 0.5 pence
per Placing Share. The Placing completed in full on 2 October 2014
and all proceeds were received in October. The net proceeds of the
Placing will be used to complete the permitting process at the
Group's Holliday Block, Utah in the United States and for working
capital purposes.
While dilution of existing shareholders is a concern and issuing
equity is not a decision the Board takes lightly, the Board
believes that ensuring the Group is fully funded through the
permitting process and beyond is vital and we look towards a
potentially transformational period for the Group. TomCo has a
strengthened balance sheet as we look to move our asset forward
towards development.
Directors
Directors who served on the Board during the year to 30
September 2014 were as follows:
Sir Nicholas Bonsor
Paul Rankine
Miikka Haromo
Directors' interests in the shares of the Group, including
family interests, were as follows:
30 September 2014 30 September 2013
--------------------- ---------------------
Ordinary Ordinary
0.5 pence Share 0.5 pence Share
shares warrants shares warrants
----------- ---------- --------- ---------- ---------
N Bonsor 1,550,011 - - -
M Haromo* 3,000,000 - - -
P Rankine 5,000,000 - 1,295,301 -
----------- ---------- --------- ---------- ---------
9,550,011 - 1,295,301 -
----------- ---------- --------- ---------- ---------
Details of share warrants can be found in Note 19.
* Miikka Haromo has an option to acquire 15 million Ordinary
Shares from Kenglo One Limited at a price of 3p per Ordinary Share.
The option period commenced on 21 July 2012 and ends on 31 December
2014.
Payments of payables
The Group's policy is to negotiate payment terms with its
suppliers in all sectors to ensure that they know the terms on
which payment will take place when the business is agreed and to
abide by those terms of payment.
The Group's payment days as at 30 September 2014 for trade
payables was 8 days (2013: 11 days).
Going concern
The Directors have prepared cash flow forecasts which show that
the Group has sufficient funds to meet its working capital
requirements and known commitments for a period of twelve months
from the date of signing of these financial statements. The Group's
working capital and commitments are closely monitored by the
directors and monthly forecasts are prepared in order to ensure
that the Group has cash available to meet known project and
overhead commitments. There are no contractual commitments for
minimum development spend within any of the Group's licences and
therefore the pace of development of the asset can be adjusted
within the availability of cash resources. Should expenditures
arise which are not included within the directors' forecasts, the
Group will require further funding, or existing contractual working
capital commitments will need to be deferred. As a result of the
review performed by the directors, the monitoring of the cash
position and the availability of forecast cash at the end of the
twelve month period from the date of signing the financial
statements, the Directors have confirmed that it is appropriate for
the financial statements to be prepared on the going concern
basis.
Insurance of key management
The Group maintains Directors' and officers' liability insurance
cover for TomCo Energy plc's Directors in respect of their duties
as Directors.
Directors' responsibilities
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and Group and enable them to
ensure that the financial statements comply with the requirements
of the Isle of Man Companies Act 2006. They are also responsible
for safeguarding the assets of the company and the group and for
taking steps for the prevention and detection of fraud and other
irregularities.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the Group and Company financial statements
in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of the
Group for that year. The Directors are also required to prepare
financial statements in accordance with the rules of the London
Stock Exchange for companies trading securities on the Alternative
Investment Market. In preparing these financial statements, the
directors are required to:
-- consistently select and apply appropriate accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information; and
-- provide additional disclosures when compliance with the
specific requirements in IFRSs is 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
-- state that the Group has complied with IFRS, subject to any
material departures disclosed and explained in the financial
statements.
The Directors confirm that they have complied with these
requirements, and, having a reasonable expectation that the Group
has adequate resources to continue in operational existence for the
foreseeable future and continue to adopt the going concern basis in
preparing the financial statements.
Auditors
All of the current Directors have taken all the steps that they
ought to have taken to make themselves aware of any information
needed by the Company's auditors for the purposes of their audit
and to establish that the auditors are aware of that information.
The Directors are not aware of any relevant audit information of
which the auditors are unaware.
The external auditors are required to rotate the Senior
Statutory Auditor responsible for the company audits every five
years. In certain circumstances, it is permissible to extend that
tenure by up to two years. The Board believes that due to
significant strategic changes the Group has undergone over the last
18 months and the developments anticipated by the Group merits
having a continuity of the Senior Statutory Auditor that this
extension provides.
BDO LLP and the Company have agreed to extend the term of the
Senior Statutory Auditor for a seventh year in line with the
guidance as to how long a responsible individual may remain the
Senior Statutory Auditor for a client as set out in Ethical
Standard 3 'Long Association with the Audit Engagement' issued by
the Audit Practices Board. There are specific provisions relating
to the extension of tenure for listed companies with which the
Company complies.
BDO LLP have expressed their willingness to continue in office
and a resolution to re-appoint them will be proposed at the annual
general meeting.
By order of the Board
Sir Nicholas Bonsor
Non-Executive Chairman
4 December 2014
Independent auditors' report
to the members of TomCo Energy plc
We have audited the financial statements of TomCo Energy plc for
the year ended 30 September 2014 which comprise the consolidated
statement of comprehensive income, the consolidated and company
statement of financial position, the consolidated and company
statements of changes in equity, the consolidated and company
statements of cash flows and the related notes. The financial
reporting framework that has been applied in their preparation is
applicable Isle of Man company law and International Financial
Reporting Standards as adopted by the European Union (IFRS).
This report is made solely to the Company's members as a body,
in accordance with Section 80C of the Isle of Man Companies Act
2006. Our audit work has been undertaken so that we might state to
the Company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, and the Company's
members as a body for our audit work, for this report, or for the
opinion we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors'
responsibilities, 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
Isle of Man company law and International Standards on Auditing (UK
and Ireland). Those standards require us to comply with the
Financial Reporting Council's (FRC's) Ethical Standards for
Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the FRC's website at
www.frc.org.uk/auditscopeukprivate.
Opinion on the financial statements
In our opinion the financial statements:
-- give a true and fair view of, in all material respects the
state of the Group and the Company's affairs as at 30 September
2014 and of the Group's loss for the year then ended; and
-- have been properly prepared in accordance with International
Financial Reporting Standards as adopted by the European Union.
