Pires Investments plc
(Incorporated in England and Wales with registered number 02929801)
Annual Report and
Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
PIRES INVESTMENTS PLC
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
Contents
Company Information
Chairman’s Statement
Strategic Report
Directors’ Report
Report on Remuneration
Statement of Directors’ Responsibilities
Corporate Governance Report
Report of the Independent Auditor
Group Statement of Comprehensive Income
Group and Company Statement of Changes in Equity
Group and Company Statement of Financial Position
Group and Company Statement of Cash Flows
Notes to the Group Financial Statements
Page
1
2
3
5
7
8
9
10
12
13
14
15
16
PIRES INVESTMENTS PLC
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
Company Information
Directors
Peter Redmond (Chairman)
Placid Gonzales (Non-Executive Director)
John May (Non-Executive Director)
Secretary
Miles Nicholson
Registered office
Independent Auditors
Nominated adviser
Broker
Registrars
c/o Cooley Services Limited
Dashwood
69 Old Broad Street
London
EC2M 1QS
Welbeck Associates
Chartered Accountants and Registered Auditors
30 Percy Street
London
W1T 2DB
Cairn Financial Advisers LLP
61 Cheapside
London
EC2V 6AX
Peterhouse Corporate Finance Limited
3rd Floor
New Liverpool House
15 – 17 Eldon Street
London
EC2M 7LD
Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Company Registration
number
02929801
Page | 1
PIRES INVESTMENTS PLC
Chairman’s Statement
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
The results for the year under review are disappointing – although the level of losses sustained in the
first half were stemmed, the Company continued to make losses at a reduced level in the second half of
the period.
The principal factors contributing to the loss were the continuing poor performance of the share price of
the Company’s principal investment, Rame Energy plc (“Rame”), the lack of progress on the European
wind projects of our subsidiary, Ventec Renewable Energy Limited (“Ventec”), and the level of the
Company’s operating costs relative to its modest asset base.
Other than Rame, our investments particularly in Kennedy Ventures plc (“Kennedy”) and 3 Legs
Resources plc (“3Legs”) performed satisfactorily, although the size of these investments mean that gains
are more than offset by the decrease in the share price of Rame. Rame has recently announced a
significant round of non-equity financing which should enable it to take a number of its wind projects to
the ready to build stage and on the 28 April 2016 announced its intention to carry out a £2.8m equity
private placement at 9p per share and an intention to make an open offer on the same terms to existing
shareholders.
As shareholders will be aware, Kennedy acquired a controlling stake in a tantalite project in Namibia –
under Kennedy’s management, this has now returned to production. 3Legs Resources, which became an
its Polish shale gas projects, acquired a cancer
investing company following the disposal of
immunotherapy business – SalvaRx – on 22 March 2016 by means of a reverse transaction into 3Legs –
which changed its name to SalvaRx Group plc (“SALV”). Since the reverse transaction SALV has
announced significant developments which give it an interest in two further compounds which are
progressing to human trials in the coming year, plus significant off-balance sheet funding for one of
these projects.
The Company has partially realised some of its investments and intends to continue this process in the
coming months.
The projects which Ventec was pursuing in the European wind sector did not prove possible to take
forward and consequently, as announced by the Company on 11 March 2016, Ventec was disposed of to
Ambrosia Investments, our largest shareholder. The consideration for the disposal was £2 and in
addition Ambrosia agreed to settle intercompany liabilities amounting to circa £45,000. This disposal
recovered most of the costs incurred in the venture.
Subsequent to the year end the Company undertook a share capital reorganisation in order to reduce
the par value of its shares to below the market price, which allows the Company to raise additional
equity finance.
Following a review of the Company’s activities, the Board concluded that the strategy of investing in
developing companies as they came to market was not practical without much more substantial funds
for the purpose. In continuing to implement its investing policy, the Company will now adopt a more
focussed approach and would also consider using the Company to undertake a reverse transaction.
Prior to 31 October 2015, in order to conserve working capital, the Board reviewed the cost structure of
the Company and took steps to reduce expenditure. An operating plan has now been adopted which will
bring about a further significant cost reduction, including a reduction in directors’ remuneration to a
level consistent with the Company’s size and status.
It is the board’s intention to raise additional funds in the near future by way of a placing, a further
announcement will be made in due course.
Peter Redmond
Chairman
29 April 2016
Page | 2
PIRES INVESTMENTS PLC
Strategic Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
Business review and future developments
Investments
During the period under review Pires Investments plc (“the Company”) made the following significant
changes to its investments:
On 13 February 2015, the Company subscribed for 34,482,760 new Ordinary shares in a placing by 3Legs
Resources PLC ("3Legs") for a consideration of £80,600. The 34,482,760 new Ordinary shares
represented approximately 8.0 per cent of 3Leg's total voting rights. 3Legs is an Isle of Man company
whose shares are traded on AIM. The Company subsequently disposed of 8,000,000 Ordinary shares for
a consideration of £19,849, representing a gain of 6% over the price paid. As at the year end the market
value of the Company’s holding in 3Legs was £84,083.
During the period under review the Company disposed of 300,095,238 Ordinary shares in Armstrong
Ventures plc (“Armstrong”) for a consideration of £71,750, representing a 14% gain over the price paid.
As at the year end the market value of the Company’s residual holding in Armstrong was £27,295.
During the period, the Company made a number of disposals of its Ordinary shares in Kennedy Ventures
plc (“Kennedy”), disposing of 978,000 ordinary shares for a consideration of £80,688, representing a
660% gain over the price paid. As at the year end the market value of the Company’s residual holding
was £61,320.
During the period, the Company disposed of 100,000 Ordinary shares in Rame Energy plc out of its total
holding of 3,485,270 Ordinary shares, representing a 34% loss over the price paid. As at the year end the
market value of the Company’s residual holding was £321,601.
Going concern
The Company’s activities resulted in a loss of £454,698 (2014: Loss of £326,909) and the cash balance
was £61,825 as at 31 October 2015 (2014: £295,198). As such, the Company’s operational existence is
dependent on the ability to raise further funding, by way of an equity placing, issuing debt instruments,
by the realisation of quoted investments, or by a reduction in operating costs.
After making enquiries, the Directors have formed a judgement that there is a reasonable expectation
that the Company can secure further adequate resources to continue in operational existence for the
foreseeable future.
