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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Andalas Energy And Power Plc | LSE:ADL | London | Ordinary Share | IM00BZ7PNY71 | 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% | 0.20 | 0.19 | 0.21 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Andalas Energy and Power Plc
Final Results
3 July 2018
Andalas Energy and Power Plc
('Andalas' or the 'Company')
Final Results
Andalas Energy and Power Plc, the AIM listed Indonesian focused energy company
(AIM: ADL), is pleased to announce its results for the year ending 30 April
2018. The Annual Report and Accounts will be posted to shareholders this month
and will be immediately made available on the Company's website: http://
www.andalasenergy.co.uk.
Highlights:
* Business development activity continued with renewed focus on upstream oil
and gas:
+ Acquisition of interest in Eagle Gas Limited provides access to Badger
prospect in UK Southern North and ongoing work programme.
+ Screening of a number of Indonesian opportunities and the Company
believes there are assets available at attractive entry prices.
+ Agreements entered into during the year on IPP projects.
* Greater financial discipline following the appointment of new CEO, Simon
Gorringe, and new Chairman, Dr Robert Arnott.
+ The operating loss was $1,161,000 (2017: $4,317,000) - a reduction of
73%.
+ The balance sheet strengthened to a net assets position of $61,000
(2017: net liability US$2,029,000).
+ Certain Directors, former Directors and key consultants waived or
otherwise cancelled $865,000 of unpaid accrued remuneration or
invoices.
Chairman, Dr Robert Arnott "During the past year, Andalas has reviewed its
operations and restructured its business. The Company's strategy has a renewed
focus on its core competency of oil and gas exploration and production (E&P)
and has broadened its geographical focus to include areas outside its existing
operations in Indonesia.
In parallel with working on the existing projects we have undertaken detailed
due diligence on a number of assets, in Indonesia and elsewhere, and at the end
of the financial year made our first purchase of an indirect interest in the
P2112 Badger prospect in the UK Southern North Sea.
The board believes the Company is now in a good position to reap the benefits
of its new strategy and we believe that over the next twelve months the Company
will be participating in new and exciting upstream E&P opportunities, alongside
existing opportunities, that will deliver value."
For further information, please contact:
Simon Gorringe Andalas Energy and Power Plc Tel: +62 21 2965 5800
Roland Cornish/ James Beaumont Cornish Limited Tel: +44 20 7628 3396
Biddle (Nominated Adviser)
Colin Rowbury Novum Securities Limited Tel: +44 207 399 9427
(Joint Broker)
Christian Dennis Optiva Securities Limited Tel: +44 20 3411 1881
(Joint Broker)
Stefania Barbaglio Cassiopeia Services Ltd Stefania@cassiopeia-ltd.com
Chairmans' Statement
During the past year, Andalas Energy and Power PLC ("Andalas", the "Group" or
the "Company") has reviewed its operations and restructured its business. The
Company's strategy has a renewed focus on its core competency of oil and gas
exploration and production (E&P) and broadened its geographical focus to
include areas outside its existing operations in Indonesia.
The Company has undertaken some significant management changes. It has
appointed Dr Robert Arnott as its Chairman and Mr Simon Gorringe as its Chief
Executive Officer. Rob and Simon are industry veterans with many years of
experience operating in the North Sea and elsewhere. Earlier in the year, Paul
Warwick resigned as Chairman. His role was taken up by David Whitby who
subsequently resigned in the latter part of the period.
Indonesia
Indonesia is a core focus area of the Company. The country's oil and gas
industry is similar in size to that of the UK. We believe that a number of
Indonesia's on-shore regions such as Sumatra have near-term development and
production opportunities at attractive entry prices and we have been actively
assessing them as we seek to build our upstream asset base.
During the period, the Company announced that it had initiated a number of
well-head independent power projects (well-head IPP) in Indonesia. Under our E
&P focused strategy, the board believes that well-head IPP is better considered
as simply one of a number of methods to commercialise upstream opportunities.
This means the Company will initiate new projects based on its assessment of
the upstream opportunity alone. Whilst some of these projects may sell gas to
a well-head IPP, Andalas will not necessarily seek to participate in those
well-head IPPs and it will not initiate new "stand alone" well-head IPP
opportunities.
In relation to the Company's existing well-head IPP opportunities, Sumatra-1 is
considered the most likely to advance. We believe the Company has a realistic
prospect of participating in the upstream component of this project and,
accordingly, we will continue to pursue it. The proposed project comprises a
40 MW well-head IPP in southern Sumatra. Andalas, together with its joint
venture partner, has completed preliminary grid stability and demand studies
which concluded that the transmission system is capable of evacuating power
from the IPP and there is a market for it within the national power company,
PLN. The parties have entered into a gas sales MOU with the upstream owner for
the sale of 6 MMscfd of gas for a period of at least 15 years at such price as
enables PLN to permit the project without public tender in accordance with
Indonesian laws and regulations. The project has been discussed with PLN.
Further advances in these discussions are dependent on, in initially, further
regulatory approvals in relation to the development of the upstream project and
then the formation of a Consortium and appropriate funding to develop the
project. In the meantime, the Company has continued to advance discussions
with additional joint venture partners.
The other well-head IPP projects announced during the period are less advanced
and our ability to influence them has continued to disappoint. The board will
keep each of them under review. At this stage, the Puspa project will not be
actively advanced until Sumatra-1 has been de-risked. This reflects the
Company's desire to both preserve financial resources and focus management time
on those projects that have a more certain development. The Company is likely
to abandon Jambi-1 because it has made only limited progress on this project
and it is not consistent with our E&P focused strategy. The Company remains in
active discussions with its partner in this project, PT PP Energi, regarding
their potential co-investment in future projects.
UK Southern North Sea
The Company is pleased to have been able to secure an indirect interest in
Licence P2112, a southern North Sea licence containing the Badger prospect, as
a result of its acquisition of a minority interest in Eagle Energy. The
Company is excited by the Badger prospect. Work undertaken by the previous
operator indicates Badger has significant gas potential.
Petroleum Geo-Services ASA (PGS) has been contracted to reprocess the 3D
seismic data and we expect to be able to announce these results in summer
2018. Andalas' team has over 25 years' experience in the UK North Sea, working
across 15 fields on every stage of the development cycle. Eagle is actively
seeking additional projects and we believe our expertise compliments their team
and will provide a valuable contribution towards securing these projects.
