Notes to the financial statements

for the financial year ended 30 September 2021

1.      Accounting policies

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

1.1     Basis of preparation and going concern

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and International Financial Reporting Interpretations Committee ("IFRIC") interpretations and with those parts of the Isle of Man Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historic cost convention.

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Details of the Group's significant accounting judgments are set out in these financial statements and include:

Judgements

-     Purchase of remaining interest in Greenfield Energy LLC ("Greenfield")

On acquisition of the remaining 50% of Greenfield not already owned by the Group, the Directors were required to assess whether the acquisition was of a business, as defined by IFRS 3, or a group of assets. They determined that, as Greenfield had, at the date of acquisition, neither outputs, namely goods or services to customers, nor an organised workforce, or access to such a workforce, the IFRS 3 definition of a business combination was not met. Therefore, the Directors concluded that the acquisition represented an asset purchase to be accounted for at cost.

Further judgement was then required concerning:

i.              the identification of assets purchased; and

ii.             measurement of accumulated cost of the purchase, including the accumulated cost of the Group's initial holding in Greenfield up to the date of acquisition of the remaining 50% interest; and the cost of the remaining 50%, which is principally determined by reference to the directors' estimate of the probability of those events occurring that would trigger the issue of equity consideration under the agreement to purchase the remaining interest.

-     Impairment indicator assessment on intangible assets and property, plant and equipment used in exploration and evaluation activities

The Directors consider that impairment indicators existed at 30 September 2021 concerning its tangible and intangible assets employed in exploration and evaluation activities in relation to oil shale. Having carried out a subsequent impairment review the directors have decided to impair these assets in full at 30 September 2021.

-     Internally generated development assets

Greenfield has incurred expenditure on researching and developing the design and operation of a pilot plant and processes that is not of a scale economically feasible for commercial production. Judgement is required In determining what constitutes research expenditure, to be expensed in profit and loss, and what constitutes development expenditure that meets the criteria set out in IAS 38, which must be capitalised. Qualifying expenditure is capitalised from the point at which Greenfield's board are satisfied as to the technical feasibility of the production processes. The board have deemed that this was achieved when the preliminary results of the Pre-Feed study were released, which indicated the use of the Oil Sands Technology was likely to be economically viable. Judgements on these matters affect the Group's share of Greenfield's net assets and profits that are recognised under the equity method up to the point that the remaining 50% of Greenfield was acquired and the cost of intangible assets thereafter.

-     Joint arrangements

Prior to the acquisition of the remaining 50% of Greenfield, judgement was required In assessing whether the Group was party to a joint arrangement under IFRS 11. The Group considered whether decisions about relevant activities of the investee entity required the unanimous consent of the investors ("joint control"). Having established the existence of joint control, judgement was required to establish whether the structure of the arrangement, the contractual terms or other facts and circumstances give the parties to the arrangement rights to the assets and obligations for the liabilities of the investee entity. In those circumstances, the entity is a joint operation. Having evaluated the matter, the Group determined that the parties to the arrangement did not have rights to the assets and obligations of the investee entity and therefore the joint arrangement was a joint venture prior to the acquisition of control of Greenfield.

Estimates

-     Share based payments

Estimates were required in determining the fair value of share options and warrants granted in the year including future share price volatility and the instrument life. Volatility is estimated using TomCo's historic share prices for a period of time that matches the exercise period of the warrant or option. This assumes that historic share price volatility is the best estimate of future volatility. The Black-Scholes model is used for valuing both options and warrants. Estimates are also made of the likely time of exercise of the options or warrants.

In measuring the value of equity consideration for the purchase of the remaining 50% of Greenfield, the Directors have applied IFRS 2. Where goods or services are provided by persons other than employees, the value of the share-based payment is determined by reference to the fair value of the assets acquired. Because of the unique nature of the principal asset acquired, namely the pilot plant processes developed by Greenfield, the directors have determined that cost is the best estimate of fair value at acquisition.

The Group has consistently applied all applicable accounting standards.

