Pires Investments plc
Annual Report 2017

Plain-text annual report

Pires Investments plc (Incorporated in England and Wales with registered number 02929801) Annual Report and Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 PIRES INVESTMENTS PLC Annual Report and Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 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 Statement of Comprehensive Income Statement of Changes in Equity Statement of Financial Position Statement of Cash Flows Notes to the Financial Statements Page 1 2 3 5 7 8 9 10 14 15 16 17 18 PIRES INVESTMENTS PLC Annual Report and Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 Company Information Directors Peter Redmond (Chairman) John May (Non-Executive Director) Nicholas Lee (Non-Executive Director) Secretary Robert Porter Registered office Independent Auditors Nominated adviser Broker Registrars c/o Cooley Services Limited Dashwood House 69 Old Broad Street London EC2M 1QS Welbeck Associates Chartered Accountants and Registered Auditors 30 Percy Street London W1T 2DB Cairn Financial Advisers LLP 62-63 Cheapside Cheyne House Crown Court 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 2017 During the year to 31 October 2017, the Company’s net assets increased significantly to £627,548 compared to the previous year’s figure of £130,714. This was principally due to fundraising during the year and the favourable performance of the Company’s investment portfolio. The operating loss from continuing activities for the period amounted to £142,916, a significant reduction compared to the previous year. This improvement was principally due to the increase in value of the Company’s investment portfolio, as already mentioned. We were also able to realise some of these investment gains through certain strategic disposals. The results also included a significant provision against our VAT receivable balance, which has had the effect of inflating our operating costs. Discussions with Customs and Excise continue however the Directors consider it prudent to make this provision at this stage. During the period under review, we raised £675,000 gross (£639,750 net of fees) in new equity from investors and these funds were largely used to make a significant investment in Eco (Atlantic) Oil and Gas Limited (“ECO”), an oil and gas exploration company listed on both AIM and the Toronto Stock Exchange. Since the year end, the Company’s net asset position has continued to grow and is, at the date of this statement approximately 30% higher than as at the year end. This is principally due to the increase in the share price of ECO, which now represents the Company’s largest investment. The Company reviewed a number of potential reverse transaction opportunities during the year. However, none of them advanced beyond the diligence stage. The Company continues to review a range of opportunities and the Directors believe that it is in a stronger position to attract interesting transactions given the improvement in its financial position. Peter Redmond Chairman 29 April 2018 Page | 2 PIRES INVESTMENTS PLC Strategic Report Annual Report and Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 Business review and future developments Investments During the year, the Company disposed of part of its holding in SalvaRx Group plc and its entire holding in EVR Holdings plc. It also acquired some additional shares in Kazera Global plc (formerly Kennedy Ventures plc) and subscribed for shares in Eco (Atlantic) Oil and Gas Limited as part of this company’s introduction to AIM in February 2017. As at 31 October 2017, the Company’s principal investments comprised: Investment SalvaRx Group plc Kazera Global plc Eco (Atlantic) Oil and Gas Limited Total Value (£)* 76,139 36,296 424,875 537,310 *based on the market valuation of the respective companies’ shares at 31 October 2017. Going concern The Company’s activities resulted in a loss of £142,916 (2016: loss of £559,637) and, as at 31 October 2017, the Company’s cash balance was £241,142 (2016: £49,448). The Company’s administrative expenses in the 12 month period from the signing of these financial statements may exceed the Company’s current cash balance. The Company, however, has a significant portfolio of listed investments some of which could be easily realised to meet a possible shortfall if it were to arise. This provides more than sufficient headroom for the Company, as at the date of signing of these accounts. The Directors therefore consider that, based upon financial projections, the Company will be a going concern for the next twelve months. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements. Investing Policy The Company’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 Company’s financial instruments and financial risk management policies can be found in notes 14 and 15 to the financial statements. Page | 3 PIRES INVESTMENTS PLC Strategic Report Annual Report and Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 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 2017 £ 627,548 0.014p 241,142 31 October 2016 £ 130,714 0.011p 49,448 Change % 379% 27% 388% Identifying suitable targets The Company 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 Company 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 Company’s ability to execute investments in suitable entities which generate acceptable returns. There is no guarantee that the Company will be successful in sourcing suitable investments. Costs associated with potential investments The Company 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 Company’s performance, financial condition and business prospects. Valuation error The Company 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 Company 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 2018 Page | 4 PIRES INVESTMENTS PLC Directors’ Report Annual Report and Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 The Directors present their annual report and the audited Company financial statements of Pires Investments plc for the year ended 31 October 2017. On 2 November 2016 the the Company raised, £525,000 gross of expenses, for the Company, through the issue to third party investors of 17,500,000 new ordinary shares in the Company at a placing price of 3 pence per share. Placees also received one warrant for every two placing shares subscribed for. The warrants have an exercise price of 4.25 pence each, and are exercisable for a period of 18 months from the date of issue, the last exercise date being 2 May 2018. On 28 November 2016, the Company raised a further £150,000, gross of expenses, through the issue of 5,000,000 new ordinary shares at a placing price of 3 pence per share. Placees also received one warrant for every two placing shares subscribed for. The warrants have an exercise price of 4.25 pence each, and are exercisable for a period of 18 months from the date of issue, the last exercise date being 25 May 2018. The Company’s Ordinary Shares are traded on AIM Market of the London Stock Exchange under the ticker PIRI. Results and dividends The Company’s loss from continuing activities for the year was £142,916 (2016 loss: £559,637). 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 Company 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 In March 2018 the Company exercised warrants to acquire 1,000,000 shares in Eco (Atlantic) Oil & Gas Limited at a total cost of £176,000. Directors The following Directors have held office since 1 November 2016: Peter Redmond John May Nick Lee (appointed 13th February 2017) Placid Gonzales (resigned 18th August 2017) Charitable and political donations No charitable or political donations were made during the year (2016: nil). Page | 5 PIRES INVESTMENTS PLC Directors’ Report (continued) Annual Report and Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 Substantial shareholders As at 25 April 2018, the Company’s share register showed the following shareholdings representing 3% or more of the Company’s issued ordinary share capital: Fiske Nominees Limited Beaufort Nominees Limited Lawshare Nominees Limited Interactive Investor Services Nominees Limited HSDL Nominees Limited Manoli Vaindirlis Ambrosia Investment Limited HSDL Nominees Limited ( Maxi) Ordinary shares of 0.25p each Number 8,685,259 5,329,368 3,231,503 2,379,669 1,859,937 1,585,624 1,500,000 1,077,201 % of the issued ordinary share capital 25.62% 15.72% 9.53% 7.02% 5.49% 4.68% 4.42% 3.18% 8,333,333 shares within the Fiske Nominees holding are beneficially owned by Paternoster Resources plc, the Chairman of which is Nicholas Lee, a director of the Company. Auditor 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 2018 Page | 6 PIRES INVESTMENTS PLC Report on Remuneration Annual Report and Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 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. 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 Nick Lee Salaries 2017 £ 18,000 - - 8,500 26,500 Fees 2017 £ 18,000 24,332 10,866 8,500 61,698 Total 2017 £ 36,000 24,332 10,866 17,000 88,198 Total 2016 £ 60,000 25,000 15,000 - 100,000 As at 31 October 2017, £24,500 of Directors fees had been deferred for payment. Directors’ interests The Directors had no beneficial interests in the share capital of the Company as at 31 October 2016 and 31 October 2017. Peter Redmond Director 29 April 2018 Page | 7 PIRES INVESTMENTS PLC Statement of Directors’ Responsibilities Annual Report and Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 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 Company 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 Company and Parent Company and of the profit or loss of the Company 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 Company’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 Directors responsibility also extends to the financial statements contained therein. By order of the Board Peter Redmond Director 29 April 2018 Page | 8 PIRES INVESTMENTS PLC Corporate Governance Report Annual Report and Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 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 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 John May and Nicholas Lee. 