Company Registration Number 3740688
PRIMORUS INVESTMENTS PLC
(formerly Stellar Resources plc)
REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2016
PRIMORUS INVESTMENTS PLC
CONTENTS
CHAIRMAN’S STATEMENT INCORPORATING THE STRATEGIC REVIEW
COMPANY INFORMATION
INFORMATION ON THE BOARD OF DIRECTORS
REPORT OF THE DIRECTORS
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
REPORT OF THE AUDITOR
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2016
STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2016
STATEMENT OF CHANGES IN EQUITY AT 31 DECEMBER 2016
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S STATEMENT INCORPORATING THE STRATEGIC REVIEW
I am pleased to present the Chairman's report for the year ended 31 December 2016.
Overview
Primorus Investments plc (“Primorus Investments”) has a strong balance sheet with no debt and with current
assets (including cash of £221,000) as at 31 December 2016 amounting to £1,295,000. (2015: £1,218,000)
It has been a successful year for the Company on the oil and minerals exploration front. The Company has
investment in two natural resource assets in the UK, being a 10% stake in Horse Hill Developments Limited
(“HHDL”), and a 49% stake in Gold Mines of Wales Limited. We believe these investments will enhance future
shareholder value.
The planned testing at the Horse Hill-1 (“HH-1”) discovery in the Weald Basin onshore UK was undertaken in early
2016 with exceptionally high oil flow rates being achieved in both the Kimmeridge Limestone and the Portland
Sandstone reservoirs. Flow results from the HH-1 well at Horse Hill produced stable dry oil flow rates from initial
flow tests of 1,688 barrels of oil per day through restricted choke settings, which are thought to be the UK’s highest
flow rates for any onshore discovery.
These confirm that a commercial discovery has been made and plans to develop the field will now proceed. The
Company is awaiting proposals from the operator at Horse Hill, Horse Hill Developments Limited (“HHDL”) on the
next phase of operations at Horse Hill, but the Company sees significant potential for commercial development of
both the Portland and Kimmeridge intervals. The HH-1 Portland Sandstone discovery is now estimated to contain
21 million barrels of oil (“mmbbls”) initially in place. The discovery made in the Jurassic, Kimmeridgian, Oxfordian
and Liassic limestones and mudstones has been extensively studied and attributed with very significant resource
potential in separate studies by Nutech and Schlumberger. HHDL has advised that it is seeking regulatory
permissions to conduct extended production tests from all 3 oil zones at the site, followed by a horizontal side-
track in the Kimmeridge limestones and a new Portland appraisal and development well.
Gold Mines of Wales Limited (49% owned by Primorus Investments) in turn owns 100% of Gold Mines of Wales
(Operations) Limited ("GMOW"). GMOW is the UK entity that holds the exclusive Option from the Crown Estate
over 107 km2 of exploration area. The Option granted to GMOW is akin to what is known as an exploration licence
in other jurisdictions, in that it gives GMOW the exclusive right to explore for gold and other minerals within the
licence area for the specific period.
The Company announced an update on 2 May 2017 in regard to its investment in Fresho, a leading Australian B2B
company servicing the Restaurant and Food Service industries. It has informed us that annualised platform volume
growth has risen 5-fold to circa A$100million.
Investments
Investment in Gold Mines of Wales: (49% interest in Gold Mines of Wales Limited)
Option Renewal
On 17 August 2015, the Company announced the renewal of the Crown Estate ("Crown") Mines Royal Exploration
Option ("Option") over the Dolgellau Gold-Belt for a period of six years to GMOW subject to review by the Crown
of GMOW's progress and activities every two years. Previous extensions of the Option have only been granted for
a period of one year.
Work programme
In July 2016, the Company announced a summary of a Competent Person's Report on GMOW’s mineral assets in
Wales prepared by SRK Exploration Services Ltd ("SRK ES"). Broadly the outcomes of this report were positive and
the exploration potential, in the opinion of SRK ES, is good. The success of any new exploration will depend on
sound geological knowledge and the application of a detailed systematic exploration programme. SRK ES
recommends that this should include stream sediment sampling, geological mapping, soil sampling, hand auger
1
PRIMORUS INVESTMENTS PLC
CHAIRMAN’S REPORT INCORPORATING THE STRATEGIC REVIEW – CONTINUED
drilling and geophysical surveying, and considers the drilling targets could be provided within a 10-month period
at a cost of £350,000 - £400,000. Following this, if the necessary planning and environmental permissions can be
secured by GMOW, diamond drilling could be undertaken to support the presence of a potential deposit.
GMOW and SRK ES are likely to commence the physical on-the-ground works during the next 12 months. GMOW
is also currently working with its environmental consultants to commence environmental impact (“EIS”) and
conceptual planning studies.
Investment in Horse Hill Developments Limited: (10% interest in HHDL)
The Company currently owns a 10% direct interest in Horse Hill Developments Limited. HHDL is a special purpose
company that owns a 65% participating interest and operatorship of Licence PEDL137 and the adjacent Licence PEDL246
in the UK Weald Basin.
As reported in March 2016, the final total aggregate stable dry oil flow rate from two Kimmeridge limestones plus the
overlying Portland sandstone in HH-1 stands at 1,688 barrels of oil per day (“bopd”), a UK record for an onshore
discovery well. Over the 30 to 90 hour flow periods from each of the 3 zones in HH-1, no clear indication of any reservoir
pressure depletion was observed.
Flow Test Highlights:
•
•
•
The final Portland test of 323 bopd, over an 8.5-hour, period is the highest stable dry oil flow rate from any
onshore UK Portland well. On further testing, with a larger pump, the rate doubled from the previously
reported stable dry oil rate of 168 bopd. The Portland was produced at maximum pump capacity and showed
no clear indication of depletion. It is likely that the peak rate can be further increased using a higher capacity
downhole pump during the next planned test.
Proof that the Kimmeridge limestones contain significant volumes of moveable light oil that can be flowed to
surface at commercial rates.
The stable dry-oil flow rate of 464 bopd from the Lower Kimmeridge Limestone is the first ever flow from this
rock unit in the Weald Basin and onshore UK.
• Based on the analysis of published reports, sighted by the Directors, from all significant UK onshore discovery
wells, the Company Directors’ concludes that the well's 1,688 bopd is likely the highest aggregate stable dry-
oil flow from any onshore UK new field discovery well.
• Based on the analysis of published reports from all significant UK onshore discovery wells, the Company
Directors’ concludes that the 901 bopd from the Upper Kimmeridge zone is likely the highest stable natural dry
oil flow rate from a single reservoir in any UK onshore new field discovery well.
