Interim Results

23 September 2014

ORACLE COALFIELDS PLC

("Oracle" or the "Company" or the "Group")

UNAUDITED INTERIM RESULTS FOR THE 6 MONTHS TO 30 JUNE 2014

Oracle Coalfields PLC (AIM:ORCP), the UK developer of a lignite coal mine located in the south-eastern Sindh Province of Pakistan, today announces its unaudited interim results for the six months ended 30 June 2014.

Period Operational Highlights

· A "No Objection" letter was issued by the Environmental Protection Agency Government of Sindh (SEPA) on 17 January 2014 for the Environmental and Social Impact Assessment for Block VI of the Thar Coalfield submitted in 2013 concerning its environmental plan.

Post Period Events

· Equity placing of £775,000 (gross), as announced on 16 September 2014. 

Shahrukh Khan, CEO of Oracle, said, "The power shortage in Pakistan remains acute and the Government remains steadfast in its objective of dealing with the country's energy crisis. The Government continues to support the Company in the development of the coal mine and power project.

"In preparation for the final investment decision, we are currently working with our Chinese partners on details of the Engineering Procurement and Construction (EPC) contracts for both the mine and the power plant, and also on debt financing supported by Sinosure the state-owned China Export and Credit Insurance Corporation.

"The Company has a plan to deliver various milestones in preparation for the larger funding required to proceed with mine and power plant development in 2015. The recent equity placing announced by the Company assists us in delivering these milestones which we are endeavouring to reach by the end of 2014. We are grateful for investor support in this interim funding and remain on course in our ambition to develop Pakistan's first large scale coal mining and power plant project in the private sector."

For further information:

In accordance with the AIM Rules for Companies, a copy of this announcement will be made available on Oracle's website at: www.oraclecoalfields.com

CHAIRMAN'S STATEMENT FOR THE 6 MONTHS TO 30 JUNE 2014

Chairman's Statement

I am pleased to present the Company's results for the six months to the 30th June 2014.

The Company successfully raised £775,000 (gross) by the issue of new shares in the third quarter of 2014. This money is being used to continue project development. 

Operational update pre and post interim results

Following the environmental studies on the mine site and the submission of the Environmental and Social Impact Assessment to the Sindh Environmental Protection Agency (SEPA) in April 2013, a "No Objection" letter was issued by SEPA on 17 January 2014 for Block VI of the Thar Coalfield, a significant step towards the mine development.

Through this period and since, the company has continued to work with its Chinese partners:

· CAMCE, a division of Sinomach, for the development of a 4.2MT mine, and

· SEPCO, a subsidiary of Power Construction Corporation of China, for the development of a 600 MW mine-mouth power plant.

In preparation for the final investment decision, we are currently working with our Chinese partners on details of the Engineering Procurement and Construction (EPC) contracts for both the mine and the power plant, and also on debt financing supported by Sinosure the state-owned China Export and Credit Insurance Corporation. In Pakistan, discussions are under way with provincial Sindh government departments regarding the coal price and are expected to shortly commence at the Federal government level regarding the electricity tariff. Transmission lines and resettlement are additional plans to be finalised during the course of this year. Delay in the execution of the above, particularly at the [local] government level in Pakistan, may hinder the date of project fruition.

Summary of Results

Our financial results for the six months to the 30 June 2014 show an operational loss for Oracle Coalfields PLC Group of Companies after taxation of £377,966 (2013: £288,499). At the period end, the Group had cash and cash equivalents of £127,797 (2013: £296,009) and total assets less current liabilities of £3,850,316 (2013: £4,130,546). The basic loss per share was 0.12p (2013: loss 0.11p).

Funding Requirements

As mentioned above, during September, a further issue of equity was made in order to provide working capital funding for the company. A total of 62,000,000 new shares were issued at a price of 1.25 pence which raised a total of £775,000 (gross). Within this total 3,768,253 shares were subscribed by the Directors and senior employees of the Company.

Looking Ahead

The power shortage in Pakistan remains acute and the Government, elected in May 2013, remains steadfast in its objective of dealing with the country's energy crisis. The Government continues to support the Company in the development of the coal mine and power project.

The Board extends its appreciation to the Thar Coal Energy Board, the Energy Department, the Sindh Coal Authority and Government of Sindh for their continued support. The Board also continues to be very grateful for the patience and support of our shareholders.