Financial review
During the year the Company focussed on streamlining its cost base and
strengthening its balance sheet. All non-essential expenditures were cut-back,
including the overhaul of the board of Directors, and we focussed on reducing
creditors including fully settling last year's loan note liability. In
parallel the Company raised a total of US$3.632m (GBP2.7m) of new equity that
together with the aforementioned effort has substantially changed the financial
position of the Company at the balance sheet date.
The operating loss was reduced to $1,161,000 from $4,317,000 - a reduction of
73%. This renewed financial discipline was further evidenced by the cash spend
in the second half of the year being 26% lower than the first half of the year.
The Company held a cash balance of US$38,000 at 30 April 2018 (US$8,000 at 30
April 2017), which was to be supplemented by the proceeds from the placing of
new ordinary shares of US$827,000 (GBP600,000) completed on 29 April 2018 but
received post year end.
In addition the Company had trade and other payables of US$1,045,000 at 30
April 2018 (US$1,546,000 at 30 April 2017), included in this amount is a total
of US$172,500 (2017: US$Nil) in respect of consideration payable to Eagle Gas
Limited and fees in connection with the year-end placing of US$69,000 (2017:
US$Nil) that was accrued but not paid at the year end.
The remaining trade payables and accruals totalled US$803,500, (2017:
US$1,546,000). Within this amount are certain payables totalling US$316,000
(2017: $461,000) to Directors or former Directors, US$Nil (2017: US$395,000)
due to key consultants and US$145,000 (2017: US$405,000) due to third parties,
where each party, at their election, has either agreed to either receive equity
settlement or cash at such time as the Company has greater cash resources at
its disposal.
The Company's principal cost is its people, therefore to preserve cash the
Company's Directors and key consultants ("key stakeholders") waived or
otherwise cancelled $865,000 of unpaid accrued remuneration or invoices. The
result on the balance sheet was significant, with the balance sheet
strengthening to a net assets position of $61,000 from a net liability position
of US$2,029,000 in the prior year. This focus on financial discipline and
strengthening the balance sheet will continue into the remainder of 2018.
Outlook
The board believes the Company is now in a good position to reap the benefits
of its new strategy. Shareholders can look forward to the Company
participating in new and exciting upstream E&P opportunities, alongside
existing opportunities, that will deliver value.
Robert Arnott
Non-Executive Chairman
2 July 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEARED 30 APRIL 2018
Note 2018 2017
$'000s $'000s
Asset evaluation expense 4 (282) (2,481)
Readmission costs 4 - (446)
Other administrative expenses 4 (879) (1,390)
Total administrative expenses 4 (1,161) (4,317)
Operating loss (1,161) (4,317)
Finance costs 3 (173) (284)
Loss before tax (1,334) (4,601)
Tax expense 9 - -
Loss after tax attributable to (1,334) (4,601)
owners of the parent
Total comprehensive loss for the (1,334) (4,601)
year attributable to owners of the
parent
Basic and diluted loss per share
attributable to owners of the 6 (0.03) (0.19)
parent during the year (expressed
in US cents per share)
The Statement of Comprehensive Income has been prepared on the basis that all
operations are continuing.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2018
Note 2018 2017
$'000s $'000s
Assets
Non-current assets
Available for sale financial assets 10 207 -
Total non-current assets 207 -
Current assets
Other receivables 11 861 158
Cash and cash equivalents 38 8
Total current assets 899 166
Total assets 1,106 166
Liabilities
Current liabilities
Trade and other payables 12 (1,045) (1,546)
Borrowings 15 - (649)
Total liabilities (1,045) (2,195)
Net Assets/(liabilities) 61 (2,029)
Equity attributable to the owners of the parent
Share premium 14 13,377 10,084
Accumulated deficit (13,316) (12,113)
Total shareholder funds/(deficit) 61 (2,029)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEARED 30 APRIL 2018
Share Accumulated Total
premium deficit equity
$'000s $'000s $'000s
Balance at 30 April 2017 6,124 (7,624) (1,500)
Loss for the year - (4,601) (4,601)
Total comprehensive income - (4,601) (4,601)
Transactions with equity shareholders of the
parent
Proceeds from shares issued 2,513 - 2,513
Share based payments and other share issues 1,749 - 1,749
Settlement of loan note 856 - 856
Cost of share issues (1,158) - (1,158)
Share warrants issued - 112 112
Balance at 30 April 2017 10,084 (12,113) (2,029)
Loss for the year - (1,334) (1,334)
Total comprehensive income - (1,334) (1,334)
Transactions with equity shareholders of the
parent
Proceeds from shares issued 3,632 - 3,632
Share warrants issued (89) 131 42
Consideration shares 35 - 35
Cost of share issues (285) - (285)
Balance at 30 April 2018 13,377 (13,316) 61
CONSOLIDATED CASH FLOW STATEMENT
YEARED 30 APRIL 2018
2018 2017
Note $'000s $'000s
Cash flows from operating activities:
Net loss for the year (1,334) (4,601)
Adjustments for:
Share-based payment - 647
Finance cost 3 173 284
IPO costs - 446
Change in working capital items:
Decrease/(Increase) in other receivables 11 124 220
Increase in trade and other payables 12 (741) 294
Net cash used in operations (1,778) (2,710)
Cash flows from financing activities
Proceeds from issue of share capital 14 2,805 2,513
Share issue costs 14 (217) (495)
Proceeds from borrowings 15 - 502
Cost of borrowings 15 - (37)
Repayment of borrowings 15 (781) -
Finance costs - (7)
Net cash generated by financing activities 1,807 2,476
Net decrease in cash and cash equivalents 29 (234)
Cash and cash equivalents, at beginning of the 8 290
year
Effect of foreign exchange rate changes 1 (48)
Cash and cash equivalents, at end of the year 38 8
Major Non Cash Transactions
Details of major non-cash transactions are described in note 13 share based
payments, in note 14 share capital and note 15 borrowings.
1 General information
The principal activity of Andalas Energy and Power PLC ('the Company') during
the year was as an energy business focussed on the Republic of Indonesia. As
at the year end, the Company was domiciled in the Isle of Man and listed on the
AIM market of the London Stock Exchange.
1.1 New standards, interpretations and amendments not yet effective
At the date of authorisation of these financial statements, the following
standards and interpretations, were in issue but not yet effective, and have
not been early adopted by the Group:
* IFRS 15, Revenue from contracts with customers
* IFRS 16, Leases
* IFRS 9, Financial instruments
* Amendments to IAS 12, recognition of deferred tax assets for unrealised
losses*
* Amendments to IFRS 2, classification and measurement of share-based payment
transactions
* not yet endorsed by the EU
Whilst the Directors do not anticipate the adoption of these standards and
interpretation in future reporting periods will have a material impact on the
Group's financial statements.
