Company Registration Number 3740688
PRIMORUS INVESTMENTS PLC
REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2017
PRIMORUS INVESTMENTS PLC
CONTENTS
CHAIRMAN’S STATEMENT INCORPORATING THE STRATEGIC REPORT
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 YEAR ENDED 31 DECEMBER 2017
STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2017
STATEMENT OF CHANGES IN EQUITY AT 31 DECEMBER 2017
STATEMENT OF CASH FLOWS YEAR ENDED 31 DECEMBER 2017
NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2017
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S STATEMENT INCORPORATING THE STRATEGIC REPORT
I am pleased to present the Chairman's Statement and Strategic report for the year ended 31 December 2017.
Overview
Primorus Investments plc (“Primorus”) has a strong balance sheet with no debt and with current assets (including
cash of £561,000) as at 31 December 2017 amounting to £1,286,000. (2016: £1,295,000)
It has been a successful year for the Company with the addition of several new investments as detailed below in
Investments. 2017 was dominated by portfolio acquisition, consolidation and rationalisation through the
participation in our first secondary funding rounds and the sale of our legacy stake in GMOW and the strong
growth seen at Engage Technology and Fresho.
Highlights for the year were as follows:
• HHDL received planning permission for the Extended Flow Test of the HH-1 oil discovery;
• Engage Technology platform expanded significantly and appointed Microsoft UK Cloud Services Director
as non-executive Director;
•
Sale of entire stake in Gold Mines of Wales for 83,333,333 shares in Alba Mineral Resources plc;
• Participation in a successful A$4m second round investment in Fresho Pty Ltd at a 40% premium to first
round;
•
Second round investment in WeShop at a 20% premium to first round. Platform usage grows markedly
since second-round investment, with registered users surging 76% in Q1 2018 to 150,000 and unique
users topped 1m for the first time.
• Appointment of TPI Limited as exclusive Company Broker;
• Directors purchased 97m ordinary shares in the Company via on-market purchases;
•
Successfully raised approximately GBP£3.4m during the period through the issue of approximately 1.7
billion Primorus shares at placing prices of 0.15p and 0.20p per share;
• A post year end sale of 5% stake in HHDL for consideration of £1m; and
• A further investment post year end in Engage of £500,000.
Significant progress has also been made elsewhere in our portfolio and we look forward to providing updates as
key news develops at TruSpine, Sport80, FOMO Money, Nomad Energy, SOA, Farina and StreamTV.
We regularly meet the CEOs and management of companies which are seeking funds to further their businesses.
It is notable the comments we receive on the perceived difficulty in securing funding outside of the VC/VCT and
private equity universe. Several companies pointed out to us that there is simply a dearth of investors able to
participate directly in pre-IPO and private funding rounds and that VC/VCT funding terms are onerous to the point
of being unattractive.
It is important for shareholders to understand that whilst we do everything possible to support our existing
investments because it is in our interest to do so, we do not have a direct effect on the exact timing of any given
IPO and or trade sale. We do however maintain regular dialogue with the companies in question and use the
Board’s extensive experience in public markets to make a value judgement on when and if a transaction may occur.
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S REPORT INCORPORATING THE STRATEGIC REPORT – CONTINUED
Thus, these timings may change over time as the facts change but we will update shareholders as material changes
occur.
Recently we have seen sustained core investment progress, portfolio rebalancing and more clarity on the likely
timing of several of our investments towards IPO. Going forward we hope to receive material news from several
of our investments as they commence the formal IPO process.
Investments
Horse Hill Developments Limited
The Company currently owns a 5% direct interest in Horse Hill Developments Limited (“HHDL”), which 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 announced on 28 February 2018, the Company disposed of half of its original 10% stake in HHDL for a total
consideration of £1m. This sale was designed to increase existing cash reserves, rebalance the portfolio make-up
and reduce the expected cash calls resulting from the soon-to-commence 90 day extended flow test (“EWT”) of
the HH-1 discovery well. As a result of this transaction, Primorus retains a 5% direct shareholding in HHDL. We
remain optimistic that the EWT will return substantial flow-rates.