BDO LLP
Chartered Accountants
London
United Kingdom
4 December 2014
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Consolidated statement of comprehensive income
for the financial year ended 30 September 2014
2014 2013
Note GBP'000 GBP'000
--------------------------------------- ----- -------- --------
Revenue 2 15 11
Cost of sales 2 (4) (4)
--------------------------------------- ----- -------- --------
Gross profit 11 7
Administrative expenses (741) (872)
--------------------------------------- ----- -------- --------
Operating loss 5 (730) (865)
Finance income 3 - 1
Finance costs 4 (2) (1)
--------------------------------------- ----- -------- --------
Loss on ordinary activities
before taxation (732) (865)
Taxation 6 - -
--------------------------------------- ----- -------- --------
Loss for the year attributable
to equity shareholders of the
parent (732) (865)
--------------------------------------- ----- -------- --------
Total comprehensive loss attributable
to equity shareholders of the
parent (732) (865)
--------------------------------------- ----- -------- --------
2014 2013
Pence Pence
Loss per share attributable per share per share
to the equity shareholders of
the parent
-------------------------------- ---------- ----------
Basic & diluted loss per share 8 (0.04) (0.05)
-------------------------------- ---------- ----------
The Company has elected to take exemption under the Companies
Act not to present the parent company's statement of comprehensive
income. The loss for the parent company for the year was GBP749,467
(2013: GBP863,153).
The notes form part of these financial statements.
Consolidated and Company Statement of Financial Position
as at 30 September 2014
Group Company Group Company
2014 2014 2013 2013
Note GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ----- --------- --------- --------- ---------
Assets
Non--current assets
Intangible assets 9 8,815 1,314 8,421 1,314
Property, plant and 10 - - - -
equipment
Investment in subsidiaries 11 - 7,501 - 7,107
Available for sale
financial assets 12 3,262 3,262 3,262 3,262
Other receivables 13 - - - 137
----------------------------- ----- --------- --------- --------- ---------
12,077 12,077 11,683 11,820
----------------------------- ----- --------- --------- --------- ---------
Current assets
Trade and other receivables 13 1,063 1,034 63 34
Cash and cash equivalents 14 90 89 1,236 933
----------------------------- ----- --------- --------- --------- ---------
1,153 1,123 1,299 967
----------------------------- ----- --------- --------- --------- ---------
TOTAL ASSETS 13,230 13,200 12,982 12,787
Liabilities
Current liabilities
Trade and other payables 15 (222) (222) (221) (34)
(222) (222) (221) (34)
----------------------------- ----- --------- --------- --------- ---------
Net current assets 931 901 1,078 933
----------------------------- ----- --------- --------- --------- ---------
Non-current liabilities
Other liabilities 15 - - - (5)
----------------------------- ----- --------- --------- --------- ---------
TOTAL LIABILITIES (222) (222) (221) (39)
----------------------------- ----- --------- --------- --------- ---------
Total net assets 13,008 12,978 12,761 12,748
----------------------------- ----- --------- --------- --------- ---------
Shareholders' equity
Share capital 17 9,931 9,931 8,894 8,894
Share premium 18 14,578 14,578 14,636 14,636
Warrant reserve 19 42 42 42 42
Retained deficit (11,543) (11,573) (10,811) (10,824)
----------------------------- ----- --------- --------- --------- ---------
Total equity 13,008 12,978 12,761 12,748
----------------------------- ----- --------- --------- --------- ---------
The accounts were approved and authorised for issue by the Board
of Directors on 4 December 2014.
Paul Rankine Miikka Haromo
Director Director
Consolidated statement of changes in equity
for the financial year ended 30 September 2014
Group Company
Share Share Warrant Retained Share Share Warrant Retained
capital premium reserve Deficit Total capital premium reserve deficit Total
Note
--------------- ------ -------- -------- -------- --------- -------- -------- -------- -------- --------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------ -------- -------- -------- --------- -------- -------- -------- -------- --------- --------
Balance at 1
October
2012 8,105 13,629 361 (10,307) 11,788 8,105 13,629 361 (10,322) 11,773
--------------- ------ -------- -------- -------- --------- -------- -------- -------- -------- --------- --------
Total
comprehensive
loss for the
year - - - (865) (865) - - - (863) (863)
Issue of
warrants 19 - (42) 42 - - - (42) 42 - -
Expired
warrants 17,18 - - (361) 361 - - - (361) 361 -
Issue of share
capital 17,18 789 1,049 - - 1,838 789 1,049 - - 1,838
Balance at 30
September
2013 8,894 14,636 42 (10,811) 12,761 8,894 14,636 42 (10,824) 12,748
--------------- ------ -------- -------- -------- --------- -------- -------- -------- -------- --------- --------
Total
comprehensive
loss for the
year - - - (732) (732) - - - (749) (749)
Issue of share
capital 17,18 1,037 (58) - - 979 1,037 (58) - - 979
At 30
September
2014 9,931 14,578 42 (11,543) 13,008 9,931 14,578 42 (11,573) 12,978
--------------- ------ -------- -------- -------- --------- -------- -------- -------- -------- --------- --------
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Descriptions and purpose
Share capital Amount subscribed for share capital at nominal value.
Share premium Amount subscribed for share capital in excess of nominal
value.
Warrant reserve Amounts credited to equity in respect of warrants to acquire
ordinary shares in the Company.
Retained deficit Cumulative net gains and losses recognised in the consolidated
statement of comprehensive income.
The notes form part of these financial statements.
