TIDMQRM
RNS Number : 5476S
Quoram PLC
25 September 2014
QUORAM PLC
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2014
Quoram Plc ("Quoram" or the "Company) announces its audited
financial results for the year ended 30 June 2014.
Highlights:
-- Net assets as at 30 June 2014 of GBP2.52 million (2013:
GBP3.22 million); including cash balances of GBP1.73 million (2013:
GBP1.99 million)
-- Successful exit of oil and gas portfolio substantially completed
James Ede-Golightly, Chairman, said:
Having simplified the group structure and reduced expenditure
while retaining a strong balance sheet, the group is in an
increasingly attractive position to address corporate opportunities
as they arise. The board will inform investors of future
developments when they arise.
A full copy of the Company's Annual Report and Accounts for the
year ended 30 June 2013, together with the Notice of Annual General
Meeting, will shortly be posted to shareholders and is available on
the Company's website at www.quoram.co.uk within the Investor
Relations section.
The Company's Annual General Meeting will be held on 5 November
2014 at 2.00 p.m. at the offices of WH Ireland, 24 Martin Lane,
London, EC4R 0DR.
Enquiries :
Quoram Plc
James Ede-Golightly, Chairman +44 (0) 1481738723
WH Ireland Limited (Nominated adviser)
John Wakefield, Corporate Finance +44 (0) 117 945 3470
CHAIRMAN'S STATEMENT
At the end of the year the company's net assets were 0.26p per
share, an increase from 0.25p since December 2013 and a decline
from 0.33p per share in June 2013.
The loss for the year declined from GBP1.98m to GBP0.69m, the
improvement reflecting the non-repetition of exceptional
administrative expenses, partially offset by a continued decline in
the carrying value of Wessex Exploration Plc, which is held as an
asset available for sale.
A recovery in the market value of the company's interest in
Plant Health Care resulted in a gain of GBP211k during the second
half of the year. While the carrying value remains below book cost
of 78p, the company reported encouraging progress with its strategy
in an interim results statement released on 15 September 2014.
Other income increased to GBP181k (2013:GBP22k) through the
provision of third party services to generate supplemental income.
This income helped offset administrative expenses, which declined
to GBP517k (2013: GBP852k).
Having substantially exited the company's oil and gas portfolio
in the prior year the company's residual dormant licenses over the
Solitaire acreage expired during the year, there was no financial
impact as these assets had previously been written down in the
prior financial year.
During the second half of the year further measures have been
undertaken to reduce administrative overhead, which is anticipated
to fall to under GBP250k in the current financial year.
Having simplified the group structure and reduced expenditure
while retaining a strong balance sheet, the group is in an
increasingly attractive position to address corporate opportunities
as they arise. The board will inform investors of future
developments when they arise.
James Ede-Golightly
Chairman
24 September 2014
CONSOLIDATED INCOME STATEMENT
for the year ended 30 June 2014
Notes 2014 2013
Continuing operations: GBP'000 GBP'000
----------------------------------- ------ ------------------------------------- ----------------------------------
Portfolio investment return (55) 29
Impairment of available-for-sale
investments (306) (154)
Other income 181 22
----------------------------------- ------ ------------------------------------- ----------------------------------
Gross profit (180) (103)
Administrative expenses (517) (852)
Exceptional administrative
expenses 3 - (1,032)
----------------------------------- ------ ------------------------------------- ----------------------------------
Total administrative expenses (517) (1,884)
----------------------------------- ------ ------------------------------------- ----------------------------------
Operating loss (697) (1,987)
----------------------------------- ------ ------------------------------------- ----------------------------------
Finance income 5 9 4
Loss before taxation (688) (1,983)
----------------------------------- ------ ------------------------------------- ----------------------------------
Taxation 6 - -
----------------------------------- ------ ------------------------------------- ----------------------------------
Loss for the financial year (688) (1,983)
----------------------------------- ------ ------------------------------------- ----------------------------------
Loss per share
Basic/diluted loss for the year
(pence) 7 (0.07) (0.31)
----------------------------------- ------ ------------------------------------- ----------------------------------
The accompanying accounting policies and notes form an integral
part of these financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2014
Notes 2014 2013
GBP'000 GBP'000
---------------------------------------------------------------- ------- ------------------ --------
Loss for the financial year (688) (1,983)
Other comprehensive income/(expense)
Items that may be reclassified subsequently to profit or loss:
Available-for-sale financial assets:
Fair value gains / (losses) arising during the year - (1,930)
Tax movement on gain on available-for-sale financial assets - 451
Foreign exchange (losses) / gains on consolidation (7) 24
------------------------------------------------------------------------- ------------------ --------
Other comprehensive income for the financial year net of tax (7) (1,455)
Total comprehensive income for the financial year (695) (3,438)
------------------------------------------------------------------------- ------------------ --------
The accompanying accounting policies and notes form an integral
part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2014
2014 2013
Notes GBP'000 GBP'000
----------------------------------- ------ -------------------------------- ---------------------------------------
Assets
Non-current assets
Available-for-sale financial
assets 11 167 473
Portfolio investments 8 633 688
----------------------------------- ------ -------------------------------- ---------------------------------------
Total portfolio investment assets
held 800 1,161
----------------------------------- ------ -------------------------------- ---------------------------------------
Property, plant and equipment 9 - -
Intangible assets 10 - -
----------------------------------- ------ -------------------------------- ---------------------------------------
800 1,161
Current assets
Trade and other receivables 12 18 111
Cash and cash equivalents 13 1,734 1,991
----------------------------------- ------ -------------------------------- ---------------------------------------
1,752 2,102
Total assets 2,552 3,263
Current liabilities
----------------------------------- ------ -------------------------------- ---------------------------------------
Trade and other payables 14 (32) (48)
----------------------------------- ------ -------------------------------- ---------------------------------------
Total liabilities (32) (48)
Net assets 2,520 3,215
----------------------------------- ------ -------------------------------- ---------------------------------------
