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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tomco Energy Plc | LSE:TOM | London | Ordinary Share | IM00BZBXMN96 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.0385 | 0.037 | 0.04 | 0.0385 | 0.0385 | 0.0385 | 1,900,063 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Drilling Oil And Gas Wells | 0 | -690k | -0.0002 | -2.00 | 1.27M |
From Apr 2019 to Apr 2024
TIDMTOM
RNS Number : 4227T
TomCo Energy PLC
29 March 2016
29 March 2016
TomCo Energy plc
("TomCo" or the "Company")
Full year results for the year ended 30 September 2015
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 2015.
The annual report and accounts are available on the Company's website.
For further information, please visit www.tomcoenergy.uk.com or contact the following:
TomCo Energy plc
Miikka Haromo, CEO Tel: +44 (0) 20 7917 6822
SP Angel (Nomad & Broker)
Stuart Gledhill Tel: +44 (0) 20 3470 0470
Richard Hail
Directors' Report
The Directors submit their report and the financial statements of the Company and of the Group for the year ended 30 September 2015.
During the financial year ending 30 September 2015 Tomco has been successful in progressing permitting for its Holliday Block. However, in line with previous guidance, the Company will only progress with commercial-scale construction at such time as the results of our technology partner Red Leaf Resources' nearby EPS capsule are available.
As shareholders will be aware, the oil and gas sector continues to be faced with challenging times which has contributed to the previously announced delays in Red Leaf's EPS capsule construction plans. Accordingly the Board is continuing to prudently manage its cash resources and is actively considering further options for reducing costs and building value for shareholders
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 Holliday Block oil shale leases, the latest of which was obtained in 2012 and 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. Red Leaf built and tested a pilot plant in 2008 and completed its permitting for its Seep Ridge project. The next step is to start construction of a one-off Early Production System ("EPS") capsule to demonstrate scalability of the process and economic viability of its technology. However, due to the severe fall in the oil price, Red Leaf and Total SA have agreed (as announced on 6(th) October 2015) to delay building the EPS capsule and use the delay to accelerate the commercial technology optimisation of the Ecoshale technology. Red Leaf expects per barrel economics to be substantially improved compared to first generation technology. The technology developed by Red Leaf is currently unique within the marketplace but until the EPS capsule is constructed, the commercial viability of this technology will not be conclusively determined. Once the viability of this technology has been conclusively 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.
Oil price risk
The economic viability of the Group's oil shale and technology licence and the value of the investment in Red Leaf are ultimately dependent on future oil prices. The Board monitor oil prices on a daily basis and analyse events of a business, political or environmental nature that might affect future prices.
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 operating 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. Refer to the 'Going Concern' section below for details on current funding requirements.
The Group has no significant exposure to interest rate risk.
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 11.
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 19.
Results and dividends
The statement of comprehensive income is set out in this report. The Directors do not propose the payment of a dividend (2014: GBPNil).
Review of the key events during the year
During the year the company concentrated on keeping its leases in good standing and obtaining all necessary permits to commence mining.
In February 2015, the Utah Division of Oil, Gas and Mining ("DOGM") approved TomCo's Notice of Intention to Commence Large Mining Operations ("LMO"). TomCo agreed to only commence full-scale operations under the LMO at such time as the results of Red Leaf Resources Inc's nearby Early Production System capsule are available and must submit a reclamation surety to DOGM before beginning any mining operations. This was the first of the three major permits necessary under Utah State law to take the Company's Holliday Block into production.
In July 2015 the Utah Division of Water Quality ("DWQ") issued TomCo with a Ground Water Discharge Permit ("GWDP") and a Construction Permit ("CP"). Together with its Large Mining Operation permit described above, TomCo has now received all necessary major permits from the various Utah State departments to take the Company's Holliday Block into development and production.
Details regarding developments in the Red Leaf technology are provided under the 'Risk Assessment' section.
Directors
Directors who served on the Board during the year to 30 September 2015 were as follows:
Sir Nicholas Bonsor (resigned 17 July 2015)
Paul Rankine (resigned 17 July 2015)
Miikka Haromo
Andrew Jones (appointed 17 July 2015)
Simon Corney (appointed 17 July 2015)
Directors' interests in the shares of the Group, including family interests, were as follows:
Hot Features
Premium
30 September 2015 30 September 2014
--------------------- ---------------------
Ordinary Ordinary
0.5 pence Share 0.5 pence Share
shares warrants shares warrants
----------- ---------- --------- ---------- ---------
N Bonsor 1,550,011 - 1,550,011 -
P Rankine 5,000,000 - 5,000,000 -
M Haromo* 3,000,000 - 3,000,000 -
A Jones - - - -
S Corney - - - -
----------- ---------- --------- ---------- ---------
9,550,011 - 9,550,011 -
----------- ---------- --------- ---------- ---------
Details of remuneration and share warrants can be found in Note 7 and Note18.