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.
The carrying value of this investment remains unchanged however the Board looks forward with considerable
interest to the upcoming long-term extended flow test programme in 2018 and its likely potential impact on our
investment value going forward.
SOA Energy
SOA Energy (“SOA”) is an oil exploration and development company with prospects in the Dead Sea region of
Israel. Primorus participated in a private funding round by purchasing 14,977 shares at £6.67 per share. SOA is
currently seeking a significant funding package to further their development plans. We are encouraged by funding
progress made by SOA and we expect a funding deal to be completed soon.
Fresho Pty Ltd
Fresho Pty Ltd (”Fresho”), a company in which Primorus holds an investment of approximately £250,000,
representing approximately 3.1% of Fresho's issued 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 suppliers are able to make savings in time,
money and wastage and also generate powerful reporting and business data analytics.
We continued to be impressed by the team at Fresho. We met management in Melbourne in October 2017 and
were not only pleased with the business performance to date but also by the financial interest generated in Fresho
which enabled them to raise A$4m in what we understand to have been a keenly sought-after funding round.
Pleasingly the Fresho platform continues to perform strongly with order volumes and customers numbers in
Australia and now New Zealand growing strongly. Fresho maintains a strong cash balance and it is anticipated that
it should get to a breakeven basis, including R&D spend, sometime in the second half of 2018. Whilst much of the
data regarding Fresho is now “commercial in confidence”, the Board of Primorus believes the Fresho platform is
exceeding our expectations.
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S REPORT INCORPORATING THE STRATEGIC REPORT – CONTINUED
Nomad Energy
Nomad Energy is a private oil and gas exploration and development company primarily focussed on
commercialising existing gas reserves in shallow offshore waters off the Ivory Coast. Nomad Energy is currently
attempting to negotiate a gas sales agreement with local utilities for the supply of gas to existing and proposed
power stations in the country. Primorus owns 40,000 shares at the last investor round price of US$7.50 per share.
We have been informed that negotiations over off-take pricing for its domestic gas project are moving forward,
albeit more slowly than first anticipated. Completing this off-take is the final step in allowing Nomad to monetise
the asset with its partner VITOL and thereby potential providing a good return on our investment. We will keep
shareholders up to date as these matters progress.
TruSpine Technologies Limited
Primorus invested £500,000 in TruSpine Technologies Limited (“Truspine”) on a pre-new money valuation of
£15m. Founded in December 2014, TruSpine secured intellectual property and subsequently developed the Faci-
LOK and Cervi-FAS minimally invasive spine stabilisation devices, and the VOSC Catheter atherosclerosis treatment
product 'VOSC Catheter'. This development is on-going and TruSpine is targeting FDA clearance and
commercialisation of its first product, the Faci-LOK with a view to an AIM IPO. We have been informed TruSpine will
require further funding to complete this. We understand TruSpine is in negotiations with a funder at the current time to
provide all the funding required.
Importantly, TruSpine has appointed Mr Simon Stephens as its new interim CEO. Most recently, Simon has held the
position of Research Director for London Valve Therapies, where he was responsible for the provision of a new
service for the analysis of CT/Echocardiography scans for bleeding edge transcathether cardiac interventions
mainly for Mitral Valve/Left Ventricular procedures. He is also a Research Fellow at the Royal Brompton &
Harefield NHS Foundation Trust. In a previous role as CTO for Hometrack, he was responsible for developing
software technologies that resulted in the company being sold in 2017 for £120m. In addition to Mr Stephens,
Professor Abdallah Raweh has joined the medical advisory board. He is a professor of Cardiology who was trained
in Italy, the UK and US, and who now operates internationally.
We view the appointment of Mr Stephens and Professor Raweh as key steps in helping to secure the remaining
funding required to complete the FDA fast-track approvals process and build a credible Board in advance of an
IPO. We look forward to updating shareholders in the near future as to the progress of the aforementioned
TruSpine funding, as that is key to unlocking the FDA fast-track and IPO processes.