Consolidated and company statements of cash flows
for the financial year ended 30 September 2014
Note Group Company Group Company
2014 2014 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ------ -------- -------- -------- --------
Cash flows from operating
activities
Loss after tax 2 (732) (749) (865) (863)
Depreciation 10 - - 9 9
Finance income 3 - - (1) (1)
Finance costs 4 2 2 1 1
(Increase)/decrease in trade
and other receivables 13 - - (11) (306)
Increase/(decrease) in trade
and other payables 15 114 138 (7) (2)
----------------------------------- ------ -------- -------- -------- --------
Cash used in operations (615) (609) (874) (1,162)
----------------------------------- ------ -------- -------- -------- --------
Cash flows from investing
activities
Investment in oil & gas assets 9 (581) - (139)
Additions to investment in
subsidiary 11 - (285) - (139)
Net cash used in investing
activities (581) (285) (139) (139)
----------------------------------- ------ -------- -------- -------- --------
Cash flows from financing
activities
Issue of share capital (net
of issue costs) 17,18 50 50 1,838 1,838
----------------------------------- ------ -------- -------- -------- --------
Net cash generated from financing
activities 50 50 1,838 1,838
----------------------------------- ------ -------- -------- -------- --------
Net increase/(decrease) in
cash and cash equivalents (1,146) (844) 825 537
Cash and cash equivalents
at beginning of financial
year 1,236 933 411 396
----------------------------------- ------ -------- -------- -------- --------
Cash and cash equivalents
at end of financial year 90 89 1,236 933
----------------------------------- ------ -------- -------- -------- --------
The notes form part of these financial statements.
Notes to the financial statements
for the financial year ended 30 September 2014
1. Accounting policies
The principal accounting policies adopted in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all years presented, unless otherwise
stated.
1.1 Basis of preparation
The Group's financial statements have been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union ("IFRS") and International Financial
Reporting Interpretations Committee ("IFRIC") interpretations and
with those parts of the Isle of Man Companies Act 2006 applicable
to companies reporting under IFRS. The financial statements have
been prepared under the historic cost convention modified by the
revaluation of certain financial instruments to fair value
including derivatives and available for sale financial assets.
The preparation of financial statements in conformity with IFRS
requires the use of estimates and assumptions that affect the
reporting amounts of assets and liabilities at the date of the
financial statements and the reported amount of revenue and
expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amount, event or
actions, actual results ultimately may differ from those estimates.
Details of the Group's significant accounting judgments and
critical accounting estimates are set out in these financial
statements and include:
- Commercial reserves estimates; (Note 9);
- Impairment of intangible assets (Note 9);
- Impairment of available for sale financial assets (Note
12);
- Share based payments (Note 19);
The Group has consistently applied all applicable accounting
standards.
The Directors have prepared cash flow forecasts which show that
the Group has sufficient funds to meet its working capital
requirements and known commitments for a period of twelve months
from the date of signing of these financial statements. The Group's
working capital and commitments are closely monitored by the
directors and monthly forecasts are prepared in order to ensure
that the Group has funds available to meet known project and
overhead commitments. There are no contractual commitments for
minimum development spend within any of the Group's licences and
therefore the pace of development of the asset can be adjusted
within the availability of cash resources. Should expenditures
arise which are not included within the directors' forecasts, the
Group will require further funding, or existing contractual working
capital commitments will need to be deferred. As a result of the
review performed by the directors, the monitoring of the cash
position and the availability of forecast cash at the end of the
twelve month period from the date of signing the financial
statements, the directors have confirmed that it is appropriate for
the financial statements to be prepared on the going concern
basis.
1.2 Future changes in accounting standards
The IFRS financial information has been drawn up on the basis of
accounting standards, interpretations and amendments effective at
the beginning of the accounting period.
There were no new standards, interpretations and amendments to
published standards effective in the year which had a significant
impact on the Group.
Standards, Interpretations and amendments, which are effective
for future reporting periods:
International Accounting Standards Effective
(IAS/IFRS) date
(periods beginning
on or after)
-- IFRS 10 Consolidated Financial Statements 1 Jan 2014
-- IFRS 11 Joint Arrangements 1 Jan 2014
-- IFRS 12 Disclosure of Interests in Other 1 Jan 2014
Entities
-- IAS 32 Offsetting Financial Assets and 1 Jan 2014
Financial Liabilities
-- IAS 27 Separate Financial Statements 1 Jan 2014
-- IAS 28 Investments in Associates and 1 Jan 2014
Joint Ventures
-- IAS 36 Recoverable amounts disclosures 1 Jan 2014
for non financial assets
-- IFRS 9 Financial instruments 1 Jan 2018
-- IFRS 15* Revenue from contracts with customers 1 Jan 2017
These standards are not expected to have a material impact on
future financial statements.
Standards marked * are still to be endorsed by the European
Union.
1.3 Basis of consolidation
The Group accounts consolidate the accounts of the parent
company, TomCo Energy plc, and all its subsidiary undertakings
drawn up to 30 September 2014. All intra--group transactions,
balances, income and expenses are eliminated on consolidation.
The acquisition of subsidiaries is accounted for on the purchase
basis. A subsidiary is consolidated where the Company has the
power, either directly or indirectly, to govern the financial and
operating activities of another entity or business, so it is able
to obtain benefits from its activities. On acquisition all the
subsidiary's assets and liabilities which existed at the date of
acquisition are recorded at their fair values reflecting their
condition at the time. If, after re--assessment, the Group's
interest in the net fair value of the identifiable assets
liabilities and contingent liabilities exceeds the cost of the
business combination, the excess is recognised immediately in the
statement of comprehensive income.
1.4 Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the
management team including the Chief Executive Officer, and the
Finance Director.
Based on an analysis of risks and returns, the Directors
consider that the Group has one principal business segment based on
geographical location. The Group's revenue arises within the US.
The profit / (loss) before taxation arises within the UK and US.
Net assets are in the UK and the US.
1.5 Revenue
Turnover represents the Group's share of sales of oil during the
year, excluding sales tax and royalties. Income arises from the US
and is recognised when the oil is delivered to the customer.
1.6 Finance income
Finance income is accounted for on an effective interest
basis.
1.7 Property, plant and equipment
Office fixtures, fittings and equipment are stated at cost of
purchase. Depreciation of office fixtures, fittings and equipment
is provided at 33.3% straight line per annum on cost.
Oil & Gas development and production assets are accumulated
on a field-by-field basis and represent the cost of developing the
commercial reserves discovered and bringing them into production,
together with any decommissioning asset. They are presented as oil
properties in Note 10.
The net book values of producing assets are depreciated on a
field-by-field basis using the unit of production method by
reference to the ratio of production in the period to the related
commercial reserves of the field, taking into account estimated
future development expenditures necessary to bring those reserves
into production.
The carrying values of property, plant and equipment are
reviewed for impairment if events or changes in circumstances
indicate the carrying value may not be recoverable. Impairments are
charged to administrative expenses within the statement of
comprehensive income.