• High quality Brent Crude produced: light, sweet oil (40 degrees API in Kimmeridge, 35-37 degrees API in
•
•
Portland) with 1,940 barrels delivered to the Esso Fawley refinery.
Preliminary analysis confirms that the Lower and Upper Kimmeridge Limestone units are naturally fractured
reservoirs with high deliverability.
Strong possibility for further optimisation and increased flow rates from all 3 zones in future development and
production wells, particularly through the use of horizontal wells.
Summary Table of Test Results: Horse Hill -1 well – Weald Basin, UK
Stabilised Dry Oil
Maximum
Zone
Instantaneous Oil
Rate
Rate
Perforated
Interval
bopd
360
U. Portland *
1008
U. Kimmeridge **
700
L. Kimmeridge **
Total
2068
Note: * flow rate limited by pump stroke rate capacity ** natural flow
Bopd
323
901
464
1688
ft
103
88
80
271
Stabilised Flow
Depth
Period
hours
8.5
4.0
7.5
20
Below
Surface
ft
2000
2800
2950
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S REPORT INCORPORATING THE STRATEGIC REVIEW – CONTINUED
HH-1 Overview and Recap:
The HH-1 discovery well, completed in November 2014, was the first modern well since the 1980s to test the entire
Jurassic and Triassic section of the Weald Basin, reaching Palaeozoic basement at circa 8,500 feet. The well was drilled
with oil-based mud to ensure good electric log data collection. A comprehensive suite of modern Schlumberger log data,
including magnetic resonance data, was acquired. Geological samples were collected at 10 foot intervals throughout
the well specifically for geochemical analysis.
The analysis of thermal maturity data (vitrinite reflectance) from geological samples, by a leading analyst in Switzerland,
showed that the Kimmeridge section of the well was within the peak oil generative window. Previous researchers had
stated that the Kimmeridge was thermally immature, and whilst recognised to be the time equivalent of the North Sea's
main oil source rock, had likely only generated either early stage immoveable bitumen or minor quantities of moveable
oil, as seen in the Upper Kimmeridge Limestone in Balcombe-1, 15 km to the south of HH-1.
As previously announced by UK Oil & Gas PLC (“UKOG”), geochemical analysis of samples throughout the c. 1300 feet
thick Kimmeridge shale section of HH-1, showed that the shales comprised a world class oil source rock. Analysis of 277
samples showed 780 feet of drilled section exceeding 2% total organic carbon ("TOC") by weight, with an average of
4.1% TOC. The richest section, and possible sweet-spot, lay between the Upper and Lower Kimmeridge Limestones with
an average of 5% TOC and a high of 9.4% TOC. The organic shales demonstrated high oil generative potentials ranging
from an average of 35 kg/tonne to a high of 103 kg/tonne and with high Hydrogen Indices ("HI") averaging 754. Further
significant potential source rock sections were identified in the Middle Jurassic and Lias sections of the well.
Both Nutech and Schlumberger, leaders in the field of electric log analysis in rocks with low permeabilities, were then
engaged by UKOG to investigate the presence of oil in the HH-1 well. UKOG reported the results during 2015, which
indicated that a mean estimated total of between 9.97 and 10.99 billion barrels of OIP, or oil in the ground, existed
under the HH-1 licence area, contained in shales and limestones of the Kimmeridge, Oxford Clay and Lias.
Based on analysis of published reports from all significant UK onshore discovery wells, the 1,688 bbl per day flow rate
is likely to be the highest aggregate stable rate recorded from any onshore UK discovery well.
The operator at Horse Hill, HHDL, have advised that it is seeking regulatory permissions to conduct extended production
tests from all 3 oil zones at the site, followed by a horizontal side-track in the Kimmeridge limestones and a new Portland
appraisal and development well.
All of the reviews and reports mentioned above state that the OIP volumes estimated should not be construed as
recoverable resources or reserves.
Other Investments:
Fresho Pty Ltd (“Fresho”)
Fresho, a company in which Primorus holds an investment of £175,000, representing approx. 3.5% of the
company’s share capital, is positioning itself as a leading Australian B2B company servicing the Restaurant and Food
Service industries. By aggregating and streamlining the food order process via Fresho’s unique cloud-based platform,
both customers and streamlining the food order process via Fresho’s unique cloud-based platform, both customers and
suppliers are able to make savings in time, money and wastage and also generate powerful reporting and business data
analytics. To date Fresho’s customer base has been located in Melbourne with many of Australia’s most iconic
restaurants and suppliers using the product, however they are now expanding into a number of Australia’s other cities.
Boletus Resources Limited (“Boletus”)
In January 2014, Stellar acquired an initial 20% shareholding in Boletus, a special purpose company established for
developing the Bengkulu Coal Project on the Indonesian island of Sumatra. Since the time of the original
investment in Boletus, Boletus have reviewed their options with the lease owner of the Bengkulu Coal Project to
ascertain if a commercially viable coal operation is indeed possible. At this stage it is not deemed viable and as
such the investment in Boletus has been fully impaired by a further £150,000. (2015: nil).
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S REPORT INCORPORATING THE STRATEGIC REVIEW – CONTINUED
Financial Results
The operating loss was £332,000 (2015 - £266,000 loss). The net loss after tax was £694,000 (2015: £348,000),
which included a provision of £150,000 against an unlisted investment in Boletus, and a provision of £152,000
against the loan due from its associate GMOW.
Current assets including cash at 31 December 2016 amounted to £1,295,000 (2015: £1,218,000).
In February 2016, the Company announced it had raised £870,000 through the issue of 348 million new shares at
a placing price of 0.25 pence per share. The funds were used for general working capital purposes and to assist in
seeking further investment opportunities.
In March 2017, the Company announced it had raised £237,000 through the issue of 158 million new shares at a
placing price of 0.15 pence per share. The funds are to be used for general working capital purposes and to assist
in seeking further investment opportunities. Also in March 2017, the Company obtained, at a general meeting,
shareholder approval for an increased authority to issue new ordinary shares. The Directors stated that they
wished to undertake a further placing, and a further announcement will be made as appropriate.
Outlook
The Horse Hill-1 well has added significant additional value to the Company. It contains both a commercial
conventional Portland Sandstone discovery and a major new play in the Kimmeridge Limestones that has very
significant potential. We will work closely with HHDL on potentially increasing our oil production and reserves from the
existing fields.
GMOW continues with its exploration activities and we await further updates.
We will continue to seek out further investments in line with the Company’s investing strategy.
The directors would like to take this opportunity to thank our shareholders, staff and consultants for their continued
support.