Sport:80 plc
Primorus invested £100,000 in Sport:80 plc (“Sport:80”) on a pre-new money valuation of £10m as part of a
fundraising of up to £1m. Sport:80 is a technology and management company with a proprietary cloud-based
platform focused on transforming the business operations and management of sports organisations. The Sport:80
platform is used by 20 prominent sports organisations. Sport:80 is revenue-generating with four-fold revenue
growth per annum since 2014. It is the intention of Sport:80 to pursue an AIM IPO.
Sport:80 remains on track to formally commence the IPO process soon with our best estimate suggesting a likely
Q3 2018 listing subject to financing and regulatory approvals. We view Sport:80 as a strong IPO candidate and
subject to available funds, we may participate in any IPO funding round.
Farina Investments (UK) Limited
Primorus invested £100,000 in Farina Investments (UK) Limited (“Farina”) on a pre-new money valuation of
£4m. Farina is a boutique corporate finance and asset management company which specialises in leveraging profit
opportunity in the post-crisis financial landscape. Farina has been carefully structured and strategically placed to
fully capitalise on these opportunities, thereby optimising capital growth, profitability and returns for both the
company and investors. Farina is currently exploring various UK listing opportunities either via IPO or reverse
takeover.
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S REPORT INCORPORATING THE STRATEGIC REPORT – CONTINUED
Engage Technology Partners Limited
The Company initially invested £400,000 in Engage Technology Partners Limited ("Engage") on a pre-new money
valuation of £15m as part of a fully subscribed £5.25m funding round. Founded in 2013, Engage builds software
to assist with finding, hiring, compliance and paying of the rapidly growing contingent workforce in the UK. Engage
has developed and is now selling a unique, fully integrated SaaS platform servicing the HR industry surrounding
the contingent workforce in the UK.
Engage has developed, and is now selling, access to a unique, fully-integrated SaaS platform servicing the HR
industry surrounding the contingent workforce in the UK. In recent shareholder updates we have been informed
that the platform has already reached £1m of Annual Recurring Revenue (”ARR”).
This is significant because from this ARR figure we believe that top-line revenues and underlying EBITDA for the
Engage platform may grow exponentially as customers are on-boarded and the product becomes fully self-serve
from a customer point of view. The underlying attraction of SaaS platforms is their ability to scale rapidly as a
result of a low cost of service base to generate very high EBITDA margins as a result.
We believe testimony to this potential is the appointment of Mr Paul Bolt as a non-executive director at Engage.
Paul is UK Cloud Services Director at Microsoft. Microsoft have allowed Paul to take on the non-executive role at
Engage whilst retaining his current post as UK Cloud Services Director allowing him to foster and mentor
potentially globally scalable SaaS platforms.
We have been informed that Engage continues to be courted by a large number of VC funds in the UK and US but
is considering maintaining its independence via a further capital raise during 2018. On 13 March 2018, the
Company announced that it had invested a further £500,000 in Engage at £22 per share and now held
approximately 3.6% of the issued share capital of Engage.
As flagged in our announcement of 13 March 2018, we remain optimistic regarding Engage as an investment
because of the rapid pace of uptake of the product from UK corporates. It is also noteworthy that Engage has
begun discussions with City brokers regarding a potential IPO in 2019. The Company is hoping to invest further in
Engage in the coming Quarter should the opportunity arise.
WeShop Limited
Primorus invested £200,000 in WeShop Limited ("WeShop") on a pre-new money valuation of £25m in September
2017. We invested a further £675,000 at a £30m valuation in November 2017. WeShop is a new way to shop
online and earn rewards. Users can browse millions of products from many top brands, discover which have been
recommended by people known to them and earn rewards to withdraw as cash or donate to charity.
WeShop allows the user to shop with friends to share ideas and gain inspiration, with everyone earning rewards.
An AIM IPO is planned to take place during 2018.
Stream TV
Primorus invested US$200,000 on a fully-diluted valuation of US$336m. Stream TV is a Philadelphia-based new
media company created to serve a consumer market seeking enhanced entertainment and communications
experiences through devices with unlimited accessibility and superior quality. Through its wholly-owned research
subsidiary, SeeCubic B.V., Stream TV has developed breakthrough glasses-free 3D display technology launched
under the trade name Ultra-D. Stream TV is on the cusp of commercially launching, via license, a range of TV,
tablet and smartphone glasses-less 3D screens in 2018.