For this reason, the Directors continue to adopt the going concern basis in preparing the financial
statements. Whilst there are inherent uncertainties in relation to future events, and therefore no
certainty over the outcome of the matters described, the Directors consider that, based upon financial
projections and dependent on the success of their efforts to complete these activities, the Company will
be a going concern for the next twelve months.
Investing Policy
The Group’s investing policy was approved by shareholders on 16 April 2012 and implemented in
accordance with the requirements of Rule 15 of the AIM Rules (as in force at that time) on 12 April 2013.
A copy of the investing policy is available on the website (www.piresinvestments.com).
Financial risk management objectives and policies
Details of the Group’s financial instruments and financial risk management policies can be found in notes
13 and 14 to the financial statements.
Page | 3
PIRES INVESTMENTS PLC
Strategic Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
Key performance indicators
The key performance indicators are set out below:
Net asset value
Net asset value – fully diluted per share
Cash and cash equivalents
Principal business risks and uncertainties
31 October
2015
£524,028
0.023p
£61,825
31 October
2014
£978,726
0.042p
£295,198
Change %
(46%)
(46%)
(79%)
Identifying suitable targets
The Group is dependent upon the ability of the Directors to identify suitable investment opportunities in
accordance with its Investing Policy. There is no guarantee that the Group will be able to source further
opportunities, or complete investments, at an appropriate price, or at all, as a consequence of which
resources may be expended fruitlessly on investigative work and due diligence.
Market conditions
Market conditions may have a negative impact on the Group’s ability to execute investments in suitable
entities which generate acceptable returns. There is no guarantee that the Group will be successful in
sourcing suitable investments.
Costs associated with potential investments
The Group expects to incur certain third party costs associated with the sourcing of suitable investments.
The Company can give no assurance as to the level of such costs, and given that there can be no
guarantee that negotiations to acquire any given investment will be successful, the greater the number
of deals that do not reach completion, the greater the likely impact of such costs on the Group’s
performance, financial condition and business prospects.
Valuation error
The Group may miscalculate the realisable value of an investment in a project. A lack of reliable
information, errors in assumptions or forecasts and/or inability to successfully implement an investment,
among other factors, could all result in the project having a lower realisable value than anticipated. If the
Group is not able to realise an investment at its anticipated levels of profitability, projected investment
returns could be adversely affected.
Funding
It is likely that, if the Company identifies and wishes to pursue an investment opportunity or a reverse
takeover, it is likely to need to raise further funds for further working or development capital. There is
no guarantee that the then prevailing market conditions will allow for such a fundraising or that new
investors will be prepared to invest on a basis which is acceptable to shareholders.
Assessment of Business Risk
The Board regularly reviews operating and strategic risks and considers in such reviews financial and
non-financial information including:
a review of the business at each Board meeting, focusing on any new decisions/risks arising;
the performance of investments;
selection criteria of new investments; and
reports prepared by third parties.
Peter Redmond
Director
29 April 2016
Page | 4
PIRES INVESTMENTS PLC
Directors’ Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
The Directors present their annual report and the audited group financial statements of Pires
Investments plc for the year ended 31 October 2015.
The Company’s Ordinary Shares are traded on AIM Market of the London Stock Exchange under the
ticker PIRI. On 31 March 2016 shareholders approved a capital reorganisation under which, inter alia,
the 2,321,659,864 Ordinary Shares of 0.1p each were consolidated into 9,286,639 Ordinary Shares of
0.25p each.
Results and dividends
The Group’s loss from continuing activities for the year was £454,698 (2014 loss: £326,909). The
Directors are unable to recommend the payment of a dividend, given the deficit on distributable
reserves.
Principal activities and review of business
The principal activities of the Group throughout the year under review and since have been as an
investment company which has involved the seeking, investigation and making of investments.
The review of the business is contained within the Strategic Report on page 3.
Events after the Reporting Period
On 11 March 2016 the Company announced that it had disposed of the entire issued share capital of
Ventec, a subsidiary of the Company, to Ambrosia Investment Limited. The Company, prior to the
disposal, obtained an independent valuation for Ventec which confirmed the directors’ view that the
subsidiary had nil economic value. Consideration for the disposal was £2 and in addition Ambrosia
settled in cash intercompany liabilities amounting to circa £45,000.
On 31 March 2016 shareholders approved a share reorganisation of Ordinary Shares and a buy-back of
Deferred Shares. Under the reorganisation of Ordinary Shares 2,321,659,864 Ordinary Shares of 0.1p
each were consolidated into 9,286,639 Ordinary Shares of 0.25p each. The buy-back of Deferred Shares,
which carry no economic value, has not yet been finalised and the intention is that all Deferred Shares in
existence will be cancelled.
Directors
The following Directors have held office since 1 November 2014:
Peter Redmond
John May (appointed 18 December 2014)
Placid Gonzales (appointed 18 December 2014)
Richard Armstrong (resigned 18 December 2014)
Aamir Quraishi (resigned 18 December 2014)
Christopher Yates (resigned 18 December 2014)
Charitable and political donations
No charitable or political donations were made during the year (2014: nil).
Page | 5
PIRES INVESTMENTS PLC
Directors’ Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
Substantial shareholders
As at 1 April 2016, the Company’s share register showed the following shareholdings representing 3%
or more of the Company’s issued ordinary share capital:
Ambrosia Investment Limited
JIM Nominees Limited (Jarvis)
Pershing Nominees Limited (MDCLT)
TD Direct Investing Nominees (Europe) Limited (SMKTNOMS)
AIMS Consultancy Limited
W B Nominees Limited
Wealth Nominees Limited (Nominee)
XCAP Nominees Limited (Nominee)
Barclayshare Nominees Limited
Auditor
Ordinary
shares
of 0.25p
each
Number
1,700,000
1,163,594
900,000
524,138
500,000
446,640
416,425
351,016
291,074
% of the issued
ordinary share
capital
18.3%
12.5%
9.7%
5.6%
5.4%
4.8%
4.5%
3.8%
3.1%
Welbeck Associates have expressed their willingness to continue in office as auditor and a resolution to
re-appoint them will be proposed at the forthcoming Annual General Meeting.
By order of the Board
Peter Redmond
Director
29 April 2016
Page | 6
PIRES INVESTMENTS PLC
Report on Remuneration
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
Policy on Directors’ remuneration
The policy of the Board is to provide remuneration packages designed to attract, motivate and retain
Directors of the calibre necessary to maintain the Company’s position. It aims to provide sufficient levels
of remuneration to do this, but to avoid paying more than is necessary. The remuneration will reflect the
Directors’ responsibilities and time commitment.