Capital and reserves attributable
to the Company's equity
shareholders:
Share capital 15 2,420 2,420
Share premium account 3,813 3,813
Foreign exchange translation
reserve 1,108 1,115
Retained earnings (5,695) (5,007)
Share-based payment reserve 874 874
----------------------------------- ------ -------------------------------- ---------------------------------------
Total equity 2,520 3,215
----------------------------------- ------ -------------------------------- ---------------------------------------
The financial statements were approved by the Board of Directors
on 24 September 2014 and were signed on its behalf by:
James Ede-Golightly
Chairman
The accompanying accounting policies and notes form an integral
part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2014
Foreign exchange translation
Share capital Share premium account reserve Retained earnings Share-based payment reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------------------------------- -------------------------------- ----------------------------- -------------------------------- -------------------------------- --------
Balance at 1 July
2012 1,245 3,123 1,091 (1,545) 539 4,453
Loss for the
financial period - - - (1,983) - (1,983)
Other comprehensive
income:
Fair value loss on
available-for-sale
financial assets - - - (1,930) - (1,930)
Tax on loss on
available-for-sale
investments - - - 451 - 451
Foreign exchange
losses on
consolidation - - 24 - - 24
-------------------- -------------------------------- -------------------------------- ----------------------------- -------------------------------- -------------------------------- --------
Total comprehensive
income - - 24 (3,462) - (3,438)
Share-based
payments - - - - 335 335
Issue of share
capital 1,175 705 - - - 1,880
Issue costs - (15) - - - (15)
Balance at 30 June
2013 2,420 3,813 1,115 (5,007) 874 3,215
-------------------- -------------------------------- -------------------------------- ----------------------------- -------------------------------- -------------------------------- --------
Balance at 1 July
2013 2,420 3,813 1,115 (5,007) 874 3,215
Loss for the
financial period - - - (688) - (688)
Other comprehensive
income:
Foreign exchange
losses on
consolidation - - (7) - - (7)
-------------------- -------------------------------- -------------------------------- ----------------------------- -------------------------------- -------------------------------- --------
Total comprehensive
income - - (7) (688) - (695)
Balance at 30 June
2014 2,420 3,813 1,108 (5,695) 874 2,520
-------------------- -------------------------------- -------------------------------- ----------------------------- -------------------------------- -------------------------------- --------
The accompanying accounting policies and notes form an integral
part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2014
Cash Flow from Operating Activities 2014 2013
----------------------------------------------------------------
Notes GBP'000 GBP'000
---------------------------------------------------------------- ------ ------------------------------- --------
Loss for the financial year (688) (1,983)
Finance income 5 (9) (4)
Unrealised loss/(gain) on revaluation of portfolio investments 8 55 (29)
Share-based payment - 335
Loss on disposal of business - 47
Impairment of available-for-sale investments 11 306 154
Impairment of intangible assets 10 - 529
Impairment of land assets 9 - 503
---------------------------------------------------------------- ------ ------------------------------- --------
(336) (448)
Changes in working capital
Purchase of portfolio investments - (659)
Decrease / (increase) in trade and other receivables 93 (49)
Decrease in trade and other payables (16) (23)
---------------------------------------------------------------- ------ ------------------------------- --------
Net cash outflow from operating activities (259) (1,179)
---------------------------------------------------------------- ------ ------------------------------- --------
Cash flow from investing activities
Proceeds from disposal of business - 17
Interest received 5 9 4
---------------------------------------------------------------- ------ ------------------------------- --------
Net cash generated from investing activities 9 21
---------------------------------------------------------------- ------ ------------------------------- --------
Cash flow from financing activities
Proceeds on issue of new shares - 1,880
Expenses of new share issue - (15)
---------------------------------------------------------------- ------ ------------------------------- --------
Net cash generated from financing activities - 1,865
---------------------------------------------------------------- ------ ------------------------------- --------
Net increase / (decrease) in cash and cash equivalents (250) 707
Cash and cash equivalents at beginning of financial year 1,991 1,279
Effects of exchange rate changes (7) 5
---------------------------------------------------------------- ------ ------------------------------- --------
Cash and cash equivalents at end of financial year 1,734 1,991
---------------------------------------------------------------- ------ ------------------------------- --------
The accompanying accounting policies and notes form an integral
part of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Principal Accounting Policies
Basis of Preparation
The annual consolidated financial statements of Quoram Plc ("the
Group") have been prepared in accordance with International
Financial Reporting Standards ("IFRSs") as adopted by the European
Union ("EU") applied in accordance with the provisions of the
Companies Act 2006.
IFRSs is subject to amendment and interpretation by the
International Accounting Standards Board ("IASB") and the IFRS
Interpretations Committee and there is an on-going process of
review and endorsement by the European Commission. These accounting
policies comply with each IFRS that is mandatory for accounting
periods ending on 30 June 2014.
The financial statements have been prepared under the historical
cost convention as modified by the revaluation of Portfolio
Investments and available-for-sale investments which are carried at
fair value. The principal accounting policies set out below have
been consistently applied to all periods presented.
Basis of Consolidation
The consolidated financial statements incorporate the results of
the Company and entities controlled by the Company (its
subsidiaries). Control is achieved where the Company has the power
to govern the financial and operating policies of an investee
entity so as to obtain benefits from its activities.
These financial statements consolidate the results and Balance
Sheet of the Company and its wholly owned subsidiaries using the
acquisition method of accounting.
Intra-Group transactions and balances with subsidiaries are
eliminated on consolidation.
Revenue
Revenue is measured at the fair value of the consideration
received or receivable in the normal course of business, net of
discounts, VAT and other sales related taxes. The Group recognises
revenue when the amount of revenue can be reliably measured and
when it is probable that the future economic benefits will flow
into the Group.