* Miikka Haromo had 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 expired 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 2015 for trade payables was 8 days (2014: 8 days).
Going concern
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The Directors have prepared a cash flow forecast, based on a reduced level of operations with costs scaled back, for the next 12 months from the date of approval of these financial statements. This cash flow forecast indicates that the Group requires funding within the next few months to have sufficient cash to meet its liabilities and commitments in respect of operating expenditure for a period of at least 12 months. The Directors are currently negotiating with the Group's advisors and a number of potential investors regarding an injection of new capital, via further equity raisings or debt finance, which would provide sufficient funds to allow the Group to meet its committed operating expenditure for at least the next 12 months. The Directors are confident of being able to raise the necessary funding.
The requirement to successfully raise funds through further equity raisings or debt finance within the next few months has been identified as a material uncertainty which may cast significant doubt over the going concern assessment. Whilst acknowledging this uncertainty, based upon the expectation of completing a successful fundraising in the near future, the Directors consider it appropriate to continue to prepare the financial statements of the Company on a going concern basis. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.
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:
-- select suitable accounting policies and then apply them consistently; -- make judgements and estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records that set out with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps to prevent and detect fraud and other irregularities.
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.
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
Andrew Jones
Non-Executive Chairman
24 March 2016
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 2015 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 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 our engagement letter dated 22 October 2015. 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
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 company'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 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.
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 2015 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.
Emphasis of Matter - Going Concern
In forming our opinion of the financial statements, which is not modified, we have considered the adequacy of the disclosures made in Note 1 to the financial statements concerning the Group's ability to continue as a going concern. The Group's cash flow forecasts indicate that it needs to successfully raise further funds in the next few months, either through equity raisings or debt finance, to meet its liabilities and commitments as they fall due for a period of at least the next 12 months. While the Directors are confident of being able to raise the necessary funding these conditions indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.
BDO LLP
Chartered Accountants
London
United Kingdom
24 March 2016
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 2015
2015 2014
Note GBP'000 GBP'000
-------------------------------- ----- -------- --------
Revenue 2 3 15
Cost of sales 2 (8) (4)
-------------------------------- ----- -------- --------
Gross (loss)/profit (5) 11
Administrative expenses (710) (741)
-------------------------------- ----- -------- --------
Operating loss 5 (715) (730)
Finance income 3 - -
Finance costs 4 (1) (2)
-------------------------------- ----- -------- --------
Loss on ordinary activities
before taxation (716) (732)
Taxation 6 - -
-------------------------------- ----- -------- --------
Loss for the year attributable
to equity shareholders
of the parent (716) (732)
-------------------------------- ----- -------- --------
Total comprehensive loss
attributable to equity
shareholders of the parent (716) (732)
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-------------------------------- ----- -------- --------
2015 2014
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) (0.04)
----------------------------- ---------- ----------
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 GBP668,395 (2014: GBP749,467).
The notes to the accounts form part of these financial statements.
Consolidated and Company Statement of Financial
Position
as at 30 September 2015
Group Company Group Company
2015 2015 2014 2014
Note GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ----- --------- --------- --------- ---------
Assets
Non--current assets
Intangible assets 9 8,933 1,314 8,815 1,314
Investment in
subsidiaries 10 - 7,619 - 7,501
Available for
sale financial
assets 11 3,262 3,262 3,262 3,262
Other receivables 12 - 42 - -
--------------------- ----- --------- --------- --------- ---------
12,195 12,237 12,077 12,077
--------------------- ----- --------- --------- --------- ---------
Current assets
Trade and other
receivables 12 42 12 1,063 1,034
Cash and cash
equivalents 13 272 271 90 89
--------------------- ----- --------- --------- --------- ---------
314 283 1,153 1,123
--------------------- ----- --------- --------- --------- ---------
TOTAL ASSETS 12,509 12,520 13,230 13,200
Liabilities
Current liabilities
Trade and other
payables 14 (136) (129) (222) (222)
(136) (129) (222) (222)
--------------------- ----- --------- --------- --------- ---------
Net current assets 178 154 931 901
--------------------- ----- --------- --------- --------- ---------
TOTAL LIABILITIES (136) (129) (222) (222)
--------------------- ----- --------- --------- --------- ---------
Total net assets 12,373 12,391 13,008 12,978
--------------------- ----- --------- --------- --------- ---------
Shareholders'
equity
Share capital 16 10,133 10,133 9,931 9,931
Share premium 17 14,457 14,457 14,578 14,578
Warrant reserve 18 42 42 42 42
Retained deficit (12,259) (12,241) (11,543) (11,573)
--------------------- ----- --------- --------- --------- ---------
Total equity 12,373 12,391 13,008 12,978
--------------------- ----- --------- --------- --------- ---------
The accounts were approved and authorised for issue by the Board of Directors on 24 March 2016.