Remuneration of the Directors
During the period, the following remuneration and other benefits were charged to the Company:
Peter Redmond
John May
Placid Gonzales
Aamir Quraishi
Christopher Yates
Richard Armstrong
Directors’ interests
Salaries
2015
£
30,000
-
-
6,976
3,750
5,726
46,452
Fees
2015
£
30,000
20,833
13,024
-
-
1,344
65,201
Total
2015
£
60,000
20,833
13,024
6,976
3,750
7,070
111,653
Total
2014
£
44,000
-
-
17,500
18,450
17,866
97,816
The Directors’ beneficial interests in the share capital of the Company as at 31 October 2014 and 31
October 2015 were:
Peter Redmond
John May
Placid Gonzales
Aamir Quraishi (note 1)
Christopher Yates (note 1)
Richard Armstrong (note 1)
Ordinary shares of
0.1p each 31 October
2015
-
-
-
-
-
-
Ordinary shares of
0.1p each 31 October
2014
-
-
-
-
6,766,819
15,113,436
Notes:
1
2
Aamir Quraishi, Christopher Yates and Richard Armstrong resigned as directors 18 December 2014.
On 16 April 2012, the Board granted to each of Peter Redmond and Aamir Quraishi a warrant over
1.5% of the Company’s issued ordinary share capital from time to time exercisable at 0.1p per new
ordinary share at any time up to 17 April 2015. These have lapsed during the year.
Peter Redmond
Director
29 April 2016
Page | 7
PIRES INVESTMENTS PLC
Statement of Directors Responsibilities
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
Statement of Directors’ responsibilities
The Directors are responsible for preparing the financial statements in accordance with applicable law
and regulations. Company law requires the Directors to prepare financial statements for each financial
year. Under that law the Directors are required to prepare the Group financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the European Union and Article 4
of the IAS Regulation and have also chosen to prepare the Company financial statements under IFRSs as
adopted by the EU. Under company law, the Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent
Company and of the profit or loss of the Group for that period. In preparing those financial statements,
International Accounting Standard 1 requires the Directors to:
• properly select and apply accounting policies;
• present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information;
• make judgements and accounting estimates that are reasonable and prudent
• provide additional disclosures when compliance with the specific requirements in IFRSs are
insufficient to enable users to understand the impact of particular transactions, other events and
conditions on the entity’s financial position and financial performance; and
• make an assessment of the Group’s ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Disclosure of information
In the case of each of the persons who are acting as Directors of the Company at the date when this
report was approved:-
• so far as each of the Directors is aware, there is no relevant audit information (as defined in the
Companies Act 2006) of the which the Company’s auditor is not aware; and
• each of the Directors has taken all the steps that he ought to have taken as a Director to make
himself aware of any relevant audit information (as defined) and to establish that the Company’s
auditor is aware of that information.
The Directors are also responsible for the maintenance and integrity of the investor information
contained on the website. Legislation in the UK concerning the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
Publication of Accounts on the Company Website
Financial statements are published on the Company’s website: www.piresinvestments.com. The
maintenance and integrity of the website is the responsibility of the Directors. The Director’s
responsibility also extends to the financial statements contained therein.
By order of the Board
Peter Redmond
Director
29 April 2016
Page | 8
PIRES INVESTMENTS PLC
Corporate Governance Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
The Company’s shares are traded on AIM and, accordingly, compliance with the revised UK Corporate
Governance Code is not mandatory. However, the Company has sought to comply with the principles
underlying the provisions of the Code in so far as it considers them to be appropriate for a company of
this size and nature. The Board is accountable to the Company’s shareholders for good corporate
governance. This report and the Remuneration Report describe how the Company applies the provisions
of good corporate governance.
Directors
The Board currently consists of the Chairman and two other Directors whilst it is seeking investment
opportunities. It is responsible for approving Company policy and strategy and for implementing it with
support from consultants. The Directors will review the composition of the Board on a regular basis. All
Directors have access to advice from the Company Secretary and independent professional advice at the
Company’s expense.
Relations with shareholders
The Company values the views of its shareholders and recognises their interest in the Company’s
strategy and performance. The Annual General Meeting is used to communicate with investors and they
are encouraged to participate and the Directors are available to answer questions. Separate resolutions
are proposed on each issue so that they can be given proper consideration.
Audit Committee
During the year the Audit Committee comprised Christopher Yates and Peter Redmond until 18
December 2014 and since then has comprised John May and Peter Redmond. The Committee has met
with the auditors and considered the results and the audit process, and has satisfied itself as to the
auditor’s independence during the year.
Remuneration Committee
During the year the Remuneration Committee comprised Christopher Yates and Peter Redmond until 18
December 2014 and since then has comprised John May and Placid Gonzales. The policy of the Company
on remuneration is to reward individual performance so as to promote the best interests of the
Company and enhance shareholder value. The remuneration of Directors is approved by the Board.
Individual Directors do not participate in decisions concerning their own remuneration.
Internal control
The Board is committed to the maintenance of effective internal controls. The Board recognises its
responsibility for maintaining a strong system of internal control to safeguard shareholders’ investment
and the Company’s assets and for reviewing its effectiveness. The system of internal financial control is
designed to provide reasonable, but not absolute, assurance against material misstatement or loss.
The Board has determined that there is currently no requirement for an internal audit function whilst it
is undertaking its current activities. However, the Directors will continue to review the requirement for
an internal audit function on a regular basis.
Peter Redmond
Director
29 April 2016
Page | 9
PIRES INVESTMENTS PLC
Independent auditor’s report to the members of Pires Investments Plc
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
We have audited the Group and Parent Company financial statements (the “financial statements”) of
Pires Investments plc for the year ended 31 October 2015 which comprise the Group statement of
comprehensive income, Group statement of changes in equity, Company statement of financial position,
Company statement of cash flows and the related notes to the financial statements. The financial
reporting framework that has been applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Group’s
members those matters we are required to state to them in an auditors’ report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company members as a body, for our audit work, for this report, or for
the opinions we have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors' Responsibilities Statements, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to
comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting
policies are appropriate to the Group’s circumstances and have been consistently applied and
adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and
the overall presentation of the financial statements. In addition we read all financial and non-financial
information in the Chairman’s Statement, Strategic Report, and Report of the Directors to identify any
information that is apparently materially incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the audit.