(i) Business portfolio return
Business portfolio return represents the sum of realised gains
and losses on the disposal of investment portfolio assets and the
unrealised gains and losses on the revaluation of investments and
any related investment income received and receivable.
Realised gains and losses on the disposal of investments is the
difference between the fair value of the consideration received
less any directly attributable costs on the sale and the fair value
of the investments at the start of the accounting period or
acquisition date if later.
Unrealised gains and losses on the revaluation of investments is
the movement in carrying value of investments between the start of
the accounting period or acquisition date if later and the end of
the accounting period.
Dividends from investments are recognised when the shareholders'
rights to receive payment have been established.
Other income
Fees for advisory work are recognised in profit and loss when
the related services are performed.
Finance Income
Interest is recognised using the effective interest method.
Exceptional Items
Exceptional items are events or transactions which, by virtue of
their size or nature, have been disclosed in order to improve a
reader's understanding of the Financial Statements
Portfolio Investment Assets
Portfolio investments - held by the Group with a long-term view
to the ultimate realisation of capital gains are classified as
portfolio investments and are stated at the Directors' estimate of
their fair value determined in accordance with International
Private Equity and Venture Capital Valuation Guidelines ("IPEVCVG")
on the basis set out below. Investment assets are designated at
fair value through profit or loss on initial recognition and any
gains or losses arising from subsequent changes in fair value are
presented in profit or loss as they arise.
Available-for-sale investments - held by the Group with a
long-term view to the ultimate realisation of capital gains are
classified as available-for-sale investments and are stated at the
Directors' estimate of their fair value on the basis set out below.
Available-for-sale investments are initially recognised at fair
value and are measured at subsequent reporting dates at fair value;
the gains and losses arising from changes in fair value are
included in other comprehensive income. On disposal the cumulative
gain or loss previously recognised in other comprehensive income is
included in the Consolidated Income Statement for the period. If an
available-for-sale investment is determined to be impaired, the
amount of cumulative loss previously recognised in other
comprehensive income is included in the Consolidated Income
Statement for the period.
(i) Quoted investments for which an active market exists are
valued at closing bid-market price at the reporting date.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and deposits
held at call with banks.
Financial Instruments
Financial assets and financial liabilities are recognised on the
Statement of Financial Position when the Group becomes a party to
the contractual provisions of the instrument.
Trade and other receivables are measured at initial recognition
at fair value, and are subsequently measured at amortised cost
using the effective interest method.
Trade and other payables are initially measured at fair value,
and are subsequently measured at amortised cost using the effective
interest rate method.
An equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its
liabilities. Equity instruments issued by the Company are recorded
at the proceeds received, net of direct issue costs.
Available for sale assets - Investments that are classified as
'available for sale' are initially recognised at fair value and are
measured at subsequent reporting dates at fair value; the gains and
losses arising from changes in fair value are included in other
comprehensive income. On disposal the cumulative gain or loss
previously recognised in other comprehensive income is included in
the Consolidated Income Statement for the period. If an
available-for-sale investment is determined to be impaired, the
cumulative loss previously recognised in other comprehensive income
is included in the Consolidated Income Statement for the
period.
Portfolio Investment assets are designated at fair value through
profit or loss on initial recognition and any gains or losses
arising from subsequent changes in fair value are presented in
profit or loss as they arise.
Foreign Currency
The presentational currency for the Group's consolidated
financial statements is Sterling and it is this currency in which
the Group reports. Foreign currency transactions by Group companies
are recorded in their functional currencies at the exchange rate at
the date of the transaction. Monetary assets and liabilities have
been translated at rates in effect at the balance sheet date, with
any exchange adjustments being charged or credited to the Income
Statement.
The Parent Company's functional currency is Sterling. On
consolidation the assets and liabilities of the Parent's subsidiary
companies are translated into the Group's presentational currency
at the exchange rate at the balance sheet date and the income and
expenditure account items are translated at the average rate for
the period. The exchange difference arising on the translation from
functional currency to presentational currency of the Parent
Company is classified as other comprehensive income and is
accumulated within equity as a translation reserve.
For the purpose of foreign currency translation, the net
investment in a subsidiary is determined inclusive of foreign
currency intercompany balances for which settlement is neither
planned nor likely to occur in the foreseeable future. The balance
of the foreign currency translation reserve relating to a
subsidiary that is disposed of, or partially disposed of, is
recognised in the Income Statement at the time of disposal.
Share-Based Payments
Where share options have been granted to directors, employees
and suppliers, IFRS 2 has been applied, whereby the fair value of
the options is measured at the grant date and spread over the
period during which the employees become entitled to the options.
An options valuation model is used to assess the fair value, taking
into account the terms and conditions attached to the options. The
fair value of goods and services received are measured by reference
to the fair value of options.
The cost of equity-settled transactions is recognised, together
with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on
the date on which the relevant employees become fully entitled to
the award ('the vesting date').
The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting date reflects
the extent to which the vesting period has expired and the Group's
best estimate of the number of equity instruments that will
ultimately vest.
The Income Statement charge or credit for a period represents
the movement in cumulative expense recognised as at the beginning
and end of that period. No expense is recognised for awards that do
not ultimately vest, except for awards where vesting is conditional
upon a market condition, which are treated as vesting irrespective
of whether or not the market condition is satisfied, provided that
all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, the
minimum expense recognised is the expense as if the terms had not
been modified. An additional expense is recognised for any
modification, which increases the total fair value of the
share-based payment arrangement, or is otherwise beneficial to the
employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if
it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a
new award is substituted for the cancelled award, and designated as
a replacement award on the date that it is granted, the cancelled
and new awards are treated as if they were a modification of the
original award, as described in the previous paragraph.
Where an equity-settled award is forfeited before it was vested,
the cumulative charge expensed up to the date of forfeiture is
credited to the Income Statement.