Adrian Loader

Chairman of the Board - Oracle Coalfields PLC

Date: 23 September 2014

CONSOLIDATED INCOME STATEMENT

FOR THE 6 MONTHS ENDED 30 JUNE 2014

(Unaudited) (Unaudited) (Audited)

6 months to 6 months to Year ended

30 June 2014 30 June 2013 31 Dec 2013

£ £ £

CONTINUING OPERATIONS

Revenue - - -

Other operating income 491 - 82

Administrative expenses (379,827) (290,310) (1,041,434)

OPERATING LOSS (379,336) (290,310) (1,041,352)

Finance costs - - -

Finance income 1,370 1,811 3,010

LOSS BEFORE TAX (377,966) (288,499) (1,038,342)

Tax - - -

LOSS FOR THE PERIOD (377,966) (288,499) (1,038,342)

Loss attributable to:

Owners of the parent (377,966) (288,499) (1,028,042)

Non-controlling interests - - (10,300)

(377,966) (288,499) (1,038,342)

Earnings per share:

Basic loss per share (0.12p) (0.11p) (0.37p)

Diluted loss per share (0.11p) (0.10p) (0.35p)

STATEMENT OF COMPREHENSIVE INCOME

FOR THE 6 MONTHS ENDED 30 JUNE 2014

(Unaudited) (Unaudited) (Audited)

6 months to 6 months to Year ended

30 June 2014 30 June 2013 31 Dec 2013

£ £ £

LOSS FOR THE PERIOD (377,966) (288,499) (1,038,342)

OTHER COMPREHENSIVE INCOME

Item that will not be reclassified to profit or loss:

Exchange difference arising on consolidation 37,245 6,820 (3,272)

Income tax relating to components of other

 comprehensive income - - -

OTHER COMPREHENSIVE INCOME

FOR THE PERIOD, NET OF INCOME TAX 37,245 6,820 (3,272)

TOTAL COMPREHENSIVE INCOME

FOR THE PERIOD (340,721) (281,679) (1,041,614)

Total comprehensive income attributable to:

Owners of the parent (340,721) (281,679) (1,031,314)

Non-controlling interests - - (10,300)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

(Unaudited) (Unaudited) (Audited)

As at As at As at

30 June 2014 30 June 2013 31 Dec 2013

Notes £ £ £

ASSETS

NON-CURRENT ASSETS

Intangible assets 3,841,101 3,939,993 3,755,014

Property, plant and equipment 1,067 1,629 1,228

Loans and other financial instruments - 60,910 -

3,842,168 4,002,532 3,756,242

CURRENT ASSETS

Trade and other receivables 59,118 47,584 40,952

Cash and cash equivalents 127,797 296,009 538,789

186,915 343,593 579,741

TOTAL ASSETS 4,029,083 4,346,125 4,335,983

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital 4 327,009 278,294 327,009

Share premium 7,672,130 6,898,709 7,672,130

Share scheme reserve 63,070 63,070 63,070

Translation reserve 13,074 (12,369) (22,461)

Retained earnings (4,230,696) (3,113,187) (3,852,730)

3,844,587 4,114,517 4,187,018

Non-controlling interest 5,729 16,029 5,729

TOTAL EQUITY 3,850,316 4,130,546 4,192,747

LIABILITIES

CURRENT LIABILITIES

Trade and other payables 178,767 215,579 143,236

TOTAL LIABILITIES 178,767 215,579 143,236

TOTAL EQUITY AND LIABILITIES 4,029,083 4,346,125 4,335,983

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE 6 MONTHS ENDED 30 JUNE 2014

Share

Called up Retained Share scheme

share capital earnings premium reserve

£ £ £ £

Balance at 31 December 2012 216,011 (2,824,688) 6,070,418 63,070

Changes in equity

Issue of share capital 62,283 - 828,291 -

Loss for the period - (288,499) - -

Other comprehensive income - - - -

Balance at 30 June 2013 278,294 (3,113,187) 6,898,709 63,070

Changes in equity

Issue of share capital 48,715 - 773,421 -

Loss for the period - (739,543) - -

Other comprehensive income - - - -

Balance at 31 December 2013 327,009 (3,852,730) 7,672,130 63,070

Changes in equity

Issue of share capital - - - -

Loss for the period - (377,966) - -

Other comprehensive income - - - -

Balance at 30 June 2014 327,009 (4,230,696) 7,672,130 63,070

Translation Non-controlling Total

reserve Total interest equity

£ £ £ £

Balance at 31 December 2012 (19,189) 3,505,622 16,029 3,521,651

Changes in equity

Issue of share capital - 890,574 - 890,574

Loss for the period - (288,499) - (288,499)