A description of the scope of an audit of financial statements is provided on the APB’s website at
www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the financial statements:
•
•
•
give a true and fair view of the state of the Group and Company’s affairs as at 31 October 2015
and of the Group’s loss for the year then ended;
have been properly prepared in accordance with IFRS as adopted by the European Union; and
have been properly prepared in accordance with the requirements of the Companies Act
2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Report of the Directors for the
financial year for which the financial statements are prepared is consistent with the financial statements.
Page | 10
PIRES INVESTMENTS PLC
Independent auditor’s report to the members of Pires Investments Plc
(continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
Emphasis of Matter – Going Concern
In forming our opinion on the financial statements, which is not modified, we draw your attention to the
disclosures made in note 2 to the financial statements concerning the Group’s ability to continue as a
going concern.
These conditions, along with other matters explained in note 2 to the financial statements, indicate the
existence of a material uncertainty which may cast significant doubt about the ability of the Group to
continue as a going concern. The Directors have plans to manage the cash flows of the Group to enable it
to continue as a going concern. These plans include either raising capital or liquidating quoted
investments to provide the working capital requirements for the next 12 months. The financial
statements do not include the adjustments that would result if the Group were unable to continue as a
going concern.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires
us to report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the Group, or returns adequate for our
audit have not been received from branches not visited by us; or
the Group financial statements are not in agreement with the accounting records and returns;
or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Jonathan Bradley-Hoare (Senior Statutory Auditor)
For and on behalf of Welbeck Associates
Chartered Accountants and Statutory Auditor
30 Percy Street
London
W1T 2DB
29 April 2016
Page | 11
PIRES INVESTMENTS PLC
Group Statement of Comprehensive Income
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
CONTINUING ACTIVITIES
Revenue
Investment income
Other income
Total revenue
Losses on investments held at fair value through profit or
loss
Operating expenses
Operating (loss) from continuing activities
(Loss) before taxation from continuing activities
Tax
(Loss) for the period and attributable to equity holders of
the Company
Basic (loss) per share
Equity holders
Basic and diluted
Notes
2015
£
2014
£
6
12
4
8
134
6,200
6,334
1,833
5,000
6,833
(80,380)
(15,981)
(380,652)
(317,761)
(454,698)
(326,909)
(454,698)
(326,909)
-
-
(454,698)
(326,909)
9
(0.02)p
(0.01)p
The Company has elected to take exemption under section 408 of the Companies Act 2006 not to
present the Parent Company profit and loss accounts. The loss for the Parent Company for the year was
£388,253 (2014: £325,031).
The accounting policies and notes are an integral part of these financial statements.
Page | 12
PIRES INVESTMENTS PLC
Company Statement of Changes in Equity
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
GROUP
Share
Capital
£
11,853,192
Share
Premium
£
2,904,840
Capital
Redemption
Reserve
£
164,667
Retained
Earnings
£
(13,617,064)
Total
£
1,305,635
-
-
-
11,853,192
-
-
-
2,904,840
-
-
-
164,667
(326,909)
-
-
(13,943,973)
(326,909)
-
-
978,726
-
11,853,192
-
2,904,840
-
164,667
(454,698)
(14,398,671)
(454,698)
524,028
Share
Capital
£
11,853,192
Share
Premium
£
2,904,840
Capital
Redemption
Reserve
£
164,667
Retained
Earnings
£
(13,617,064)
Total
£
1,305,635
-
-
-
11,853,192
-
-
-
2,904,840
-
-
-
164,667
(325,031)
-
-
(13,942,095)
(325,031)
-
-
980,604
-
11,853,192
-
2,904,840
-
164,667
(388,253)
(14,330,348)
(388,253)
592,351
Balance at 1 November 2013
Total comprehensive income
for the year ended 31 October
2014
Issue of shares
Share issuance costs
As at 31 October 2014
Total comprehensive income
for the year ended 31 October
2015
As at 31 October 2015
COMPANY
Balance at 1 November 2013
Total comprehensive income
for the year ended 31 October
2014
Issue of shares
Share issuance costs
As at 31 October 2014
Total comprehensive income
for the year ended 31 October
2015
As at 31 October 2015
The accounting policies and notes are an integral part of these financial statements.
Page | 13
PIRES INVESTMENTS PLC
(Incorporated in England and Wales with registered number 02929801)
Group and Company Statements of Financial Position
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
Note
10
12
16
17
17
Group
2015
£
1,057
-
1,057
2014
£
2,163
-
2,163
Company
2015
£
2014
£
1,057
2,163
18,503
19,560
18,503
20,666
516,520
50,561
61,825
628,906
629,963
698,612
122,396
295,198
1,116,206
1,118,369
516,520
76,340
61,825
654,685
674,245
698,612
124,271
276,698
1,099,581
1,120,247
11,853,192
2,904,840
(14,398,671)
164,667
524,028
11,853,192
2,904,840
(13,943,973)
164,667
978,726
11,853,192
2,904,840
(14,330,348)
164,667
592,351
11,853,192
2,904,840
(13,942,095)
164,667
980,604
18
105,935
139,643
81,894
139,643
105,935
139,643
81,894
139,643
Non-current assets
Property, plant and
equipment
Investment in subsidiaries
Total non-current assets
Current assets
Investments
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity
Issued share capital
Share premium
Retained earnings
Capital redemption reserve
Total equity
Liabilities
Current liabilities
Trade and other payables
Total liabilities and current
liabilities
Total equity and liabilities
629,963
1,118,369
674,245
1,120,247
These financial statements were approved and authorised for issue by the Board of Directors on 29 April
2016 and were signed on its behalf by:
Peter Redmond
Director
John May
Director
The accounting policies and notes are an integral part of these financial statements.