Share warrants have been issued by the Company.
IFRS 2 has been applied whereby the fair value of the warrants
is measured at the grant date. A Black Scholes valuation model is
used to assess the fair value, taking into account the terms and
conditions attached to the warrants. The costs recorded are
measured by reference to the fair value of warrants.
The cost of share warrants is recognised, together with a
corresponding increase in equity, immediately on issue as warrants
vest immediately.
Property, Plant and Equipment
Property, plant and equipment is stated at historical cost less
depreciation less any recognised impairment losses. Cost includes
expenditure that is directly attributable to the acquisition or
construction of these items. Subsequent costs are included in the
asset's carrying amount only when it is probable that future
economic benefits associated with the item will flow to the Group
and the costs can be measured reliably. All other costs, including
repairs and maintenance costs, are charged to the Income Statement
in the period in which they are incurred.
Depreciation is provided on all property, plant and equipment
and is calculated on a straight-line basis as follows:
Plant and equipment 5%
Leasehold land 10%
Depreciation is provided on cost less residual value. The
residual value, depreciation methods and useful lives are annually
reassessed.
Each asset's estimated useful life has been assessed with regard
to both its own physical life limitations and the present
assessment of economically recoverable reserves of the mine
property at which the item is located, and to possible future
variations in those assessments. Estimates of remaining useful
lives are made on a regular basis with annual reassessments for
major items.
The gain or loss arising on disposal or scrapping of an asset is
determined as the difference between the sales proceeds, net of
selling costs, and the carrying amount of the asset and is
recognised in the Income Statement.
As at 30 June 2014, the Group's property, plant and equipment
assets are written down to nil.
Intangible Assets
Expenditure on former exploration was capitalised under a
successful efforts policy for oil and gas assets and in relation to
the acquisition of royalty interests. As at 30 June 2014 all such
costs have been fully impaired.
Impairment of Assets Other than Intangible Assets with an
Indefinite Life
At each balance sheet date, the directors review the carrying
amounts of the Group's tangible and intangible assets, other than
intangible assets with an indefinite life, to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss, if any. Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior periods. A reversal
of an impairment loss is recognised in the Income Statement
immediately.
The carrying value of property, plant and equipment and
intangible assets at 30 June 2014 is GBPnil (2013: GBPnil).
Current Taxation
Current tax for each taxable entity in the Group is based on the
local taxable income at the local statutory tax rate enacted or
substantively enacted at the balance sheet date and includes
adjustments to tax payable or recoverable in respect of previous
periods.
Deferred Taxation
Deferred taxation is calculated using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated
financial statements. However, if the deferred tax arises from the
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss, it is not
recognised. Deferred tax is determined using tax rates and laws
that have been enacted or substantively enacted by the balance
sheet date and are expected to apply when the related deferred tax
asset is realised or the deferred tax liability is settled.
Deferred tax liabilities are provided in full.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the Income Statement, except where
they relate to items that are charged or credited directly to
equity in which case the related deferred tax is also charged or
credited directly to equity.
Employment Benefits
Provision is made in the financial statements for all employee
benefits. Liabilities for wages and salaries, including
non-monetary benefit and annual leave obliged to be settled within
12 months of the balance sheet date, are recognised in
accruals.
Equity
Equity comprises the following:
-- "Share capital" represents amounts subscribed for shares at nominal value.
-- "Share premium" represents amounts subscribed for share
capital, net of issue costs, in excess of nominal value.
-- "Foreign exchange translation reserve" represents the
exchange differences arising from the translation of the financial
statements of the subsidiary companies into the Group's
presentational currency and the translation at the closing rate of
the net investment in the subsidiaries.
-- "Retained earnings" represents the accumulated profits and
losses attributable to equity shareholders.
-- "Share-based payment reserve" represents the accumulated
amounts credited to equity in respect of options to acquire
ordinary shares in the Company.
Adoption of new accounting standards
Standards, amendments and interpretations effective up to 30
June 2014
"IFRS 13, Fair value measurement" has been adopted in the year
but has only had a presentation and disclosure impact on these
financial statements.
Other than this, there have only been minor improvements to
existing International Financial Reporting Standards and
interpretations that are effective for the first time in the
current financial year that have been adopted by the Group. These
have had no impact on its consolidated results or financial
position.
Standards, amendments and interpretations that are expected to
be effective for periods beginning on or after 1 July 2014 for
standards, amendments subject to EU endorsement include the
following:
-- IFRS 10, Consolidated financial statements (effective for
periods beginning on or after 1 January 2014)
-- IFRS 12, Disclosure of interests in other entities (effective
for periods beginning on or after 1 January 2014)
-- Amendments to IFRS 10, IFRS 12 and IAS 27, Investment
entities (effective for periods beginning on or after 1 January
2014)
-- IFRS 15, Revenue from contracts with customers (effective for
periods beginning on or after 1 January 2017, subject to EU
endorsement)
-- IFRS 9, Financial Instruments (effective for periods
beginning on or after 1 January 2018, subject to EU
endorsement)
The Directors are currently assessing the impact of these on the
Group's results, assets and liabilities. The Directors do not
consider that any other standards, amendments or interpretations
issued by the IASB, but not yet applicable, will have a significant
impact on the financial statements.
Critical Accounting Judgements and Key Sources of Estimation
Uncertainty
The preparation of financial statements in conformity with
generally accepted accounting practice requires management to make
estimates and judgements that affect the reported amounts of assets
and liabilities as well as the disclosure of contingent assets and
liabilities at the balance sheet date and the reported amounts of
revenues and expenses during the reporting period.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
Carrying value of portfolio investment assets
The estimate and assumption that has the most significant effect
on the carrying amounts of assets and liabilities in the financial
statements is the valuation of quoted investments. These are valued
at closing bid market price and in accordance with IFRS, no
discount is applied for liquidity of the stock or any dealing
restrictions. However, it may not always be possible to trade at
the quoted bid market price. Quoted investments are carried in the
financial statements as at 30 June 2014 at a valuation of
GBP800,000 (2013: GBP1,161,000). For further detail see notes 8, 11
and 17.