Other comprehensive income 6,820 6,820 - 6,820

Balance at 30 June 2013 (12,369) 4,114,517 16,029 4,130,546

Changes in equity

Issue of share capital - 822,136 - 822,136

Loss for the period - (739,543) (10,300) (749,843)

Other comprehensive income (10,092) (10,092) - (10,092)

Balance at 31 December 2013 (22,461) 4,187,018 5,729 4,192,747

Changes in equity

Issue of share capital - - - -

Loss for the period - (377,966) - (377,966)

Other comprehensive income 35,535 35,535 - 35,535

Balance at 30 June 2014 13,074 3,844,587 5,729 3,850,316

CONSOLIDATED CASHFLOW STATEMENT

FOR THE 6 MONTHS ENDED 30 JUNE 2014

(Unaudited) (Unaudited) (Audited)

6 months to 6 months to Year ended

30 June 2014 30 June 2013 31 Dec 2013

Notes £ £ £

Cash flows from operating activities

Cash generated from operations 1 (352,875) (482,820) (1,007,580)

Net cash from operating activities (352,875) (482,820) (1,007,580)

Cash flows from investing activities

Purchase of intangible fixed assets (55,872) (235,435) (272,169)

Purchase of tangible fixed assets - - -

Cash acquired with subsidiary - - 804,516

Interest received 1,065 1,506 2,395

Net cash from investing activities (54,807) (233,929) 534,742

Cash flows from financing activities

Share issue - 956,908 1,006,609

Cost of share issue (4,022) (43,818) (94,393)

Net cash from financing activities (4,022) 913,090 912,216

(Decrease)/Increase in cash

 and cash equivalents (411,704) 196,341 439,378

Effect of the exchange rate changes on the

 balance of cash held in foreign currencies at

 the beginning of the financial period 712 76 (181)

Cash and cash equivalents at beginning

 of period 2 538,789 99,592 99,592

Cash and cash equivalents at end of period 127,797 296,009 538,789

NOTES TO THE CASH FLOW STATEMENT

FOR THE 6 MONTHS ENDED 30 JUNE 2014

1. RECONCILIATION OF LOSS BEFORE TAX TO CASH GENERATED FROM OPERATIONS

(Unaudited) (Unaudited) (Audited)

6 months to 6 months to Year ended

30 June 2014 30 June 2013 31 Dec 2013

£ £ £

Loss before tax (377,966) (288,499) (1,038,342)

Depreciation 83 83 166

Impairment of exploration costs - - 217,519

Impairment of loans - - 58,334

Impairment of accrued interest receivable 305 - 5,904

Finance income (1,370) (1,811) (3,010)

(378,948) (290,227) (759,429)

(Increase)/Decrease in trade and

 other receivables (18,096) (17,779) 5,722

Increase/(Decrease) in trade and

 other payables 44,169 (174,814) (253,873)

Cash generated from operations (352,875) (482,820) (1,007,580)

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the cash flow statement in respect of cash and cash equivalents are in respect of the statement of financial position amounts:

Period ended 30 June 2014

(Unaudited) (Audited)

As at As at

30 June 2014 31 Dec 2013

£ £

Cash and cash equivalents 127,797 538,789

Period ended 30 June 2013

(Unaudited) (Audited)

As at As at

30 June 2013 31 Dec 2012

£ £

Cash and cash equivalents 296,009 99,592

Period ended 31 December 2013

(Audited) (Audited)

As at As at

31 Dec 2013 31 Dec 2012

£ £

Cash and cash equivalents 538,789 99,592

Cash and cash equivalents consist of cash in hand and balances with banks.

NOTES TO THE FINANCIAL STATEMENTS UNAUDITED RESULTS

FOR THE 6 MONTHS ENDED 30 JUNE 2014

1. INFORMATION

These interim consolidated financial statements for the six month period ended 30 June 2014 have been prepared using the historical cost convention, on a going concern basis and in accordance with the International Financial Reporting Standards ("IFRS") including IAS 34 'Interim Financial Reporting' and IFRS 6 'Exploration for and Evaluation of Mineral Resources', as adopted by the European Union ("EU"). They have also been prepared on a basis consistent with the accounting policies expected to be applied for the year ending 31 December 2014, and which are also consistent with the accounting policies applied for the year ended 31 December 2013 except for the adoption of new standards and interpretations.

