REG-Cadogan Petroleum: Annual Financial Report <Origin Href="QuoteRef">CADP.L</Origin> - Part 6
28/04/2017 08:35
- Part 6: For the preceding part double click ID:nPRrS1DE1e
67,674 72,565
LIABILITIES
Current liabilities
Trade and other payables 34 (934) (380)
(934) (380)
Total liabilities (934) (380)
Net assets 66,740 72,185
EQUITY
Share capital 35 13,337 13,337
Retained earnings (1) 162,122 167,567
Cumulative translation reserves 36 (108,719) (108,719)
Total equity 66,740 72,185
The financial statements of Cadogan Petroleum plc, registered in England and
Wales no. 05718406, were approved by the Board of Directors and authorised for
issue on 27 April 2017.
They were signed on its behalf by:
Guido Michelotti
Chief Executive Officer
27 April 2017
The notes on pages 97 to 100 form part of these financial statements.
(1 Included into retained earnings, loss for the financial year ended 31
December 2016 was $5.4 million (2015: $45.3 million).)
Company Cash Flow Statement
For the year ended 31 December 2016
Note 2016 $’000 2015 $’000
Net cash inflow from operating activities 37 (764) 3,655
Investing activities
Interest received 131 79
Loans to subsidiary companies (15,790) (3,633)
Net cash used in investing activities (15,659) (3,554)
Net (decrease)/increase in cash and cash equivalents (16,423) 101
Effect of foreign exchange rate changes (79) (1,853)
Cash and cash equivalents at beginning of year 44,882 46,634
Cash and cash equivalents at end of year 28,380 44,882
Company Statement of Changes in Equity
For the year ended 31 December 2016
Share capital $’000 Retained earnings $’000 Cumulative translation reserves $’000 Total $’000
As at 1 January 201 5 13,337 212,902 (102,892) 123,347
Net income for the year - (45,335) - (45,335)
Other comprehensive loss - - (5,827) (5,827)
Total comprehensive loss for the year - (45,335) (5,827) (51,162)
As at 1 January 201 6 13,337 167,567 (108,719) 72,185
Net loss for the year - (5,445) - (5,445)
Total comprehensive loss for the year - (5,445) - (5,445)
As at 31 December 2016 13,337 162,122 (108,719) 66,740
Notes to the Company Financial Statements
For the year ended 31 December 2016
30. Significant accounting policies
The separate financial statements of the Company are presented as required by
the Companies Act 2006 (the “Act”). As permitted by the Act, the separate
financial statements have been prepared in accordance with International
Financial Reporting Standards.
The financial statements have been prepared on the historical cost basis. The
principal accounting policies adopted are the same as those set out in note 3
to the Consolidated Financial Statements except as noted below.
As permitted by section 408 of the Act, the Company has elected not to present
its profit and loss account for the year. Cadogan Petroleum plc reports a loss
for the financial year ended 31 December 2016 of $5.4 million (2015: $45.3
million) of which $3.4 million relates to the impairment of receivables from
subsidiaries.
Investments
Investments in subsidiaries are stated at cost less, where appropriate,
provisions for impairment.
Critical accounting judgements and key sources of estimation uncertainty
The Company’s financial statements, and in particular its investments in and
receivables from subsidiaries, are affected by certain of the critical
accounting judgements and key sources of estimation uncertainty described in
note 4 to the Consolidated Financial Statements.
31. Auditor’s remuneration
The auditor’s remuneration for audit and other services is disclosed in note
9 to the Consolidated Financial Statements.
32. Investments
The Company’s subsidiaries are disclosed in note 16 to the Consolidated
Financial Statements. The investments in subsidiaries are all stated at cost
less any provision for impairment.
33. Financial assets
The Company’s principal financial assets are bank balances and cash and cash
equivalents, prepayments and receivables from related parties none of which
are past due. The Directors consider that the carrying amount of receivables
from related parties approximates to their fair value.
Receivables from subsidiaries
At the balance sheet date gross amounts receivable from the fellow Group
companies were $332.3 million (2015: $316.7 million). The Group recognised
impairment of $3.4 million in relation to receivables from subsidiaries in
2016 (2015: $46.5 million). The accumulated provision on receivable as at 31
December 2016 was $293.1 million (2015: $289.8 million). The carrying value of
the receivables from the fellow Group companies as at 31 December 2016 was
$39.2 million (2015: $26.9 million). There are no past due receivables.
Trade and other receivables
2016 $’000 2015 $’000
Prepayments - 752
Other receivables 17 26
17 778
Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Company and short-term
bank deposits with an original maturity of three months or less. The carrying
value of these assets approximates to their fair value.
As of 31 December 2016 cash and cash equivalents in the amount of $10 million,
related to security of the loan provided to the Ukrainian subsidiary and held
at UK bank, was restricted (note 22).