Page | 14
PIRES INVESTMENTS PLC
Group and Company Statements of Cash Flows
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
Cash flows from operating activities
(Loss)
Depreciation
Realised (gain)/loss on disposal of investments
Fair value movements in investments
Finance income
(Increase)/decrease in receivables
Increase/(decrease) in payables
Net cash used in operating activities
Cash flows from investing activities
Payments to acquire tangible fixed assets
Payments to acquire investments
Proceeds of disposal of investments
Finance income received net
Net cash used in investing activities
Cash flows from financing activities
Finance cost paid
Net cash from financing activities
Net (decrease)/increase in cash and cash
equivalents during the year
Group
Company
2015
£
2014
£
2015
£
2014
£
(454,698)
1,106
(38,969)
119,349
(134)
71,835
(33,708)
(335,219)
(343,909)
904
73,612
(85,409)
(1,833)
32,971
52,533
(271,131)
(388,253)
1,107
(38,969)
119,349
(134)
47,931
(57,749)
(316,718)
(325,031)
904
73,612
(85,409)
(1,833)
13,593
34,533
(289,631)
-
(80,600)
182,312
134
101,846
(1,256)
(674,349)
44,722
1,833
(629,050)
-
(80,600)
182,312
134
101,846
(1,256)
(674,349)
44,722
1,833
(629,050)
-
-
-
-
-
-
-
-
(233,373)
(900,181)
(214,873)
(918,681)
Cash and cash equivalents at beginning of year
295,198
1,195,379
276,698
1,195,379
Cash and cash equivalents at end of year
61,825
295,198
61,825
276,698
Page | 15
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
1. ACCOUNTING POLICIES
General Information
Pires Investments plc (“the Company”) was throughout the year an investing company with an investing
policy adopted on 16 April 2012 and re-adopted on 21 March 2013.
The Company is a limited liability company incorporated and domiciled in England.
The address of the registered office is c/o Cooley Services Limited, Dashwood, 69 Old Broad Street,
London, EC2M 1QS.
These financial statements are prepared in Pounds Sterling, because that is the currency of the primary
economic environment in which the Company operates.
Principal accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all periods presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRSs) and IFRIC interpretations as adopted by the European Union applicable to
companies reporting under IFRSs. The consolidated financial statements have also been prepared
under the historical cost convention.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying
the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial statements are disclosed later in
these accounting policies.
Going Concern
The financial statements have been prepared on the going concern basis.
Any consideration of the foreseeable future involved making a judgement, at a particular point in time,
about future events which are inherently uncertain. The ability of the Group to carry out its planned
business objectives is dependent on its continuing ability to raise adequate capital from equity
investors and/or the realisation of quoted investments.
At the time of approving these financial statements and after making due enquiries, the Directors have
a reasonable expectation that the Company has adequate resources to continue operating for the
foreseeable future. For this reason they continue to adopt the going concern basis in preparing the
Company’s financial statements.
Basis of consolidation
The Group’s consolidated financial statements incorporate the financial statements of Ventec
Renewable Energy Limited (the “Company”) and entities controlled by the Company. Subsidiaries are
entities over which the Group has the power to govern the financial and operating policies generally
accompanying a shareholding of more than one half of the voting rights. The existence and effect of
potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated from the date that control ceases. Inter-
company transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets
are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group. Where necessary, adjustments are made to the
financial statements of subsidiaries to bring the accounting policies used into line with those used by the
Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Page | 16
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
1. ACCOUNTING POLICIES (continued)
Statement of compliance
The following new and revised Standards and Interpretations have been adopted in the current period by the
Group for the first time and do not have a material impact on the group.
IFRS 10
IFRS 12
Consolidated financial statements
Disclosures of interests in other entities
A number of new standards and amendments to standards and interpretations have been issued but are not
yet effective and not early adopted. None of these are expected to have a significant effect on the
consolidated financial statements of the Group.
Depreciation
Computer equipment is measured at cost less provision for depreciation. Depreciation is provided on these
assets at 33 1/3% of cost per annum which is calculated to write off the cost less estimated residual value of
the assets over their expected useful lives.
Revenue recognition
Revenue is measured at the fair value of consideration received or receivable and represents amounts
receivable for goods or services provided in the normal course of business, net of discounts, VAT and other
sales-related taxes, and provisions for returns.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset’s net carrying amount. Dividend income is recognised at the
time any market share price is adjusted to exclude the right to receive such dividend or, if there is no such
adjustment, when received.
Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which deductible temporary differences can be
utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial
recognition of goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or
the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax
assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company
intends to settle its current tax assets and liabilities on a net basis.
Page | 17
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
1. ACCOUNTING POLICIES (continued)
Share based awards
The Company has applied the requirements of IFRS 2 Share based payment. All services received in exchange
for the grant of any share based remuneration are measured at their fair values. These are indirectly
determined by reference to the fair value of the share options/warrants awarded. Their value is appraised at
the grant date and excludes the impact of any non-market vesting conditions (for example, profitability and
sales growth targets).
Share based payments are ultimately recognised as an expense in the Statement of Comprehensive Income
with a corresponding credit to the retained earning reserve in equity, net of deferred tax where applicable. If
vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on
the best available estimate of the number of share options/warrants expected to vest. Non-market vesting
conditions are included in assumptions about the number of options/warrants that are expected to become
exercisable. Estimates are subsequently revised if there is any indication that the number of share
options/warrants expected to vest differs from previous estimates. No adjustment is made to the expense or
share issue cost recognised in prior periods if fewer share options ultimately are exercised than originally
estimated.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to
the nominal value of the shares issued are allocated to share capital with any excess being recorded as share
premium.
Where share options are cancelled, this is treated as an acceleration of the vesting period of the options. The
amount that otherwise would have been recognised for services received over the remainder of the vesting
period is recognised immediately within the Statement of Comprehensive Income.
Fair value is measured by use of the Black-Scholes model. 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.
Investments in subsidiaries
Investments in subsidiaries are stated in the Company's statement of financial position at cost less any
attributable impairment losses.
Financial assets
The Company classifies its financial assets into one of the following categories, cash and cash equivalents, loans
and receivables and investments held at fair value through profit or loss depending on the purpose for which
the asset was acquired. The Company has not classified any of its financial assets as held to maturity, held for
trading or available for sale.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and deposit balances at banks, together with
other short-term, highly liquid investments that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
Loans and receivables
Loans and receivables from third parties are initially recognised at fair value and subsequently carried at
amortised cost using the effective interest rate method.
Page | 18
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
1. ACCOUNTING POLICIES (continued)
Financial assets designated at fair value through profit or loss
All short term investments are designated upon initial recognition as held at fair value through profit or loss
(FVTPL). Investment transactions are accounted for on a trade date basis. Assets are de-recognised at the trade
date of the disposal. Investments are initially measured at fair value plus incidental acquisition costs.
Subsequently, they are measured at fair value in accordance with IAS 39. This is either the bid price or the last
traded price, depending on the convention of the exchange on which the investment is quoted. The fair value
of the financial instruments in the balance sheet is based on the quoted bid price at the balance sheet date,
with no deduction for any estimated future selling cost.
Unquoted investments are valued by the directors using primary valuation techniques such as recent
transactions, last price and net asset value. Changes in the fair value of investments held at fair value through
profit or loss and gains and losses on disposal are recognised in the Statement of Comprehensive Income as
“Net change in fair value of investments”.