Going concern

At 28 March 2022, the Group had cash of approximately £1.12 million, and a loan due to Valkor of approximately £1.14 million ($1.5 million).

The Directors have prepared a cash flow forecast for the period to 30 June 2023. The forecast, which includes capital expenditure committed at the date of this report, indicates that the Group needs to raise additional finance in order to continue as a going concern. The cash flow forecast assumes, amongst other things, the following:

• that either the Valkor loan of $1.5 million, which is due for repayment by 30 May 2022, is extended by mutual agreement, which would lead to an increase in financing costs, or is settled by the grant of a production share over wells on land now occupied by the group under arrangements concluded after the year-end.

• the payment which is due in respect of the TSHII option by 31 December 2022 of $16,250,000 requires sufficient additional funding to be raised prior to December 2022 otherwise the option lapses. Should the option lapse because funding cannot be secured then the Group's current business plan would be curtailed but, in the Board's view, the Group would remain a going concern subject to the occurrence of other currently unforeseen events.

The cash currently held by the Group is sufficient to fund ongoing overhead costs for approximately 12 months, beyond which further funding will be required.

The Group has a reasonable expectation that it can raise the required additional funds based on a history of raising funds. However, there are currently no binding agreements in place.

It is possible that rather than extend the term or grant a production share, the Group would wish to refinance the Valkor loan by May 2022 and that additional capital expenditure beyond that committed at the date of this report will be necessary prior to April 2023 to maximise the opportunities presented by, in particular, Greenfield. Any such refinance or additional expenditure would be subject to funding, in whole or in part, via additional debt or equity or a combination of both.

The Directors note that because of both the lingering effects of COVID-19 and the war in Ukraine there remains considerable uncertainty concerning the global economy and oil prices continue to be volatile, albeit reaching higher levels of late, which may have implications in respect of additional funding, either for the Group's day-to-day operations or additional capital expenditure. These conditions represent a material uncertainty which may cast significant doubt over the Group's ability to continue as a going concern. Whilst acknowledging this material uncertainty, the Directors remain confident of raising any additional funds required and therefore the Directors consider it appropriate to prepare the financial statements on a going concern basis. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

1.2     Future changes in accounting standards

The IFRS financial information has been drawn up on the basis of accounting standards, interpretations and amendments effective at the beginning of the accounting period.

There are currently no new or revised standards, amendments and interpretations to existing standards that are not effective for the financial year ended 30 September 2021 and have not been adopted early, which, when effective, might have an impact upon the Group's financial statements.

1.3     Basis of consolidation

The Group accounts consolidate the accounts of the parent company, TomCo Energy plc, and all of its subsidiary undertakings drawn up to 30 September 2021. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

The acquisition of subsidiaries where the acquisition represents the purchase of a business is accounted for on the purchase basis. A subsidiary is consolidated where the Company has control over an investee. The Group controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control. On acquisition, all of the subsidiary's assets and liabilities which existed at the date of acquisition are recorded at their fair values reflecting their condition at the time. If, after re-assessment, the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the statement of comprehensive income.

Acquisitions of subsidiaries where the IFRS 3 definition of a business combination are not met are accounted for as the purchase of relevant assets less liabilities at cost. Where the acquisition is a stepped acquisition, cost represents the accumulated cost, under the equity method, of the Group's initial interest in the subsidiary plus cost of equity consideration measured in accordance with IFRS 2. Identifiable assets acquired are stated at their respective relative fair values.

Entities over which the Group had joint control were classified as joint ventures and were accounted for using the equity method of accounting. On initial recognition the investment in the joint venture was recognised at cost. The carrying amount was increased or decreased to recognise the Group's share of the profit or loss of the joint venture after the date of acquisition. During the year, the Group acquired control of the remaining unowned interest in it's joint venture. The accumulated cost on the equity basis to the date of acquisition forms part of the total acquisition cost referred to in the preceding paragraph.

1.4     Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the Board of Directors.