Recently Stream TV has added to their product plan 8K displays which produce effects approaching hologram-like
quality as new prototypes used by prospective customers. They announced joint cooperation with Beijing Optical
and Electric (“BOE”) to commercialise its Ultra-D Glasses-Free 3D technology in its next generation 8K panels.
Further licensed products will follow including laptops, PCs, gaming, medical, and automotive. Stream TV desires
to IPO in the near future.
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S REPORT INCORPORATING THE STRATEGIC REPORT – CONTINUED
Gold Mines of Wales
In December 2017, the Company sold its entire 49% stake in Gold Mines of Wales (“GMOW”) for circa 83m shares
in Alba Mineral Resources PLC (“Alba”). We see this as an attractive outcome for shareholders as we retain some
exposure to the project via the consequent 3.6% shareholding in Alba and by definition increase our exposure to
HHDL in which Alba is a 18.1% shareholder. Furthermore, the Alba stake is inherently more liquid than our previous
direct stake in GMOW.
Financial Results
The operating loss for the year was £703,000 (2016 - £420,000 loss). The net loss after tax was £947,000 (2016:
£694,000). The increase in the net loss is due to share based payments expense during the year of £311,000 (2016:
nil) and loss on disposal of GMOW of £199,000 (2016:nil).
Current assets including cash at 31 December 2017 amounted to £1,286,000 (2016: £1,295,000).
Outlook
2017 was dominated by portfolio acquisition, consolidation and rationalisation through the participation in our
first secondary funding rounds and the sale of our legacy stake in GMOW and the exceptional growth seen at
Engage Technology and Fresho.
The Board remains confident that the private and pre-IPO markets remain significantly under-served and as such
significant opportunities exist for the Company going forward. We look forward to 2018 being one in which we
can demonstrate our business model by exiting some more of our investment positions, thereby realising tangible
value for all shareholders.
As evidenced by the above, Primorus has had a busy end to 2017 and start to 2018. We successfully completed
the first two second-round investments and are confident a number of our investments are making material
progress towards either IPO or trade sale. Furthermore, I am pleased that all Directors have made significant on-
market purchases of Company stock which demonstrates to investors that the Board are committed and aligned
to shareholders and to generating share price-based outcomes in the future for the benefit of all.
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
18 May 2018
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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
Turner Pope Investments (TPI) Ltd
6th Floor, Becket House
36 Old Jewry
London
EC2R 8DD
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
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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 qualified 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 of various AIM 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
2017.
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 15 and are stated in UK sterling. The Company made a loss after
taxation of £947,000 (2016 - loss of £694,000). The Directors do not recommend payment of a dividend (2016 -
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 5.
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 2017. The Directors
have prepared cash flow forecasts for the period ending 31 May 2019 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;
Jeremy Taylor-Firth
Alastair Clayton
Donald Strang
Each of the directors at the date of this report hold fully vested options over ordinary shares. Jeremy Taylor-Firth
holds 87 million options, Alastair Clayton holds 162 million options and Donald Strang holds 97 million options
(total options held by directors is 346 million). The option details are disclosed in Note 14 to the financial
statements.
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PRIMORUS INVESTMENTS PLC
REPORT OF THE DIRECTORS
Substantial Shareholding
As at 1 May 2018, the Company had been notified of the following substantial shareholdings in the ordinary share
capital, over 3%;
JIM Nominees Limited
Interactive Investor Services Nominees Limited
Hargreaves Lansdown (Nominees) Limited
Interactive Investor Services Nominees Limited
Share Nominees Limited
HSDL Nominees Limited
Lawshare Nominees Limited
Hargreaves Lansdown (Nominees) Limited
Corporate Governance
Number of ordinary shares
878,838,190
251,153,506
132,735,860
129,526,019
121,060,456
111,316,651
111,095,085
100,994,016
%
31.43%
8.98%
4.75%
4.63%
4.33%
3.98%
3.97%
3.61%
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 Company’s 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 (2016- 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.