These interim results for the six months ended 30 June 2014 are unaudited and do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial statements for the year ended 31 December 2013 have been delivered to the Registrar of Companies and filed at Companies House and the auditors' report on those financial statements was unqualified and did not contain a statement made under Section 498(2) or Section 498(3) of the Companies Act 2006.

2. ACCOUNTING POLICIES

Reporting entity

Oracle Coalfields PLC is a company domiciled in United Kingdom. The address of the Company's registered office is Richmond House, Broad Street, Ely, Cambridgeshire, CB7 4AH. The Company primarily is involved in the exploration for coal.

Compliance with accounting standards

These financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The financial statements have been prepared under the historical cost convention.

Significant accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for revenues and expenses during the year and the amounts reported for assets and liabilities at the balance sheet date. However, the nature of estimation means that the actual outcomes could differ from those estimates.

The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are the measurement of any impairment on intangible assets and the estimation of share-based payment costs. The Company determines whether there is any impairment of intangible assets on an annual basis. The estimation of share-based payment costs requires the selection of an appropriate model, consideration as to the inputs necessary for the valuation model chosen and the estimation of the number of awards that will ultimately vest.

Intangible fixed assets - exploration costs

Expenditure on the acquisition costs, exploration and evaluation of interests in licences including related overheads are capitalised. Such costs are carried forward in the statement of financial position under intangible assets and amortised over the minimum period of the expected commercial production of coal in respect of each area of interest where:

a) such costs are expected to be recouped through successful development and exploration of the area of interest or alternatively by its sale;

b) exploration activities have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active operations in relation to the areas are continuing.

An annual impairment review is carried out by the directors to consider whether any exploration or development costs have suffered impairment in value where a site has been abandoned or confirmed as no longer technically feasible. Accumulated costs in respect of areas of interest that have been abandoned are written off to the income statement in the year in which the area is abandoned.

Exploration costs are carried at cost less any provision from impairment.

Property, plant and equipment

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Motor vehicles - 20% on reducing balance

Computer equipment - 30% on reducing balance

Investments

Fixed asset investments are stated at cost. The investments are reviewed annually and any impairment is taken directly to the income statement.

Financial instruments

Financial assets and liabilities are recognised on the balance sheet when the Company becomes a party to the contractual provisions of the instrument.

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the statement of financial position date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Profit and losses of overseas subsidiary undertakings are translated into sterling at the average rate for the year. The statements of financial position of overseas subsidiary undertakings are translated at the rate ruling at the statement of financial position date. Differences arising from the translation of Group investments in overseas subsidiary undertakings are recognised as a separate component of equity.

Net exchange differences classified as equity are separated tracked and the cumulative amount disclosed as a translation reserve.

The principal place of business of the Group is the United Kingdom with sterling being the functional currency. Funds are advanced to Pakistan as required to finance the exploration costs which are payable in Rupees.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to the statement of profit or loss on a straight line basis over the period of the lease.

Share-based payment transactions

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of all options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Where terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the income statement over the remaining vesting period.

Where equity instruments are granted to persons other than employees, the income statement or share premium account if appropriate, are charged with the fair value of goods and services received.

Cash and cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement comprise cash and bank balances.

3. LOSS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares of 327,009,493 (30 June 2013 - 270,379,330 and 31 December 2013 - 282,644,053) outstanding during the period.

Diluted earnings per share is calculated using the weighted average number of shares of 337,806,159 (30 June 2013 - 283,910,514 and 31 December 2013 - 293,440,719) adjusted to assume the conversion of all dilutive potential ordinary shares.

4. CALLED UP SHARE CAPITAL

(Unaudited) (Unaudited) (Audited)

30 June 2014 30 June 2013 31 Dec 2013

£ £ £

Allotted, called up and fully paid

327,009,493 Ordinary shares of 1p each 327,009 278,294 327,009

The number of shares in issue was as follows:

Number of shares

Balance as 31 December 2012 216,011,000

Issued during the period 62,282,707

Balance at 30 June 2013 278,293,707

Issued during the period 48,715,786

Balance at 31 December 2013 327,009,493

Issued during the period -

Balance at 30 June 2014 327,009,493

5. POST BALANCE SHEET EVENTS

On 16 September 2014 the Company announced that it has raised £775,000 (before expenses) via the placing of 62,000,000 new ordinary shares of 0.1 pence each in the Company at a placing price of 1.25 pence per share. As a result of the placing the Company's issued share capital now comprises 389,09,493 ordinary shares.