Westmount Engy. Regulatory News (WTE)

30 June 2013

30 June 2012

Notes

£

£

Realised profit/(loss) on disposal of investments

69,043

(1,371,884)

Unrealised (loss)/ gain on financial assets at fair value through profit or loss

(627,157)

1,513,407

Administrative expenses

(196,977)

(480,914)

Operating loss

(755,091)

(339,391)

Interest receivable

-

205

Loss before tax

(755,091)

(339,186)

Taxation

3

-

-

Comprehensive loss for the year

(755,091)

(339,186)

Basic loss per share (pence)

4

(7.72)

(3.85)

Diluted loss per share (pence)

4

(7.72)

(3.85)

All results are derived from continuing operations.

The Company has no items of other comprehensive income.

As at

As at

30 June 2013

30 June 2012

Notes

£

£

ASSETS

Non Current Assets

Financial assets at fair value through profit or loss

5

746,175

1,464,718

Current Assets

Other receivables

6

7,642

7,430

Cash and cash equivalents

7

226,565

251,471

234,207

258,901

Total assets

980,382

1,723,619

LIABILITIES AND EQUITY

Current Liabilities

Trade and other payables

8

89,921

98,067

EQUITY

Share capital

9

1,966,060

1,946,060

Share premium account

10

492,103

480,295

Share option account

10

293,427

305,235

Retained Earnings

(1,861,129)

(1,106,038)

Total equity

890,461

1,625,552

Total liabilities and equity

980,382

1,723,619

These financial statements were approved and authorised for issue by the Board of Directors on 26 November 2013 and were signed on its behalf by:

P J RICHARDSON

Director

Share capital

Share Premium

Share Option

Retained

Total

Account

Account

Account

Earnings

Equity

£

£

£

£

£

As at 1 July 2011

1,506,060

451,341

128,111

(766,852)

1,318,660

Comprehensive Income

Loss for the year ended 30 June 2012

-

-

-

(339,186)

(339,186)

Transaction with owners

Issue of ordinary shares

440,000

-

-

-

440,000

Expired redemption of B shares not taken up

-

28,954

-

-

28,954

Cost of share options

-

-

177,124

-

177,124

At 30 June 2012

1,946,060

480,295

305,235

(1,106,038)

1,625,552

Comprehensive Income

Loss for the year ended 30 June 2013

-

-

-

(755,091)

(755,091)

Transaction with owners

Issue of ordinary shares

20,000

-

-

-

20,000

Premium on shares issued

-

11,808

-

-

11,808

Realisation of share options

-

-

(11,808)

-

(11,808)

At 30 June 2013

1,966,060

492,103

293,427

(1,861,129)

890,461

30 June 2013

30 June 2012

Note

£

£

Cash flows from operating activities

Total comprehensive loss for the year

(755,091)

(339,186)

Adjustment for interest income

-

(205)

Adjustment for net unrealised loss/(gain) on investments at fair value through profit or loss

627,157

(1,513,407)

Adjustment for costs attributable to share options

-

177,124

Adjustment for realised (gains)/losses on investments at fair value through profit or loss

(69,043)

1,371,884

Increase in prepayments and accrued income

(212)

(202)

Decrease in creditors and accrued expenses

(8,146)

(180,235)

Purchase of investments

-

(623,973)

Sale of investments

160,429

598,993

Net cash outflows from operating activities

(44,906)

(509,207)

Cash flows from investing activities

Interest received

-

205

Net cash generated from investing activities

-

205

Cash flows from financing activities

Ordinary shares issued

20,000

440,000

Expired redemption of B shares not taken up

-

28,954

Net cash generated in financing activities

20,000

468,954

Net decrease in cash and cash equivalents

(24,906)

(40,048)

Cash and cash equivalents at beginning of year

251,471

291,519

Cash and cash equivalents at end of year

7

226,565

251,471

1. GENERAL INFORMATION AND STATEMENTS OF COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN UNION

Westmount Energy Limited (the "Company") operates solely as an energy investment company. The investment strategy of the Company is to provide seed capital to small companies that are identified as having significant growth possibilities.

The Company was incorporated in Jersey on 1 October 1992 under the Companies (Jersey) Law 1991, as amended, and is a public company with registered number 53623. The Company is listed on the London Stock Exchange Alternative Investment Market ("AIM").

Basis of Preparation

The financial statements have been prepared under the historical cost convention with the exception of investments measured at fair value and are in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union, including standards and interpretations issued by the International Accounting Standards Board ("IASB").