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 2018 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 2017 Opinion We have audited the financial statements of Pires Investments Plc (the ‘Company’) for the year ended 31 October 2017 which comprise the income statement, the statement of comprehensive income, the Company statements of changes in equity, the Company statements of financial position, the Company statements of cash flows, and notes to the financial statements, including a summary of significant accounting policies. 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. In our opinion, the financial statements: • • • give a true and fair view of the state of the company’s affairs as at 31 October 2017 and of its loss for the year then ended; have been properly prepared in accordance with IFRSs as adopted by the European Union; and have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: • • the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. Emphasis of matter We draw attention to note 2 of the financial statements. The Company’s administrative expenses in the 12-month period from the signing of these financial statements may exceed the Company’s current cash balance, barring any fundraising activities undertaken by Pires. The Company, however, has a significant portfolio of listed investments, some of which could be easily realised to meet a possible shortfall if it were to arise. This provides more than sufficient headroom for Pires, as at the date of signing of these accounts. Our opinion is not modified in this respect. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Page | 10 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 2017 Key audit matter Accounting Estimates Are prepared on a reasonable and consistent basis and are disclosed adequately in the financial statements. Related Parties We are required to consider if the disclosures made in the financial statements are complete and accurate and the processes for identifying related parties and related party transactions. Management override We are required to consider how management biases could affect the results of the company Going Concern We consider the company’s ability to finance its activities for a period of not less than 12 months from the date the financial statements are approved. Investments We consider the disclosure of the investment net book value, the realised and unrealised gains, the acquisitions and disposals. How we addressed it We have considered the basis of the accounting estimates you have applied when preparing the financial statements and consider your responses to audit questions with professional scepticism. We have assessed the Company’s procedures for identifying related parties and ensuring the completeness of the disclosures that are included in the audit planning pack. We have considered the controls in place, remained alert for material and unusual items and tested a sample of journals to assess the risk. Our going concern review focused on the cash flow forecasts and current and future financing arrangements in place in order to assert the going concern assumption. We have performed a test of details through agreement to bank statements and the contracts, together with a review of the client calculations and valuations. We have tested valuations of the listed investments through agreement to London Stock Exchange prices at the year end. Our application of materiality Materiality for the Company financial statements as a whole was set at £ 42,000 (2016: £12,000). This has been calculated as 5% of the benchmark of Net Assets (2016: 3% of the benchmark of Gross Assets), which we have determined, in our professional judgment, to be one of the principal benchmarks within the financial statements relevant to members of the Company in assessing financial performance. We report to the director’s all corrected and uncorrected misstatements we identified through our audit with a value in excess of £2,100 (2016: £600), in addition to other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds. An overview of the scope of our audit Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material misstatement, aspects subject to significant management judgement as well as greatest complexity, risk and size. The investments balance is highly material and all but one of the investments are listed. Additionally, profit/loss on the sale of investments is also highly material. As such testing was detailed, through agreement to bank statements, contracts and LSE prices, together with a review of the client calculations and valuations. Specifically, there is a risk with regard to accuracy, as part of the valuation relates