1.8 Intangible assets
The Company applies the full cost based method of accounting for
oil and gas operations. For evaluation properties, all lease and
licence acquisition costs, geological and geophysical costs and
other direct costs of exploration appraisal and development are
capitalised as intangible fixed assets in appropriate cost pools.
Costs relating to unevaluated properties are held outside the
relevant cost pool, and are not amortised until such time as the
related property has been fully appraised. When a cost pool reaches
an evaluated and bankable feasibility stage, the assets are
transferred from intangible to oil properties within property,
plant and equipment.
Depreciation is not charged on the technology licences as the
technology is not yet available for use. The technology produced by
Red Leaf is currently unique within the marketplace and until
extraction commences, the full scale viability of this technology
will not be determinable.
1.9 Impairment
An impairment test on intangible oil & gas assets is
performed whenever events and circumstances arising during the
exploration and evaluation phase indicate that the carrying value
of the asset may exceed its recoverable amount. The cash generating
unit applied for impairment test purposes is generally the field,
except that a number of field interests may be grouped as a single
cash generating unit where the cash flows are interdependent.
The carrying amounts of the Group's assets, other than oil &
gas assets (described above), are reviewed at each reporting date
to determine whether there is any indication of impairment. If such
indication exists, the asset's recoverable amount is estimated. An
impairment loss is recognised whenever the carrying amount of an
asset exceeds its recoverable amount. Impairment losses are
recognised in the income statement.
1.10 Asset disposals
Proceeds from the disposal of an asset, or part thereof, are
taken to the statement of comprehensive income together with the
requisite net book value of the asset, or part thereof, being
sold.
1.11 Taxation
Taxation expense represents the sum of current tax and deferred
tax.
Current tax is based on taxable profits for the financial period
using tax rates that have been enacted or substantively enacted by
the reporting date. Taxable profit differs from net profit as
reported in the statement of comprehensive income because it
excludes items of income or expenses that are taxable or deductible
in other years and it further excludes items that are never taxable
or deductible.
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts for financial reporting
purposes. If deferred tax 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 nor loss, it is not accounted for.
Deferred tax is determined using tax rates that have been enacted
or substantively enacted at the reporting date and are expected to
apply when the related deferred income tax asset is realised or the
deferred tax liability is settled.
Deferred 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.
Deferred tax is provided on temporary differences arising on
investments in subsidiaries, except where the timing of the
reversals of the temporary differences is controlled by the Group
and it is probable that the temporary differences will not reverse
in the foreseeable future.
Deferred tax is charged or credited in the statement of
comprehensive income, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also
dealt with in equity.
1.12 Foreign currencies
The accounts have been prepared in pounds sterling being the
presentational currency of the Group and Company. The functional
currency of the holding Company and the Company's subsidiaries is
also pounds sterling. Assets and liabilities held in the Company or
overseas subsidiaries in US dollars are translated into pounds
sterling at the rate of exchange ruling at the reporting date.
Transactions entered into by Group entities in a currency other
than the functional currency of the entity are recorded at the
rates ruling when the transactions occur. Exchange differences
arising from the settlement of monetary items are included in the
statement of comprehensive income for that period.
1.13 Operating leases
Rentals payable under operating leases, net of lease incentives,
are charged to the statement of comprehensive income on a
straight--line basis over the period of the lease.
1.14 Available--for--sale financial assets
The Group classifies its investments as available--for--sale
financial assets.
The fair value of available for sale financial assets are
carried at fair value when the fair value can be measured reliably
with changes in fair value recognised directly in equity within the
available-for-sale reserve; exchange differences on
available-for-sale financial assets denominated in a foreign
currency are recognised in other comprehensive income. If the fair
value of available for sale financial assets cannot be reliably
measured then they are carried at historic cost. Where there is a
significant or prolonged decline in the carrying value of an
available for sale financial asset (which constitutes objective
evidence of impairment), the full amount of the impairment,
including any amount previously recognised directly in equity
within the available-for-sale reserve, is recognised in profit or
loss. Purchases and sales of available for sale financial assets
are recognised on settlement date with any change in carrying value
between trade date and settlement date being recognised in the
available-for-sale reserve. On sale, the cumulative gain or loss
recognised in other comprehensive income is reclassified from the
available-for-sale reserve to profit or loss.
1.15 Loans and receivables
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
arise principally through the provision of goods and services to
customers (e.g. trade receivables), but also incorporate other
types of contractual monetary asset such as receivables from
subsidiaries. They are initially recognised at fair value plus
transaction costs that are directly attributable to their
acquisition or issue, and are subsequently carried at amortised
cost using the effective interest rate method, less provision for
impairment.
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that
the Group or Company will be unable to collect all of the amounts
due under the terms receivable, the amount of such a provision
being the difference between the net carrying amount and the
present value of the future expected cash flows associated with the
impaired receivable. For trade receivables, which are reported net,
such provisions are recorded in a separate allowance account with
the loss being recognised within administrative expenses in the
consolidated statement of comprehensive income. On confirmation
that the trade receivable will not be collectable, the gross
carrying value of the asset is written off against the associated
provision.
The Group's loans and receivables comprise trade and other
receivables and cash and cash equivalents in the consolidated
statement of financial position.
1.16 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held
at the bank and other short term liquid investments with original
maturities of three months or less.
1.17 Trade payables
Trade payables, defined as financial liabilities in accordance
with IAS 39, are recognised at amortised cost. All of the trade
payables are non--interest bearing.
1.18 Share capital
Ordinary shares are classified as equity. Ordinary shares
allotted under a Liquidity Facility Agreement and an associated
Promissory Note (Note 17) are only recognised as equity on sale and
issue to a third party. Shares which remain unsold at the reporting
date are not included within the share capital and share premium
account as they are not considered called up.
1.19 Share based payments and warrants
For equity--settled share--based payments, the fair value
determined at the date of grant is expensed on a straight--line
basis over the vesting period. Fair value is measured by the use of
the Black Scholes model. The calculation of this fair value is
detailed in Note 19.
1.20 Investments in subsidiaries
Investments in subsidiary undertakings are stated at cost less
impairment provisions.