Based on an analysis of risks and returns, the Directors consider that the Group has two principal business segments based on geographical location. The loss before taxation arises principally within the UK and US. Net assets are principally in the UK and the US.

1.5     Revenue

Revenue represents the Group's share of sales of oil during the year, excluding sales tax and royalties. Income arises from the US and is recognised when the oil is delivered to the customer. No revenue has arisen in the current or prior year.

1.6     Finance income

Finance income is accounted for on an effective interest basis.

1.7     Property, plant and equipment

Property, plant and equipment employed in exploration and evaluation activities are carried at cost. Following a review of the Group's activities, these assets have been impaired in full as at 30 September 2021.

1.8     Intangible assets

Exploration and development licences

The Group applies the full cost method of accounting for oil and gas operations. For evaluation properties, all mineral leases, permits, acquisition costs, geological and geophysical costs and other direct costs of exploration appraisal, renewals and development are capitalised as intangible fixed assets in appropriate cost pools, with the exception of tangible assets, which are classed as property, plant and equipment. Costs relating to unevaluated properties are held outside the relevant cost pool and are not amortised until such time as the related property has been fully appraised. When a cost pool reaches an evaluated and bankable feasibility stage, the assets are transferred from intangible to oil properties within property, plant and equipment.

Development assets

Greenfield has incurred expenditure on researching and developing the design and operation of a pilot plant and processes for oil sands extraction that is not of a scale economically feasible for commercial production. Development expenditure at acquisition is measured at cost. Development expenditure incurred following the acquisition of Greenfield that meets the requirements of IAS 38 for recognition as intangible assets are capitalised. All other expenditure is expensed. No amortisation is charged on such assets until commercial exploitation of the processes commences.

Technology licences

Amortisation is not charged on technology licences associated with oil and gas assets until they are available for use.

Patents and patent applications

Patents and patent applications acquired in consideration for a combination of cash and the issue of shares in subsidiary undertakings are recognised at fair value, and amortised over their expected useful lives, which is 12 years being the patent term.

1.9     Impairment

Exploration and development licences

Exploration and development assets are assessed for impairment when facts and circumstances suggest that the carrying amount may exceed the recoverable amount. In accordance with IFRS 6 the Group firstly considers the following facts and circumstances in their assessment of whether the Group's exploration and evaluation assets may be impaired, namely whether:

§ the period for which the Group has the right to explore in a specific area has expired during the period or will expire in the near future, and is not expected to be renewed;

§ substantive expenditure on further exploration for and evaluation of mineral resources in a specific area is neither budgeted nor planned;

§ exploration for and evaluation of hydrocarbons in a specific area have not led to the discovery of commercially viable quantities of hydrocarbons and the Group has decided to discontinue such activities in the specific area; and

§ sufficient data exists to indicate that although a development in a specific area is likely to proceed, the carrying amount of the exploration and evaluation assets is unlikely to be recovered in full, either from successful development or by sale.

The Directors have concluded that the above facts and circumstances applied in respect of its oil shale exploration and evaluation activities, because at present there is no programme in place or committed budget to continue exploration in this area. Having conducted a review, they have therefore determined to impair tangible and intangible assets employed in those activities in full. Impairment losses are recognised in the income statement and separately disclosed.

Research and development activities

The directors do not consider any impairment indicators exist with regard to the Group's research and development activities with regard to oil sands extraction. If any such facts or circumstances were noted, the Group would perform an impairment test in accordance with the provisions of IAS 36. 

Technology licences

The carrying amount of the Group's other intangible asset, its patents and technology licences, is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the asset's recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in the income statement.

1.10   Taxation

Taxation expense represents the sum of current tax and deferred tax.