Andrew Jones Miikka Haromo
Director Director
Consolidated statement of changes in equity
for the financial year ended 30 September 2015
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 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 16,17 1,037 (58) - - 979 1,037 (58) - - 979
Balance at 30
September
2014 9,931 14,578 42 (11,543) 13,008 9,931 14,578 42 (11,573) 12,978
--------------- ------ -------- -------- -------- --------- -------- -------- -------- -------- --------- --------
Total
comprehensive
loss for the
year - - (716) (716) - - - (668) (668)
Issue of share
capital 16,17 202 (121) - - 81 202 (121) - - 81
At 30
September
2015 10,133 14,457 42 (12,259) 12,373 10,133 14,457 42 (12,241) 12,391
--------------- ------ -------- -------- -------- --------- -------- -------- -------- -------- --------- --------
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, less share capital issued at a discount to 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 to the accounts form part of these financial statements.
Consolidated and Company statements of
cash flows
for the financial year ended 30 September
2015
Note Group Company Group Company
2015 2015 2014 2014
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------ -------- -------- -------- --------
Cash flows from operating
activities
Loss after tax 2 (716) (668) (732) (749)
Finance costs 4 1 1 2 2
Decrease in trade and
other receivables 12 93 51 - -
Increase/(decrease)
in trade and other payables 14 (86) (92) 114 138
------------------------------- ------ -------- -------- -------- --------
Cash used in operations (708) (708) (615) (609)
------------------------------- ------ -------- -------- -------- --------
Cash flows from investing
activities
Investment in oil &
gas assets 9 (118) - (581) -
Additions to investment
in subsidiary 10 - (118) - (285)
Net cash used in investing
activities (118) (118) (581) (285)
------------------------------- ------ -------- -------- -------- --------
Cash flows from financing
activities
Issue of share capital
(net of issue costs) 16,17 1,008 1,008 50 50
------------------------------- ------ -------- -------- -------- --------
Net cash generated from
financing activities 1,008 1,008 50 50
------------------------------- ------ -------- -------- -------- --------
Net increase/(decrease)
in cash and cash equivalents 182 182 (1,146) (844)
Cash and cash equivalents
at beginning of financial
year 90 89 1,236 933
------------------------------- ------ -------- -------- -------- --------
Cash and cash equivalents
at end of financial
year 272 271 90 89
------------------------------- ------ -------- -------- -------- --------
The notes to the accounts form part of these financial statements.
Notes to the financial statements
for the financial year ended 30 September 2015
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
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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.
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 11);
The Group has consistently applied all applicable accounting standards.
Going Concern
The Directors have prepared a cash flow forecast, based on a reduced level of operations with costs scaled back, for the next 12 months from the date of approval of these financial statements. This cash flow forecast indicate that the Group requires funding within the next few months to have sufficient cash to meet its liabilities and commitments in respect of operating expenditure for a period of at least 12 months. The Directors are currently negotiating with the Group's advisors and a number of potential investors regarding an injection of new capital, via further equity raisings or debt finance, which would provide sufficient funds to allow the Group to meet its committed operating expenditure for at least the next 12 months. The Directors are confident of being able to raise the necessary funding.
The requirement to successfully raise funds through further equity raisings or debt finance within the next few months has been identified as a material uncertainty which may cast significant doubt over the going concern assessment. Whilst acknowledging this uncertainty, based upon the expectation of completing a successful fundraising in the near future, the Directors consider it appropriate to continue to prepare the financial statements of the Company on a going concern basis. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.