2. Segmental reporting - Analysis by geographical segment
The Group's revenue arises within the US. The loss before
taxation arises within the UK and US. Net assets are in the UK and
US. Based on an analysis of risks and returns, the Directors
consider that the Group has one principle business segment based on
geography, with the UK representing head office costs of the Group.
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the
management team including the Chief Executive Officer, and the
Finance Director. The Directors therefore consider that no further
segmentation is appropriate.
United United United United
States Kingdom Total States Kingdom Total
Year ended 30 September 2014 2014 2014 2013 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- -------- -------- -------- -------- --------
Revenue 15 - 15 11 - 11
Cost of sales (4) - (4) (4) - (4)
--------------------------------- -------- -------- -------- -------- -------- --------
Gross profit 11 - 11 7 - 7
--------------------------------- -------- -------- -------- -------- -------- --------
Depreciation - - - - (9) (9)
Administrative expenses (13) (728) (741) (8) (855) (863)
--------------------------------- -------- -------- -------- -------- -------- --------
Operating loss (2) (728) (730) (1) (864) (865)
--------------------------------- -------- -------- -------- -------- -------- --------
Financial income
Financial expense - - - - 1 1
Finance costs - (2) (2) - (1) (1)
-------- -------- -------- -------- -------- --------
Loss for the year
operations
operaoperations (2) (730) (732) (1) (864) (865)
Total loss (2) (730) (732) (1) (864) (865)
--------------------------------- -------- -------- -------- -------- -------- --------
Non-Current assets:
- exploration and development
licences 7,501 - 7,501 7,107 - 7,107
- technology licence 1,314 - 1,314 1,314 - 1,314
- Available for sale financial
assets - 3,262 3,262 - 3,262 3,262
--------------------------------- -------- -------- -------- -------- -------- --------
8,815 3,262 12,077 8,421 3,262 11,683
-------------------------------- -------- -------- -------- -------- -------- --------
Current assets:
Trade and other receivables
Cash and cash equivalents 29 1,034 1,063 28 35 63
Cash and cash equivalents 1 89 90 303 933 1,236
--------------------------------- -------- -------- -------- -------- -------- --------
Total assets 8,845 4,385 13,230 8,752 4,230 12,982
--------------------------------- -------- -------- -------- -------- -------- --------
Current liabilities:
Trade and other payables - (222) (222) (187) (34) (221)
Total liabilities - (222) (222) (187) (34) (221)
--------------------------------- -------- -------- -------- -------- -------- --------
3. Finance income
2014 2013
GBP'000 GBP'000
--------------- --------- --------
Bank interest - 1
- 1
------------------------- --------
4. Finance costs
2014 2013
GBP'000 GBP'000
Bank charges 2 1
-------------- -------- --------
2 1
-------------- -------- --------
5. Operating loss
2014 2013
The following items have been charged in arriving GBP'000 GBP'000
at operating loss:
--------------------------------------------------- -------- --------
Depreciation of property, plant and equipment - 9
Directors' fees (Note 7) 314 316
Auditors' remuneration:
- audit services 26 24
Rentals payable in respect of land and buildings 7 38
--------------------------------------------------- -------- --------
6. Taxation
There is no tax charge in the year due to the loss for the
year.
Factors affecting the tax charge:
2014 2013
GBP'000 GBP'000
---------------------------------------------- -------- --------
Loss on ordinary activities before tax (732) (865)
---------------------------------------------- -------- --------
Loss on ordinary activities at standard rate
of corporation tax in the UK of 22.0% (2013
- 23.5%) (161) (203)
Effects of:
Excess management expenses carried forward 161 203
Tax charge for the financial year - -
---------------------------------------------- -------- --------
7. Employees and Directors
The Group has no employees other than the directors, whose
emoluments comprise fees paid for services. Share--based payments
relate to warrants issued, further details of which are included in
Note 19. The amounts paid for their services are detailed
below:
Salaries Salaries
2014 2013
GBP'000 GBP'000
-------------------- --------- ---------
N Bonsor 71 71
P Rankine 139 141
M Haromo 104 104
Total remuneration 314 316
-------------------- --------- ---------
8. Loss per share
Basic loss per share is calculated by dividing the losses
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Reconciliations of the losses and weighted average number of shares
used in the calculations are set out below.
Weighted
average
Number Per share
Losses of shares Amount
Financial year ended 30 September GBP'000 '000 Pence
2014
---------------------------------------- -------- ---------- ----------
Basic and Diluted EPS
Losses attributable to ordinary
shareholders on continuing operations (732) 1,782,051 (0.04)
---------------------------------------- -------- ---------- ----------
Total losses attributable to ordinary
shareholders (732) 1,782,051 (0.04)
---------------------------------------- -------- ---------- ----------
Financial year ended 30 September GBP'000 '000 Pence
2013
---------------------------------------- -------- ---------- -------
Basic and Diluted EPS
Losses attributable to ordinary
shareholders on continuing operations (865) 1,709,363 (0.05)
---------------------------------------- -------- ---------- -------
Total losses attributable to ordinary
shareholders (865) 1,709,363 (0.05)
---------------------------------------- -------- ---------- -------
The warrants which were in issue at the year end (Note 19) are
considered anti-dilutive. As the options and warrants would be
anti-dilutive a separate diluted loss per share is not
presented.