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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
18 May 2018
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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.
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PRIMORUS INVESTMENTS PLC
REPORT OF THE AUDITOR
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRIMORUS INVESTMENTS PLC
OPINION
We have audited the financial statements of Primorus Investments Plc (the ‘Company’) for the year ended 31 December
2017 which comprise the statement of comprehensive income, the statement of financial position, the statement of
changes in equity, the statement 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 the preparation of the company financial statements 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 December 2017 and
of the Company’s loss for the year then ended;
• the Company financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
• the financial statements 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.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report of the current period. These matters were addressed in the context of our audit of the financial report
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have
determined the matters described below to be the key audit matters to be communicated in our report.
CARRYING VALUE OF AVAILABLE FOR SALE INVESTMENTS
The Company’s Available for Sale Investment assets (‘AFS assets’) represent the most significant asset on its statement
of financial position totalling £3.8m as at 31 December 2017, of which unlisted investments represented £3.3m of the
total AFS assets.
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PRIMORUS INVESTMENTS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRIMORUS INVESTMENTS PLC - CONTINUED
CARRYING VALUE OF AVAILABLE FOR SALE INVESTMENTS
The carrying value of AFS assets represents significant assets of the company and assessing whether facts or
circumstances exist to suggest that impairment indicators were present, and if present, whether the carrying amount
of these asset may exceed its recoverable amount was considered key to the audit. This assessment involves significant
judgement applied by management to the Company’s unlisted investments.
We considered it necessary to assess whether facts and circumstances existed to suggest that impairment indicators
were present, and if present, whether the carrying amount of these assets may exceed its recoverable amount.
How the Matter was addressed in the Audit
The procedures included, but were not limited to, assessing and evaluating management's assessment of whether any
impairment indicators have been identified across the Company’s AFS assets, the indicators being:
• Expiring, or imminently expiring, rights to licences or assets held by the investee Companies
• A lack of flow of information in regards to the investee companies exploration activities and/or production, trading
or strategic advancement.
• Discontinuation of, or a plan to discontinue, exploration activities in the areas, or cessation or delays in trading of
interest by the Investee Companies.
• Sufficient data exists to suggest carrying value of exploration and evaluation assets is unlikely be recovered in full
through successful development or sale by the Investee Companies.
• Updates on trading activities by Investee Companies.
We also reviewed Stock Exchange RNS announcements and Board meeting minutes for the year and subsequent to year
end for activity to identify any indicators of impairment.We also assessed the disclosures included in the financial
statements and our results found the carrying value for AFS assets to be acceptable.
The materiality level for the financial statements as a whole was set at £75,000 , being 1.5% of Net Assets, with a lower
materiality level set at £50,000 for the Company`s AFS assets.
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.
13
PRIMORUS INVESTMENTS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRIMORUS INVESTMENTS PLC – CONTINUED
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 by the Company, 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.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ responsibilities statement, 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
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.
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) or ISA IAASB 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: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Rowan Palmer
(Senior Statutory Auditor)
For and on behalf of Chapman Davis LLP, Statutory Auditor
London
Chapman Davis LLP is a limited liability partnership registered in England and Wales (with registered number
OC306037).
18 May 2018
14
PRIMORUS INVESTMENTS PLC
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 DECEMBER 2017
Revenue
Realised gain on disposal of AFS investments
Unrealised gain on market value movement of AFS investments
Total gains on AFS investments
Impairment provision on AFS investments
Share based payments
Administrative costs
Operating (loss)
Provision on associate loan
Share of (loss) of associate
Net (loss) on disposal of associate
(Loss) before tax
Taxation
(Loss) for the year attributable to equity holders of the company
Notes
2017
£000
2016
£000
2
2
3
7
7
5
12
29
41
-
(311)
(433)
17
45
62
(150)
-
(332)
(703)
(420)
-
(45)
(199)
(947)
-
(947)
(152)
(122)
-
(694)
-
(694)
(Loss) per Share
Basic and diluted (loss) per share (pence)
6
(0.05)
(0.07)
There are no other recognised gains or losses for the year.