to Page | 11 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 2017 Evolution Energy E&P, which is unquoted. The cost of this unquoted investment is a subjective figure, determined by management. We consider management override and related parties to be qualitatively material. Although it is not the responsibility of the auditor to discover fraud, clearly any instances of fraud which we detect are material to the users of the financial statements. We have tested manual and automated journal entries, with a focus on those journal entries at year end. In addition, as part of our audit procedures to address this fraud risk, we assessed the overall control environment and reviewed whether there had been any reported actual or alleged instances of fraudulent activity during the year. For Related Parties, we have inquired with the client as the relevant related parties. We have also assessed the Company’s procedures regarding related parties. With regard to the Going Concern assumption, materiality is less relevant in terms of our scoping, since it does not relate to a specific balance. However, this is nonetheless a key audit matter and we have therefore challenged management’s going concern model including the liquidity position at year end and the projected cash flows. We assessed and challenged the accuracy of the expected timing of the sale of suitable investments. Other information The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: • • the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or • the 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. Page | 12 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 2017 Responsibilities of directors As explained more fully in the directors’ responsibilities statement set out on page 8, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. This report is made solely to the Company's 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 Company'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's members as a body, for our audit work, for this report, or for the opinions we have formed. Jonathan Bradley-Hoare (Senior statutory auditor) for and on behalf of Welbeck Associates Chartered Accountants and Statutory Auditor London, United Kingdom 29 April 2018 Page | 13 PIRES INVESTMENTS PLC Statement of Comprehensive Income FOR THE YEAR ENDED 31 OCTOBER 2017 CONTINUING ACTIVITIES Income Investment income Other Income Total income Gain / (Loss) 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 year from continuing activities (Loss) for the year from discontinued operations (Loss) for the year and attributable to equity holders of the Company Basic (loss) per share Equity holders Basic and diluted Notes 2017 £ 2016 £ 6 13 4 8 9 0 8 8 33 21 54 196,049 (302,463) (338,973) (248,611) (142,916) (551,020) (142,916) (551,020) - - (142,916) (551,020) - (8,617) (142,916) (559,637) 10 (0.43)p (5.00)p The accounting policies and notes are an integral part of these financial statements. Page | 14 PIRES INVESTMENTS PLC Statement of Changes in Equity FOR THE YEAR ENDED 31 OCTOBER 2017 Share Capital £ 11,853,192 5,285 - - 11,858,477 Share Premium £ 2,904,840 94,715 (2,000) Capital Redemption Reserve £ 164,667 - - Retained Earnings £ (14,330,348) - - Total £ 592,351 100,000 (2,000) - 2,997,555 - 164,667 (559,637) (14,889,985) (559,637) 130,714 23,217 (23,217) - - - 11,881,694 2,974,338 164,667 (14,889,985) 130,714 Balance at 1 November 2015 Issue of shares Share issue costs Total comprehensive loss for the year As at 31 October 2016 Restatement re share consolidation: Adjustment re share consolidation Total restated balance at 31 October 2016 Issue of shares Total comprehensive loss for the year As at 31 October 2017 56,250 583,500 - - 639,750 - 11,937,944 - 3,557,838 - 164,667 (142,916) (15,032,901) (142,916) 627,548 The accounting policies and notes are an integral part of these financial statements. Page | 15 PIRES INVESTMENTS PLC (Incorporated in England and Wales with registered number 02929801) Statement of Financial Position AT 31 OCTOBER 2017 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 Note 11 16 13 17 18 18 2017 £ 0 1 1 2016 £ 230 1 231 543,421 9,875 241,142 794,438 794,439 152,624 53,865 49,448 255,937 256,168 11,937,944 3,557,838 (15,032,901) 164,667 627,548 11,881,694 2,974,338 (14,889,985) 164,667 130,714 19 166,891 125,454 166,891 125,454 794,439 256,168 These financial statements were approved and authorised for issue by the Board of Directors on 29 April 2018 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 | 16 PIRES INVESTMENTS PLC Statement of Cash Flows FOR THE YEAR ENDED 31 OCTOBER 2017 Cash flows from operating activities (Loss) Depreciation Realised (gain)/loss on disposal of investments Fair value movements in investments Finance income 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 Proceeds from disposal of subsidiary operations Finance income received net Net cash used in investing activities Cash flows from