The financial statements for the year ended 30 June 2013 (including comparatives) were approved by the Board of Directors on 26 November 2013.

2. ACCOUNTING POLICIES

The significant accounting policies that have been applied in the preparation of these financial statements are summarised below. These accounting policies have been used throughout all periods presented in the financial statements.

Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Company

At the date of the authorisation of these financial statements, the following new standards, amendments and interpretations to existing standards have been published but are not yet effective and have not been adopted early by the Company. The standards below are not expected to affect the financial position of the Company, however they will require additional disclosure in future financial statements.

· IFRS 9 (revised April 2009) Financial Instruments - Classification and Measurement, effective for annual periods beginning on or after 1 January 2015

Use of estimates and judgements

The preparation of financial statements in conformity with IFRS requires the use of accounting estimates and exercise of judgement by the management while applying the Company's accounting policies in relation to the value of options issued, as set out in note 10. These estimates are based on the management's best knowledge of the events which existed at the date of issue of the financial statements and at the statement of financial position date however, the actual results may differ from these estimates.

NOTES TO THE FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 30 JUNE 2013

2. ACCOUNTING POLICIES (Continued)

Foreign currency

a) Functional and presentational currency

The functional currency of the Company is United Kingdom Sterling ("Sterling"), the currency of the primary economic environment in which the Company operates. The presentation currency of the Company for accounting purposes is also Sterling.

b) Transactions and balances

Foreign currency monetary assets and liabilities balances are translated into Sterling at the rate of exchange ruling on the last day of the Company's financial year. Foreign currency transactions are translated at the exchange rate ruling on the date of the transaction. Gains and losses arising on the currency translation are included in administrative expenses in the statement of comprehensive income in the year in which they arise.

Financial assets

The Company classifies its financial assets in the following categories:

· at fair value through profit or loss

The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Financial assets at fair value through profit or loss

The Company designates its financial assets as at fair value through profit or loss (FVTPL) as the financial assets are managed and their performance is evaluated on a fair value basis. Financial assets carried at fair value through profit or loss are initially recognised at fair value and any transactions costs are recognised in the statement of comprehensive income. Regular purchases and sales of financial assets are recognised on the trade date, the date on which the Company commits to purchase or sell the investment.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all the risks and rewards of ownership. Financial assets at fair value through profit or loss are subsequently carried at fair value. Any gains or losses on derecognition of investments is calculated after setting the proceeds against the fair value and, in respect of a part disposal, against the fair value at the date of sale. The surplus or loss on realisation is transferred to the statement of comprehensive income.

Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' are presented in the statement of comprehensive income in the period in which they arise.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks. For the purpose of the Statement of Cash Flows, cash and cash equivalents are considered to be all highly liquid investments with maturity of three months or less at inception.

Trade and other payables

Trade and other payables are not interest bearing and are accounted for at amortised cost using the effective interest method.

NOTES TO THE FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 30 JUNE 2013

2. ACCOUNTING POLICIES (Continued)

Equity, reserves and dividend payments

Ordinary shares are classified as equity. Share premium includes any premiums received on issue of share capital. Transaction costs associated with the issuing of shares are deducted from share premium. Retained earnings include all current and prior period retained profits.

Revenue Recognition

Revenue comprises interest income from short term deposits and is recognised on an accruals basis.

Expenditure

The expenses of the Company are recognised on an accruals basis in the Statement of Comprehensive Income.

Share options

Awards of share options are recorded under IFRS 2: 'Share-based Payment'. The cost of the share options are ascribed a fair value at grant date and accounted for as an administration expense of the Company with an equal Share Option Reserve being created in the Statement of Changes in Equity. The cost is recognised in the Statement of Comprehensive Income over the vesting period of the award.

3. TAXATION

The Company is subject to income tax at a rate of 0%.

The Company is registered as an International Services Entity under the Goods and Services Tax (Jersey) Law 2007 and a fee of £200 has been paid, which has been included in administrative expenses.

4. EARNINGS PER SHARE

The calculation of basic earnings per ordinary share is based on the comprehensive loss for the year of £755,091 (2012:£339,186). The weighted average number of shares in issue during the year was 9,780,985 (2012:£8,808,108). As explained in note 10 there are share options in issue over the Company's ordinary shares. The options would decrease the basic loss per share and as a result there is no dilution effect on the earnings per share, therefore the diluted loss per share is the same as the basic loss per share.

5. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

2013

2012

£

£

Desire Petroleum plc ("Desire")

237,600

435,000

Sterling Energy plc ("Sterling")

176,250

175,000

Argos Resources Ltd ("Argos")

188,800

153,800

Falkland Oil & Gas Ltd ("Falkland")

53,000

348,000

Pancontinental Oil & Gas NL ("Pancontinental")

90,525

352,918

Total investments

746,175

1,464,718

NOTES TO THE FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 30 JUNE 2013

5. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Investments at fair value through profit or loss at 30 June 2013

Cost

Unrealised loss

Fair value

£

£

£

Desire Petroleum plc ("Desire")

874,643

(637,043)

237,600

Sterling Energy plc ("Sterling")

863,064

(686,814)

176,250

Argos Resources Ltd ("Argos")

310,775

(121,975)

188,800

Falkland Oil & Gas Ltd ("Falkland")

91,386

(38,386)

53,000

Pancontinental Oil & Gas NL ("Pancontinental")

393,246

(302,721)

90,525

2,533,114

(1,786,939)

746,175

Investments at fair value through profit or loss at 30 June 2012

Cost

Unrealised gain/(loss)

Fair value

£

£

£

Desire Petroleum plc ("Desire")

874,643

(439,643)

435,000

Sterling Energy plc ("Sterling")

863,064

(688,064)

175,000

Argos Resources Ltd ("Argos")

310,775

(156,975)

153,800

Falkland Oil & Gas Ltd ("Falkland")

182,772

165,228

348,000

Pancontinental Oil & Gas NL ("Pancontinental")

393,246

(40,328)

352,918

2,624,500

(1,159,782)

1,464,718

On 30 June 2013 the market value of the Company's holding of 2,000,000 (2012:2,000,000) ordinary fully paid shares in Desire, representing 0.58% (2012:0.58%) of the issued share capital of the company was £237,600 (2012:£435,000) (11.88p per share (2012: 21.75p per share)). During the year, the Company disposed of nil (2012:450,000) ordinary shares in Desire, realising a profit/(loss) of £nil (2012:profit £100,303) (after expenses) which is included in the Statement of Comprehensive Income.

On 30 June 2013 the market value of the Company's holding of 500,000 (2012:500,000) ordinary fully paid shares in Sterling representing 0.23% (2012:0.23%) of the issued share capital of the Company was £176,250 (2012:175,000) (35.25p per share, (2012:35.00p per share)). During the year, the Company disposed of nil (2012:1,000,000) ordinary shares in Sterling, realising a profit/(loss) of £nil (2012:loss of £1,326,225) (after expenses) which is included in the Statement of Comprehensive Income.

On 30 June 2013 the market value of the Company's holding of 1,000,000 (2012:1,000,000) ordinary fully paid shares in Argos, representing 0.46% (2012:0.46%) of the issued share capital of the company was £188,800 (2012:£153,800) (18.88p per share, (2012:15.38p per share)). No shares were disposed in the current or prior year.

On 30 June 2013 the market value of the Company's holding of 200,000 (2012:400,000) ordinary fully paid shares in Falkland representing 0.06% (2012:0.13%) of the issued share capital was £53,000 (2012:£348,000) (26.50p per share, (2012:87.00p)). During the year, the Company disposed of 200,000 (2012:105,000) ordinary shares in Falkland, realising a profit of £69,043 (2012: profit of £54,644) (after expenses) which is included in the Statement of Comprehensive Income.

On 30 June 2013 the market value of the Company's holding of 3,000,000 (2012:3,000,000) ordinary fully paid shares in Pancontinental, representing 0.26% (2012:0.27%) of the issued share capital of the company was £90,525 (2012:£352,918) (3.02p per share, (2012:11.76p per share)). No shares were disposed in the current or prior year.

NOTES TO THE FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 30 JUNE 2013

6. OTHER RECEIVABLES

2013

2012

£

£

Prepayments

7,642

7,430

7. CASH AND CASH EQUIVALENTS

2013

2012

£

£

Cash at bank

226,565

251,471

Cash and cash equivalents are considered to be highly liquid, so that book cost is considered equivalent to fair value.