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance sheet
date. Financial assets are impaired where there is objective evidence that, as a result of one or more events
that occurred after the initial recognition of the financial asset, the estimated future cash flows of the
investment have been impacted.
Financial liabilities
Financial liabilities are recognised in the Group’s balance sheet when the Company becomes a party to the
contractual provisions of the instrument. All interest related charges are recognised as an expense in finance
cost in the income statement using the effective interest rate method.
The Group's financial liabilities comprise trade and other payables.
Trade payables are recognised initially at their fair value and subsequently measured at amortised cost less
settlement payments.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received
net of direct issue costs.
The share premium account represents premiums received on the initial issuing of the share capital. Any
transaction costs associated with the issuing of shares are deducted from share premium, net of any related
income tax benefits.
Share capital account represents the nominal value of the shares issued.
Retained earnings include all current and prior period results as disclosed in the Statement of Comprehensive
Income.
2.
CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
The preparation of the financial statements in conformity with IFRS requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting period. Although these estimates are
based on management’s best knowledge of the amounts, events or actions, actual results ultimately may differ
from these estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Page | 19
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
2.
CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS (continued)
In certain circumstances, where fair value cannot be readily established, the Company is required to make
judgements over carrying value impairment, and evaluate the size of any impairment required.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting
estimates are recognised in the period. Judgements and estimates that may affect future periods are as
follows:
GOING CONCERN
The Company’s activities resulted in a loss of £454,698 (2014: Loss of £326,909) and the cash balance was
£61,825 as at 31 October 2015 (2014: £295,198). As such, the Company’s operational existence is dependent
on the ability to raise further funding, by way of an equity placing, issuing debt instruments, by the realisation
of quoted investments, or by a reduction in operating costs.
After making enquiries, the Directors have formed a judgement that there is a reasonable expectation that the
Company can secure further adequate resources to continue in operational existence for the foreseeable
future.
For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
Whilst there are inherent uncertainties in relation to future events, and therefore no certainty over the
outcome of the matters described, the Directors consider that, based upon financial projections and
dependent on the success of their efforts to complete these activities, the Company will be a going concern for
the next twelve months.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company holds investments that have been designated as held at fair value through profit or loss.
Investment transactions are accounted for on a trade date basis. Assets are de-recognised at the trade date of
the disposal. Assets are sold at their fair value, which comprises the proceeds of sale less any transaction cost.
The fair value of the financial instruments in the balance sheet is based on the quoted bid price at the balance
sheet date, with no deduction for any estimated future selling cost. Unquoted investments are valued by the
directors using primary valuation techniques such as recent transactions, last price and net asset value.
Changes in the fair value of investments held at fair value through profit or loss and gains and losses on
disposal are recognised in the consolidated statement of comprehensive income as “Net gains on
investments”. Investments are initially measured at fair value plus incidental acquisition costs. Subsequently,
they are measured at fair value in accordance with IAS 39. This is either the bid price or the last traded price,
depending on the convention of the exchange on which the investment is quoted.
3. BUSINESS AND GEOGRAPHICAL REPORTING
The Company’s operations are solely in the United Kingdom. Its primary trading operation and activity is
the rendering of services and so no segmental analysis of operations is included.
4. OPERATING (LOSS)
Operating (loss) from continuing activities is stated after charging:
Depreciation of property, plant and equipment
1,106
904
2015
£
2014
£
Page | 20
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
5. AUDITORS REMUNERATION
During the year the Company obtained the following services from the Company’s auditor (in respect of
continuing and discontinuing activities):
Fees payable to auditors for the audit of the Company’s financial statements
Fees payable to the Company’s auditor and its associates for other services:
Other services relating to taxation
All other services
6.
INVESTMENT INCOME
The Company’s finance income was:
Interest receivable
Dividends receivable
7. REMUNERATION
The Company’s employee benefit expense (for continuing activities in 2015) was:
Wages and salaries
Social security costs
2015
£
14,500
-
2014
£
14,500
-
1,500
1,500
-
-
16,000
16,000
2015
£
134
-
134
2014
£
1,583
250
1,833
2015
£
72,782
3,530
2014
£
103,966
2,003
76,312
105,969
The average monthly number of persons employed by the Company, including Directors, during the year was as
follows:
2015
No
3
2014
No
4
Details of Directors’ emoluments, including details of warrants awarded, are given in the Report on
Remuneration. These disclosures form part of the audited financial statements of the Company. The Directors of
the Company are considered to represent key management of the Company as defined by IFRS.
Page | 21
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
8. TAX EXPENSE
8.
2015
£
2014
£
Factors affecting the tax charge for the year
(Loss)/ profit on ordinary activities before taxation
(454,698)
(326,909)
(Loss)/ profit on ordinary activities before taxation multiplied by the standard
rate of UK corporation tax of 20% (2014: 21.83%)
(90,940)
(71,364)
Effects of:
Expenses not deductible for tax purposes net of income not subject to
corporation tax
Provisions against amounts due from subsidiaries
Tax depreciation in excess of book depreciation
Gain on disposal of capital assets
Tax losses arising in the year carried forward
Tax losses of prior year offset against realised investment gains
-
-
(181)
7,794
5,224
-
(142)
-
107,197
78,863
-
Unrealised taxable losses not subject to tax in the period
(23,870)
(12,581)
Share-based payment charge not deductible
Tax charge
-
-
-
-
The Company has tax losses available to carry forward against relevant future taxable income and profits of
approximately £2.5million (2014: £2.4 million) in respect of which no deferred tax asset has been recognised.
Where it is anticipated that future taxable profits will be available against which these losses will be utilised a
deferred tax asset is recognised.
Page | 22
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
9.
(LOSS)/EARNINGS PER SHARE
(Loss)/profit attributable to the owners of the Company
Continuing Operations
(454,698)
(326,909)
2015
£
2014
£
2015
No. of
shares
2014
No. of
shares
Weighted average number of shares for calculating basic loss per share
2,321,659,864
2,321,659,864
Basic and diluted loss per share
Continuing Operations
2015
pence
2014
pence
(0.02)
(0.01)
There were no dilutive instruments which would give rise to diluted earnings per share.