financing activities Net proceeds from share issues Net cash from financing activities Net increase / (decrease) in cash and cash equivalents during the year 2017 £ 2016 £ (142,916) 230 (44,205) (151,844 ) (8) 43,990 41,437 (253,316) - (520,000) 325,252 - 8 (194,740) (559,637) 827 3,996 298,647 (33) 22,475 43,560 (190,165) - - 61,434 18,321 33 79,788 639,750 639,750 98,000 98,000 191,694 (12,377) Cash and cash equivalents at beginning of year 49,448 61,825 Cash and cash equivalents at end of year 241,142 49,448 Page | 17 PIRES INVESTMENTS PLC Notes to the Financial Statements FOR THE YEAR ENDED 31 OCTOBER 2017 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 House, 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 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 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 involves making a judgement, at a particular point in time, about future events which are inherently uncertain. The ability of the Company 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. Page | 18  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 1. ACCOUNTING POLICIES (continued) Adoption of new and revised Standards At the date of authorisation of these financial statements, The Company has not applied the following new and revised IFRSs that have been issued but are not yet effective and had not yet been adopted by the EU. The directors do not expect that the adoption of the Standards listed below will have a material impact on the financial statements of the Company in future periods. Amendments – Classification and measurement of share-based payments transactions Amendment – applying IFRS 9 “Financial Instruments” with IFRS 4 “Insurance Contracts” Financial instruments – incorporating requirements for classification and measurement, impairment, general hedge accounting and de-recognition. Amendment – Prepayment features with negative compensation Amendments – Sale or contribution of assets between an investor and its associate or joint venture Revenue from contracts with customers, and the related clarifications Leases – recognition, measurement, presentation and disclosure Insurance contracts Amendment – Transfers of investment property IFRS 2 IFRS 4 IFRS 9 IFRS 9 IFRS 10/ IAS 28 IFRS 15 IFRS 16 IFRS 17 IAS 40 Tangible assets Tangible fixed assets are stated at historic purchase cost less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. The company assesses at each reporting date whether tangible fixed assets (including those leased under a finance lease) are impaired. 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 Page | 19  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 (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. 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 | 20  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 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 Company’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 Company'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 | 21  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 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 £142,916 (2016: loss of £559,637) and, as at 31 October 2017, the Company’s cash balance was £241,142 (2016: £49,448). The Company’s administrative expenses in the 12-month period from the signing of these financial statements may exceed the Company’s current cash balance, barring any fundraising activities undertaken by Pires. The Company, however, has a significant portfolio of listed investments, some of which could be easily realised to meet a possible shortfall if it were to arise. This provides more than sufficient headroom for Pires, as at the date of signing of these accounts. 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 Provision against VAT receivable 2017 £ 230 68,157 2016 £ 827 - Page | 22  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 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. OTHER INCOME The Company’s other income was: Interest receivable 7. REMUNERATION The Company’s employee benefit expense (for continuing activities in 2016) was: Wages and salaries Social security costs 2017 £ 15,000 1,500 - 16,500 2016 £ 14,500 1,500 - 16,000 2017 £ 8 8 2016 £ 33 33 2017 £ 26,500 1,779 2016 £ 26,250 1,725 28,279 27,975 The average monthly number of persons employed by the Company, including Directors, during the year was as follows: 2017 No 3 2016 No 3 Details of Directors’ emoluments, 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 | 23  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 8. TAX EXPENSE 8. Factors affecting the tax charge for the year Loss on ordinary activities before taxation (Loss)/ profit on ordinary activities before taxation multiplied by the standard rate of UK corporation tax of 19.4% (2016: 20%) Effects of: Expenses not deductible for tax purposes net of income not subject to corporation tax Tax depreciation in excess of book depreciation Gain on disposal