These consolidated financial statements have been prepared using
policies based on International Financial Reporting Standards (IFRS
and IFRIC interpretations) issued by the International Accounting
Standards Board ("IASB") as adopted for use in the EU. They do not
include all disclosures that would otherwise be required in a
complete set of financial statements and should be read in
conjunction with the 2012 Annual Report. The financial information
for the half years ended 30 June 2013 and 30 June 2012 does not
constitute statutory accounts within the meaning of Section 434(3)
of the Companies Act 2006 and is unaudited.
The annual financial statements of Equatorial Palm Oil plc are
prepared in accordance with IFRSs as adopted by the European Union.
The comparative financial information for the year ended 31
December 2012 included within this report does not constitute the
full statutory accounts for that period. The statutory Annual
Report and Financial Statements for 2012 have been filed with the
Registrar of Companies. The Independent Auditors' Report on that
Annual Report and Financial Statement for 2012 was unqualified, but
did draw attention by way of emphasis to the disclosures on going
concern, and did not contain a statement under 498(2) or 498(3) of
the Companies Act 2006.
The same accounting policies, presentation and methods of
computation are followed in these condensed consolidated financial
statements as were applied in the Group's latest annual audited
financial statements.
In addition, the IASB has issued a number of IFRS and IFRIC
amendments or interpretations since the last annual report was
published. It is not expected that any of these will have a
material impact on the Group.
2. Going Concern
In December 2010, the Company entered into and announced a joint
venture with Biopalm. As agreed under the terms of the joint
venture agreement, dated 10 December 2010, entered into between
Biopalm and EPO (the "Investment Agreement"), EPO, in February
2011, transferred its oil palm assets in Liberia together with
US$7.5m to LPD, and Biopalm transferred US$22.5m to LPD. Under the
Investment Agreement, Biopalm is required to arrange and/or
contribute, either directly or through any member of its group, any
external funding required by LPD (up to a maximum of US$30m) (the
"Commitment").
On 8 July 2013, the Company announced that it had issued a
written notice to Biopalm setting out that Biopalm is in material
breach of its obligations under the Investment Agreement having
failed to provide the Commitment.
On 14 August 2013, the Company announced that no resolution of
the dispute had taken place and that the next step for dispute
resolution is to seek resolution by arbitration.
As a result, EPO, since formation of the JV, has advanced an
additional $8.0m to LPD to date (in addition to $7.5m on inception
of the JV in February 2011) in anticipation of the provision of the
External Funding by Biopalm.
EPO continues to negotiate and work with Biopalm regarding the
Commitment with a view to an amicable solution being reached, but
has reserved all rights to take action against Biopalm under the
Investment Agreement.
In July 2013, the Company announced certain fund raising efforts
had been concluded which included equity and loans.
On 16 July 2013, the Company announced it had entered into short
term loan agreements with Adelise Services Limited ("Adelise"), a
company associated with Michael Frayne, Executive Chairman of EPO,
for the advance of GBP29,745 and US$425,000 to the Company (the
"Adelise Loans").
The July Raise allowed the Company to clear the majority of
creditors, including full repayment of the balance of the loan
provided by Adelise announced 16 July 2013, and will allow the
Company to continue to fund JV operations on a care and maintenance
basis for approximately two months from today.
There a number of short term facilities and funding solutions
currently at an advanced stage of negotiations but not yet
finalised. Whilst there can be no certainty over the level of funds
to be raised or that these funding sources will formally complete,
the Directors remain confident in being able to raise further funds
to finance future working capital requirements of the Group for the
next twelve months of operations.
Whilst the Board remains confident in its ability to raise
funds, the conditions set out above indicate the existence of a
material uncertainty which may cast significant doubt about the
Group's ability to continue as a going concern. The financial
statements do not include the adjustments that would result if the
Group was unable to continue as a going concern, which would
principally relate to the impairment of the investment in the
JV.
3. Loss per share
The basic loss per share is derived by dividing the loss for the
Period attributable to ordinary shareholders by the weighted
average number of shares in issue.
As inclusion of the potential Ordinary shares would result in a
decrease in the loss per share they are considered to be
anti-dilutive, as such, a diluted earnings per share is not
included.
Period ended Period ended Year ended
30 June 2013 30 June 2012 31 December 2012
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Loss for the period (1,656) (1,570) (3,814)
Weighted average number of Ordinary
shares of 1p in issue 145.7 million 127.3 million 127.8 million
Loss per share - basic (1.1) cents (1.2) cents (3.0) cents
4. Investment in joint venture
The results of the joint venture for the period of six months to
30 June 2013 were as follows:
30 June 31 December
30 June 2013 2012 2012
$'000 $'000 $'000
Non-current assets 37,322 27,412 31,693
Current assets 7,807 14,270 8,089
Non-current liabilities - - -
Current liabilities (8,740)(1) (664) (1,576)
TOTAL NET ASSETS 36,389 41,018 38,206
(1) $5,656,000 relates to amounts
payable to the Company
Income 132 574 1,693
Expenses (1,741) (1,522) (5,453)
Loss after tax (1,609) (948) (3,760)
The Company, through its investment in Equatorial Biofuels
(Guernsey) Limited, owns a 50% interest in Liberian Palm
Developments Limited. The Company's interest in Liberian Palm
Developments Limited is as follows:
$'000
Interest in joint venture at 1 January
2012 20,982
Share of losses of joint venture (474)
Interest in joint venture at 30 June
2012 20,508
Interest in joint venture at 1 January
2012 20,982
Share of losses of joint venture (1,879)
Interest in joint venture at 31 December
2012 19,103
Interest in joint venture at 1 January
2013 19,103
Share of losses of joint venture (805)
Interest in joint venture at 30 June
2013 18,298
5. Called up share capital
Period ended Period ended Period ended
30 June 30 June 31 December
2013 2012 2012
Allotted, called up and fully paid $'000 $'000 $'000
-------------------------------------- -------------- -------------- --------------
159,144,092 Ordinary shares of 1p
each (2012: 128,316,434) 2,445 1,969 1,969
-------------------------------------- -------------- -------------- --------------
During the Period the Group issued 30,827,658 shares at an
average price of 10.4 pence per share ($0.16 cents).
6. Share based payments
Warrants
Details of the warrants outstanding during the Period are as
follows:
Weighted
Number of average exercise
warrants price
Outstanding at 1 January 2013 8,188,928 17.5p
Issued during the period 23,900,000 13.8p
Expired during the period (5,990,171) 17.5p
Outstanding at 30 June 2013 26,098,757 14.1p
Exercisable at 30 June 2013 26,098,757 14.1p
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