The only standard that is anticipated to be significant or relevant to the
Group is IFRS 9 "Financial Instruments". The new standard will replace existing
accounting standard, IAS 39 "Financial Instruments: Recognition and
Measurement". IFRS 9 will require all equity investments to be measured at fair
value. The default approach is for all changes in fair value to be recognised
in profit or loss (FVPL). However, for equity investments that are not held for
trading, the Group can make an irrevocable election at initial recognition to
classify the instruments at FVOCI, with all subsequent changes in fair value
being recognised in other comprehensive income (OCI). This election is
available for each separate investment. The Group currently has no investments
classified as held for trading and will account for future subsequent changes
in fair value through other comprehensive income.
IFRS 15 'Revenue from Contracts with Customers' is intended to introduce a
single framework for revenue recognition and clarify principles of revenue
recognition. This standard modifies the determination of when to recognise
revenue and how much revenue to recognise. The new standard becomes mandatory
for financial years beginning on or after 1 January 2018. The adoption of this
standard is not expected to have a material impact in the future periods until
the Group commences generating revenues from its exploration projects.
The future adoption of IFRS 16 "Leases", expected from 1 January 2019, provides
for a new model of lessee accounting in which all leases, other than short-term
and small-ticket-items leases, will be accounted for by the recognition on the
balance sheet of a right-to-use asset and an associated lease liability, with
the subsequent amortisation of the right-to-use asset over the lease term.
However, as the Group has no leases other than short-term, the expected impact
of the adoption of IFRS 16 is immaterial.
1.2 New standards, interpretations and amendments effective in year
There were no new standards adopted by the Group during the year. As the Group
does not have any revenue at present or any material leases the Directors do
not consider there will be any impact of IFRS 15 and IFRS 16 respectively. The
Group will continue to assess the impact of IFRS 9 on its financial assets and
financial liabilities however, note the Directors do not consider there will be
a material impact of the new standard.
2 Summary of significant accounting policies
2.1. Basis of Preparation
The Consolidated Financial Statements have been prepared under the historical
cost convention, as modified for financial assets and financial liabilities at
fair value through profit or loss and in accordance with International
Financial Reporting Standards (IFRSs) and International Financial Reporting
Interpretations Committee (IFRIC) interpretations, as adopted by the EU. The
principal accounting policies applied in the preparation of these consolidated
financial statements are set out below. These policies have been consistently
applied to all the years presented unless otherwise stated. The consolidated
financial statements are presented in thousands of US Dollars ($'000).
2.2. Basis of Consolidation
The consolidated Financial Statements consolidate the Financial Statements of
Andalas Energy and Power PLC (the "Company" or "Andalas") and its subsidiary
undertakings made up to 30 April 2018.
Subsidiaries are entities over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns
through its power over the entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
When necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with the Group's
accounting policies. All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions between members of the Group
are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control,
is accounted for as an equity transaction. If the Group loses control over a
subsidiary, it derecognises the related assets (including goodwill),
liabilities, non-controlling interest and other components of equity while any
resultant gain or loss is recognised in the Statement of Comprehensive Income.
Any investment retained is recognised at fair value at the date when control is
lost.
The parent of the Group has shareholdings in the following entities;
Name Interest Interest Country of Nature of business
2018 2017 incorporation
Corvette Energy Services (Singapore) 100% 100% Singapore Trading subsidiary
Pte. Ltd
Corvette Energy Services Limited 100% 100% UK Dormant
Peelwood Pty Ltd 20% 20% Australia Mineral Exploration
Eagle Gas Limited 14.75% - UK Gas Exploration
2.3. Interest Expense
Interest expense on borrowings is recognised within "finance costs" in the
Statement of Comprehensive Income using the effective interest rate method.
2.4. Intangible assets
Pre-licence costs incurred prior the acquisition of a licence or asset are
expensed as incurred.
2.5. Investments
Investments are classified as either held for trading or available-for-sale.
There are currently no investments classified as held for trading.
Available-for-sale investments are held at fair value if this can be reliably
measured. If the equity instruments are not quoted in an active market and
their fair value cannot be reliably measured, the available-for-sale investment
is carried at cost, less accumulated impairment. Unless the valuation falls
below its original cost, gains and losses arising from changes in fair value of
available-for-sale assets are recognised directly in equity. On disposal the
cumulative net gain or loss is transferred to the statement of comprehensive
income. Valuations below cost are recognised as impairment losses in the income
statement. Investments are entities over which the Group does not have
significant influence or control, generally accompanied by a shareholding
giving rise to voting rights of 20% or less. Investments in these companies are
carried at cost less accumulated impairment losses in the Group's Statement of
Financial Position. On disposal of these investments the difference between
disposal proceeds and the carrying amounts of the investments are recognised in
profit or loss. Contingent consideration is recorded at fair value, when on
balance of probabilities, the conditions triggering the payment of the
consideration are expected to be met. The assessment is made on the original
date of the transaction.
2.6. Operating segments
Operating segments are reported in a manner consistent with the internal
reporting provided to the Chief Operating Decision Maker. The Chief Operating
Decision Maker ("CODM"), who is responsible for allocating resources and
assessing performance of the operating segments and make strategic decisions,
has been identified as the Directors of the Group.
2.7. Going Concern
The financial statements have been prepared on a going concern basis. The
Company raises money to support its corporate overheard, its operations and
capital projects as and when required. The Group requires additional funding to
meet its daily working capital needs, to settle its outstanding liabilities and
in order to fund the development of its projects. As additional funding is
required in order to settle outstanding liabilities, to meet on going working
capital needs and to raise finance to fund project development there can be no
assurance that the Group's projects will be developed in accordance with
current plans or completed on time or to budget. Therefore future work on the
development of the Group's projects and financial returns arising therefrom may
be adversely affected by factors outside the control of the Group which are
inherently linked to the availability of funding for the Group.