Current tax is based on taxable profits for the financial period using tax rates that have been enacted or substantively enacted by the reporting date. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. If deferred tax arises from 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 nor loss, it is not accounted for. Deferred tax is determined using tax rates that have been enacted or substantively enacted at the reporting date and that are expected to apply when the related deferred income tax asset is realised, or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversals of the temporary differences is controlled by the Group and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

1.11   Foreign currencies

The accounts have been prepared in pounds sterling being the presentational currency of the Group. The functional currency of the holding company is also pounds sterling. The functional currency of the US subsidiaries is US dollars. Assets and liabilities held in the Group or overseas subsidiaries in currencies other than the functional currency are translated into the functional currency at the rate of exchange ruling at the reporting date.

Transactions entered into by Group entities in a currency other than the functional currency of the entity are recorded at the rates ruling when the transactions occur. Exchange differences arising from the settlement of monetary items are included in the statement of comprehensive income for that period.

The assets and liabilities of subsidiaries and joint ventures with functional currencies other than sterling are translated at balance sheet date rates of exchange.  Income and expense items are translated at the average rates of exchange for the period. Exchange differences arising are recognised in other comprehensive income (attributed to the parent equity holder and non-controlling interests as appropriate).

1.12   Leases

The Group is party as lessee only to low value or short-term leases. Rentals payable under such leases, net of lease incentives, are charged to the statement of comprehensive income on a straight-line basis over the period of the lease.

1.13   Debt instruments at amortised cost

These assets are non-derivative financial assets which are held in a business model whose objective is to collect contractual cashflows and whose contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. They arise principally through types of contractual monetary asset such as receivables. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. Impairment provisions are recognised based on expected credit losses over the asset's life. 

The Group's assets held at amortised cost comprise trade and other receivables and cash and cash equivalents in the consolidated statement of financial position.

1.14   Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at the bank and other short-term liquid investments with original maturities of three months or less.

1.15   Trade payables

Trade payables are recognised at amortised cost. All of the trade payables are non-interest bearing.

1.16   Share capital

Ordinary shares are classified as equity. Shares issued in the period are recognised at the fair value of the consideration received.

1.17   Warrants

Warrants issued as part of financing transactions in which the holder receives a fixed number of shares on exercise of the warrant are fair valued at the date of grant and recorded within the warrant reserve. Fair value is measured by the use of the Black-Scholes model.

On expiry or exercise, the fair value of warrants is credited to reserves as a change in equity.

1.18   Non-controlling interests

Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Those interests of non-controlling shareholders that are present ownership interests entitling their holders to a proportionate share of net assets upon liquidation may initially be measured at fair value or at the non-controlling interests' proportionate share of the fair value of the acquiree's identifiable net assets. The choice of measurement is made on an acquisition-by-acquisition basis. Other non-controlling interests are initially measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group's interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the Group.

Details concerning non-wholly owned subsidiaries of the Group that have material non-controlling interests are set out in note 18.

1.19   Share-based payments

Equity-settled share-based payments to directors are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions is set out in Note 18.

The fair value determined at the grant date is expensed on a straight-line basis over the vesting period or periods, based on the Group's estimate of equity instruments that will eventually vest. At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to equity reserves.

In respect of equity-settled arrangements within the scope of IFRS 2 representing contingent consideration for the acquisition of assets, the value of the equity instruments is presumed to be equivalent to the fair value of the assets acquired. In the case of assets acquired on the acquisition of Greenfield, cost is deemed to be the best estimate of fair value.

2.      Segmental reporting - Analysis by geographical segment

The loss before taxation arises within principally the UK and US. Net assets are principally in the UK and US. Based on an analysis of risks and returns, the Directors consider that the Group has two principal business segments based on geography, with the UK primarily representing head office costs of the Group. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the Board of Directors. The Directors therefore consider that no further segmentation is appropriate.

3.      Impairment losses

          Impairment losses recognised during the year were as follows:

The impairments arose as a result of the reassessment by the Directors of the Group's future strategy and intentions for the commitment of future resources towards oil shale exploration and extraction activities and the absence of a committed budget or programme for such work.

4.      Finance costs

5.      Operating loss

6.      Taxation

There is no tax charge in the year due to the loss for the year.