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.
There are new standards, amendments and interpretations to existing standards have been published that are relevant to the group's activities and are mandatory for the group's accounting periods beginning after 1 October 2015 or later periods which the group has decided not to adopt early. These include:
International Accounting Standards (IAS/IFRS) Effective date
(periods beginning
on or after)
-- IAS 16 & 38 Clarification of Acceptable Methods of Depreciation and Amortisation
1 Jan 2016
-- IFRS 15 Revenue from contracts with customers 1 Jan 2018
-- IFRS 9 Financial instruments 1 Jan 2018
IFRS 9 is currently being reviewed to determine any future impact on the financial statements but the other standards are not expected to have a material impact given current activities.
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 2015. 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 control over an investee. The company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control. 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 Board of Directors.
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
Revenue represents the Group's share of sales of oil during the year, excluding sales tax and royalties. Income arises from the Group's working interest in a US asset 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.
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
Exploration and development licences
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.
Technology licences
The technology licence is initially recorded at cost and subsequently carried at cost less depreciation and applicable impairment. Depreciation is not yet 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
Exploration and development licences
Exploration and development assets are assessed for impairment when facts and circumstances suggest that the carrying amount may exceed the recoverable amount. In accordance with IFRS 6 the Group firstly considers the following facts and circumstances in their assessment of whether the Group's exploration and evaluation assets may be impaired, whether:
-- the period for which the Group has the right to explore in a specific area has expired during the period or will expire in the near future, and is not expected to be renewed;
-- substantive expenditure on further exploration for and evaluation of mineral resources in a specific area is neither budgeted nor planned;
-- exploration for and evaluation of hydrocarbons in a specific area have not led to the discovery of commercially viable quantities of hydrocarbons and the Group has decided to discontinue such activities in the specific area; and
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-- sufficient data exists to indicate that although a development in a specific area is likely to proceed, the carrying amount of the exploration and evaluation assets is unlikely to be recovered in full from successful development or by sale.
If any such facts or circumstances are noted, the Group perform an impairment test in accordance with the provisions of IAS 36. The aggregate carrying value is compared against the expected recoverable amount of the cash generating unit, which 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 recoverable amount is the higher of value in use and the fair value less costs to sell.
Any impairment loss would be recognised in the income statement and separately disclosed.
Technology licence
The carrying amount of the Group's other asset, its technology licence, is 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 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. 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. On sale, the cumulative gain or loss recognised in other comprehensive income is reclassified from the available-for-sale reserve to profit or loss.
If the fair value of available for sale financial assets cannot be reliably measured then they are carried at historic cost. For such instruments, if there is objective evidence that an impairment loss has been incurred, the amount of the impairment loss is recorded in profit and 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 16) 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 Board of Directors. The Directors therefore consider that no further segmentation is appropriate.
United United United United
States Kingdom Total States Kingdom Total
Year ended 30 September 2015 2015 2015 2014 2014 2014
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- -------- -------- -------- -------- --------
Revenue 3 - 3 15 - 15
Cost of sales (8) - (8) (4) - (4)
--------------------------------- -------- -------- -------- -------- -------- --------
Gross (loss)/ profit (5) - (5) 11 - 11
--------------------------------- -------- -------- -------- -------- -------- --------
Depreciation - - - - - -
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Administrative expenses (42) (668) (710) (13) (728) (741)
--------------------------------- -------- -------- -------- -------- -------- --------
Operating loss (47) (668) (715) (2) (728) (730)
--------------------------------- -------- -------- -------- -------- -------- --------
Financial income - - - - - -
Financial expense
Finance costs - (1) (1) - (2) (2)
--------------------------------- -------- -------- -------- -------- -------- --------
Total loss (47) (669) (716) (2) (730) (732)
--------------------------------- -------- -------- -------- -------- -------- --------
Non-Current assets:
- exploration and development
licences 7,619 - 7,619 7,501 - 7,501
- technology licence 1,314 - 1,314 1,314 - 1,314
- Available for sale financial
assets - 3,262 3,262 - 3,262 3,262
--------------------------------- -------- -------- -------- -------- -------- --------
8,933 3,262 12,195 8,815 3,262 12,077
-------------------------------- -------- -------- -------- -------- -------- --------
Current assets:
Trade and other receivables
Cash and cash equivalents 30 12 42 29 1,034 1,063
Cash and cash equivalents 1 271 272 1 89 90
--------------------------------- -------- -------- -------- -------- -------- --------
Total assets 8,964 3,545 12,509 8,845 4,385 13,230
--------------------------------- -------- -------- -------- -------- -------- --------
Current liabilities:
Trade and other payables (7) (129) (136) - (222) (222)
Total liabilities (7) (129) (136) - (222) (222)
--------------------------------- -------- -------- -------- -------- -------- --------
3. Finance income
2015 2014
GBP'000 GBP'000
-------------- -------- --------
Bank interest - -
- -
-------------- -------- --------
4. Finance costs
2015 2014
GBP'000 GBP'000
Bank charges 1 2
-------------- -------- --------
1 2
-------------- -------- --------
5. Operating loss
2015 2014
The following items have been charged GBP'000 GBP'000
in arriving at operating loss:
---------------------------------------- -------- --------
Directors' fees (Note 7) 293 314
Auditors' remuneration:
- audit services 27 26
Rentals payable in respect of land and
buildings 6 7
---------------------------------------- -------- --------
6. Taxation
There is no tax charge in the year due to the loss for the year.