The Directors remain confident that the potential income stream from the
development of its projects, the continued deferral of remuneration by the
Directors and senior consultants, together with the Directors historic ability
to raise additional funds and the availability, subject to mutual agreement, of
the Volantis loan note facility, will enable the Group to settle its
outstanding liabilities, finance its future working capital and fund the
development cost requirements of its projects beyond the period of twelve
months from the date of approval of this report. However, there are no
confirmed funding arrangements in place at present; as such there can be no
guarantee that the required funds to settle current liabilities, meet future
working capital requirements and fund future development costs will be
available to the Group within the necessary timeframe. Consequently a material
uncertainty exists that may cast significant doubt on the Group's ability to
fund this cash shortfall and therefore be able to meet its commitments and
discharge its liabilities in the normal course of business for a period not
less than twelve months from the date of approval of these financial
statements. The financial statements do not include the adjustments that would
result if the Group were unable to continue in operation.
2.8. Financial assets
The classification of financial assets depends on the purpose for which the
financial assets were acquired. Management determines the classification of its
financial assets at initial recognition.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets. The Group's loans and receivables comprise trade
and other receivables and cash and cash equivalents in the Statement of
Financial Position. Loans and receivables are initially recognised at fair
value plus transaction costs and are subsequently carried at amortised cost
using the effective interest method, less provision for impairment.
The Group assesses at the end of each reporting period whether there is
objective evidence that a financial asset, or a group of financial assets, is
impaired. A financial asset, or a group of financial assets, is impaired, and
impairment losses are incurred, only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial
recognition of the asset (a "loss event"), and that loss event (or events) has
an impact on the estimated future cash flows of the financial asset, or group
of financial assets, that can be reliably estimated. Financial assets include
available for sale investments (note 2.5)
The criteria that the Group uses to determine that there is objective evidence
of an impairment loss include:
* significant financial difficulty of the issuer or obligor; and
* a breach of contract, such as a default or delinquency in interest or
principal repayments.
The amount of the loss is measured as the difference between the asset's
carrying amount and the present value of estimated future cash flows (excluding
future credit losses that have not been incurred), discounted at the financial
asset's original effective interest rate. The asset's carrying amount is
reduced, and the loss is recognised in the Statement of Comprehensive Income.
If, in a subsequent period, the amount of the impairment loss can be related
objectively to an event occurring after the impairment was recognised (such as
an improvement in the debtor's credit rating), the reversal of the previously
recognised impairment loss is recognised in the Statement of Comprehensive
Income ("SOCI")
2.9. Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and current balances with banks
and similar institutions, which are readily convertible to known amounts of
cash.
2.10. Financial liabilities
Financial liabilities are recognised on the statement of financial position
when the Group becomes a party to the contractual provisions of the instrument.
The Group classifies financial liabilities into one of three categories. The
accounting policy for each category is as follows:
2.10.1 Borrowings
Borrowings are initially measured at fair value, net of transaction costs and
are subsequently measured at amortised cost using the effective interest
method, with interest expense recognised on an effective yield basis. The
effective interest method is a method of calculating the amortised cost of a
financial liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the financial
liability, or, where appropriate, a shorter period.
2.10.2 Trade and other payables
Trade and other payables are obligations to pay for goods or services that have
been acquired in the ordinary course of business. Accounts payable are
classified as current liabilities if payment is due within one year or less (or
in the normal operating cycle of the business if longer). If not, they are
presented as non-current liabilities. Trade payables are recognised initially
at fair value, and subsequently measured at amortised cost using the effective
interest method.
2.10.3 Convertible loan notes
The proceeds received on issue of the Group's convertible debt are allocated
into their liability and equity components. The amount initially attributed to
the debt component equals the discounted cash flows using a market rate of
interest that would be payable on a similar debt instrument that does not
include an option to convert. Subsequently, the debt component is accounted for
as a financial liability measured at amortised cost until extinguished on
conversion or maturity of the bond. The remainder of the proceeds is allocated
to the conversion option and is recognised in the "Convertible debt option
reserve" within shareholders' equity, net of income tax effects.
2.11. Equity
Equity comprises the following:
· "Share premium" represents the premium paid on Ordinary Shares issued of
no par value.
· "Accumulated deficit" represents retained losses.
Equity instruments issued to a creditor to extinguish all or part of a
financial liability are recognised at their fair value.
2.12. Related Parties
Parties are considered to be related to the Group if the Group has the ability,
directly or indirectly, to control the party or exercise significant influence
over the party in making financial and operating decisions, or vice versa, or
where the Group and the party are subject to common control or common
significant influence. Related parties may be individuals (being members of key
management personnel, significant shareholders and/or their close family
members) or other entities and include entities which are under significant
influence of related parties of the Group where those parties are individuals,
and post-employment benefit plans which are for the benefit of employees of the
Group or of any entity that is a related party of the Group.
2.13. Foreign Currency Translation
* Functional and presentational currency
Items included in the financial statements are measured using the currency of
the primary economic environment in which the entity operates ("the functional
currency"). The Financial Statements are presented in US Dollars ($). The
parent company's functional currency is US Dollars (US$) and the subsidiary
entities functional currency is US Dollars (US$).
* Transactions and balances
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions,
and from the translation at period-end of monetary assets and liabilities
denominated in foreign currencies, are recognised in the Consolidated SOCI.
2.14. Share Based Payments
The Group issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value at the date of
grant with the charge being spread over the vesting period or over the period
the goods and services are received. Where share based payments are contingent
on a future event the share based payment charge is not recognised until the
event is considered probable. The equity-settled share-based payments are
expensed to the consolidated statement of comprehensive income. Where equity
instruments are granted to persons other than employees, the consolidated
statement of comprehensive income is charged with the fair value of goods and
services received when the goods are received or the service is delivered,
except where it is in respect to costs associated with the issue of securities,
in which case it is charged to share premium.
2.15. Taxation
Tax expense represents the sum of the current tax payable and deferred tax.
The current tax payable is based on taxable profit for the year. Taxable profit
differs from net profit as reported in the consolidated statement of
comprehensive income because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Group's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the reporting date.
Tax is charged or credited in the consolidated statement of comprehensive
income, except when it relates to items charged or credited directly to equity
or in other comprehensive income, in which case the tax is also dealt with in
equity or other comprehensive income respectively. Deferred tax is the tax
expected to be payable or recoverable on differences between the carrying
amount of assets and liabilities in the financial statements and the
corresponding tax base used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in
subsidiaries, and interests in joint ventures, except where the Group is able
to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the asset to be recovered. Any
such reduction shall be reversed to the extent that it becomes probable that
sufficient taxable profit will be available.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised based on tax rates
and laws substantively enacted by the reporting date. Deferred tax assets and
liabilities are offset when there exists a legal and enforceable right to
offset and they relate to income taxes levied by the same taxation authority
and the Group intends to settle its current tax assets and liabilities on a net
basis.