Impairment of Property, Plant and Equipment and Intangible
Assets
Management reviews property, plant and equipment at each balance
sheet date to determine whether there are any indications of
impairment. If any such indication exists, an estimate of the
recoverable amount is performed, and an impairment loss is
recognised to the extent that the carrying amount exceeds
recoverable amount. Impairment charges of GBPnil have been
recognised in the year ended 30 June 2014 (2013: GBP1,032k).
Share-based payments
In determining the fair value of equity settled share based
payments and the related charge to the Income Statement, the
Company makes assumptions about future events and market
conditions; in particular, judgement must be made as to the likely
number of shares that will vest, and the fair value of each award
granted. The fair value is determined using a valuation model which
is dependent on further estimates, including the Company's future
dividend policy, the timing with which options will be exercised
and the future volatility in the price of the Company's shares.
Different assumptions about these factors to those made by the
Company could materially affect the reported value of share-based
payments.
2. Segmental Reporting
Quoram's operating segments are reported based on the financial
information provided to the Board, which is used to make strategic
decisions. The Directors are of the opinion that under IFRS 8 -
'Operating segments', the Group has only one reportable segment,
being Portfolio Investment return.
The Board assesses the performance of the operating segment
based on financial information which is measured and presented in a
manner consistent with that in the financial statements.
3. Operating Loss
Operating Loss 2014 2013
GBP'000 GBP'000
---------------------------------------------------------- ---------------- --------
Operating loss is stated after charging:
Fees payable to the Company's auditor for the audit
of the annual statements 14 17
Fees payable to the Company's auditor and its associates
for other services:
Tax compliance services 3 4
Tax advisory services - 3
Audit related assurance services - 5
---------------------------------------------------------- ---------------- --------
Equity settled share-based payments - 335
---------------------------------------------------------- ---------------- --------
Exceptional administrative expenses:
Impairment of intangible assets - 529
Impairment of land assets - 503
---------------------------------------------------------- ---------------- --------
Total exceptional administrative expenses - 1,032
---------------------------------------------------------- ---------------- --------
4. Directors and Employees
2014 2013
GBP'000 GBP'000
-------------------------------------- -------------------- --------
Staff costs
Wages and salaries 285 183
Social security costs 26 14
-------------------------------------- -------------------- --------
311 197
-------------------------------------- -------------------- --------
Equity settled share-based payments* - 335
-------------------------------------- -------------------- --------
311 532
-------------------------------------- -------------------- --------
*The charge for the year ended 30 June 2013 includes accelerated
charges to reflect the cost of share options for directors who left
the Group in the year.
The average number of employees employed by the Group were:
2014 2013
----------------------------- ----- -----
Average number of employees 5 4
----------------------------- ----- -----
2014 2013
GBP'000 GBP'000
------------------------------------------------ --------------------- -----------------
Compensation of key management was as follows:
Short term benefits 97 86
Share-based payments - 335
------------------------------------------------ --------------------- -----------------
97 421
Social security costs 8 4
------------------------------------------------ --------------------- -----------------
105 425
------------------------------------------------ --------------------- -----------------
2014 2013
GBP'000 GBP'000
------------------------------------------------ --------------------- -----------------
Highest paid director:
Aggregate emoluments and benefits 55 34
------------------------------------------------ --------------------- -----------------
Key management consists of the directors. Details of each
director's remuneration and their share options are included in the
Report of the Directors.
5. Finance Income
2014 2013
GBP'000 GBP'000
------------------------ --------- ---------
Bank interest received 9 4
------------------------ --------- ---------
6. Taxation
There was no current tax charge for the year ended 30 June 2014
(2013: GBPnil).
Reconciliation of the effective tax charge 2014 2013
GBP'000 GBP'000
---------------------------------------------------------------------------------- ---------------- ----------------
Loss before taxation (699) (1,983)
Loss before tax multiplied by standard rate of corporation tax in the UK of 20.0%
(2013: 23.8%) (140) (471)
Tax effects of:
Other expenses not deductible for tax purposes 72 -
Tax losses not utilised within the year 68 471
---------------------------------------------------------------------------------- ---------------- ----------------
Tax expense and effective tax rate - -
---------------------------------------------------------------------------------- ---------------- ----------------
The amount of unutilised tax losses are as follows:
2014 2013
GBP'000 GBP'000
-------------------------- -------- --------
Unutilised tax losses UK 1,314 987
Unutilised tax losses US 11,020 12,386
-------------------------- -------- --------
Total 12,334 13,373
-------------------------- -------- --------
A deferred tax asset in respect of trading losses has not been
recognised due to the uncertainty over timing of future profits.
The trading losses are recoverable against suitable future trading
profits in each jurisdiction.
Deferred tax liabilities arising as a result of the movement in
fair value of available-for-sale financial assets are recognised in
the balance sheet as follows:
2014 2013
Deferred tax liabilities GBP'000 GBP'000
--------------------------------------------------------------------- ----------------- ----------------
At 1 July - 452
Deferred tax (credit)/charge recognised in equity during the period - (452)
--------------------------------------------------------------------- -----------------
At 30 June - -
--------------------------------------------------------------------- ----------------- ----------------
7. Loss per share
Basic loss per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Given the Group's reported loss for the year share options are
not taken into account when determining the weighted average number
of ordinary shares in issue during the year and therefore the basic
and diluted earnings per share are the same.