10. PROPERTY, PLANT AND EQUIPMENT
Cost
At 1 November 2013
Additions during the year
At 1 November 2014
Additions during the year
At 31 October 2015
Depreciation
At 1 November 2013
Charge for the year
Disposal during the year
At 1 November 2014
Charge for the year
As at 31 October 2015
Carrying amount
As at 31 October 2015
At 31 October 2014
Computer equipment
£
2,108
1,255
3,363
-
3,363
296
904
-
1,200
1,106
2,306
1,057
2,163
Page | 23
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
11.
FAIR VALUE MEASUREMENT
The table below sets out the fair value measurements using the IFRS 7 fair value hierarchy. Categorisation
within the hierarchy has been determined on the basis of the lowest level of input that is significant to the fair
value measurement of the relevant asset as follows:
Level 1 – valued using quoted prices in active markets for identical assets.
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices
included within Level 1.
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market
data.
There were no transfers between Level 1 and Level 3 in 2015 or 2014.
12. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
Investments at fair value brought forward
Purchase of investments
Investment disposals
Provision for impairment of unquoted investments
Movement in investment holding gains
Balance
Categorised as
Level 1 – quoted prices
Level 3 – Unquoted investments
Gains / (losses) on investments held at fair value through profit or loss
Movement in investment holding gains
Realised gain on disposal of investments
Impairment of Level 3 investments
Net loss on investments held at fair value through profit or loss
Unquoted investments (Level 3)
2015
£
698,612
80,600
(143,343)
-
(119,349)
2014
£
84,966
674,349
(44,723)
(27,777)
11,797
516,520
698,612
494,297
676,389
22,223
22,223
(119,349)
38,969
-
(80,380)
85,409
(73,613)
(27,777)
(15,981)
The value of the unquoted investments as at 31 October 2015 was £22,223 and the amount comprised a
holding in Evolution Energy E&P plc (previously named Shale Energy plc).
Evolution Energy E&P plc is an unquoted public company whose focus is the acquisition or development of oil,
gas or shale gas assets principally in the UK and USA. The holding is valued on the basis of evaluation of
subsequent pre-IPO fundraising. The latest fundraising price and liquidity of private investors are reflected in
determining the fair value of the investment holding. The Directors consider this value to be supported by
information they have received over the course of the financial year.
Page | 24
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
13. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group is exposed to a variety of financial risks which result from both its operating and investing
activities. The Company’s risk management is coordinated by the Board of Directors, and focuses on actively
securing the Company’s short to medium term cash flows by minimising the exposure to financial markets.
The main risks the Company is exposed to through its financial instruments are credit risk, foreign currency
risk, liquidity risk and market price risk.
Capital risk management
The Group’s objectives when managing capital are:
to safeguard the Group’s ability to continue as a going concern, so that it continues to provide returns
and benefits for shareholders;
to support the Group’s growth; and
to provide capital for the purpose of strengthening the Group’s risk management capability.
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital
structure and equity holder returns, taking into consideration the future capital requirements of the Group
and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital
expenditures and projected strategic investment opportunities. Management regards total equity as capital
and reserves, for capital management purposes.
Credit risk
The Group’s financial instruments, which are subject to credit risk, are cash and cash equivalents and loans
and receivables. The credit risk for cash and cash equivalents is considered negligible since the counterparties
are reputable financial institutions.
The Company’s maximum exposure to credit risk is £112,386 (2014: £428,053) comprising cash and cash
equivalents and loans and receivables.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. The Company manages this risk through
maintaining a positive cash balance and controlling expenses and commitments. The Directors are confident
that adequate resources exist to finance current operations.
Market price risk
The Group’s exposure to market price risk mainly arises from potential movements in the fair value of its
investments.
The Group’s exposure to price risk on quoted investments is as follows:
Change in equity
Increase in quoted investments by 10%
Decrease in quoted investments by 10%
2015
£
2014
£
49,430
67,640
(49,430)
(67,640)
Page | 25
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
14. FINANCIAL INSTRUMENTS
Financial assets by category:
The IAS 39 categories of financial asset included in the statement of financial position and the headings in
which they are included are as follows:
Financial assets:
Fair value through profit or loss investments
Loans and receivables
Cash and cash equivalents
Total
Financial liabilities by category:
2015
£
516,520
38,624
61,825
616,969
2014
£
698,612
108,419
295,198
1,102,229
The IAS 39 categories of financial liabilities included in the statement of financial position and the headings in
which they are included are as follows:
Trade and other payables
15.
INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Cost
At 1 November 2013
Additions during the year
At 1 November 2014
Disposals during the year
Additions during the year
At 31 October 2015
Provision for diminution in value
At 1 November 2013
Disposals during the year
At 1 November 2014
Disposals during the year
At 31 October 2015
Net book value
At 31 October 2015
At 31 October 2014
2015
£
73,107
2014
£
62,968
£
-
18,503
18,503
-
-
18,503
-
-
-
-
-
18,503
18,503
Page | 26
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
15.
INVESTMENTS IN SUBSIDIARY UNDERTAKINGS (continued)
All principal subsidiaries of the Group are consolidated into the financial statements. At 31 October 2015
the subsidiaries were as follows
Subsidiary undertaking
Ventec Renewable Energy Limited*
Ventec Wind 1 GmbH*
Energy Investment Opportunities Limited
Country of
registration
UK
Germany
UK
Principal
activity
Renewable Energy
Renewable Energy
Dormant
Percentage
holding
100%
90%
100%
*Ventec Renewable Energy Limited and its subsidiary Ventec Wind 1 GmbH were disposed of after the
year end as detailed in note 24, Post Balance Sheet Events.
16. TRADE AND OTHER RECEIVABLES
Amount held by Insolvency Practitioner in connection
with with the CVA
Other receivables
Group
2015
£
2014
£
Company
2015
£
2014
£
-
6,104
-
6,104
38,624
102,315
64,403
104,190
Prepayments and accrued income
11,937
13,977
11,937
13,977
50,561
122,396
76,340
124,271
As described in note 13, the Directors do not consider credit risk to be material to the Company's operations.
17.
ISSUED SHARE CAPITAL
Issued and fully paid:
At 1 November 2013 and 31 October 2014
Ordinary shares of 0.1p each
Deferred shares of 5p each
Deferred shares of 4.9p each
Number of
shares
Nominal value
£
Share premium
£
2,321,659,864
136,171,197
55,570,856
2,321,660
6,808,560
2,722,972
11,853,192
2,904,840
-
-
2,904,840
-
Ordinary shares issued in the year
-
-
At 31 October 2015
Ordinary shares of 0.1p each
Deferred shares of 5p each
Deferred shares of 4.9p each
2,321,659,864
136,171,197
55,570,856
2,321,660
6,808,560
2,722,972
11,853,192
2,904,840
-
-
2,904,840
Page | 27
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
17.