Jeremy Taylor-Firth
Chairman
10 May 2017
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PRIMORUS INVESTMENTS PLC
GLOSSARY
Discovery
flow test
Limestone
Mean
a discovery is a petroleum accumulation for which one or several exploratory wells have
established through testing, sampling and/or logging the existence of a significant quantity
of potentially moveable hydrocarbons
a flow test or well test involves testing a well by flowing hydrocarbons to surface, typically
through a test separator. Key measured parameters are oil and gas flow rates, downhole
pressure and surface pressure. The overall objective is to identify the well's capacity to
produce hydrocarbons at a commercial flow rate
a sedimentary rock predominantly composed of calcite (a crystalline mineral form of
calcium carbonate) of organic, chemical or detrital origin. Minor amounts of dolomite, chert
and clay are common in limestones. Chalk is a form of fine-grained limestone
or expected value, is the probability-weighted average of all possible values and is a
measure of the central tendency either of a probability distribution or of the random
variable characterised by that distribution
P50
a 50% probability that a stated volume will be equalled or exceeded
reservoir pressure
depletion
a reduction in reservoir pressure as indicated by downhole pressure gauges positioned in
the well close to the zone being tested
Sandstone
OIP
a clastic sedimentary rock whose grains are predominantly sand-sized. The term is
commonly used to imply consolidated sand or a rock made of predominantly quartz sand
oil in place - the quantity of oil or petroleum that is estimated to exist originally in
naturally occurring accumulations before any extraction or production
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PRIMORUS INVESTMENTS PLC
COMPANY INFORMATION
Directors
Secretary
Registered Office:
J Taylor-Firth (Non-executive Chairman)
A Clayton (Executive director)
D Strang (Non-executive director)
D Strang
Suite 3B,
38 Jermyn Street,
London,
SW1Y 6DN
Company Registration Number:
03740688
Country of Incorporation:
United Kingdom
Nominated Adviser
Broker
Auditor
Bankers
Solicitors
Registrars
Cairn Financial Advisers LLP
Cheyne House, Crown Court
62-63 Cheapside
London
EC2V 6AX
Optiva Securities Ltd
2 Mill Street
London
W1S 2AT
Chapman Davis LLP
2 Chapel Court
London
SE1 1HH
Barclays Bank plc
Corporate Banking
One Churchill Place
London
E14 5HP
Hill Dickinson LLP
The Broadgate Tower
20 Primrose Street
London
EC2A 2EW
Share Registrars Limited
Suite E, First Floor
9 Lion and Lamb Yard
Farnham, Surrey
GU9 7LL
6
PRIMORUS INVESTMENTS PLC
INFORMATION ON THE BOARD OF DIRECTORS
Jeremy Taylor-Firth, Non-Executive Chairman
Jeremy has 20 years of experience in investment management. In June 2006 he joined Singer & Friedlander
Investment Management as an Investment Director. This business was then acquired by Williams de Broe where
he worked until October 2010. Jeremy is currently an Investment Manager with Hanson Asset Management,
where he has worked for the last 4 years.
Alastair Clayton, Executive Director
Alastair has over 20 years’ experience in identifying, financing and developing mineral, energy and materials
processing projects in Australia, Europe and Africa. A qualifed geologist, Alastair also has a Graduate Diploma in
Finance and Economics and maintains a broad network of Equity Provider and Private Equity relationships in
Europe, Africa and the US.
Donald Strang, Non-Executive Director
Donald is a member of the Australian Institute of Chartered Accountants and has been in business for over 20
years, holding senior financial and management positions in both publicly listed and private enterprises in
Australia, Europe and Africa. He has considerable corporate and international expertise and over the past decade
has focussed on mining and exploration activities. He is currently a director on various AIM listed companies.
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PRIMORUS INVESTMENTS PLC
REPORT OF THE DIRECTORS
The Directors present their annual report and the audited Financial Statements for the year ended 31 December
2016.
Principal Activities
Primorus Investments plc is an investing company with a focus to acquire a diverse portfolio of direct and indirect
interests in exploration and producing projects and assets in the natural resources sector in addition to
acquisitions in the leisure, corporate services, consultancy and brand licensing sectors. The Company will consider
possible opportunities anywhere in the world.
Results
The results for the year are set out on page 13 and are stated in UK sterling. The Company made a loss after
taxation of £694,000 (2015 - loss of £348,000). The Directors do not recommend payment of a dividend (2015 -
Nil).
Review of the Business & Future Developments
A review of the business for the year, and future developments are set out in the Chairman’s Statement
(incorporating the Strategic Report) on pages 1 to 4.
Key Performance Indicators
Due to the current status of the Company, the Board has not identified any performance indicators as key.
Going Concern
The Directors note the losses that the Company has made for the year ended 31 December 2016. The Directors
have prepared cash flow forecasts for the period ending 31 May 2018 which take account of the current cost and
operational structure of the Company.
The cost structure of the Company comprises a high proportion of discretionary spend and therefore in the event
that cash flows become constrained, costs can be quickly reduced to enable the Company to operate within its
available funding.
These forecasts demonstrate that the Company has sufficient cash funds available to allow it to continue in
business for a period of at least twelve months from the date of approval of these financial statements.
Accordingly, the financial statements have been prepared on a going concern basis.
Events After the Reporting Period
Events After the Reporting Period are outlined in Note 17 to the Financial Statements.
Directors’ Remuneration and interests
The Company remunerates the Directors at a level commensurate with the size of the Company and the
experience of its Directors. The Remuneration Committee has reviewed the Directors’ remuneration and believes
it upholds the objectives of the Company with regard to this issue. Details of the Directors’ emoluments and
payments made for professional services rendered are set out in note 4 to the Financial Statements.
All the directors below served during throughout the period unless otherwise stated;
Donald Strang
Jeremy Taylor-Firth
Alastair Clayton
Each of the directors hold fully vested options over ordinary shares, Jeremy Taylor-Firth and Alastair Clayton each
hold 12 million, and Donald Strang holds 22 million options (total options held by directors is 46 million). The
option details are disclosed in Note 14 to the financial staements.
8
PRIMORUS INVESTMENTS PLC
REPORT OF THE DIRECTORS
Substantial Shareholding
As at 8 May 2017, the Company had been notified of the following substantial shareholdings in the ordinary share
capital, over 3%;
JIM Nominees Limited
TD Direct Investing Nominees (Europe) Limited
Hargreaves Lansdown (Nominees) Limited (15942)
HSDL Nominees Limited
Barclayshare Nominees Limited
Mr Neil Maclachlan
HSDL Nominees Limited (IWSIPP)
Hargreaves Lansdown (Nominees) Limited (HLNOM)
Corporate Governance
Number of ordinary shares
276,028,962
112,203,093
55,512,302
54,749,923
51,805,023
50,000,000
47,313,247
39,181,395
%
21.76%
8.84%
4.38%
4.32%
4.08%
3.94%
3.73%
3.09%
Audit and Remuneration Committees have been established. The Audit Committee comprises Donald Strang and
Jeremy Taylor-Firth, chaired by Jeremy Taylor-Firth. The Remuneration Committee comprises Donald Strang and
Alastair Clayton, chaired by Donald Strang.