2.16. Critical Accounting Estimates and Judgements
Use of Estimates and Judgements
The Group makes certain estimates and judgements regarding the future.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and judgements. The estimates and
judgements that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are
discussed below.
a) Share based payments (note 13)
The Group has made awards of options and warrants over its un-issued capital.
The valuation of these options and warrants involves making a number of
estimates relating to price volatility, future dividend yields, expected life
and forfeiture rates.
b) Going concern (note 2.7)
The Group made a loss in the year and has a net liability position at the year
end. The board has prepared a budget and considered its ability to continue as
a going concern, together with the Directors historic ability to raise
additional funds will enable the Group to finance its future working capital
and development cost requirements beyond the period of twelve months from the
date of this report.
c) Available for sale investments (note 10)
The Group acquired an interest in an available for sale investment in the
period. The Directors consider the fair value of the investment at the balance
sheet date. The board reviews the carrying value for indications of fair value
or indication of changes in value.
3. Finance income and Finance costs
Year ended Year ended
30 April 30 April
2018 2017
Finance expense $'000 $'000
Bank charges and finance expense on borrowings 173 173
Foreign exchange loss - 111
173 284
4. Administration expenses
Administration fees and expenses consist of the 2018 2017
following:
$'000 $'000
Audit fees 38 34
Professional fees 284 360
Administration costs 51 68
Directors' fees (Note 7) 506 928
Total corporate overhead 879 1,390
Office costs 26 80
Professional fees - 51
Consulting expenses 40 1,439
Travel and accommodation 216 447
Share based payment expense (Note 13 and 14) - 464
Asset evaluation and energy business expense 282 2,481
Readmission costs - 446
Total 1,161 4,317
Share based payment expense includes $Nil (2017: $112,457) relating to options
granted to advisors as described in note 13 and $Nil (2017: $351,040) relating
to the issue of shares in settlement of Corsair carried interest as described
in note 14.
5. Segmental analysis
In the opinion of the Directors, the operations of the Group comprise one
single operating segment comprising that of developer of gas to power projects
in the Republic of Indonesia. The Group only has one reportable segment and
the Directors consider that the primary financial statements presented
substantially reflect all the activities of this single operating segment.
6. Loss per Share
Basic loss per share is calculated by dividing the loss attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
2018 2017
$'000s $'000s
Loss attributable to owners of the (1,334) (4,601)
Group
Weighted average number of ordinary shares in issue 4,752,183 2,420,989
(thousands)
Loss per share (US cents) ($0.03) ($0.19)
In accordance with International Accounting Standard 33 'Earnings per share',
no diluted earnings per share is presented as the Group is loss making.
Details of potentially dilutive share instruments are detailed in notes 13, 14
and 15.
7. Staff Costs (including Directors)
The group employed an average of 6 individuals during the year, including the
directors (2017: 6).
2018 2017
$'000 $'000
Directors' remuneration 506 890
Share based payments - 38
506 928
Key management of the Group are considered to be the Directors and the
remuneration of those in office during the year was as follows:
Short term Social Pension Termination Waiver of
employee security contribution arrears Total
benefits payments 2018
$'000 $'000 $'000 $'000 $'000 $'000
David Whitby (2) 240 - - 120 (226) 134
Paul Warwick (1) 30 4 - - - 34
Daniel Jorgensen 140 25 40 - (100) 105
Ross Warner 180 - - - (100) 80
Simon Gorringe 180 - - - (100) 80
Graham Smith 12 - - - - 12
Robert Arnott 54 7 - - - 61
Total Key 836 36 40 120 (526) 506
Management
(1) Only a Director until 31 October 2017.
(2) Only a Director until 29 April 2018.
On 29 April 2018 the Company entered into a termination agreement with David
Whitby under which it was agreed that he step down as Chairman and Director of
the Company with immediate effect. The Company agreed to settle claims to all
outstanding remuneration and his contractual 6 months' notice for $52,500 (GBP
38,000) as part of this David Whitby waived his contractual entitlements
relating to unpaid remuneration and notice period for his service totalling
$225,518 (GBP163,400).
Also on 29 April 2018 each of Daniel Jorgensen, Ross Warner and Simon Gorringe
agreed to each waive $100,000 of contractual unpaid remuneration for $nil
consideration. Details of amounts due at 30 April 2018 and 30 April 2017 are
detailed in note 18.
Prior year disclosure:
Short term Share
employee based Total
benefits payments 2017
$'000 $'000 $'000
David Whitby (2) 240 - 240
Paul Warwick (1) 60 8 68
Daniel Jorgensen (1) 180 25 205
Ross Warner (2) 180 - 180
Simon Gorringe (2) 180 - 180
Graham Smith (1) 13 - 13
Robert Arnott (1) 37 5 42
Total Key Management 890 38 928
(1) Certain Directors elected to defer settlement of 100% of their 2017 salary
during the year.
(2) Certain Directors elected to defer settlement of 25% of their 2017 salary
during the year.
8. Financial Risk Management
The Group's activities expose it to a variety of financial risks: market risk
(including foreign currency exchange risk, price risk and interest rate risk),
credit risk and liquidity risk. The Board of Directors seek to identify and
evaluate financial risks.
Market risk
(a) Foreign currency exchange risk
Foreign exchange risk arises because the Group entities enter into transactions
in currencies that are not the same as their functional currencies, resulting
in gains and losses on retranslation into US Dollars. It is the Group's policy
to ensure that individual Group entities enter into local transactions in their
functional currency wherever possible and that only surplus funds over and
above working capital requirements should be transferred to the treasury of the
Parent Company. The Group and Company considers this policy minimises any
unnecessary foreign exchange exposure. Despite this policy the Group cannot
avoid being exposed to gains or losses resulting from foreign exchange
movements. At the reporting date a 10% increase (decrease) in the strength of
the US Dollar would result in a corresponding reduction of $30,000 (2017:
$160,000) (increase of $30,000 (2017:$160,000) in the net liabilities of the
Group.
(b) Cash flow interest rate risk
The Group's cash and cash equivalents are invested at short term market
interest rates. As market rates are low the Group is not subject to significant
cash flow interest rate risk and no sensitivity analysis is provided. The
Group is also not subject to significant fair value interest rate risk. No
interest rate sensitivity has been presented as it is considered not material.