34. Financial liabilities
Trade and other payables
2016 $’000 2015 $’000
Accruals 554 143
Trade creditors 29 237
Other creditors and payables 351 -
934 380
Trade payables principally comprise amounts outstanding for trade purchases
and ongoing costs. The average credit period taken for trade purchases is 48
days (2015: 126 days).
The Directors consider that the carrying amount of trade and other payables
approximates to their fair value. No interest is charged on balances
outstanding.
35. Share capital
The Company’s share capital is disclosed in note 25 to the Consolidated
Financial Statements.
36. Cumulative translation reserve
The directors decided to change the functional currency of the Company from
sterling to US dollars with effect from 1 January 2016.
The effect of a change in functional currency is accounted for prospectively.
In other words, the Company translates all items into the US dollar using the
exchange rate at the date of the change. The resulting translated amounts for
non-monetary items are treated as their historical cost. Exchange differences
arising from the translation of an operation previously recognised in other
comprehensive income in accordance with paragraphs 32 and 39(c) IAS 21
“Foreign Currency” are not reclassified from equity to profit or loss
until the disposal of the operation.
37. Notes to the cash flow statement
2016 $’000 2015 $’000
Loss for the year (5,445) (45,335)
Adjustments for: Interest received Effect of foreign exchange rate changes Impairment of receivables from subsidiaries (131) 120 3,415 (79) - 46,504
Operating cash flows before movements in working capital (2,041) 1,090
Decrease in receivables 715 2,555
Increase in payables 562 10
Cash (used in)/from operations (764) 3,655
Income taxes paid - -
Net cash (outflow)/inflow from continuing operations (764) 3,655
38. Financial instruments
The Company manages its capital to ensure that it is able to continue as a
going concern while maximising the return to shareholders. Refer to note 26
for the Group’s overall strategy and financial risk management objectives.
The capital resources of the Group consist of cash and cash equivalents
arising from equity, comprising issued capital, reserves and retained
earnings.
Categories of financial instruments
2016 $’000 2015 $’000
Financial assets – loans and receivables (includes cash and cash equivalents)
Cash and cash equivalents 28,380 44,882
Amounts due from subsidiaries 39,277 26,905
67,657 71,787
Financial liabilities – measured at amortised cost
Trade creditors (29) (237)
(380) ( 237)
Interest rate risk
All financial liabilities held by the Company are non-interest bearing. As the
Company has no committed borrowings, the Company is not exposed to any
significant risks associated with fluctuations in interest rates.
Credit risk
Credit risk refers to the risk that counterparty will default on its
contractual obligations resulting in financial loss to the Company. For cash
and cash equivalents, the Company only transacts with entities that are rated
equivalent to investment grade and above. Other financial assets consist of
amounts receivable from related parties.
The Company’s credit risk on liquid funds is limited because the
counterparties are banks with high credit ratings assigned by international
credit-rating agencies.
The carrying amount of financial assets recorded in the Company financial
statements, which is net of any impairment losses, represents the Company’s
maximum exposure to credit risk.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which has built an appropriate liquidity risk management framework
for the management of the Company’s short, medium and long-term funding and
liquidity management requirements. The Company maintains adequate reserves, by
continuously monitoring forecast and actual cash flows.
The Company’s financial liabilities are not significant and therefore no
maturity analysis has been presented.
Foreign exchange risk and foreign currency risk management
The Company undertakes certain transactions denominated in foreign currencies.
Hence, exposures to exchange rate fluctuations arise. The Company holds a
large portion of its foreign currency denominated monetary assets and monetary
liabilities in US dollars. More information on the foreign exchange risk and
foreign currency risk management is disclosed in note 26 to the Consolidated
Financial Statements.
39. Related parties
Amounts due from subsidiaries
The Company has entered into a number of unsecured related party transactions
with its subsidiary undertakings. The most significant transactions carried
out between the Company and its subsidiary undertakings are mainly for short
and long-term financing. Amounts owed from these entities are detailed below:
2016 $’000 2015 $’000
Cadogan Petroleum Holdings Limited 39,277 26,905
39,277 26,905
Refer to note 33 for details on the Company’s receivables due from
subsidiaries.
The remuneration of the Directors, who are the key management personnel of the
Group, is set out below in aggregate for each of the categories specified in
IAS 24 Related Party Disclosures. In 2016 there were no other employees in the
Company. Further information about the remuneration of individual Directors is
provided in the audited part of the Annual Report on Remuneration 2016 on
pages 42 to 48.
Remuneration Amounts owing
2016 $’000 2015 $’000 2016 $’000 2015 $’000
Directors’ remuneration 1,071 603 454 28
The total remuneration of the highest paid Director was $1.0 million in the
year (2015: $0.4 million), which includes bonus for 2015 of $0.2 million
(2015: $nil) that was approved in June 2016 (page 43).