The Audit Committee is responsible for making recommendations to the Board on the appointment of the auditors
and the audit fee, and receives and reviews reports from management and the Company’s auditors on the internal
control systems in use throughout the Company and its accounting policies.
The role of the Remuneration Committee is to review the performance of the executive Directors and to set the
scale and structure of their remuneration, including bonus arrangements. The Remuneration Committee also
administers and establishes performance targets for the Companys employee share schemes and executive
incentive schemes for key management. In exercising this role, the terms of reference of the Remuneration
Committee require it to comply with the Code of Best Practice published in the Combined Code.
Suppliers’ Payment Policy
It is the Company's policy to agree appropriate terms and conditions for its transactions with suppliers by means
ranging from standard terms and conditions to individually negotiated contracts and to pay suppliers according to
agreed terms and conditions, provided that the supplier meets those terms and conditions. The Company does
not have a standard or code dealing specifically with the payment of suppliers.
Trade payables at the year end all relate to sundry administrative overheads and disclosure of the number of days
purchases represented by year end payables is therefore not meaningful.
Charitable Contributions
During the year the Company made charitable donations amounting to Nil (2015- Nil).
Directors' Indemnities
In accordance with the Companies (Audit Investigations and Community Enterprise) Act 2004, which came into
force on 6 April 2005, the Company has indemnified the Directors against liability to third parties, and undertaken
to pay Directors' legal costs as incurred, provided that they are reimbursed to the Company if the individual is
convicted.
9
PRIMORUS INVESTMENTS PLC
REPORT OF THE DIRECTORS
Principal risks and uncertainties
The principal risks and uncertainties facing the Company involve the ability to raise funding in order to finance the
acquisition and exploitation of mining opportunities and the exposure to fluctuating commodity prices.
In addition, the amount and quality of minerals available and the related costs of extraction and production
represent a significant risk to the Company.
Financial risk management objectives and policies
The Company’s principal financial instruments are available for sale assets, trade receivables, trade payables and
cash at bank. The main purpose of these financial instruments are to fund the Company's operations.
It is, and has been throughout the period under review, the Company’s policy that no trading in financial
instruments shall be undertaken. The main risk arising from the Company’s financial instruments is liquidity risk.
The board reviews and agrees policies for managing this risk and this is summarised below.
Liquidity risk
The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of
equity and its cash resources. Further details of this are provided in the principal accounting policies, headed 'going
concern' and in note 12 to the financial statements.
Auditors
Chapman Davis LLP offer themselves for re-appointment as auditor in accordance with Section 489 of the
Companies Act 2006.
Annual General Meeting
Notice of the forthcoming Annual General Meeting will be enclosed separately.
By Order of the Board
Donald Strang
Director
10 May 2017
10
PRIMORUS INVESTMENTS PLC
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and 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 have elected to prepare the Financial Statements under IFRS as adopted by the EU and applicable law.
The Financial Statements are required by law to give a true and fair view of the state of affairs of the Company
and company and of the profit or loss of the Company for that period.
In preparing these Financial Statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgements and estimates that are reasonable and prudent;
•
state whether applicable accounting standards have been followed, subject to any material departure
disclosed and explained in the Financial Statements; and
• prepare the Financial Statements on the going concern basis, unless it is inappropriate to presume that
the Company will continue in business.
The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy
at any time the financial position of the Company and to 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.
In so far as each of the Directors are aware:
•
•
there is no relevant audit information of which the Company's auditors are unaware; and
the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant
audit information and to establish that the auditors are aware of that information.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company's website. Legislation in the United Kingdom governing the preparation and
dissemination of Financial Statements may differ from legislation in other jurisdictions.
11
PRIMORUS INVESTMENTS PLC
REPORT OF THE AUDITOR
Report of the Independent Auditor to the Members of Primorus Investments plc
We have audited the Financial Statements of Primorus Investments plc for the year ended 31 December 2016
which comprise the income statement, the statement of comprehensive income, the statement of financial
position, the statement of changes in equity, statement of cash flows, and the related notes. The financial
reporting framework that has been applied in the preparation of the Financial Statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union.
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 auditor’s 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.
Respective Responsibilities of Directors and Auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 10, the Directors are
responsible for the preparation of the Financial Statements and for being satisfied that they give a true and fair
view. Our responsibility is to audit and express an opinion on the Financial Statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the Audit of the Financial Statements
A description of the scope of an audit of Financial Statements is provided on the APB's website at
www.frc.org.uk/apb/scope/private.cfm.
Opinion on Financial Statements
In our opinion:
•
•
•
the Financial Statements give a true and fair view of the state of the Company's affairs as at 31 December
2016 and of the Company's loss for the year then ended;
the Financial Statements have been properly prepared in accordance with IFRS as adopted by the
European Union;
the Financial Statements have been prepared in accordance with the requirements of the Companies Act
2006 and Article 4 of the IAS Regulation.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report
to you if, in our opinion:
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company 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.
Opinion on Other Matter Prescribed by the Companies Act 2006;
In our opinion the information given in the Directors' Report for the financial year for which the Financial
Statements are prepared is consistent with the Financial Statements.
Keith Fulton (Senior Statutory Auditor)
for and on behalf of Chapman Davis LLP
Chartered Accountants and Statutory Auditors
London, United Kingdom
10 May 2017
12
PRIMORUS INVESTMENTS PLC
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 DECEMBER 2016
Revenue
Share based payments
Administrative costs
Total administrative costs
Operating (loss)
Realised gain on disposal of AFS investments
Unrealised gain on market value movement of AFS investments
Impairment provision on AFS investments
Provision on associate loan
Share of (loss) of associate
(Loss) before tax
Taxation
(Loss) for the year attributable to equity holders of the company
Notes
2016
£000
2015
£000
2
-
-
-
(332)
(332)
(60)
(206)
(266)
2, 3
(332)
(266)
5
7
5
17
45
(150)
(152)
(122)
(694)
-
(694)
-
-
-
-
(82)
(348)
-
(348)
(Loss) per Share
Basic and diluted (loss) per share (pence)
6
(0.07)
(0.05)
There are no other recognised gains or losses for the year.