7.      Employees and Directors

The Group has one employee (2020-none) other than the Directors, whose emoluments comprise fees paid for services. The amounts for their services are detailed below:

Unvested share options granted to Mr Jones were outstanding on his resignation, and this has resulted in a credit to profit and loss in 2020 in respect of charges for share-based payment previously recognised in respect of those options that have been forfeited.

8.      Loss per share

Basic loss per share is calculated by dividing the losses attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Reconciliations of the losses and weighted average number of shares used in the calculations are set out below.

The warrants and share options which were issued or for which entitlement to warrants was established in the current and prior years (Notes 17 and 18) are anti-dilutive. As these instruments would be anti-dilutive a separate diluted loss per share is not presented.

9.      Intangible assets

The assets acquired with Greenfield are described at note 1.8.  The exploration and development licences comprise nine Utah oil shale leases covering approximately 15,488 acres. These assets have been impaired in full on 30 September 2021 for the reasons given in note 1.9.The impairment value represents the estimated value in use of the assets concerned, which is estimated at nil. The discount rate is not relevant for the purposes of computing the quantum of the impairment loss. The impairment relates to assets in the US geographical reporting segment.

10.    Property, plant and equipment

These assets have been impaired in full at 30 September 2021 for the reasons given in note 1.9.The impairment value represents the estimated value in use of the assets concerned, which is estimated at nil. The discount rate is not relevant for the purposes of computing the quantum of the impairment loss. The impairment relates to assets in the US geographical reporting segment.

11.    Investment in joint venture

During the year, the Group acquired the remaining 50% interest in Greenfield not previously owned by it. The acquisition did not satisfy the criteria for a business combination under IFRS 3, such that the acquisition has been accounted for as an asset purchase. The consideration for the acquisition is the issue to Valkor LLC, the Group's former joint venture partner, of 592.8 million new ordinary shares in TomCo. The issue of the shares is contingent upon the Company receiving funds from, or drawing down on, a loan or credit facility granted in connection with the proposed construction of an oil sands processing facility by August 2024.

Details of the assets and liabilities acquired by the Group on the acquisition of control of Greenfield are as follows:

There is no quoted market price for the Group's investment in Greenfield. The fair value of the net assets acquired was deemed to be their cost. The value of the contingent consideration is deemed to be the fair value of the net assets acquired, in accordance with IFRS 2.

Summarised financial information for Greenfield at and for the period from 1 October 2020 to 25 August 2021 (comparative information is given for the period from May 2020 (its incorporation) to 30 September 2020), when it ceased to be a joint venture and became a subsidiary, is as follows:

12.    Trade and other receivables

As at 30 September 2021, there were no receivables considered past due (2020: £Nil). The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable and cash and cash equivalents as disclosed in Note 14.

All current receivable amounts are due within six months.

13.    Other financial assets

As at 30 September 2021, Greenfield had paid a deposit of US$500,000 against a possible acquisition of a 10% interest in Tar Sands Holdings II LLC, a Utah limited liability company for US$2 million, The sum paid is deductible against the final consideration, which was paid after the end of the financial year. In the Directors' opinion, the fair value of the deposit was equivalent to its cost.

14.    Cash and cash equivalents

The Group earns 0.05% (2020: 0.05%) interest on its cash deposits, consequently the Group's exposure to interest rate volatility is not considered material.

15.    Trade and other payables

All current amounts are payable within six months and the Directors consider that the carrying values adequately represent the fair value of all payables.

16.    Deferred tax

Unrecognised losses

The Group has tax losses in respect of excess management expenses of approximately £12.7 million (2020: £10.8 million) available for offset against future Company income. This gives rise to a potential deferred tax asset at the reporting date of £2.9 million (2020: £2.0 million). No deferred tax asset has been recognised in respect of the tax losses carried forward as the recoverability of this benefit is dependent on the future profitability of the Company, the timing of which cannot reasonably be foreseen but the excess management expenses have no expiry date. In addition, subsidiary entities have accumulated losses of approximately £9 million for which no deferred tax asset is recorded given the uncertainty of future profits.