The Accounting Policies and Notes form an integral part of these Financial Statements.
15
PRIMORUS INVESTMENTS PLC
STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2017
ASSETS
Notes
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
2017
£000
-
3,761
725
561
7
8
9
10
2017
£000
2016
£000
2016
£000
155
915
3,761
1,070
1,074
221
1,286
5,047
11
(97)
(38)
(97)
4,950
1,295
2,365
(38)
2,327
13
15,391
35,296
471
(46,208)
15,223
32,205
160
(45,261)
4,950
2,327
These Financial Statements were approved by the Board of Directors and authorised for issue on 18 May 2018.
Donald Strang
Director
Alastair Clayton
Director
The Accounting Policies and Notes form an integral part of these Financial Statements.
16
PRIMORUS INVESTMENTS PLC
STATEMENT OF CHANGES IN EQUITY
AT 31 DECEMBER 2017
Share
capital
Share
premium
Share
based
payment
reserve
Retained
earnings
£000
£000
£000
£000
Total
attributable
to owners
of the
Company
£000
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
Loss for the year
Total comprehensive income
for the year
Shares issued
Share Issue costs
Share options issued
Transactions with owners of the company
-
-
168
-
-
168
-
-
3,219
(128)
-
3,091
-
-
-
-
311
311
(947)
(947)
-
-
-
-
(947)
(947)
3,387
(128)
311
3,570
Balance at 31 December 2017
15,391
35,296
471
(46,208)
4,950
17
PRIMORUS INVESTMENTS PLC
STATEMENT OF CASH FLOWS
YEAR ENDED 31 DECEMBER 2017
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
Change in AFS Investments
Taxation (paid)
Net Cash used in Operating Activities
Cash Flows from Investing Activities
Loan advanced to associate
Loan advanced to related party
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
2016
£000
(420)
(141)
(561)
2017
£000
2017
£000
2016
£000
(703)
(2,186)
(2,889)
-
24
-
(165)
-
(60)
(289)
311
(26)
59
(2,530)
-
(5)
(25)
3,387
(128)
(30)
(349)
870
(56)
3,259
340
221
561
814
(96)
317
221
18
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017
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”).
The Financial Statements are for the year ended 31 December 2017 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 18 May 2018 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.
19
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
1. Accounting Policies (continued)
Going Concern
The Directors noted the losses that the Company has made for the Year Ended 31 December 2017. The
Directors have prepared cash flow forecasts for the period ending 31 May 2019 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
2017 the Company had cash and cash equivalents of £561,000 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 2017 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.
- IFRS 17 Insurance Contracts (effective date 1 January 2021).
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.
20
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (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.
21
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (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.
22
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (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.
23
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (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:
•
• 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).
including any market performance conditions;
•
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.
24
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (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
sale of investments, was £12,000 (2016 - £17,000). The non-current assets of the segment is £3,761,000 (2016
- £1,070,000).
3. Operating Activities and Auditor’s Remuneration
Included within results from operating activities are the following:
2017
£000
2016
£000
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
10
10
-
2017
£000
190
311
501
No.
4
4
£000
489
23
10
-
2016
£000
72
-
72
No.
3
3
£000
72
The Company operates only the basic pension plan required under UK legislation, contributions thereto
during the year amounted to £15.
25
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
4.
Information Regarding Directors and Employees (continued)
Emoluments of the Individual Directors
2017
A Clayton
J Taylor Firth
D Strang
2016
A Clayton
J Taylor Firth
D Strang
Fees and
salaries
£000
112
42
24
178
£000
24
24
24
72
Share based
payments
(non-cash)
£000
156
-
155
311
£000
-
-
-
-
Total
£000
268
42
179
489
£000
24
24
24
72
Directors’ interest in share options is set out in note 14.
Key Management Personnel
The key management personnel are considered to be the Directors. There remuneration is included in note 4
above.
5.