Basic loss per share 2014 2013
p p
------------------------------------------- ------- -------
Loss per share from continuing operations (0.07) (0.31)
------------------------------------------- ------- -------
The losses and weighted average number of ordinary shares used
in the calculation of basic loss per share are as follows:
2014 2013
GBP'000 GBP'000
---------------------------------------------------------------------------------------- ------------- -------------
Loss used in the calculation of total basic and diluted earnings per share (688) (1,983)
---------------------------------------------------------------------------------------- ------------- -------------
2014 2013
Number Number
---------------------------------------------------------------------------------------- ------------- -------------
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share 968,196,408 635,977,230
---------------------------------------------------------------------------------------- ------------- -------------
The company has issued options over 14,675,215 ordinary shares
which are potentially dilutive. There is however, no dilutive
effect of these issued options as there is a loss for each of the
periods concerned.
8. Portfolio Investment
Quoted equity shares
GBP'000
------------------------------------- ---------------------
Fair value at 30 June 2011 and 2012 -
Additions 659
Unrealised gain on revaluation 29
------------------------------------- ---------------------
Fair value at 30 June 2013 688
------------------------------------- ---------------------
Unrealised loss on revaluation (55)
---------------------
Fair value at 30 June 2014 633
------------------------------------- ---------------------
All portfolio investments are held by Quoram Plc.
9. Property, plant and equipment
Leasehold land Plant and equipment Total
GBP'000 GBP'000 GBP'000
----------------------------------------- ----------------------- --------------------- --------------------------
Cost
At 1 July 2012 4,197 1,105 5,302
Effects of foreign exchange 9 - 9
----------------------------------------- ----------------------- --------------------- --------------------------
At 1 July 2013 4,206 1,105 5,311
----------------------------------------- ----------------------- --------------------- --------------------------
At 1 July 2014 4,206 1,105 5,311
----------------------------------------- ----------------------- --------------------- --------------------------
Accumulated depreciation and impairment
At 1 July 2012 3,703 1,105 4,808
----------------------------------------- ----------------------- --------------------- --------------------------
Impairment 503 - 503
----------------------------------------- ----------------------- --------------------- --------------------------
At 30 June 2013 4,206 1,105 5,311
----------------------------------------- ----------------------- --------------------- --------------------------
At 30 June 2014 4,206 1,105 5,311
----------------------------------------- ----------------------- --------------------- --------------------------
Net book value
At 30 June 2014 - - -
----------------------------------------- ----------------------- --------------------- --------------------------
At 30 June 2013 - - -
----------------------------------------- ----------------------- --------------------- --------------------------
10. Intangible assets
Exploration costs Royalty interests Total
GBP'000 GBP'000 GBP'000
----------------------------- ---------------------- ---------------------- ------------------------
Cost
At 30 June 2012 5,538 64 5,602
----------------------------- ---------------------- ---------------------- ------------------------
Effects of foreign exchange 9 1 10
Disposals - (65) (65)
----------------------------- ---------------------- ---------------------- ------------------------
At 30 June 2013 5,547 - 5,547
----------------------------- ---------------------- ---------------------- ------------------------
At 30 June 2014 5,547 - 5,547
----------------------------- ---------------------- ---------------------- ------------------------
Amortisation and impairment
At 30 June 2012 5,018 - 5,018
Impairment 529 - 529
At 30 June 2013 5,547 - 5,547
----------------------------- ---------------------- ---------------------- ------------------------
At 30 June 2014 5,547 - 5,547
----------------------------- ---------------------- ---------------------- ------------------------
Net book value
At 30 June 2014 - - -
----------------------------- ---------------------- ---------------------- ------------------------
At 30 June 2013 - - -
----------------------------- ---------------------- ---------------------- ------------------------
11. Available-for-sale financial assets
Quoted equity shares
GBP'000
-------------------------------- ----------------------
Fair value at 30 June 2012 2,557
Unrealised loss on revaluation (2,084)
Fair value at 30 June 2013 473
-------------------------------- ----------------------
Unrealised loss on revaluation (306)
----------------------
Fair value at 30 June 2014 167
-------------------------------- ----------------------
The available-for-sale financial assets consist of listed
investments and the fair value is based on bid quoted market prices
at the balance sheet date. During the year, the group incurred a
fair value loss through equity of GBPnil (2013: GBP1,930k) and an
impairment charge of GBP306k (2013: GBP154k) recognised in the
income statement.
12. Trade and other receivables
Trade and Other Receivables 2014 2013
GBP'000 GBP'000
-------------------------------- ---------------- --------
Trade receivables 15 57
Other receivables 2 46
Prepayments and accrued income 1 8
-------------------------------- ---------------- --------
18 111
-------------------------------- ---------------- --------
The directors consider the carrying value of trade and other
receivables are approximate to their fair value.
All of the Group's receivables have been reviewed for
indications of impairment. None of the receivables were found to be
impaired as at 30 June 2014 (2013: GBPnil).
No unimpaired receivables are past due as at the reporting date
(2013: GBPnil).
13. Cash and cash equivalents
Cash and Cash Equivalents 2014 2013
GBP'000 GBP'000
--------------------------- -------- --------
Cash at bank (GBP) 1,697 1,946
Cash at bank (USD) 37 45
--------------------------- -------- --------
1,734 1,991
--------------------------- -------- --------
14. Trade and other payables
Trade and Other Payables 2014 2013
GBP'000 GBP'000
-------------------------- -------- ---------------------
Trade payables 1 1
Other payables 7 20
Accruals 24 27
-------------------------- -------- ---------------------
32 48
-------------------------- -------- ---------------------
15. Share Capital
a) Share Capital 2014 2013
GBP'000 GBP'000
------------------------------------------------------ -------- --------
Issued and fully paid up
968,196,408 (2013: 968,196,408) shares of 0.25 pence 2,420 2,420
------------------------------------------------------ -------- --------
During the year ended 30 June 2013 the Company issued a total of
470,000,000 ordinary shares for a premium net of issue costs of
GBP690k.