Factors affecting the tax charge:
2015 2014
GBP'000 GBP'000
------------------------------------ -------- --------
Loss on ordinary activities before
tax (716) (732)
------------------------------------ -------- --------
Loss on ordinary activities at
standard rate of corporation tax
in the UK of 20% (2014 - 22.0%) (143) (161)
Effects of:
Excess management expenses carried
forward 143 161
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. The amounts paid for their services are detailed below:
Salaries Salaries
2015 2014
GBP'000 GBP'000
-------------------- --------- ---------
N Bonsor 63 71
P Rankine 113 139
M Haromo 104 104
A Jones 7 -
S Corney 6 -
-------------------- --------- ---------
Total remuneration 293 314
-------------------- --------- ---------
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 GBP'000 '000 Pence
September 2015
--------------------------- -------- ---------- ----------
Basic and Diluted EPS
Losses attributable to
ordinary shareholders on
continuing operations (716) 1,999,455 (0.04)
--------------------------- -------- ---------- ----------
Total losses attributable
to ordinary shareholders (716) 1,999,455 (0.04)
--------------------------- -------- ---------- ----------
Financial year ended 30 GBP'000 '000 Pence
September 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)
--------------------------- -------- ---------- -------
The warrants which were in issue at the year end (Note 18) are considered anti-dilutive. As the 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
licences
GBP'000 GBP'000 GBP'000
---------------------- ----------------- ----------- ----------
Cost
At 1 October 2013 7,107 1,314 8,421
---------------------- ----------------- ----------- ----------
Additions 394 - 394
---------------------- ----------------- ----------- ----------
At 30 September 2014 7,501 1,314 8,815
---------------------- ----------------- ----------- ----------
Additions 118 - 118
---------------------- ----------------- ----------- ----------
At 30 September 2015 7,619 1,314 8,933
---------------------- ----------------- ----------- ----------
Net book value
At 30 September 2015 7,619 1,314 8,933
---------------------- ----------------- ----------- ----------
At 30 September 2014 7,501 1,314 8,815
---------------------- ----------------- ----------- ----------
At 30 September 2013 7,107 1,314 8,421
---------------------- ----------------- ----------- ----------
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, declared a surface mineable JORC compliant Measured Resource of 126 million barrels on the main tract of TomCo's Holliday Block lease in 2012. 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
The resource assessments in relation to its oil shale leases, by their nature, involve a significant degree of judgment and estimation regarding economic inputs. As such, changes to those inputs may result in changes to the estimated resources. In addition, if the required additional funding was not to be made available to the company to develop the oil shale leases, the carrying value of the asset might need to be impaired.
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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 technology is planned for use in the Group's oil shale lease interests. Initial test results from the testing of the EcoShale(TM) technology showed that the technology works on a small scale and Red Leaf and Total previously planned to construct the EPS capsule with design optimisation following thereafter. Red Leaf and Total have subsequently agreed to defer building the EPS capsule and will use the period to accelerate the commercial technology optimization of the Ecoshale technology; with Total continuing to demonstrate their continued long term commitment to the project.
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 have performed an impairment review to determine the recoverable amount using a value in use model. The future cash flows used for the impairment review are estimates based on the expected future production plans. These estimates include:
-- commencement of production following commercial viability of the EcoShale In-Capsule Process;
-- future oil prices determined from the forward WTI oil price curve at 30 September 2015 and also a long term price based on assessment of long term market forecasts at 30 September 2015; and
-- a post-tax discount rate of 10%.