17.    Share capital

In July 2020 the Company issued 375 million shares and 187.5 million warrants at a price of 0.4pence per share

There are 592.8 million contingent shares issuable (note 11).

18.    Share premium

19.    Warrants

At 30 September 2021, the following share warrants were outstanding in respect of ordinary shares:

The inputs into the Black-Scholes model for calculating the estimated fair value of warrants granted, at their grant date, were as follows:

Expected volatility was determined by calculating the historical volatility of the Company's share price. 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.

Issue of Warrants

3,610,520 warrants were issued during 2019 in connection with the placing of new shares. The fair value of these warrants was assessed at £59,000. Of the warrants issued during 2019, warrants over 2,839,091 ordinary shares were exercised in 2019 and the remaining 771,429 expired in 2021.

291,895,086 warrants were issued during the year ended 30 September 2020 at exercise prices ranging from 0.4p per share to 5.25p per share. 22,875,000 of those warrants were exercised during that year at exercise prices ranging from 0.4p per share to 0.8p per share.

435,555,554 warrants were issued during the year ended 30 September 2021 at exercise prices of between 0.45p and 0.9p per share.

Each warrant in issue is governed by the provisions of warrant instruments representing the warrants which have been adopted by the Company. The rights conferred by the warrants are transferable in whole or in part subject to and in accordance with the transfer provisions set out in the Articles. The warrants outstanding at 30 September 2021 had a weighted average exercise price of 0.88p (2020: 1p) and a weighted average remaining contractual life of 0.95 years (2020: 1.59 years).

20.    Non-controlling interests

Details of non-controlling interests are as follows:

Summarised financial information for TurboShale Inc is as follows:

21.     Share-based payments

The Company implemented a share option scheme for its Directors during the year ended 30 September 2018. Further issues of options took place in June 2020 and June 2021. Options are exercisable at a price equal to the quoted market price of the Company's shares at the date of grant. The vesting period is between six months and 1 year. If the options remain unexercised after a period of ten years from the date of grant (5 years in the case of options granted in June 2020) the options expire. Options are forfeited if the director leaves the Company before the options vest.

Details of the share options issued during the year and outstanding at the year-end are as follows:

Details of the options held by each Director are provided in the Directors' Report.

The inputs into the Black-Scholes model for calculating the estimated fair value of options granted, at their grant date, were as follows:

Expected volatility was determined by calculating the historical volatility of the Company's share price. 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 value of each option granted during the year was estimated at 0.35 pence (2020: 0.35 pence) at the date of grant. The weighted average unexpired life of the options at 30 September 2021 was 8.95 years (2020: 5.97 years).

The charge (2020: credit) recognised in profit or loss for 2021 was £135,000 (2020: £1,000).

Where equity instruments to be issued as consideration for the purchase of a group of assets that does not constitute a business are within the scope of IFRS 2, the value of the equity instruments is determined by reference to the fair value of the net assets acquired. This is deemed to be cost at the date of acquisition.

22.    Financial instruments

The Group's financial instruments, other than its investments, comprise cash and items arising directly from its operations such as other receivables, and trade payables.

Management review the Group's exposure to currency risk, interest rate risk, liquidity risk and credit risk on a regular basis and consider that through this review they manage the exposure of the Group. No formal policies have been put in place in order to hedge the Group's activities to the exposure to currency risk or interest risk, however, this is constantly under review.

There is no material difference between the book value and fair value of the Group and Company's cash and other financial assets.

Currency risk

The Group has overseas subsidiaries which operate in the United States and include expenses, assets and liabilities denominated in US$. Foreign exchange risk is inherent in the Group's activities and is accepted as such. The effect of a 10% strengthening or weakening of the US dollar against sterling at the reporting date on the dollar denominated balances would, all other variables held constant, result in a gain or loss of approximately £6,000 (2020: £1,000).