Date Price per share (Sterling) Number of shares issued Total consideration received (GBP)
----------- --------------------------- ------------------------ -----------------------------------
15-Mar-13 0.4p 470,000,000 1,880,000
----------- --------------------------- ------------------------ -----------------------------------
b) Share based payments - options and warrants
The Company has a share option scheme for all directors and senior
management. Options are exercisable at a price equal to the average
market price of the Company's shares on the date of grant. The
vesting period is one, two and three years - one third of the
options vesting in each period. The options are settled in equity
once exercised.
If the options remain unexercised after a period of 10 years from
the date of grant, the options expire. Options are forfeited if
the employee leaves the Company before the options vest.
Share warrants were issued on 4 February 2011 which were exercisable
immediately. None of these warrants were exercised and they expired
on 4 February 2013.
The issue of warrants constituted a transaction with parties other
than employees for which the fair value of services received cannot
be reliably estimated, as they were granted on a 1 for 8 basis
to shareholders as part of an open offer and placing that took
place in February 2011, and therefore the services received have
been measured by reference to the fair value of the warrants granted,
measured at the date of the placing.
Details of the number of share options and warrants and the weighted
average exercise price (WAEP) outstanding during the year are
as follows:
2014 Number of WAEP Number of WAEP
options GBP warrants GBP
------------- -------------------------------- ----------------------------- ----------------------------- ---------------------
Outstanding
at the
beginning
of the year 20,075,215 0.04 - -
Expired
during the
year (4,400,000) (0.05) - -
Forfeited
during the
year (1,000,000) (0.05)
------------- -------------------------------- ----------------------------- ----------------------------- ---------------------
Outstanding
at the year
end 14,675,215 0.04 - -
Number
exercisable
at 30 June
2014 14,341,882 0.04 - -
------------- -------------------------------- ----------------------------- ----------------------------- ---------------------
2013
------------- -------------------------------- ----------------------------- ----------------------------- ---------------------
Outstanding
at the
beginning
of the year 25,000,000 0.04 3,750,000 0.12
Expired
during the
year - - (3,750,000) (0.12)
Forfeited
during the
year (4,924,785) (0.04) - -
------------- -------------------------------- ----------------------------- ----------------------------- ---------------------
Outstanding
at the year
end 20,075,215 0.04 - -
Number
exercisable
at 30 June
2013 19,741,882 0.04 - -
------------- -------------------------------- ----------------------------- ----------------------------- ---------------------
The fair values of share options issued in the financial years
30 June 2007 and 30 June 2008 were calculated using the binomial
pricing model. The inputs into the model are as follows:
Date of grant 5 May '07 20 Feb '08
------------------------------------------------ ---------- -----------
Number granted 3,200,000 7,000,000
Share price at date of grant 0.25p 4p
Exercise price 1p 4p
Expected volatility 51% 51%
Expected life 3 years 3 years
Risk free rate 5.00% 4.70%
Expected dividend yield 0% 0%
Fair value of options granted at date of grant 0.08p 2.20p
Exit rate 0% 0%
Earliest vesting date 05-May-10 20-Feb-11
Expiry date 05-May-17 20-Feb-18
------------------------------------------------ ---------- -----------
Expected volatility was determined based on the historic
volatility of four comparator companies as suggested by management.
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.
The fair values of share options and warrants issued in the
financial year ended 30 June 2011 were calculated using the Black
Scholes model. The inputs into the model are as follows:
4 Feb 19 May 19 May
Date of grant '11 '11 '11
------------------------------ ---------- ----------- -----------
Number granted 3,750,000 11,500,000 4,800,000
Share price at date of grant 5.0p 5.0p 5.0p
Exercise price 12p 5.0p 5.0p
Expected volatility 85% 85% 85%
Expected life 1 year 5.5, 5.5,
6 and 6 and
6.5 years 6.5 years
Risk free rate 2.80% 2.34% 2.34%
Expected dividend yield 0% 0% 0%
Fair value at date of grant 0.51p 3.61p 3.61p
Earliest vesting date 04-Feb-11 19-May-12 19-May-12
Expiry date 04-Feb-13 19-May-21 19-May-21
------------------------------ ---------- ----------- -----------
For May 2011 options, these vest 33.3% after 1 year, 33.3% after
2 years and 33.3% after 3 years.
Expected volatility was determined based on the historic
volatility of comparable companies. The expected life used in the
model has been adjusted, based on the management's best estimate,
for the effects of non-transferability, exercise restrictions and
behavioural considerations.
The Group recognised total expenses of GBPnil (2013: GBP335,000)
related to equity-settled share-based payment transactions during
the year.
16. Financial Instruments
Classification of financial instruments
The tables below set out the Group's accounting classification
of each class of its financial assets and liabilities.
At 30 June Loans and Financial assets at Total
2014 other fair value through Financial liabilities carrying
Available-for-sale receivables profit and loss at amortised cost value
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------------- -------------- ----------------------- ----------------------- --------------
Portfolio
investments - - 633 - 633
Available for
sale
financial
assets 167 - - - 167
Trade and
other
receivables - 18 - - 18
Cash and cash
equivalents - 1,734 - - 1,734
Trade and
other
payables - - - (32) (32)
167 1,752 633 (32) 2,520
--------------- ------------------- -------------- ----------------------- ----------------------- --------------
At 30 June Loans and Financial assets at Total
2013 other fair value through Financial liabilities carrying
Available-for-sale receivables profit and loss at amortised cost value
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------------- -------------- ----------------------- ----------------------- --------------
Portfolio
investments - - 688 - 688
Available for
sale
financial
assets 473 - - - 473
Trade and
other
receivables - 111 - - 111
Cash and cash
equivalents - 1,991 - - 1,991
Trade and
other
payables - - - (48) (48)
-----------------------
473 2,102 688 (48) 3,215
--------------- ------------------- -------------- ----------------------- ----------------------- --------------
Loans and other receivables and financial liabilities' at
amortised cost carrying values approximate to their fair values, as
at 30 June 2014 and 2013, given their nature and short times to
maturity.