ISSUED SHARE CAPITAL (continued)
The holders of the ordinary shares are entitled to one vote for each share held on a poll. They are also entitled
to receive dividends declared in proportion to the number of shares held (subject to any right of another class,
and none currently exists, to receive a preferred dividend) and, on a return of capital and subject to the limited
participation rights of the holders of the two classes of deferred shares detailed below and any subsequently
created class of shares with preferential rights, to participate in such return in proportion to the number of
shares held.
Neither class of deferred shares have any voting or dividend rights and only have rights to a repayment of the
nominal value of the shares and then only after a £100,000 per ordinary share has been returned to each
holder of ordinary shares. The Company has the right to acquire for cancellation each entire class of deferred
share for an aggregate consideration of 1p and the Company intends to exercise such right in due course.
On 31 March 2016 shareholders approval a capital reorganisation under which:
(a) the ordinary shares of 0.1p each were sub-divided into one ordinary share of 0.001p each and one
deferred share of 0.099p each;
(b) the ordinary shares of 0.001p each were consolidated on the basis of one ordinary share of 0.25p for
every 250 ordinary shares of 0.001p each;
(c) the deferred shares of 5p each, 4.9p each and 0.099p each are to be bought back by the company for
cancellation from the proceeds of the issue of one ordinary share of 0.25p at a price of £1
18. TRADE AND OTHER PAYABLES
Trade payables
Other payables
Accruals and deferred income
Taxation and social security
Group
2015
£
72,262
-
32,828
845
2014
£
35,686
26,250
76,675
1,032
Company
2015
£
48,221
-
32,828
845
2014
£
35,686
26,250
76,675
1,032
105,935
139,643
81,894
139,643
The fair value of trade and other payables has not been disclosed as, due to their short duration, management
considers the carrying amounts recognised in the statement of financial position to be a reasonable
approximation of their fair value.
Page | 28
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
19. CONTINGENT LIABILITES
At 31 October 2015 and 2014, the Company had no material contingent liabilities.
20. CAPITAL COMMITMENTS
At 31 October 2015 and 2014, the Company had no capital commitments authorised or contracted by the
Directors.
21. POTENTIAL SHARE ISSUES AND SHARE BASED PAYMENTS
The Company has been subject to the following potential share issue obligations during the year, none of which
are share based payments of the current year:
On 16 April 2012, the Company granted a warrant to Peterhouse Capital Limited which gave Peterhouse Capital
Limited the right to subscribe new ordinary shares of 0.1p each representing up to 3% of the issued share
capital of the Company from time to time. The subscription price for the exercise of this warrant was 0.1p per
share and the warrant was able to be exercised at any time up to 20 March 2015. The warrants expired
unexercised.
On 17 April 2012, the Company granted warrants to each of Peter Redmond and Aamir Quraishi which each
gave the holder the right to subscribe new ordinary shares of 0.1p each representing up to 1.5% of the issued
share capital of the Company from time to time. The subscription price for the exercise of these warrants was
0.1p per share and the warrants were able to be exercised at any time up to 17 April 2015. The warrants
expired unexercised.
Number of
shares to be
issued upon
exercise for the
year ended 31
October
2015
Exercise
price for the
year ended
31 October
2015
Number of
shares to be
issued upon
exercise price
for the year
ended 31
October 2014
Exercise
price for the
year ended
31 October
2014
£
£
Outstanding at beginning of period
0.10p
139,229,592
0.10p
139,229,592
Arising during the period
Lapsed during the period
-
-
0.10p
139,229,592
-
-
-
-
Outstanding at end of period
Exercisable at end of period
-
-
-
-
0.10p
0.10p
139,229,592
139,229,592
Page | 29
PIRES INVESTMENTS PLC
Notes to the Group Financial Statements (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2015
22. RELATED PARTY TRANSACTIONS
Ultimate controlling party
The Directors do not consider there to be a single ultimate controlling party.
Transactions with Directors
Fees for consultancy services and disbursements supplied by Benedict
Investments Limited, a company of which Aamir Quraishi is a director and the
controlling shareholder
Fees for consultancy services supplied by Catalyst Corporate Consultants
Limited, a company beneficially controlled by Peter Redmond and of which
he is a director
Fees for consultancy services supplied by City and Westminster Corporate
Finance LLP, a company beneficially owned by John May
Fees for consultancy services supplied by Placid P. Gonzales & Associates, a
company beneficially owned by Placid Gonzales and of which he is a director.
Fees for consultancy services supplied by Christopher Yates as a consultant
for services other than director’s duties
Fees for consultancy services supplied by Richard Armstrong as a consultant
for services other than director’s duties
2015
£
-
2014
£
2,500
30,000
24,000
20,833
13,653
13,024
-
-
5,950
1,344
-
During the period, a member of key management, Emmanouil Vaindirlis, charged consultancy fees of £35,000
(2014: £29,167) through a Company of which he is a Director, Newdoor Capital Limited.
23. POST BALANCE SHEET EVENTS
Reconstruction of Share Capital
On 31 March 2016 shareholders approved a capital reorganisation under which:
(a) the ordinary shares of 0.1p each were sub-divided into one ordinary share of 0.001p each and one
deferred share of 0.099p each;
(b) the ordinary shares of 0.001p each were consolidated on the basis of one ordinary share of 0.25p for every
250 ordinary shares of 0.001p each;
(c) the deferred shares of 5p each, 4.9p each and 0.099p each are to be bought back by the company for
cancellation from the proceeds of the issue of one ordinary share of 0.25p at a price of £1.
Disposal of Ventec Renewable Energy Limited ("Ventec")
On 10 March 2016, Pires disposed of the entire issued share capital of Ventec Renewable Energy Limited
(“Ventec”) and its subsidiary Ventec Wind 1 GmbH to Ambrosia Investment Limited, a substantial shareholder
of the Company. Ventec was formed in July 2014 with a view to entering into a number of European renewable
energy projects. Ultimately it was not possible to complete such transactions. Prior to the disposal, Pires
obtained an independent valuation for Ventec and its subsidiary which confirmed the directors’ view that the
subsidiary had nil economic value. Consideration for the disposal was £2 and additionally the purchaser settled
intercompany liabilities amounting to circa £45,000 due from Ventec to Pires.
Page | 30