The Accounting Policies and Notes on form an integral part of these Financial Statements.
13
PRIMORUS INVESTMENTS PLC
STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2016
ASSETS
Notes
2016
£000
2015
£000
2015
£000
Non-Current Assets
Investment in Associate
Available for Sale Investments
Current Assets
Trade and other receivables
Cash and cash equivalents
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Total Liabilities
Net Assets
EQUITY
Equity Attributable to Equity Holders
of the Company
Share capital
Share premium account
Share based payment reserve
Retained earnings
Total Equity
2016
£000
155
915
1,074
221
7
8
9
10
277
750
901
317
1,070
1,295
2,365
11
(38)
(38)
(38)
2,327
1,027
1,218
2,245
(38)
2,207
13
15,223
32,205
160
(45,261)
15,188
31,426
160
(44,567)
2,327
2,207
These Financial Statements were approved by the Board of Directors and authorised for issue on 10 May 2017.
Donald Strang
Director
Alastair Clayton
Director
The Accounting Policies and Notes on form an integral part of these Financial Statements.
14
PRIMORUS INVESTMENTS PLC
STATEMENT OF CHANGES IN EQUITY
AT 31 DECEMBER 2016
Share
capital
Share
premium
Share
based
payment
reserve
Retained
earnings
£000
£000
£000
£000
Total
attributable
to owners
of parent
£000
Balance at 31 December 2014
15,188
31,432
100
(44,219)
2,501
Loss for the year
Total comprehensive income
for the year
Share options issued
Share Issue costs
Transactions with owners of the company
-
-
-
-
-
-
-
-
(6)
(6)
-
-
60
-
60
(348)
(348)
(348)
(348)
-
-
-
60
(6)
54
Balance at 31 December 2015
15,188
31,426
160
(44,567)
2,207
Loss for the year
Total comprehensive income
for the year
Shares issued
Share Issue costs
Transactions with owners of the company
-
-
35
-
35
-
-
835
(56)
779
-
-
-
-
-
(694)
(694)
-
-
-
(694)
(694)
870
(56)
814
Balance at 31 December 2016
15,223
32,205
160
(45,261)
2,327
15
PRIMORUS INVESTMENTS PLC
STATEMENT OF CASH FLOWS
YEAR ENDED 31 DECEMBER 2016
Cash Flows from Operating Activities
Operating Loss
Adjustments for:
Share based payment charge
Change in trade and other receivables
Change in trade and other payables
Taxation (paid)
Net Cash used in Operating Activities
Cash Flows from Investing Activities
Loan advanced to associate
Loan advanced to related party
Net payment for available for sale investments
Net Cash used in Investing Activities
Cash Flows from Financing Activities
Proceeds from share issues
Share issue costs
Net Cash in generated from Financing Activities
Net Change in Cash and Cash Equivalents
Cash and Cash Equivalents at beginning of period
Cash and Cash Equivalents at end of period
-
24
-
-
(60)
(289)
(253)
870
(56)
2016
£000
2016
£000
2015
£000
2015
£000
(266)
251
(15)
(332)
24
(308)
60
217
(26)
-
(87)
(179)
-
(602)
(266)
-
(6)
(6)
(287)
604
317
814
(96)
317
221
16
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016
1. Accounting Policies
Basis of Preparation
Primorus Investments Plc is a company incorporated in the United Kingdom. The Company's shares are listed
on the AIM market of the London Stock Exchange, and on the NEX Exchange Growth Market as operated by
NEX Exchange Limited (“NEX”). On 5 December 2016, the Company changed its name from Stellar Resources
Plc to Primorus Investments Plc by way of a statutory notice of change filed at Companies House.
The Financial Statements are for the year ended 31 December 2016 and have been prepared under the
historical cost convention and in accordance with International Financial Reporting Standards as adopted by
the EU ("adopted IFRS"). These Financial Statements (the "Financial Statements") have been prepared and
approved by the Directors on 10 May 2017 and signed on their behalf by Donald Strang and Alastair Clayton.
The accounting policies have been applied consistently throughout the preparation of these Financial
Statements, and the financial report is presented in Pound Sterling (£) and all values are rounded to the
nearest thousand pounds (£‘000) unless otherwise stated.
Investing Policy
The Company’s investing policy is to acquire a diverse portfolio of direct and indirect interests in exploration
and producing projects and assets in the natural resources sector in addition to acquisition(s) in the leisure,
corporate services, consultancy and brand licensing sectors. The Company will consider possible opportunities
anywhere in the world.
The Directors have considerable experience investing, both in structuring and executing deals and in raising
funds. The Directors will use this experience to identify and investigate investment opportunities, and to
negotiate acquisitions. Wherever necessary the Company will engage suitably qualified technical personnel to
carry out specialist due diligence prior to making an acquisition or an investment.
The Company may invest by way of outright acquisition or by the acquisition of assets, including the
intellectual property, of a relevant business, or by entering into partnerships or joint venture arrangements.
Such investments may result in the Company acquiring the whole or part of a company or project (which in
the case of an investment in a company may be private or listed on a stock exchange, and which may be pre-
revenue), and such investments may constitute a minority stake in the company or project in question.
The Company may be both an active and a passive investor depending on the nature of the individual
investments in its portfolio. Although the Company intends to be a long-term investor, the Directors will place
no minimum or maximum limit on the length of time that any investment may be held.
The Directors may offer new Ordinary Shares by way of consideration as well as cash, thereby helping to
preserve the Company’s cash for working capital and as a reserve against unforeseen contingencies including
by way of example, and without limitation, delays in collecting accounts receivable, unexpected changes in
the economic environment and unforeseen operational problems. The Company may in appropriate
circumstances issue debt securities or otherwise borrow money to complete an investment. The Directors do
not intend to acquire any cross-holdings in other corporate entities that have an interest in the Ordinary
Shares.
There are no restrictions in the type of investment that the Company might make nor on the type of
opportunity that may be considered other than set out in this Investing policy.
In addition, the Directors may consider from time to time other means of facilitating returns to Shareholders
including dividends, share repurchases, demergers, and schemes of arrangements or liquidation.
17
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
1. Accounting Policies (continued)
Going Concern
The Directors noted the losses that the Company has made for the Year Ended 31 December 2016. The
Directors have prepared cash flow forecasts for the period ending 31 May 2018 which take account of the
current cost and operational structure of the Company.
The cost structure of the Company comprises a high proportion of discretionary spend and therefore in the
event that cash flows become constrained, costs can be quickly reduced to enable the Company to operate
within its available funding.
These forecasts demonstrate that the Company has sufficient cash funds available to allow it to continue in
business for a period of at least twelve months from the date of approval of these financial statements.