Under IFRS 7 Financial Instruments: Disclosures, Portfolio
investments and the available-for-sale assets are classified under
the fair value hierarchy as level 1.
17. Financial Instrument Risk Exposure and Management
The principal financial risks to which the Group is exposed are:
interest rate risk; liquidity risk, equity price risk; credit risk
and (in the prior year) foreign currency exchange rate risk. This
note describes the Group's objectives, policies and processes for
managing those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented
below.
There have been no substantive changes to the Group's exposure
to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure
them from the previous year.
Liquidity risk
Liquidity risk is dealt with in note 18 of these financial
statements.
Credit risk
The Group's credit risk is primarily attributable to its cash
balances, portfolio investments and available-for-sale financial
assets.
The credit risk on liquid funds is limited because the third
parties are large international banks with strong credit
ratings.
The Group's total credit risk amounts to the total of the sum of
the receivables, portfolio investments, available-for-sale
financial assets and cash and cash equivalents. At the year end
this amounts to GBP2,258,000 (2013: GBP3,263,000)
Interest rate risk and sensitivity analysis
The Group's only exposure to interest rate risk is the interest
received on the cash held on deposit.
The Group does not have any interest bearing borrowings
The following table indicates the impact of a change in interest
rate on the interest received during the year, and with all other
variables being held constant, on the Group's loss before tax
Change in interest rate 2014 Change in interest rate 2013
---------- ------------------------ ------------------------
GBP'000 GBP'000
---------- ------------------------ -------- ------------------------ --------
Sterling 0.50% 8.50 0.50% 9.70
1.00% 17.00 1.00% 19.50
1.50% 2.54 1.50% 2.92
Dollars 0.50% 0.20 0.50% 0.20
1.00% 0.40 1.00% 0.50
1.50% 0.60 1.50% 0.70
---------- ------------------------ -------- ------------------------ --------
Market risk and sensitivity analysis
Market risk arises when the fair value or cash flows of a
financial instrument fluctuates from the level where a long or
short position was established. These financial instruments are
subject to equity price risk.
Equity price risk
The Group's portfolio investments and its available-for-sale
financial assets are subject to equity price risk. For financial
instruments held, the Group uses a sensitivity analysis technique
that measures the changes in fair value of the Group's financial
instruments to hypothetical changes in market price.
A 5% increase/(decrease) in the market value of positions held
at 30 June 2014 would increase/(decrease) the value of the
Portfolio Investment assets by GBP25k (2013: GBP58K).
Foreign exchange risk
The Group no longer has a material exposure to foreign exchange
risk.
18. Liquidity risk
In managing liquidity risk, the main objective of the Group is
to ensure that it has the ability to pay all of its liabilities as
they fall due. The table below shows the undiscounted cash flows on
the Group's financial liabilities as at 30 June 2014 on the basis
of their earliest possible contractual maturity
Total Within 2 months Within 2 -6 months
GBP'000 GBP'000 GBP'000
----------------- -------- ---------------- -----------------------
At 30 June 2014
Trade payables 1 1 -
Other payables 7 7 -
Accruals 24 - 24
----------------- ---------------- -----------------------
32 8 24
----------------- -------- ---------------- -----------------------
At 30 June 2013
Trade payables 1 1 -
Other payables 20 20 -
Accruals 27 - 27
----------------- -------- ---------------- -----------------------
48 21 27
----------------- -------- ---------------- -----------------------
19. Capital Management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern, to provide
returns for shareholders and to maintain an optimal capital
structure to reduce the cost of capital. The Group defines capital
as being share capital plus reserves as disclosed in the
consolidated balance sheet.
The Board of Directors monitors the level of capital as compared
to the Group's commitments and adjusts the level of capital as is
determined to be necessary, by issuing new shares.
The Group is not subject to any externally imposed capital
requirements
20. Financial Commitments
The Group had no capital commitments at 30 June 2014 (2013:
GBPnil).
21. Related Party Transactions
Related party transactions during the year with the directors
and key management were as follows.
Short-term benefits
2014 2013
GBP'000 GBP'000
-------------------------- -------- -----------------
Directors' remuneration:
Mr A Yeo n/a 34
Mr J Ede-Golightly 25 25
Mr F Dekker n/a 5
Mr B Marshall 5 13
Mr G Hall 12 9
Mr C Hill 55 -
97 86
-------------------------- -------- -----------------
Social security costs 8 8
-------------------------- -------- -----------------
Total 105 94
-------------------------- -------- -----------------
In addition to the remuneration shown above, the Group incurred
share-based payment charges of GBPnil (2013: GBP335k) in respect of
the above named directors and key management.
During the year ended 30 June 2014, consultancy fees of GBP144k
(2013: GBP40k) were invoiced in respect of ORA Capital Partners Ltd
which was a substantial shareholder in Quoram Plc.
22. Investment in subsidiaries
The Group's Parent Company holds the issued share capital of the
following subsidiary undertakings, which are incorporated in the
USA and have been included in these consolidated financial
statements.
Company Principal activities Class Percentage holding
------------------------ ------------------------- ---------- -------------------
Osceola Royalties LLC Oil and gas development Ordinary 100%
Osceola Production LLC Oil and gas development Ordinary (indirectly) 100%
------------------------ ------------------------- ---------- -------------------
23. Contingent Liabilities
The directors are not aware of any contingent liabilities within
the Group or the Company at 30 June 2014.
24. Ultimate Controlling Party
As at 30 June 2014, Quoram Plc had no ultimate controlling
party.
25. Events after the Balance Sheet date
There were no significant events after the balance sheet
date.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEMFMLFLSELU
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