2018 2017
$'000 $'000
Cash & Cash Equivalents
USD 16 7
GBP 22 1
Total Financial Assets 38 8
Borrowings
GBP - 649
- 649
Trade & other payables
USD 780 683
AUD 28 86
GBP 210 758
Other 27 19
1,045 1,546
Total Financial Liabilities 1,045 2,195
(c) Credit risk
Credit risk arises on investments, cash balances and receivable balances. The
amount of credit risk is equal to the amounts stated in the Statement of
Financial Position for each of these assets. Cash balances and transactions are
limited to high-credit-quality financial institutions. There are no impairment
provisions as at 30 April 2018 (2017: nil).
Credit risk also arises from cash and cash equivalents. The Group considers the
credit ratings of banks in which it holds funds in order to reduce exposure to
credit risk. The Group will only keep its holdings of cash and cash equivalents
with institutions which have a minimum credit rating of 'B'.
(d) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and
marketable securities, the availability of funding through an adequate amount
of committed credit facilities and the ability to close out market positions.
The Group has adopted a policy of maintaining surplus funds with approved
financial institutions.
Management of liquidity risk is achieved by monitoring budgets and forecasts
against actual cash flows. Where the Group entered into borrowings during the
year management monitor the repayment and servicing of these arrangements
against the contractual terms and reviewed cash flows to ensure that sufficient
cash reserves were maintained. Further detail on liquidity risk is set out in
note 2.7
Residual undiscounted contractual maturities of 0-12 months No stated
financial liabilities: maturity
$'000 $'000
30 April 2018
Trade and other payables 1,045 -
Total 1,045 -
Residual undiscounted contractual maturities of No stated
financial liabilities: 0-12 months maturity
$'000 $'000
Borrowings 726 -
Total 726 -
Capital Risk Management
The Directors determine the appropriate capital structure of the Group,
specifically, how much is raised from shareholders (equity) and how much is
borrowed from financial institutions (debt), in order to finance the Group's
business strategy.
The Group's policy in the long term is to seek to maintain the level of equity
capital and reserves is to maintain an optimal financial position and gearing
ratio which provides financial flexibility to continue as a going concern and
to maximise shareholder value. The capital structure of the Group consists of
shareholders' equity together with net debt (where relevant). The Group's
funding requirements are currently met through equity. Further details are
included in the Group's going concern disclosure in the Directors' report.
9. Taxation
The Company is resident for tax purposes in the Isle of Man and is subject to
Isle of Man tax at the current rate of 0% (2017: 0%). The Company has a
subsidiary in Singapore and also has an investment in Peelwood Pty Ltd (a
company resident in Australia) and Eagle Gas Limited (a company resident in the
UK) and will therefore be subject to tax on distributions and gains levied by
those jurisdictions.
2018 2017
$'000 $'000
Current tax charge - -
Deferred tax charge - -
Total taxation charge - -
Taxation reconciliation
The charge for the year can be reconciled to the loss per the consolidated
statement of comprehensive income as follows:
2018 2017
$'000 $'000
Loss before income tax (1,334) (4,601)
Tax on loss at the weighted average Corporate tax rate - -
of 0% (2017: 0%)
Total income tax expense - -
The deferred tax asset has not been recognised for in accordance with IAS 12.
The Group does not have a material deferred tax liability at the year end.
10. Available for sale investments
30 April 30 April 2017
2018
US$'000 US$'000
Brought forward - -
Additions 207 -
Fair value at year end 207
-
On 29 April 2018 the Company entered into a subscription agreement with Eagle
Gas Limited, a UK private company. Under this agreement the Company acquired a
14.75% interest in Eagle Gas Limited in exchange for cash of $172,500 (GBP
125,000) in cash and the issue of 147,058,824 nil par value shares in the
Company equating to $34,500 (GBP25,000). In addition the Company will pay
contingent consideration of a further 147,058,824 ordinary shares in the
Company upon Eagle Gas Limited continuing in the licence P2112 beyond 31
December 2018 or the acquisition of an additional interest agreed by the
Company, which are outside of the control of the Company and therefore not yet
recorded.
On 18 December 2013 the Company entered an Option Agreement with ASX-listed
Company Balamara Resources to farm into its Peelwood concession located in NSW,
Australia. Under the agreement the Company, could earn into 49% of Peelwood.
This option was partly exercised on 28 January 2014 earning the Company 20% of
the concession at a cost of AUD 200,000 or US$179,000. Further rights to
exercise options have now lapsed. The investment is carried at no book value
(2017: $Nil).
a) Fair value estimation
Financial instruments held by the Group carried at fair value comprise one
unquoted investment, valued in accordance with the accounting policy set out in
Note 2.9.
The Group measures fair value by using the following fair value hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2: Inputs other than quoted prices included within level 1 that are
observable for the asset or liability either directly (that is, as prices) or
indirectly (that is, derived from prices); and
Level 3: Inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs).
The fair value of financial instruments that are not traded in an active market
is determined using valuation techniques. These valuation techniques maximise
the use of observable market data where it is available and rely as little as
possible on entity specific estimates. Where investments have recently been
made the cost of the transaction is deemed the best evidence of market value in
the absence of any significant changes. If all significant inputs required to
fair value an instrument are observable, the instrument is included in level 2;
otherwise they are classified as level 3. All the Group's investments are
included within level 3 and are designated financial assets at fair value
through profit or loss:
Level 3 inputs
The following table gives information about how the fair values of Group's
investments are determined (in particular, the valuation techniques and inputs
used).
Assets and Nature of Fair value Fair value Valuation Significant
liabilities investment as at 30 as at 30 techniques and unobservable
April 2018 April 2017 key inputs input
Available for 14.75% of USD 207,000 N/A Recent Expected
sale equity purchase price realisable
investment in and market value from
Eagle Gas Ltd knowledge sale
Financial 20% of equity USD Nil USD Nil Purchase price Expected
assets at fair investment in and market realisable
value through Peelwood Pty knowledge value from
profit or loss Ltd sale
11. Other receivables
2018 2017
$'000 $'000
Other receivables and prepayments 861 158
On 29 April 2018 the Company completed a placing for $827,000 (GBP600,000) via
the issue of 3,529,411,765 new ordinary shares at a price of 0.017pence per
share. As at the 30 April 2018 the shares had been issued but the placing had
not settled at year end but the issue of the shares completed post year end.
The fair values are as stated above equate to their carrying values as at the
year end. The financial assets were not past due and were not impaired and
were all denominated in US$.