of capital assets Tax losses arising in the year carried forward Unrealised taxable losses not subject to tax in the period Tax charge 2017 £ 2016 £ (142,916) (551,020) (27,726) (110,204) 137 - - 0 54,819 (81) 5,225 2,429 (27,230) 102,631 - - The Company has tax losses available to carry forward against relevant future taxable income and profits of approximately £3.4 million (2016: £3.0 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 | 24  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 9. DISCONTINUED OPERATIONS On 11 March 2016 the Company announced that it had disposed of the entire issued share capital of Ventec Renewable Energy Limited, a subsidiary of the Company, to Ambrosia Investments Limited. See Note 23 – Related party transactions. 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 the intercompany liabilities amounting to circa £45,000 were settled in cash. The results of the discontinued operations, which have been included in the financial statements, were as follows: Income statement Revenue Expenses Loss before tax Attributable tax expense Net loss attributable to discontinued operations Balance sheet Investment in subsidiaries Total non-current assets Trade and other payables Net liabilities 2017 - - - - - 2017 - - - - 2016 - (8,617) (8,617) - (8,617) 2016 18,502 18,502 (63,500) (44,998) Page | 25  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 10. LOSS PER SHARE Loss attributable to the owners of the Company Continuing Operations (142,916) (551,020) 2017 £ 2016 £ 2017 No. of Shares 2016 No. of shares Weighted average number of shares for calculating basic loss per share 33,521,353 11,400,805 Basic and diluted loss per share Continuing Operations – basic and diluted (0.43) (5.00) 2017 Pence 2016 Pence 11. PROPERTY, PLANT AND EQUIPMENT Cost At 1 November 2015 Additions during the year At 1 November 2016 Additions during the year At 31 October 2017 Depreciation At 1 November 2015 Charge for the year Disposal during the year At 1 November 2016 Charge for the year As at 31 October 2017 Carrying amount As at 31 October 2017 At 31 October 2016 Computer equipment £ 3,363 - 3,363 - 3,363 2,306 230 - 3,133 230 3,363 - 230 Page | 26  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 12. 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 2017 or 2016. 13. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS Investments at fair value brought forward Purchase of investments Investment disposals Movement in investment holding 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 / (loss)on disposal of investments Net gain / (loss) on investments held at fair value through profit or loss Unquoted investments (Level 3) 2017 £ 152,624 520,000 2016 £ 516,520 - (281,047) (65,429) 151,844 (298,467) 543,421 152,624 537,310 130,401 6,111 22,223 151,844 (298,467) 44,205 (3,996) 196,049 (302,463) The value of the unquoted investments as at 31 October 2017 was £6,111 and 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. 14. RISK MANAGEMENT OBJECTIVES AND POLICIES Page | 27  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 The Company 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 Company’s objectives when managing capital are:    to safeguard the Company’s ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders; to support the Company’s growth; and to provide capital for the purpose of strengthening the Company’s risk management capability. The Company 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 Company 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 Company’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 £241,142 (2016: £103,313) comprising cash and cash equivalents and loans and receivables. Liquidity risk Liquidity risk arises from the possibility that the Company 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 Company’s exposure to market price risk mainly arises from potential movements in the fair value of its investments. The Company’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% 15. FINANCIAL INSTRUMENTS 2017 £ 2016 £ 53,731 13,040 (53,731) (13,040) 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: 2017 £ 2016 £ Page | 28  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 Financial assets: Fair value through profit or loss investments Loans and receivables Cash and cash equivalents Total 537,310 0 241,142 778,452 130,401 40,895 49,448 220,744 Financial liabilities by category: 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 16. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS Cost At 1 November 2015 Disposals during the year At 1 November 2016 Disposals during the year Additions during the year At 31 October 2017 Provision for diminution in value At 1 November 2015 and 1 November 2016 Disposals during the year At 31 October 2017 Net book value At 31 October 2017 At 31 October 2016 2017 £ 68,476 2016 £ 53,171 £ 18,503 (18,502) 1 - - 1 - - - 1 1 At 31 October 2017 the subsidiaries were as follows: Subsidiary undertaking Renewable Energies (Investments) Limited 17. TRADE AND OTHER RECEIVABLES Country of registration UK Principal activity Dormant Percentage holding 100% Other receivables Prepayments and accrued income Company 2017 £ - 9,875 9,875 2016 £ 40,895 12,970 53,865 As described in note 14, the Directors do not consider credit risk to be material to the Company's operations. The directors consider that the carrying amount of trade and other receivables is approximately equal to their Page | 29  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 fair value. 18. ISSUED SHARE CAPITAL Issued and fully paid: At 1 November 2015 Ordinary shares of 0.1p each Deferred shares of 5p each Deferred shares of 4.9p each Ordinary shares issued in the year: Ordinary shares of 0.25p each Deferred shares of 5p each Deferred shares of 4.9p each At 31 October 2016 Restatement of prior year: Number of shares Nominal value £ Share premium £ 2,321,659,864 136,171,197 55,570,856 2,114,166 2,323,774,030 136,171,197 55,570,856 2,321,660 6,808,560 2,722,972 11,853,192 5,285 2,326,945 6,808,560 2,722,972 11,858,477 2,904,840 - - 2,904,840 92,715 2,997,555 - - 2,997,555 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; Ordinary shares of 0.001p each – share reorganisation 2,321,659,864 Deferred shares of 0.099p each – share reorganisation 2,321,659,864 (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; Ordinary shares of 0.25p each - consolidation 9,286,639 23,217 (23,217) Total restated at 31 October 2016 Ordinary shares of 0.25p each Ordinary shares of 0.25p each issued in the year Ordinary shares of 0.25p each as at 31 October 2016 9,286,639 2,114,,166 11,500,805 23,217 5,285 28,502 Deferred shares of 0.099p each – share reorganisation 2,321,659,864 2,321,260 Deferred shares of 5p each Deferred shares of 4.9p each Restated total at 31 October 2016 136,171,197 55,570,856 6,808,560 2,722,972 11,881,694 - - 2,974,338 Ordinary shares issued in the year: Ordinary shares of 0.25p each Ordinary shares of 0.25p each Current ordinary shares at 31 October 2017 17,500,000 5,000,000 33,900,805 43,750 12,500 84,752 453,500 130,000 Page | 30  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 Deferred shares of 0.099p each – share reorganisation Deferred shares of 5p each Deferred shares of 4.9p each Total at 31 October 2017 2,321,659,864 136,171,197 55,570,856 2,321,660 6,808,560 2,722,972 11,937,944 - - - 3,557,838 18. 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. There were no outstanding options however warrants over the ordinary share capital of the Company were issued during the year and were outstanding as at 31 October 2017 as detailed below. (2016: Nil): Number of shares to be issued upon exercise for the year ended 31 October 2017 Exercise price for the year ended 31 October 2017 Number of shares to be issued upon exercise for the year ended 31 October 2016 Exercise price for the year ended 31 October 2016 £ - - - - - - 11,250,000 - 11,250,000 - £ - - - - - - - - - - Outstanding at beginning of period Arising during the period Lapsed during the period Outstanding at end of period Exercisable at end of period The warrants on 8,750,000 shares have an exercise price of 4.25 pence each, and are exercisable for a period of 18 months from the date of issue, the last exercise date being 2 May 2018. The warrants on 2,500,000 shares have an exercise price of 4.25 pence each, and are exercisable for a period of 18 months from the date of issue, the last exercise date being 25 May 2018. 19. TRADE AND OTHER PAYABLES Trade payables Company 2017 £ 64,229 2016 £ 48,570 Page | 31  PIRES INVESTMENTS PLC Notes to the Financial Statements (continued) FOR THE YEAR ENDED 31 OCTOBER 2017 Other payables Accruals and deferred income Taxation and social security 3,646 98,415 601 4,199 72,283 402 166,891 125,454 The directors considers the carrying amounts of trade payables to be a reasonable approximation of their fair value. 20. CONTINGENT LIABILITES At 31 October 2017 and 2016, the Company had no material contingent liabilities. 21. CAPITAL COMMITMENTS At 31 October 2017 and 2016, the Company had no capital commitments authorised or contracted by the Directors. 22. RELATED PARTY TRANSACTIONS Ultimate controlling party The Directors do not consider there to be a single ultimate controlling party. Remuneration of key management personnel The remuneration of the directors, who are the key management personnel of the company, is set out below as specified in IAS 24: Related Party Disclosure: Salaries and Fees: 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 ACL Limited, a company of which Nicholas Lee is a director 2017 £ 18,000 2016 £ 30,000 24,332 25,000 10,866 15,000 8,500 - 24. POST BALANCE SHEET EVENTS On 9 March 2018 the Company exercised its warrants to acquire 1,000,000 shares in ECO Atlantic at a cost of £176,000. Page | 32 

Continue reading text version or see original annual report in PDF format above