Accordingly, the financial statements have been prepared on a going concern basis.
It is the prime responsibility of the Board to ensure the Company remains a going concern. At 31 December
2016 the Company had cash and cash equivalents of £221,000 and no borrowings. The Company has minimal
contractual expenditure commitments and the Board considers the present funds sufficient to maintain the
working capital of the Company for a period of at least 12 months from the date of signing the Annual Report
and Financial Statements. For these reasons the Directors adopt the going concern basis in the preparation
of the Financial Statements.
New standards, amendments and interpretations adopted by the Company
No new and/or revised Standards and Interpretations have been required to be adopted, and/or are
applicable in the current year by/to the Company, as standards, amendments and interpretations which are
effective for the financial year beginning on 1 January 2016 are not material to the Company.
New standards, amendments and interpretations not yet adopted
At the date of authorisation of these financial statements, the following Standards and Interpretations which
have not been applied in these financial statements, were in issue but not yet effective for the year
presented:
- IFRS 9 in respect of Financial Instruments which will be effective for the accounting periods beginning on or
after 1 January 2018.
- IFRS 15 in respect of Revenue from Contracts with Customers which will be effective for accounting periods
beginning on or after 1 January 2018.
- IFRS 16 in respect of Leases which will be effective for accounting periods beginning on or after 1 January
2019.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a
material impact on the Company.
18
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
1. Accounting Policies (continued)
Sources of Estimation and Key Judgements
The preparation of the Financial Statements requires the Company to make estimates, judgements and
assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities. The Directors base their estimates on historic experience and
various other assumptions that they believe are reasonable under the circumstances, the results of which
form the basis of making judgements about the carrying value of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions.
Revenue
Revenue is measured by reference to the fair value of consideration received or receivable by the Company
for services provided, excluding VAT and trade discounts. Revenue is credited to the Income Statement in the
period it is deemed to be earned.
Finance Income and Costs
Finance income and costs are reported on an accruals basis.
Taxation
Current tax is the tax currently payable based on taxable profit for the year.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is
generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases.
However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of
an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.
Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided
if reversal of these temporary differences can be controlled by the Company and it is probable that reversal
will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other
income tax credits to the Company are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the
extent that it is probable that the underlying deductible temporary differences will be able to be offset against
future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are
expected to apply to their respective period of realisation, provided they are enacted or substantively enacted
at the balance sheet date.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income
statement, except where they relate to items that are charged or credited directly to equity in which case the
related deferred tax is also charged or credited directly to equity.
19
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
1. Accounting Policies (continued)
Foreign Currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the
balance sheet date. Non-monetary items that are measured at historical cost in a foreign currency are
translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair
value in a foreign currency are translated using the exchange rates at the date when the fair value was
determined. Any exchange differences arising on the settlement of monetary items or on translating monetary
items at rates different from those at which they were initially recorded are recognised in the profit or loss in
the period in which they arise. Exchange differences on non-monetary items are recognised in other
comprehensive income to the extent that they relate to a gain or loss on that non-monetary item taken to
other comprehensive income, otherwise such gains and losses are recognised in the income statement.
The Company's functional currency and presentational currency is Sterling.
Equity
Equity comprises the following:
•
•
•
•
"Share capital" representing the nominal value of equity shares.
"Share premium" representing the excess over nominal value of the fair value of consideration
received for equity shares, net of expenses of the share issue.
“Share based payment reserve” represents the value of equity benefits provided to employees and
directors as part of their remuneration and provided to consultants and advisors hired by the
Company from time to time as part of the consideration paid.
"Retained earnings" representing retained profits.
Investment in associates
An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor
an interest in a joint venture. Significant influence is the power to participate in the financial and operating
policy decisions of the investee but is not control or joint control over those policies. The investment in an
associate is initially recognised at cost and adjusted for the Company’s share of in the net assets of the investee
after the date of acquisition, and for any impairment in value (equity method), except when the investment
is classified as held-for-sale in accordance with IFRS 5 Non-current assets held-for-sale and discontinued
operations. If the Company’s share of losses of an associate exceed the cost of the investment in the associate,
from that point the Company discontinues recognising its share of further losses.
20
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
1. Accounting Policies (continued)
Financial Assets
Financial assets are divided into the following categories: loans and receivables and available-for-sale financial
assets. Financial assets are assigned to the different categories by management on initial recognition,
depending on the purpose for which they were acquired, and are recognised when the Company becomes
party to contractual arrangements. Both loans and receivables and available for sale financial assets are
initially recorded at fair value.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Trade, most other receivables and cash and cash equivalents fall into this category
of financial assets. Loans and receivables are measured subsequent to initial recognition at amortised cost
using the effective interest method, less provision for impairment. Any change in their value through
impairment or reversal of impairment is recognised in the income statement.
Provision against trade receivables is made when there is objective evidence that the Company will not be
able to collect all amounts due to it in accordance with the original terms of those receivables. The amount
of the write-down is determined as the difference between the asset's carrying amount and the present value
of estimated future cash flows.
A financial asset is derecognised only where the contractual rights to the cash flows from the asset expire or
the financial asset is transferred and that transfer qualifies for derecognition. A financial asset is transferred
if the contractual rights to receive the cash flows of the asset have been transferred or the Company retains
the contractual rights to receive the cash flows of the asset but assumes a contractual obligation to pay the
cash flows to one or more recipients. A financial asset that is transferred qualifies for derecognition if the
Company transfers substantially all the risks and rewards of ownership of the asset, or if the Company neither
retains nor transfers substantially all the risks and rewards of ownership but does transfer control of that
asset.
Available-for-sale financial assets are non-derivative financial assets that are either designated to this category
or do not qualify for inclusion in any of the other categories of financial assets. The Company’s available-for-
sale financial assets include unlisted securities. These available-for-sale financial assets are measured at fair
value. Gains and losses are recognised in other comprehensive income and reported within the available-for-
sale reserve within equity, except for impairment losses and foreign exchange differences, which are
recognised in profit or loss. When the asset is disposed of or is determined to be impaired, the cumulative
gain or loss recognised in other comprehensive income is reclassified from the equity reserve to profit or loss
and presented as a reclassification adjustment within other comprehensive income. Interest calculated using
the effective interest method and dividends are recognised in profit or loss within finance income
Financial Liabilities
Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Company
becomes a party to the contractual provisions of the instrument.
All financial liabilities initially recognised at fair value less transaction costs and thereafter carried at amortised
cost using the effective interest method, with interest-related charges recognised as an expense in finance
cost in the income statement. A financial liability is derecognised only when the obligation is extinguished,
that is, when the obligation is discharged or cancelled or expires.
21
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
1. Accounting Policies (continued)
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, 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.
Share-Based Payments
The Company operates a number of equity-settled, share-based compensation plans, under which the entity
receives services from employees as consideration for equity instruments (options) of the Company. The fair
value of the employee services received in exchange for the grant of the options is recognised as an expense.
The total amount to be expensed is determined by reference to the fair value of the options granted:
including any market performance conditions;
•
• excluding the impact of any service and non-market performance vesting conditions (for example,
profitability or sales growth targets, or remaining an employee of the entity over a specified time
period; and
including the impact of any non-vesting conditions (for example, the requirement for employees to
save).
•
Non-market vesting conditions are included in assumptions about the number of options that are expected to
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied.
In addition, in some circumstances, employees may provide services in advance of the grant date, and
therefore the grant-date fair value is estimated for the purposes of recognising the expense during the period
between service commencement period and grant date.
At the end of each reporting period, the entity revises its estimates of the number of options that are expected
to vest based on the non-market vesting conditions. It recognises the impact of the revision to original
estimates, if any, in profit or loss, with a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares. The proceeds received, net of any directly
attributable transaction costs, are credited to share capital (nominal value) and share premium.
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings
in the Group is treated as a capital contribution. The fair value of employee services received, measured by
reference to the grant date fair value, is recognised over the vesting period as an increase in investment in
subsidiary undertakings, with a corresponding credit to equity in the parent entity accounts.
22
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
2. Segment Reporting
The Company is now operating as a single UK based segment with a single primary activity to invest in
businesses so as to generate a return for the shareholders. The revenue from this segment, generated from
management services in the UK, was £nil (2015 - £nil). The non-current assets of the segment is £1,070,000
(2015 - £1,027,000).
3. Operating Activities and Auditor’s Remuneration
Included within results from operating activities are the following:
Operating lease rentals - land and buildings
Auditor's remuneration:
Audit services:
- Company statutory audit
Non-audit services:
- Taxation compliance
4.
Information Regarding Directors and Employees
Employment costs, including Directors, during the year:
Wages and salaries
Share based payments
Average number of persons, including Directors employed
Administration
Directors’ remuneration
Emoluments
Number of Directors in money purchase pension schemes
2016
£000
2015
£000
23
10
-
36
13
-
2016
£000
2015
£000
72
-
72
No.
3
3
40
60
100
No.
2
2
£000
£000
72
No.
-
100
No.
-
23
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
4.
Information Regarding Directors and Employees (continued)
Emoluments of the Individual Directors
2016
A Clayton
J Taylor Firth
D Strang
2015
A Clayton (*1)
J Taylor Firth (*1)
D Strang
E. Priestly (*1)
Fees and
salaries
Share based
payments
£000
24
24
24
72
£000
2
2
36
-
40
£000
-
-
-
-
£000
20
20
20
-
60
Total
£000
24
24
24
72
£000
22
22
56
-
100
Directors’ interest in share options is set out in note 14.
(*1) – These Directors were either appointed or resigned during the relevant year, and thus were not
remunerated for a full year’s service as applicable. Details of appointment and resignation dates are disclosed
in the Directors’ report.
Key Management Personnel
The key management personnel are considered to be the Directors. There remuneration is included in note 4
above.
24
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
5.
Income Tax (Credit)/Expense
The relationship between the expected tax (credit)/expense based on the effective tax rate of the Company
at 20% (2015 – 20/21%) and the tax (credit)/expense actually recognised in the income statement can be
reconciled as follows:
Loss for the year before tax
Tax rate
Expected tax credit
Differences between capital allowances and depreciation
Expenses not deductible for tax purposes
Deferred tax asset not recognised
Actual tax expense
Deferred Tax
2016
£000
(694)
20%
(139)
-
51
88
-
2015
£000
(348)
20/21%
(70)
-
28
42
-
The amount of approximate unused tax losses for which no deferred tax asset is recognised in the statement
of financial position is £1,382,000 (2015 - £1,067,000).
6. Loss per Share
2016
Loss after tax
Earnings attributable to ordinary shareholders
Weighted
average
No. of shares
Basic per share
amount
(pence)
£000
(694)
(694)
Weighted average number of shares
1,052,549,167
Total basic and diluted loss per share
2015
Loss after tax
Earnings attributable to ordinary shareholders
£000
(348)
(348)
Weighted average number of shares
762,549,167
Total basic and diluted loss per share
(0.07)
(0.07)
(pence)
(0.05)
(0.05)
25
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
7.
Investment in associate
Investment in associate
Carrying amount at 1 January
Share of associate loss
Carrying amount at 31 December
2016
£000
155
2016
£’000
277
(122)
155
2015
£000
277
2015
£’000
359
(82)
277
The Company's share of results of its associate, which is unlisted, and its aggregated assets and liabilities,
is as follows:
Name
Country of
incorporation
Assets
Liabilities
Revenues
Profit/(Loss)
As at
5 April 2016
Year to
5 April 2016
% interest
held
Gold Mines of
Wales Limited
(Group)
Jersey
£115,000
£28,000
Nil
(£249,000)
49
Gold Mines of Wales Limited's year end is 5 April.
8. Available for Sale Investments
Investment in listed and unlisted securities
Valuation at beginning of the period
Additions at cost
Disposal proceeds
Gains on disposals
Gain on Market value revaluation
Impairment in value of unlisted investment
Valuation at the end of the period
The available for sale investments splits are as below:
Non-current assets – listed
Non-current assets – unlisted
2016
£000
750
291
(37)
16
45
(150)
915
135
780
915
2015
£000
750
-
-
-
-
-
750
-
750
750
The Directors have reviewed the carrying value of the unlisted investments, and have considered an
impairment of £150,000 against the Company’s investment in Boletus Resources Ltd has been deemed
appropriate on the basis that Boletus’s potential projects are not deemed commercially viable.
Available-for-sale investments comprise investments in listed and unlisted which if listed are traded on
stock markets throughout the world, and are held by the Company as a mix of strategic and short term
investments.
26
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
9. Trade and Other Receivables
Current trade and other receivables
Trade receivables
Other receivables
Due from associate undertaking
Due from related party (see note 16)
Prepayments and accrued income
2016
£000
-
11
400
658
5
1,074
2015
£000
-
18
422
369
92
901
The Directors have considered that a provision of £152,000 against the total loan of £552,000 due from its
associate, Gold Mines of Wales Ltd is appropriate under the current economic climate.
The directors consider that the carrying amount of trade and other receivables approximates to their fair
value.