40. Events after the balance sheet date
Events after the balance sheet date are disclosed in note 29 to the
Consolidated Financial Statements.
Glossary
IPO
Initial public offering
IFRSs
International Financial Reporting Standards
JAA
Joint activity agreement
UAH
Ukrainian hryvnia
GBP Great
Britain pounds
$
United States dollars
bbl
Barrel
boe
Barrel of oil equivalent
mmboe Million barrels of
oil equivalent
mboe Thousand
barrels of oil equivalent
mboepd Thousand barrels of
oil equivalent per day
boepd Barrels of
oil equivalent per day
bcf
Billion cubic feet
mmcm Million cubic
metres
mcm Thousand
cubic metres
Reserves Those quantities of
petroleum anticipated to be commercially recoverable by application of
development projects to known accumulations from a given date forward under
defined conditions. Reserves include proved, probable and possible reserve
categories.
Proved Reserves Those additional Reserves which analysis of
geoscience and engineering data can be estimated with reasonable certainty to
be commercially recoverable, from a given date forward, from reservoirs and
under defined economic conditions, operating methods and government
regulations.
Probable Reserves Those additional Reserves which analysis of
geoscience and engineering data indicate are less likely to be recovered than
proved Resources but more certain to be recovered than possible Reserves.
Possible Reserves Those additional Reserves which analysis of
geoscience and engineering data indicate are less likely to be recoverable
than probable Reserves.
Contingent Resources Those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from known accumulations by
application of development projects, but which are not currently considered to
be commercially recoverable due to one or more contingencies.
Prospective Resources Those quantities of petroleum which are estimated as
of a given date to be potentially recoverable from undiscovered accumulations.
P1
Proved Reserves
P2
Probable Reserves
P3
Possible Reserves
1P
Proved Reserves
2P
Proved plus probable Reserves
3P
Proved plus probable plus possible Reserves
Carboniferous A geological period 295 million to
354 million years before present
Devonian A geological period
between 417 million and 354 million years before present
Visean Geological
period within the early to middle Carboniferous
Spud To
commence drilling, once the cement cellar and conductor pipe at the well-head
have been constructed
TD
Target depth
Workover The process of
performing major maintenance or remedial treatment of an existing oil or gas
well
LWD
Logging while drilling
Contingent resources Contingent resources are those quantities of petroleum
estimated, as of a given date,
to be potentially recoverable from known accumulations, but the applied
project(s)
are not yet considered mature enough for commercial development due to one or
more contingencies.
Prospective resources Prospective resources are estimated volumes associated
with undiscovered
accumulations. These represent quantities of petroleum which are estimated, as
of a
given date, to be potentially recoverable from oil and gas deposits identified
on the
basis of indirect evidence but which have not yet been drilled.
E&E
Exploration and Evaluation
E&P
Exploration and Production
LTI
Lost time incidents
Krosno zone Techtonical element of
Ukrainian part of the Carpathian mountains
Krosno 1 Prospective horizon in
the Krosno zone
Shareholder Information
Enquiries relating to the following administrative matters should be addressed
to the Company’s registrars: Capita Asset Services, The Registry, 34
Beckenham Road, Beckenham, Kent BR3 4TU.
Telephone number:
UK: 0871 664 0300 (calls cost 10p per minute plus network extras).
International: +44 (0) 371 664 0300
Lines are open 9am – 5.30pm, Monday – Friday, excluding public holidays.
*
Loss of share certificates.
*
Notification of change of address.
*
Transfers of shares to another person.
*
Amalgamation of accounts: if you receive more than one copy of the Annual
Financial Report, you may wish to amalgamate your accounts on the share
register.
You can access your shareholding details and a range of other services at the
Capita website www.capitashareportal.com.
Information concerning the day-to-day movement of the share price of the
Company can be found on the Group’s website www.cadoganpetroleum.com or that
of the London Stock exchange www.prices.londonstockexchange.com.
Unsolicited mail
As the Company’s share register is, by law, open to public inspection,
shareholders may receive unsolicited mail from organisations that use it as a
mailing list. To reduce the amount of unsolicited mail you receive, contact:
The Mailing Preference Service, FREEPOST 22, London W1E 7EZ. Telephone: 0845
703 4599. Website: www.mpsonline.org.uk.
Financial calendar 2017/2018
Annual General
Meeting 22 June
2017
Half Yearly results announced August
2017
Annual results announced
April 2018
Investor relations
Enquiries to: info@cadoganpetroleum.com
Registered office
Shakespeare Martineau LLP,
6th Floor, 60 Gracechurch Street, London EC3V 0HR
Registered in England and Wales no. 05718406
Ukraine
48/50A Zhylyanska Street
Business center «Prime», 8th floor
01033 Kyiv
Ukraine
Email: info@cadoganpetroleum.com
Tel: +38 044 594 58 70
Fax: +38 044 594 58 71
www.cadoganpetroleum.com
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