12. Trade and other payables
2018 2017
$'000 $'000
Trade payables 509 1,012
Accruals and other payables 536 534
1,045 1,546
The amounts included in trade and other payables are payable on demand.
13. Share based payments
The following is a summary of the share options and warrants outstanding and
exercisable as at 30 April 2018 and 30 April 2017 and the changes during each
year:
Number of options Weighted average
and warrants exercise price (P
ence)
Outstanding and exercisable at 1 102,595,329 0.762
May 2016
Options granted as consideration 66,666,666 0.220
Lapsed options (25,000,000) (0.175)
Outstanding and exercisable at 30 144,261,995 0.612
April 2017
Warrants granted for services 626,244,344 0.056
Warrants granted with share issue `638,569,604 0.050
Outstanding and exercisable at 30 1,409,075,943 0.110
April 2018
The above weighted average exercise prices have been expressed in pence and not
cents due to the terms of the options and warrants. The following share options
or warrants were outstanding and exercisable in respect of the ordinary shares:
Grant Expiry 30 April Issued Expired 30 April Issued 30 April Exercise
Date Date 2017 2017 2018 Price
Warrants
07.12. 07.12.18 10,839,750 - - 10,839,750 - 10,839,750 2.00p
13
24.01.14 24.01.19 26,410,714 - - 26,410,714 - 26,410,714 1.00p
13.05.16 13.05.21 - 42,000,000 - 42,000,000 - 42,000,000 0.20p
31.01.17 31.01.22 - 10,000,000 - 10,000,000 - 10,000,000 0.20p
31.01.17 31.01.22 - 8,000,000 - 8,000,000 - 8,000,000 0.25p
31.01.17 31.01.22 - 6,666,666 - 6,666,666 - 6,666,666 0.30p
22.05.17 22.05.22 - - - - 15,000,000 15,000,000 0.10p
22.05.17 22.05.22 - - - - 35,000,000 35,000,000 0.10p
31.07.17 31.07.22 - - - - 150,000,000 150,000,000 0.10p
19.08.17 19.08.22 - - - - 90,769,231 90,769,231 0.06p
01.09.17 01.09.22 - - - - 70,769,231 70,769,231 0.06p
06.12.17 06.17.22 - - - - 638,569,604 638,569,604 0.05p
29.04.18 29.04.21 - - - - 264,705,882 264,705,882
Options
07.12.13 07.12.18 6,000,000 - - 6,000,000 - 6,000,000 2.00p
04.02.15 04.02.17 25,000,000 - (25,000,000) - - - 0.175p
05.06.15 05.06.18 34,344,865 - - 34,344,865 - 34,344,865 0.40p
102,595,329 66,666,666 (25,000,000) 144,261,995 1,264,813,948 1,409,075,943
The new options and warrants have been valued using the Black-Scholes valuation
method and the assumptions used are detailed below. The expected future
volatility has been determined by reference to the historical volatility:
Grant date Share Exercise Volatility Option Dividend Risk-free Fair
price at price life yield investment value per
grant rate option
Current year
22.05.17 0.1p 0.1p 40% 5 years 0% 3% 0.051
cents
29/04/2018
31.07.17 0.073p 0.1p 40% 5 years 0% 3% 0.028
cents
19.08.17 0.065p 0.065p 40% 5 years 0% 3% 0.033
cents
01.09.17 0.065p 0.065p 40% 5 years 0% 3% 0.033
cents
06.12.17 0.05p 0.05p 40% 5 years 0% 3% 0.017
cents
29.04.18 0.017p 0.017p 40% 3 years 0% 3% 0.007
cents
Prior year
13.05.16 0.2p 0.2p 124% 5 years 0% 3% 0.241
cents
31.01.17 0.14p 0.2p 40% 5 years 0% 3% 0.049
cents
31.01.17 0.14p 0.25p 40% 5 years 0% 3% 0.037
cents
31.01.17 0.14p 0.30p 40% 5 years 0% 3% 0.030
cents
The Group recognised $131,000 (30 April 2017: $112,457) relating to
equity-settled share based payment transactions during the year arising from
Option or Warrant grants, which was charged $89,000 in respect of services
performed in connection with the issue of new shares charged to share premium
and $42,000 charged to interest as it related to a loan extension fee paid.
There are 103,034,596 of unvested options at the year end, that are held by
certain Directors and consultants, which vest in three equal tranches relating
to acquiring an economic interest in a first concession in Indonesia, an
interest in a second concession in Indonesia and gross production from its
interest in Indonesian projects exceeding 400BOPED. As the triggers for the
grant of the tranches have not occurred at the reporting date no share based
payment charge arises. For the share options and warrants outstanding as at 30
April 2018, the weighted average remaining contractual life is 4.55 years (30
April 2017: 2.75 years).
Prior year
On 13 May 2016 the Company issued one warrant for every four shares in issue at
11 May 2016. Accordingly the Company issued 179,536,826 warrants on 13 May
2016 that were exercisable at 0.2pence per share on or before 31 May 2016.
Prior to maturity 12,007,661 warrants were exercised and issued on 31 May 2016
as disclosed in note 14. The remainder lapsed unexpired.
Please refer to the Directors' Report for details of shares, options and
warrants held by the Directors at 30 April 2018 and 2017. Details of warrants
and options issued post year end are included in note 19.
14. Share capital
All shares are Nil Coupon fully paid and each ordinary share carries one vote.
No warrants have been exercised at the reporting date.
Allotted, called-up and fully paid: Number Pence Share premium
per $'000s
share
Balance at 30 April 2016 718,147,302 6,124
13/05/2016 - equity placing for cash 825,000,000 0.200 2,405
13/05/2016 - equity placing with directors 25,000,000 0.200 73
Cost of issue - - (1,158)
13/05/2016 - loan note settlement* 300,000,000 0.200 856
13/05/2016 - share based payments*(2) 314,750,000 0.200 898
13/05/2016 - settlement of Director payables 142,834,558 0.200 408
(1)
13/05/2016 - issue of shares in respect of 122,406,940 0.200 349
Corsair settlement (2)
31/05/2016 - equity placing 12,007,661 0.200 34
07/07/2016 - share based payments*(3) 32,389,530 0.200 93
07/07/2016 - issue of Corsair settlement (4) 631,984 0.200 2
Balance at 30 April 2017 2,493,167,975 10,084
22/05/17 - Equity placing 600,000,000 0.100 776
Cost of issue - - (48)
18/08/17 - Equity placing 1,615,384,615 0.065 1,362
Cost of issue - - (178)
25/11/17 - Equity placing 1,277,139,208 0.03915 667
Cost of issue - - (68)
30/04/18 - Equity placing* 3,529,411,765 0.017 827
Cost of issue - - (80)
30/04/18 - Consideration shares* 147,058,824 0.017 35
Balance at 30 April 2018 9,662,162,387 13,377
* Non-cash item per the consolidated cash flow statement. The 30 April 2018
share issues were non-cash items because whilst the Company was legally
required to issue the shares the transactions had not yet completed.