8. TRADE AND OTHER PAYABLES

2013

2012

£

£

Amounts due to shareholders from returns of capital

65,319

66,319

Accrued expenses

24,602

31,748

89,921

98,067

9. SHARE CAPITAL

2013

2012

£

£

Authorised:

200,000,000 (2012: 200,000,000) ordinary shares of 20p each

40,000,000

40,000,000

 200,000,000 (2012: 200,000,000) redeemable "B" shares of 1p

 each

2,000,000

2,000,000

Allotted, called up, fully-paid:

2013No.

2012No.

2013£

2012£

'000

'000

In issue:

Ordinary shares

9,830.3

9,730.3

1,966,060

1,946,060

"B" Class shares

-

-

-

-

Ordinaryshares

Ordinaryshares

Movement

No.

£

Balance at 30 June 2012

9,730,300

1,946,060

Ordinary shares issued

100,000

20,000

Balance at 30 June 2013

9,830,300

1,966,060

On 20 February 2012 the Company increased the authorised share capital from £2,151,000 divided into 10,000,000 ordinary shares of 20p each and 15,100,000 redeemable "B" shares of 1p each to £42,000,000 divided into 200,000,000 ordinary shares of 20p each and 200,000,000 redeemable "B" shares of 1p each.

NOTES TO THE FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 30 JUNE 2013

9. SHARE CAPITAL (continued)

On 29 November 2011, 2,200,000 ordinary shares were issued to G Walsh and T P O'Gorman, both Directors for the Company, at a price of 20 pence per share.

10. SHARE PREMIUM AND SHARE OPTIONS

Share Premium Account

Share option Account

£

£

1 July 2011

451,341

128,111

Cost of share options

-

177,124

Expired redemption of B shares not taken up

28,954

-

At 30 June 2012

480,295

305,235

Share option exercise

-

(11,808)

Premium on issue of option shares

11,808

-

At 30 June 2013

492,103

293,427

On 22 September 2009 the Company granted 250,000 share options at a weighted average exercise price of 20p per share. The fair value of those options granted was £128,111 using the Black Scholes valuation model.

On 5 December 2011 the Company granted 1,500,000 share options at a weighted average exercise price of 20p per share. The fair value of those options granted was £177,124 and was calculated using the Finnerty valuation model where a discount of 13% for the blocking period for disposing of the shares has been used. The share options are ascribed an expense for the year ended 30 June 2013 of £nil (2012:£177,124).

As at 30 June 2013, options were outstanding over 1,650,000 (2012:£1,750,000) ordinary 20p shares, with a weighted average exercise price of 20p (2012:20p). The options are exercisable at the election of the option holder, expiring 31 December 2016. During the year 100,000 options were exercised and £11,808 of the option reserve was released to share premium.

11. FINANCIAL RISK

The Company's investment activities expose it to a variety of financial risks: market risk (including currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial performance.

a) Market Risk

i) Foreign exchange risk

The Company is not exposed directly to foreign exchange risk as it invests in companies listed on the London Stock Exchange, predominately denominated in Sterling and has cash balances denominated in Sterling.

ii) Price Risk

Price risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate due to changes in market prices. The Company is exposed to price risk on the investments held by the Company and classified by the Company on the Statement of Financial Position as fair value through profit or loss. To manage its price risk management closely monitor the activities of the underlying investments.

NOTES TO THE FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 30 JUNE 2013

11. FINANCIAL RISK (Continued)

The Company's exposure to price risk is as follows:

Cost

Fair Value

Fair Value Through Profit or Loss, as at 30 June 2013

2,533,114

746,175

Fair Value Through Profit or Loss, as at 30 June 2012

2,624,500

1,464,718

The Company's investments are all publicly traded and listed on either the Alternative Investment Market ("AIM") or on the Australian Stock Exchange. The Company's sensitivity to a 15% increase/(decrease) in market price would be £111,926/(£111,926) (2012: £219,708 /(£219,708)). A positive number indicates an increase in the net assets attributable to ordinary shareholders and a negative number indicates a decrease. The 15% increase/(decrease) on the net assets attributable to ordinary shareholders would have the same impact on the post tax profit for the year. 15% represents management's assessment of a reasonably possible change in the market prices.

iii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not significantly exposed to interest rate risk as it does not have any borrowings, however, the Company does have short term (

An increase in the interest rates of 1% would cause the Company's net financial assets to increase by £2,266 (2012:£2,515). An equal change in the opposite direction would have decreased the net assets attributable to shareholders by an equal but opposite amount. 1% represents the management's assessment of a reasonably possible change in interest rates.

The following table summarises the Company's exposure to interest rate risks: