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.
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