(1) Issue of shares in settlement of brought forward amounts payable to
Directors.
(2) Issue of shares to advisors in relation to fees related to the equity
placing and the readmission.
(3) Issue of shares in relation in relation to settlement of third party
liabilities.
(4) Issue of shares in respect of the settlement of the Corsair carried
interest as disclosed in the Companies admission document of 27 April 2016.
On 4 June 2015, the Company entered into an agreement ("the agreement") with
Corsair Petroleum (Singapore) Pte Ltd, ("Corsair"), which was a company in
which each of David Whitby, Ross Warner and Simon Gorringe had a 25 per cent.
beneficial interest. Following the agreement, David Whitby, previously
unconnected to the Company joined the board as Chief executive officer. This
arrangement established that Corsair would introduce oil and gas concessions in
Indonesia to the Company and also set out the means by which Corsair was to be
remunerated for this, which was as follows:
- 31,250,000 Ordinary Shares to be issued on closing of the Assignment
Agreement and 34,344,865 Corsair Options which vest on closing of the
Assignment Agreement (issued on 06/05/2015)
- up to an additional 93,750,000 Corsair Contingent Consideration Shares in
three equal tranches (of 31,250,000 Ordinary Shares) on the occurrence of each
of the following three milestones: (i) the acquisition by the Company of one
concession in Indonesia; (ii) the acquisition by the Company of a second
concession in Indonesia; and (iii) gross production from projects in which the
Company has an economic interest exceeding 400 bopd for a period of 30 days
(together "the Milestones"); and
- up to an additional 103,034,596 Corsair Options which vest in three equal
tranches of 34,344,865 upon the occurrence of each of the milestones.
- The Agreement also contains provisions whereby Corsair will have a
carried interest in oil and gas concessions introduced by it and a share of
future revenues from these concessions. ("carried right")
On 27 April 2018 it was agreed with Corsair that the carried right arrangement
was to be replaced by equity and subsequently on 13 May 2016 and 7 July 2016
the Company issued 123,038,924 (split 122,406,940 and 631,984). Further
details of these transactions can be found in the Company's admission document
dated 27 April 2016.
At the period end the Company continues to have the obligation under the
original Corsair assignment agreement to issue a further 93,750,000 shares
subject to the Milestones described above being achieved but as at the
reporting date the Company had not recorded these as a liability as at the
reporting date because the milestones had not yet been achieved. Other than
the Corsair consideration options (note 13) and the Corsair consideration
shares there were no other obligations to Corsair at 30 April 2018.
15. Borrowings
Loan note Convertible Loan
2018 2017 2018 2017
$'000s $'000s $'000s $'000s
Brought forward 649 - - 876
Converted into equity - - - (856)
Drawdown - 502 - -
Costs of issue - (37) - -
Imputed interest charge 128 166 - -
Foreign currency effect 4 18 - (20)
Settled for cash (781) - - -
Carried forward - 649 - -
The principal terms and the debt repayment schedule of the Group's unsecured
loans and borrowings during the prior year were as follows:
Currency Interest rate Effective Date of maturity
interest rate
Loan note GBP Nil coupon 89.06% 28.07.2017
Convertible loan GBP Nil coupon n/a No fixed
notes maturity
On 26 November 2017, 1798 Volantis Fund Ltd ("Volantis"), agreed to provide the
Company with up to GBP2,000,000 face value (issue price GBP1,800,000) of follow-on
finance via the issue of a convertible loan note facility:
- The first GBP500,000 draw down is subject to mutual agreement and will be
no earlier than 1 March 2018, or such other date as agreed in writing.
- Three further drawdowns of GBP500,000 are also subject to mutual agreement
and can be drawn down quarterly thereafter, or such other date as agreed in
writing.
No draw down under the convertible loan note had occurred at year end and no
draw down had occurred post year end.
16. Capital Commitments
There were no capital commitments authorised by the Directors or contracted
other than those provided for in these financial statements as at 30 April 2018
(30 April 2017: None).
17. Ultimate Controlling party
As at the reporting date, the Directors have not identified an ultimate
controlling party.
18. Related party transactions
Details of Directors remuneration are disclosed in Note 7 Directors
Remuneration. As at 30 April 2018 the following balances were included in
trade payables and were outstanding in respect of Directors remuneration or
remuneration incurred prior to their appointment as a Director at the year end.
30 April 30 April
2018 2017
$'000 $'000
David Whitby (1) n/a 60
Paul Warwick (2) n/a 60
Daniel Jorgensen (3) 87 180
Ross Warner (3) - 45
Simon Gorringe (3) - 45
Graham Smith (4) 9 4
Robert Arnott 71 37
Total Key Management 167 431
(1) Resigned as a Director prior to 30 April 2018. A payment of $52,500 in
full settlement of historical amounts payable was made post year end.
(2) Not a Director at year end.
(3) Amounts stated are net of $100,000 waiver of contracted but unpaid fees
to each of Ross Warner, Simon Gorringe and Daniel Jorgensen.
(4) The amounts payable to Graham Smith relate to his services as a
Director and are payable to FIM Capital Limited a company of which Graham Smith
is a Director.
The balances due were accrued in accordance with their contracts and will be
settled in the future for either equity or cash at such time as the Company has
the financial resources available to settle them.
19. Events after the reporting date
There were no material events after the reporting date.
Auditors' Report
The comparative figures for the financial year ended 30 April 2018 are not the
Company's statutory accounts for that financial year but the consolidated
accounts. Those accounts have been reported on by the Company's auditors and
will be delivered to the registrar of companies. The report of the auditors was
(i) unqualified, (ii) did give any reference to matters to which the auditors
drew attention by way of emphasis in respect of going concern without
qualifying their report, and (iii) did not contain a statement under sections
498 (2) or (3) of the Companies Act 2006, relating to the accounting records of
the company.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 ('MAR). Upon the publication of this announcement via a
Regulatory Information Service ('RIS'), this inside information is now
considered to be in the public domain.
END
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