The Directors note that there has been further decline in the oil price since the director's assessment at the year end which, if it remains sustained, may indicate impairment in future periods without associated optimisation of the Ecoshale technology.
10. Company investment in subsidiaries
Shares in Group undertakings
Total
GBP'000
---------------------- --------
Cost
---------------------- --------
At 1 October 2013 7,107
---------------------- --------
Additions 394
---------------------- --------
At 30 September 2014 7,501
---------------------- --------
Additions 118
---------------------- --------
At 30 September 2015 7,619
---------------------- --------
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 Country of Proportion Nature of business
Undertaking incorporation of voting rights
or registration and ordinary
share capital
held
--------------- ----------------- ------------------ -------------------
The Oil Mining Utah, USA 100% Holding of oil
Company Inc shale leases
--------------- ----------------- ------------------ -------------------
TomCo I LLC Delaware, USA 100% Holding company
of TomCo II
--------------- ----------------- ------------------ -------------------
TomCo II LLC Delaware, USA 100% indirect TomCo II is
holding engaged in the
exploration
and extraction
of oil and gas
through joint
investment in
oil leases
--------------- ----------------- ------------------ -------------------
11. Available--for--sale financial assets
Unlisted
Investments
Cost GBP'000
-------------------------- ------------
At 1 October 2013 3,442
Additions -
-------------------------- ------------
At 30 September 2014 3,442
---------------------------- ------------
Additions -
At 30 September 2015 3,442
Provisions
At 30 September 2014 and
2015 180
180
-------------------------- ------------
Net book value
At 30 September 2015 3,262
---------------------------- ------------
At 30 September 2014 3,262
At 30 September 2013 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. Red Leaf is a private Company and therefore there is no active market.
11. Available--for--sale financial assets (continued)
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. The directors have considered all information available in relation to Red Leaf and not identified any data which could provide a reliable fair value. The directors consider that the carrying value of the investment in Red Leaf remains dependent on the success of the Ecoshale technology. Whilst Red Leaf and Total have agreed (as announced on 6(th) October 2015) to defer building the EPS capsule, they have stated that they will use the delay to accelerate the commercial technology optimization of the Ecoshale technology. Total have demonstrated their continued long term commitment to the project, and as such the directors do not consider the asset to be impaired given the continued progression of the technology and forecast increases in future oil prices as at year end. There is a risk that in the future this investment falls in value and the Group is unable to realise its accounting value, due for instance to to the technology ultimately proving unsuccessful or uneconomic as a result of a sustained depression in future global oil prices. The Company's plans for the investment remain dependent on the progression of the Ecoshale technology and other market factors.
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.
12. Trade and other receivables
Group Company Group Company
2015 2015 2014 2014
Current GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------- -------- --------
Other receivables 34 4 1,037 1,008
Prepayments and accrued
income 8 8 26 26
42 12 1,063 1,034
------------------------- -------- -------- -------- --------
Non- current
Amounts owed from - 42 - -
Group undertakings
------------------------- -------- -------- -------- --------
Total Receivables 42 54 1,063 1,034
------------------------- -------- -------- -------- --------
As at 30 September 2015 there were no receivables considered past due (2014: 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 19.
All current receivable amounts are due within 6 months.
13. Cash and cash equivalents
Group Company Group Company
2015 2015 2014 2014
GBP'000 GBP'000 GBP'000 GBP'000
------------------ -------- -------- -------- --------
Cash at bank and
in hand 272 271 90 89
------------------ -------- -------- -------- --------
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The Group earns 0.05% (2014: 0.05%) interest on their cash deposits, consequently the Group's exposure to interest rate volatility is not considered material.
14. Trade and other payables
Group Company Group Company
2015 2015 2014 2014
Current GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- -------- -------- --------
Trade payables 10 3 28 28
Other payables 1 1 24 24
Accruals 125 125 170 170
136 129 222 222
---------------- -------- -------- -------- --------
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.
15. Deferred tax
Unrecognised losses
The Company has tax losses in respect of excess management expenses of GBP9,813,137 (2014: GBP9,144,742) available for offset against future Company income. This gives rise to a potential deferred tax asset at the reporting date of GBP1,962,627 (2014: GBP1,828,948). 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.