Interest rate risk

The Group and Company manage the interest rate risk associated with the Group's cash assets by ensuring that interest rates are as favourable as possible, whether this is through investment in floating or fixed interest rate deposits, whilst managing the access the Group requires to the funds for working capital purposes.

The Group's cash and cash equivalents are subject to interest rate exposure due to changes in interest rates. Short-term receivables and payables are not exposed to interest rate risk. The Group has no borrowings as at 30 September 2021.

A 1% increase or decrease in the floating rate attributable to the cash balances held at the year-end would not result in a significant difference on interest receivable.

Liquidity risk

At the year end the Group and Company had cash balances comprising the following:

All financial liabilities of the Group mature in less than 12 months: details of the analysis of such liabilities is provided in Note 14.

Liquidity risk arises from the Group management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. Refer to Note 1.1 for details of going concern.

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 90 days.

Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or a counter party to a financial instrument fails to meet its contractual obligations. The Group is principally exposed to credit risk on cash and cash equivalents with banks and financial institutions. For banks and financial institutions, only independently rated parties with an acceptable rating are utilised. There has been no significant change in credit risk since the recognition of applicable assets and therefore no credit losses have been recognised on financial assets.

Capital management policies

In managing its capital, the Group's primary objective is to maintain a sufficient funding base to enable the Group to meet its working capital and strategic investment needs. In making decisions to adjust its capital structure to achieve these aims, through new share issues or debt, the Group considers not only its short-term position but also its long-term operational and strategic objectives.

23.    Changes in liabilities arising from financing activities

The table below details changes in the Group's liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the cash flow statement as cash flows from financing activities:

24.    Related party disclosures

The Directors are Key Management and information in respect of key management is provided in Note 6. 

25.    Ultimate controlling party

As at 30 September 2021 and 30 September 2020 there was no ultimate controlling party.

26.    Operating lease commitments

At 30 September 2021, the Group had no operating lease commitments (2020: £nil).

27.    Subsequent events

i.              In November 2021, the Group completed the acquisition of a 10% interest in Tar Sands Holdings II LLC at a cost of US$2 million, less amounts paid to 30 September 2021 of US$500,000. The completion of the purchase was financed by a loan of US$1.5 million from Valkor Oil & Gas LLC, its former joint venture partner in Greenfield. The terms of this loan are summarised in the directors' report.

ii.             A newly formed subsidiary of Greenfield entered into an oil and mineral lease with Tar Sands II Holdings LLC over approximately 320 acres of land in Uintah County Utah USA for a period of 10 years from 15 November 2021. The lease gives the Group exclusive rights to explore, drill and mine for, and extract, store and remove oil, gas, hydrocarbons and associated substances on the site. A royalty is payable equal to 12% of the net return per barrel of product.

iii.            In November 2021, warrants in respect of 46.6 million new ordinary shares were exercised for a total consideration of £210,000.

iv.            In January 2022, the Group raised £1.25 million before costs in a placing of 250 million new ordinary shares at 0.5p per share.

v.             In January 2022, on retirement from the Board, Richard Horsman waived 7.5 million options on receipt of a payment of £30,000 from the Company.

vi.            In January 2022, the Group entered into a services agreement with Heavy Sweet Oil LLC to assist it with permitting and government relations in respect of their planned drilling programme adjacent to the D Tract of the Tar Sands Holdings II LLC ("TSHII") site in the Uinta Basin, Utah, United States. Heavy Sweet Oil agreed to pay TomCo US$10,000 per month for its services, with the agreement backdated to start from 1 January 2022.

vii.           In March 2022, Greenfield entered into a Memorandum of Understanding ("MoU") with Vivakor Inc. ("Vivakor'') covering, inter alia, the proposed development by Vivakor of an enhanced oil sands processing plant on the Tar Sands Holdings II LLC ("TSHII") site located in the Uinta Basin, Utah, United States and the provision of professional services by Greenfield.  In addition, Vivakor entered into a lease with TSHII covering approximately three acres of the TSHII site to accommodate its planned operations, which includes the future supply of oil sands by TSHII.