9. Intangible assets
Oil & Gas Oil & Gas Oil & Gas
Exploration Technology Total
and development licence
licence
GBP'000 GBP'000 GBP'000
---------------------- ----------------- ----------- ----------
Cost
At 1 October 2012 6,781 1,314 8,095
---------------------- ----------------- ----------- ----------
Additions 326 - 326
---------------------- ----------------- ----------- ----------
At 30 September 2013 7,107 1,314 8,421
---------------------- ----------------- ----------- ----------
Additions 394 - 394
---------------------- ----------------- ----------- ----------
Net book value
At 30 September 2014 7,501 1,314 8,815
---------------------- ----------------- ----------- ----------
At 30 September 2013 7,107 1,314 8,421
---------------------- ----------------- ----------- ----------
At 30 September 2012 6,781 1,314 8,095
---------------------- ----------------- ----------- ----------
The exploration and development licences comprise two State of
Utah oil shale leases covering approximately 2,919 acres and
independent natural resources consultants SRK Consultants Ltd, part
of the internationally recognised SRK Group, has declared a surface
mineable JORC compliant Measured Resource of 126 million barrels on
the main tract of TomCo's Holliday Block lease. The claim areas and
the Group's interest in them is:
Asset Per cent Licence
Interest Status Expiry Date Licence Area (Acres)
ML 49570 100 Prospect 31/12/2024 1,638.84
ML 49571 100 Prospect 31/12/2024 1,280.00
In performing an assessment of the carrying value of the
licences at the reporting date, the Directors concluded that it was
not appropriate to book an impairment. The Directors do not
consider the asset to be impaired as there is a planned programme
of development work for the next year which will add to the
Company's knowledge and understanding of the asset. As the data
from this programme is collated and analysed we will inform our
shareholders through the Regulatory News Service of the results. As
shareholders you are aware of the potential for these assets but
the directors draw your attention to the likely need to raise
additional funds in the future in order to continue to explore and
develop the asset and bring it into commercial production. At this
early stage of the project the Directors do not consider that there
is any need for any impairment of the valuation of the asset. The
Group has obtained resource assessments in relation to its oil
shale leases, the latest of which shows 126 million barrels of oil
in surface mineable JORC Measured Resource. If the required
additional funding was not to be made available to the company, the
carrying value of the asset might need to be impaired.
The oil and gas technology licence was signed in 2010 and grants
to TomCo an exclusive, site-specific license of certain patent
rights and "know how" relating to the EcoShale In-Capsule Process
(TM), developed by Red Leaf Resources Inc. ("Red Leaf"). Under the
terms of the License, Red Leaf has agreed to provide TomCo with all
new patents, techniques, information and new discoveries in
relation to the EcoShale(TM) system. The directors consider that as
the testing of the EcoShale(TM) technology continues to progress as
planned, with initial test results showing that the technology
works on a small scale, no impairment of the oil and gas technology
licence is required.
10. Property, plant and equipment
Group Oil properties Fixtures, fittings Total
and equipment
Cost GBP'000 GBP'000 GBP'000
---------------------- --------------- -------------------- --------
At 1 October 2012 102 32 134
---------------------- --------------- -------------------- --------
At 30 September 2013 102 32 134
---------------------- --------------- -------------------- --------
At 30 September 2014 102 32 134
---------------------- --------------- -------------------- --------
Depreciation
---------------------- --------------- -------------------- --------
At 1 October 2012 102 23 125
---------------------- --------------- -------------------- --------
Charge in year - 9 9
---------------------- --------------- -------------------- --------
At 30 September 2013 102 32 134
---------------------- --------------- -------------------- --------
Charge in year - - -
---------------------- --------------- -------------------- --------
At 30 September 2014 102 32 134
---------------------- --------------- -------------------- --------
Net book value
At 30 September 2014 - - -
---------------------- --------------- -------------------- --------
At 30 September 2013 - - -
---------------------- --------------- -------------------- --------
At 30 September 2012 - 9 9
---------------------- --------------- -------------------- --------
Company Fixtures, Total
fittings and
equipment
Cost GBP'000 GBP'000
---------------------------------- -------------- --------
At 1 October 2012, 2013 and 2014 32 32
---------------------------------- -------------- --------
Depreciation
At 1 October 2012 23 23
Depreciation 9 9
At 1 October 2013 32 32
Depreciation - -
---------------------------------- -------------- --------
At 30 September 2014 32 32
---------------------------------- -------------- --------
Net book value
At 30 September 2014 - -
---------------------------------- -------------- --------
At 30 September 2013 - -
At 30 September 2012 9 9
---------------------------------- -------------- --------
11. Company investment in subsidiaries
Shares in Group undertakings
Total
GBP'000
---------------------- --------
Cost
---------------------- --------
At 1 October 2012 6,781
---------------------- --------
Additions 326
---------------------- --------
At 30 September 2013 7,107
---------------------- --------
Additions 394
---------------------- --------
At 30 September 2014 7,501
---------------------- --------
The investments in subsidiaries, which the Directors consider
are supported by their assessment of the carrying value of the
intangible oil and gas assets in the subsidiary, are not considered
impaired. For further details see Note 9.
TomCo Energy plc holds interests in the following
subsidiaries:
Subsidiary Undertaking Country of incorporation Proportion of Nature of business
or registration voting rights
and ordinary share
capital held
----------------------- ------------------------- -------------------- ---------------------
The Oil Mining Utah, USA 100% Holding of oil shale
Company Inc leases
----------------------- ------------------------- -------------------- ---------------------
TomCo I LLC Delaware, USA 100% Holding company
of TomCo II
----------------------- ------------------------- -------------------- ---------------------
TomCo II LLC Delaware, USA 100% indirect TomCo II is engaged
holding in the exploration
and extraction of
oil and gas through
joint investment
in oil leases
----------------------- ------------------------- -------------------- ---------------------
12. Available--for--sale financial assets
Unlisted
investments
Cost GBP'000
------------------------------- ------------
At 1 October 2012 3,442
Additions -
------------------------------- ------------
At 30 September 2013 3,442
--------------------------------- ------------
Additions -
At 30 September 2014 3,442
Provisions
At 30 September 2013 and 2014 180
180
------------------------------- ------------
Net book value
At 30 September 2014 3,262
--------------------------------- ------------
At 30 September 2013 3,262
At 30 September 2012 3.262
--------------------------------- ------------
During the year to 30 September 2012, the Company invested $5
million (GBP3,147,735) in Red Leaf Resources Inc (Equity securities
US (3)) at $1,500 per share as part of a $100 million raising by
Red Leaf in conjunction with the closing of a Joint Venture ("JV")
with Total E&P USA Oil Shale, LLC, an affiliate of Total SA,
the 5(th) largest international integrated oil and gas company.
The Directors consider that the fair value of the investment
cannot be reliably measured and so, as permitted by IFRS, the asset
is stated at original cost. There is a risk that in the future this
investment falls in value and the Group is unable to realise its
accounting value. TomCo continues to monitor the progress of Red
Leaf and in the event that the value is deemed by the Group to have
declined, an impairment will be recognised. The Directors believe
no such impairment has occurred to date. Red Leaf has completed its
permitting for Seep Ridge and has started constructing the EPS
Capsule.