16. Share capital
2015 2014
Number GBP GBP
of shares
-------------------------- ------------- ----------- -----------
Issued and fully paid
At 1 October 10,362,279 9,347,279
-------------------------- ------------- ----------- -----------
Allotted during prior
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
-------------------------- ------------- ----------- -----------
Allotted during current - -
year:
- -
-------------------------- ------------- ----------- -----------
2,072,455,744 (2014:
2,072,455,744) ordinary
shares of 0.5p each 10,362,279 10,362,279
-------------------------- ------------- ----------- -----------
Balance of Shares issued
under Promissory Note
not called up:
At 1 October 90,675,831 (431,354) (453,379)
Called up in prior year (4,405,000) - 22,205
-------------------------- ------------- ----------- -----------
Called up in current
year (40,490,000) 202,450 -
-------------------------- ------------- ----------- -----------
At 30 September 45,780,831 (228,904) (431,354)
-------------------------- ------------- ----------- -----------
10,133,375 9,930,925
-------------------------- ------------- ----------- -----------
16. 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 GBP81,357 (2014: GBP52,853) under the facility by the sale of 40,490,000 ordinary shares (2014: 4,405,000) with a nominal value of GBP202,450 ( 2014:GBP22,205).
In September 2014, 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 0.5p per share. The placing completed in full on 2 October 2014 with all cash proceeds received in October 2014. The proceeds were included as receivables at 30 September 2014.
17. Share premium
2015 2014
GBP'000 GBP'000
------------------------------------ -------- --------
At 1 October 14,578 14,636
Premium on shares issued in the
year - 30
Expenses on shares issued in the
year and deficit on shares issued
below par (121) (88)
At 30 September 14,457 14,578
------------------------------------ -------- --------
18. Share--based payments
At 30 September 2015, the following share warrants granted for services and shares are outstanding in respect of the ordinary shares:
2015 2015 2014 2014
Weighted Weighted
average average
exercise exercise
price price
number Pence number Pence
------------------ ----------- --------- ---------- ---------
Outstanding
at 1 October 7,420,326 1.2 7,420,326 1.2
Granted during
the year 12,000,000 0.5 - -
Outstanding
at 30 September 19,420,326 0.6 7,420,326 1.2
------------------ ----------- --------- ---------- ---------
Exercisable
at 30 September 19,420,326 0.6 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. The warrants outstanding at 30 September 2015 had a weighted average exercise price of 0.6p (2014: 1.2p) and a weighted average remaining contractual life of 2.23 years (2014: 1.45 years). On completion of the placing (Note 16), on 2 October 2014, the Company issued 12,000,000 warrants with an exercise price of 0.5p and a contractual life of 5 years. Following the period end, on 12 March 2016, 7,420,326 warrants expired. The fair value of the warrants issued in the year was insignificant and therefore not recognised in the current period.
18. Share--based payments (continued)
The inputs into the Black--Scholes model for calculating estimated fair value were:
2015 2014
----------------------- ----- -----
Share price (pence) 0.18 -
Exercise price (pence) 0.5 -
Expected volatility 55% -
Risk--free rate 3% -
Contractual life 5 -
(years)
----------------------- ----- -----
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.
19. 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 except the available-for-sale asset which is held at cost as it cannot be reliably fair valued.
Currency risk
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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
2015 2015 2014 2014
Current GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- -------- -------- --------
British Pounds 271 271 86 86
US Dollars 1 - 4 3
Total 272 271 90 89
---------------- -------- -------- -------- --------
19. Financial instruments (continued)
Liquidity risk arises from the Group and Company's management of working capital. 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.
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.
The economic viability of the Group's oil shale and technology licence and the value of the investment in Red Leaf, as disclosed in note 9 and 11, are ultimately dependent on future oil prices.
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.
20. Related party disclosures
Transactions between the Company and its subsidiaries and related parties during the year are summarised below:
2015 2014
------------------------ -------- --------
GBP'000 GBP'000
Inter-group receivable 42 -
outstanding at year
end
Inter-group payable - -
outstanding at year
end
42
------------------------ -------- --------
The inter-group receivable has arisen on capital additions to the oil & gas exploration licences which have been incurred in the period and paid by Tomco Energy plc on behalf of Oil Mining Inc.
21. Ultimate controlling party
As at 30 September 2015 and 30 September 2014 there was no single ultimate controlling party, nor as at the date hereof.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKCDKNBKDCNB
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