10. Cash at Bank and Cash Equivalents
Cash at Bank
11. Trade and Other Payables
Current trade other payables
Trade payables
Taxation and social security
Accruals and deferred income
2016
£000
221
2016
£000
16
3
19
38
2015
£000
317
2015
£000
12
3
23
38
All amounts are short term and the carrying values are considered to be a reasonable approximation of fair
value.
27
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
12. Risk Management Objectives and Policies
Financial assets by category
The categories of financial asset included in the balance sheet and the headings in which they are included are
as follows:
Current assets
Loans and receivables
Cash
Financial Liabilities by Category
2016
£000
1,074
221
1,295
2015
£000
901
317
1,218
The categories of financial liability included in the balance sheet and the headings in which they are included
are as follows:
Current liabilities
Financial liabilities measured at amortised cost
38
38
The Company is exposed to market risk through its use of financial instruments and specifically to credit risk,
and liquidity risk which result from both its operating and investing activities. The Company's risk management
is coordinated at its headquarters, in close co-operation with 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.
Long term financial investments are managed to generate lasting returns. The Company does not actively
engage in the trading of financial assets for speculative purposes nor does it write options. The most significant
financial risks to which the Company is exposed to are described below.
Interest rate sensitivity
The Company is not substantially exposed to interest rate sensitivity, other than in relation to interest bearing
bank accounts.
Credit risk analysis
The Company's exposure to credit risk is limited to the carrying amount of trade receivables. The Company
continuously monitors defaults of customers and other counterparties, identified either individually or by
Company, and incorporates this information into its credit risk controls. Where available at reasonable cost,
external credit ratings and/or reports on customers and other counterparties are obtained and used.
Company's policy is to deal only with creditworthy counterparties. Company management considers that
trade receivables that are not impaired for each of the reporting dates under review are of good credit quality,
including those that are past due.
None of the Company's financial assets are secured by collateral or other credit enhancements.
The credit risk for liquid funds and other short-term financial assets is considered negligible, since the
counterparties are reputable banks with high quality external credit ratings.
28
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
12. Risk Management Objectives and Policies (continued)
Liquidity risk analysis
The Company’s continued future operations depend on the ability to raise sufficient working capital through
the issue of equity share capital. The Directors are confident that adequate funding will be forthcoming with
which to finance operations. Controls over expenditure are carefully managed.
Capital Management Policies
The Company's capital management objectives are:
•
•
to ensure the Company's ability to continue as a going concern; and
to provide a return to shareholders
The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents.
13. Share Capital
Allotted, issued and fully paid
1,110,549,167 ordinary shares of 0.01p each
(2015 – 762,549,167 of 0.01p each)
28,976,581 deferred shares of 45p each (2015 – 28,976,581)
28,976,581 A deferred shares of 4p each (2015- 28,976,581)
92,230,985 B deferred shares of 0.99p each (2015- 92,230,985)
2016
£000
2015
£000
111
76
13,040
1,159
913
15,223
13,040
1,159
913
15,188
The deferred shares and the A and B deferred shares do not carry voting rights.
Ordinary shares of 0.01p each
As at 31 December 2014 and as at 31 December 2015
1 March 2016 – Placing for cash at 0.25p per share
2 March 2016 – Placing for cash at 0.25p per share
As at 31 December 2016
Ordinary
Shares
Number
Nominal
Value
£’000
762,549,167
308,000,000
40,000,000
1,110,549,167
76
31
4
111
Details of the share options and warrants the Company has in issue are disclosed in Note 14.
29
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
14. Share-based payments
Details of share options and warrants granted to Directors, employees & consultants, over the ordinary shares
are as follows:
At
1 January
2016
No.
Issued
during
the year
No.
Exercised
or
expired
during
the year
No.
At
31 December
2016
No.
Exercise
price
Date from
which
exercisable
£
Expiry
date
Share options
D. Strang
D. Strang
A Clayton
J Taylor-Firth
Consultants
Warrants
Various
10,000,000
12,000,000
12,000,000
12,000,000
10,000,000
56,000,000
4,075,000
4,075,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,000,000
12,000,000
12,000,000
12,000,000
10,000,000
56,000,000
4,075,000
4,075,000
0.004 14/11/2013 14/11/2023
0.003 30/11/2015 31/12/2020
0.003 30/11/2015 31/12/2020
0.003 30/11/2015 31/12/2020
0.004 14/11/2013 14/11/2023
0.004 29/10/2013 14/11/2018
The share price range during the year was £0.0014 to £0.0030 (2015 - £0.004 to £0.0017).
The share based payment charge in the year was £nil (2015 - £60,000).
The weighted average values of options are as follows:
Weighted average exercise price of options granted
Weighted average exercise price of options exercisable at the
end of the year
Weighted average option life remaining
2015
0.30p
0.30p
5 years
For those options granted where IFRS 2 "Share-Based Payment" is applicable, the fair values were calculated
using the Black-Scholes model. The inputs into the model were as follows:
Risk free rate
Share price
volatility
Expected life
Share price
at date of
grant
30 November 2015
1.10%
111.1%
5.09 years
£0.0022
Expected volatility was determined by calculating the historical volatility of the Company's share price for 12
months prior to the date of grant. The expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural
considerations.
The Company recognised total expenses of £nil (2015: £60,000) relating to equity-settled share-based
payment transactions during the year, and £nil was transferred via equity to retained earnings on the exercise
of nil options (2015: nil options) during the year (2015: £nil).
30
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2016 (CONTINUED)
15. Capital Commitments
The directors have confirmed that there were no contingent liabilities or capital commitments which should
be disclosed at 31 December 2016. No provision has been made in the financial statements for any amounts
in relation to any capital expenditure requirements of the Company’s associate or investments, and such costs
are expected to be fulfilled in the normal course of the operations of the Company.
16. Related Party Transactions
The Company had the following amounts outstanding from its investee companies (Note 9) at 31 December:
Horse Hill Development Ltd (“Horse Hill”)
2016
£’000
658
2015
£’000
369
The above loan outstanding is included within trade and other receivables, Note 9. The loan to Horse Hill has
been made in accordance with the terms of the investment agreement whereby it accrues interest daily at
the Bank of England base rate and is repayable out of future cashflows.
Key Management Personnel
The key management personnel are considered to be the Directors. There remuneration is included in note 4
to the accounts.
17. Events after the end of the reporting period
On 3 March 2017, the Company announced it had raised £237,000 by way of a placing of 158 million new
ordinary shares of 0.01 pence each at aprice of 0.15 pence per share.
18. Ultimate Controlling Party
There is not considered to be an ultimate controlling party of the company.
31