Details of unlisted investments
Share Percentage Average cost
holding holding per share Cost
Name number % GBP'000
---------------------- ---------- ----------- -------------- --------
Equity securities US
(1) 9,751 0.78 31pence 30
Equity securities UK 471,070 3.47 20 pence 94
Equity securities US
(2) 1,000,000 8.12 5 pence 56
Equity securities US
- Red Leaf 3,333.33 0.43 1,500 dollars 3,262
---------------------- ---------- ----------- -------------- --------
The Directors provided in full for the investment in equity
securities in the US (1) in 2007 due to the uncertain future of the
Company. The Equity securities, US (2) and UK were also provided in
full in 2008 due to uncertainties about the future of those
Companies.
13. Trade and other receivables
Group Company Group Company
2014 2014 2013 2013
Current GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------- -------- --------
Other receivables 1,037 1,008 47 18
Prepayments and accrued
income 26 26 16 16
1,063 1,034 63 34
------------------------- -------- -------- -------- --------
Non- current
Amounts owed from Group
undertakings - - - 137
------------------------- -------- -------- -------- --------
Total Receivables 1,063 1,034 63 171
------------------------- -------- -------- -------- --------
As at 30 September 2014 there were no receivables considered
past due (2013: GBPNil). The maximum exposure to credit risk at the
reporting date is the fair value of each class of receivable
including cash and cash equivalents as disclosed in Note 20.
All current receivable amounts are due within 6 months.
14. Cash and cash equivalents
Group Company Group Company
2014 2014 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------- -------- --------
Cash at bank and in
hand 90 89 1,236 933
--------------------- -------- -------- -------- --------
The Group earns 0.05% (2013: 0.05%) interest on their cash
deposits, consequently the Group's exposure to interest rate
volatility is not considered material.
15. Trade and other payables
Group Company Group Company
2014 2014 2013 2013
Current GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- -------- -------- --------
Trade payables 28 28 3 3
Other payables 24 24 8 8
Accruals 170 170 210 23
222 222 221 34
----------------------- -------- -------- -------- --------
Non-current
Amounts owed to Group
undertakings - - - 5
----------------------- -------- -------- -------- --------
Total Payables 222 222 221 39
----------------------- -------- -------- -------- --------
All current amounts are payable within 6 months and the Board of
Directors considers that the carrying values adequately represent
the fair value of all payables. In the opinion of the directors the
carrying value of the financial liabilities approximates to their
fair value.
16. Deferred tax
Unrecognised losses
The Company has tax losses in respect of excess management
expenses of GBP9,144,742 (2013: GBP8,395,275) available for offset
against future Company income. This gives rise to a potential
deferred tax asset at the reporting date of GBP1,828,948 (2013:
GBP2,098,819). No deferred tax asset has been recognised in respect
of the tax losses carried forward as the recoverability of this
benefit is dependent on the future profitability of the Company,
the timing of which cannot reasonably be foreseen but the excess
management expenses have no expiry date.
17. Share capital
2014 2013
Number of GBP GBP
shares
------------------------------------- ------------ ----------- ----------
Issued and fully paid
At 1 October 9,347,279 8,105,246
------------------------------------- ------------ ----------- ----------
Allotted during prior year:
January 2013 - Liquidity Facility 100,000,000 - 500,000
March 2013 - subscription at
1.2 pence per share 148,406,526 - 742,033
------------------------------------- ------------ ----------- ----------
Allotted during current year:
September 2014 - placing at
0.5 pence per share 200,000,000 1,000,000 -
September 2014 - in lieu of
expenses at 0.5 pence per share* 3,000,000 15,000 -
------------------------------------- ------------ ----------- ----------
1,015,000 1,242,033
------------------------------------- ------------ ----------- ----------
2,072,455,744 (2013: 1,869,455,744)
ordinary shares of 0.5p each 10,362,279 9,347,279
------------------------------------- ------------ ----------- ----------
Balance of Shares issued under
Promissory Note not called
up:
At 1 October 100,000,000 (453,379) (500,000)
Called up in prior year (9,324,169) - 46,621
------------------------------------- ------------ ----------- ----------
Called up in current year (4,405,000) 22,205 -
------------------------------------- ------------ ----------- ----------
At 30 September 86,270,831 (431,354) (453,379)
------------------------------------- ------------ ----------- ----------
9,930,925 8,893,900
------------------------------------- ------------ ----------- ----------
* Non-cash transactions
17. Share capital (continued)
In 2013 the Group entered into a Liquidity Facility Agreement
and an associated Promissory Note (together the "Liquidity
Facility") with Windsor Capital Partners Limited ("Windsor
Capital"). Under the Liquidity Facility TomCo issued and allotted
100 million ordinary shares of 0.5p each ("Ordinary Shares") to
Windsor Capital in exchange for the Promissory Note. The Promissory
Note delivers the proceeds of the sale of the Ordinary Shares over
the life of the Promissory Note based on the occurrence of
"Liquidity Trigger Days". Liquidity Trigger Days are those days on
which the volume of shares traded is greater than 80% of the
trailing 90 day weighted average daily trading volume. On Liquidity
Trigger Days, Windsor Capital will seek to sell Ordinary Shares, up
to a maximum of 10% of the daily volume averaged over any 5 day
period, on a best effort basis at the AIM Market offer-price or
higher. The Liquidity Facility was suspended on 28 May 2013, and
reinstated on 23 September 2013 amended by way of introducing a
floor price of 2p per share and limiting the maximum net amount
raised following the announcement to one million pounds. These
amended conditions were subsequently removed in May 2014. Shares
which remain unsold at the reporting date are not included within
the share capital and share premium account as they are not
considered called up.
During the period, the Group raised a net amount of GBP52,853
(2013: GBP153,275) under the facility by the sale of 4,405,000
ordinary shares (2013: 9,324,169).
During the period, the Group also raised GBP1.0 million before
expenses through a conditional share placing of 200,000,000 new
ordinary shares of 0.5p each at a price of 0.5 per share. The
placing completed in full on 2 October 2014 with all cash proceeds
received in October.
18. Share premium
2014 2013
GBP'000 GBP'000
--------------------------------------- -------- --------
At 1 October 14,636 13,629
Premium on shares issued in the year 30 1,140
Expenses on shares issued in the year (88) (133)
At 30 September 14,578 14,636
--------------------------------------- -------- --------
19. Share--based payments
At 30 September 2014, the following share warrants granted for
services and shares are outstanding in respect of the ordinary
shares:
2014 2014 2013 2013
Weighted average Weighted average
exercise price exercise price
number Pence number Pence
-------------------- ---------- ----------------- ------------- -----------------
Outstanding at 1
October 7,420,326 1.2 65,424,778 2.5
Granted during the
year - - 7,420,326 1.2
Lapsed during the
year - - (65,424,778) 2.5
-------------------- ---------- ----------------- ------------- -----------------
Outstanding at 30
September 7,420,326 1.2 7,420,326 1.2
-------------------- ---------- ----------------- ------------- -----------------
Exercisable at 30
September 7,420,326 1.2 7,420,326 1.2
-------------------- ---------- ----------------- ------------- -----------------
Each warrant is governed by the provisions of warrant
instruments representing the warrants which have been adopted by
the Company. The rights conferred by the warrants are transferable
in whole or in part subject to and in accordance with the transfer
provisions set out in the Articles. The holders of warrants have no
voting right, pre-emptive right or other right attaching to
Ordinary Shares. All warrants issued have vested in full. The
warrants outstanding at 30 September 2014 had a weighted average
exercise price of 1.2p (2013: 1.2p) and a weighted average
remaining contractual life of 1.45 years (2013: 2.45 years). On
completion of the placing (Note 17), on 2 October the Company
issued 12,000,000 warrants with an exercise price of 0.5p and a
contractual life of 5 years.
The inputs into the Black--Scholes model for calculating
estimated fair value were:
2013
---------------------------- -----
Weighted average share
price (pence) 1.5
Weighted average exercise
price (pence) 1.2
Expected volatility 55%
Risk--free rate 3%
Weighted average remaining
contractual life (years) 2.45
----------------------------- -----
Expected volatility was determined by calculating the historical
volatility of the Company's share or the volatility of a basket of
similar listed companies where the historic volatility was not
available. The expected life used in the model has been adjusted,
based on management's best estimate, for the effects of
non--transferability, exercise restrictions and behavioural
considerations.
20. Financial instruments
The Group and Company's financial instruments, other than its
investments, comprise cash and items arising directly from its
operation such as other receivables, and trade payables.
Management review the Group and Company's exposure to currency
risk, interest rate risk, liquidity risk and credit risk on a
regular basis and consider that through this review they manage the
exposure of the Group and Company. No formal policies have been put
in place in order to hedge the Group and Company's activities to
the exposure to currency risk or interest risk, however, this is
constantly under review.
There is no material difference between the book value and fair
value of the Group and Company's cash and other financial
instruments.
Currency risk
The Group has overseas subsidiaries which operate in the United
States and whose expenses are mainly denominated in US$. Foreign
exchange risk is inherent in the Group and Company's activities and
is accepted as such. Some of the Company's expenses are denominated
in US Dollars. The effect of a 10% strengthening or weakening of
the US dollar against sterling at the reporting date on the
sterling denominated balances would, all other variables held
constant, not result in a significant exchange gain or loss in the
period.
Interest rate risk
The Group and Company manage the interest rate risk associated
with the Group cash assets by ensuring that interest rates are as
favourable as possible, whether this is through investment in
floating or fixed interest rate deposits, whilst managing the
access the Group requires to the funds for working capital
purposes.
The Company's cash and cash equivalents are subject to interest
rate exposure due to changes in interest rates. Short-term
receivables and payables are not exposed to interest rate risk.
A 1% increase or decrease in the floating rate attributable to
the cash balances held at the year end would not result in a
significant difference on interest receivable.
Liquidity risk
At the year end the Group and Company had cash balances
comprising of the following:
Group Company Group Company
2014 2014 2013 2013
Current GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- -------- -------- --------
British Pounds 86 86 929 929
US Dollars 4 3 307 4
Total 90 89 1,236 933
---------------- -------- -------- -------- --------
Liquidity risk arises from the Group and Company's management of
working capital and the finance charges and principal repayments on
any debt instruments. It is the risk that the Group and Company
will encounter difficulty in meeting its financial obligations as
they fall due.
The Group and Company policy is to ensure that it will always
have sufficient cash to allow it to meet its liabilities when they
become due. To achieve this aim, it seeks to maintain cash balances
(or agreed facilities) to meet expected requirements for a period
of at least 90 days. The group seeks to reduce liquidity risk by
fixing interest rates (and hence cash flows) on any long term
borrowings.
Credit Risk
Credit risk is the risk of financial loss to the Group and
Company if a customer or a counter party to a financial instrument
fails to meet its contractual obligations. The Group and Company is
exposed to credit risk from its relationship with its partners and
is mainly exposed to credit risk from credit sales. It is Group and
Company policy, implemented locally, to assess the credit risk of
new customers before entering contracts in accordance with best
local business practices, and seek external credit ratings where
applicable and when available. Credit risk of existing customers is
assessed when deemed necessary.
Credit risk also arises from cash and cash equivalents and
deposits with banks and financial institutions. For banks and
financial institutions, only independently rated parties with an
acceptable rating are utilised.
Price Risk
The Group is exposed to commodity price risk on its income and
assets relating to oil exploration and production. The Group
carries out sensitivity analyses for internal management purposes
to identify possible impacts on future projections.
Capital management policies
In managing its capital, the Group and Company's primary
objective is to maintain a sufficient funding base to enable the
Group and Company to meet its working capital and strategic
investment needs. In making decisions to adjust its capital
structure to achieve these aims, through new share issues or debt,
the Group and Company considers not only its short-term position
but also its long-term operational and strategic objectives.
21. Related party disclosures
The Directors are considered to be Key Management and
information in respect of key management is given in Note 7.
Transactions between the Company and its subsidiaries and
related parties during the year are summarised below:
2014 2013
------------------------------------ ------ --------
GBP GBP
Inter-group receivable outstanding
at year end - 137,800
Inter-group payable outstanding
at year end - 5,666
Fees paid to shareholder
and advisor under project
finance and management agreement - 112,000
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EALALESKLFFF
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