Income Tax (Credit)/Expense
The relationship between the expected tax (credit)/expense based on the effective tax rate of the Company
at 19/20% (2016 – 20%) 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
Expenses not deductible for tax purposes
Deferred tax asset not recognised
Actual tax expense
Deferred Tax
2017
£000
(947)
19/20%
(182)
68
114
-
2016
£000
(694)
20%
(139)
51
88
-
The amount of approximate unused tax losses for which no deferred tax asset is recognised in the statement
of financial position is £1,973,000 (2016 - £1,382,000).
26
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
6. Loss per Share
2017
Loss after tax
Earnings attributable to ordinary shareholders
Weighted
average
No. of shares
Basic per share
amount
(pence)
£000
(947)
(947)
Weighted average number of shares
1,743,253,998
Total basic and diluted loss per share
2016
Loss after tax
Earnings attributable to ordinary shareholders
£000
(694)
(694)
Weighted average number of shares
1,052,549,167
Total basic and diluted loss per share
7.
Investment in associate
Investment in associate
Carrying amount at 1 January
Share of associate loss
Value at disposal of associate
Carrying amount at 31 December
2017
£000
-
2017
£’000
155
(45)
(110)
-
(0.05)
(0.05)
(pence)
(0.07)
(0.07)
2016
£000
155
2016
£’000
277
(122)
-
155
On 1 December 2017, the Company completed the sale of its entire 49% interest in Gold Mines of Wales
Limited to Alba Mineral Resources PLC ("Alba") for a total consideration of 83,333,333 shares in Alba. Alba's
closing share price on December 1 2017 was 0.38p, these shares had a market value of approximately
£316,667 and will represent 3.6% of the so enlarged issued capital in Alba. These shares are subject to a six
month orderly market agreement and were issued immediately upon completion of the sale.
Disposal of Associate
Sale Proceeds
Value of loan to associate satisfied on disposal
Value of associate at disposal
(Loss) on disposal of associate
£’000
316
(405)
(110)
(199)
27
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
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
2017
£000
915
3,052
(247)
12
29
-
3,761
466
3,295
3,761
2016
£000
750
291
(37)
16
45
(150)
915
135
780
915
The Directors have reviewed the carrying value of the unlisted investments, and have considered no
impairment is required in the current year to 31 December 2017. For the year ended 31 December 2016, 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 both listed and unlisted investments. The listed investments are
traded on stock markets throughout the world, and are held by the Company as a mix of strategic and short
term investments.
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
2017
£000
-
24
-
683
18
725
2016
£000
-
11
400
658
5
1,074
The directors consider that the carrying amount of trade and other receivables approximates to their fair
value.
28
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
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
2017
£000
561
2017
£000
44
13
40
97
2016
£000
221
2016
£000
16
3
19
38
All amounts are short term and the carrying values are considered to be a reasonable approximation of fair
value.
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
2017
£000
725
561
1,268
2016
£000
1,074
221
1,295
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
97
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.
29
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
12. Risk Management Objectives and Policies (continued)
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.
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.
30
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
13. Share Capital
Allotted, issued and fully paid
2,796,619,344 ordinary shares of 0.01p each
(2016 – 1,110,549,167of 0.01p each)
28,976,581 deferred shares of 45p each (2016 – 28,976,581)
28,976,581 A deferred shares of 4p each (2016- 28,976,581)
92,230,985 B deferred shares of 0.99p each (2016- 92,230,985)
The deferred shares and the A and B deferred shares do not carry voting rights.
2017
£000
2016
£000
279
111
13,040
1,159
913
15,391
13,040
1,159
913
15,223
Ordinary
Shares
Number
Nominal
Value
£’000
Ordinary shares of 0.01p each
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
2 March 2017 – Placing for cash at 0.15p per share
7 July 2017 – Placing for cash at 0.15p per share
2 August 2017 – Placing for cash at 0.15p per share
23 November 2017 – Placing for cash at 0.20p per share
As at 31 December 2017
762,549,167
308,000,000
40,000,000
1,110,549,167
158,000,000
333,333,334
694,736,843
500,000,000
2,796,619,344
76
31
4
111
16
33
69
50
279
Details of the share options and warrants the Company has in issue are disclosed in Note 14.
31
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (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
2017
No.
Issued
during
the year
No.
Exercised
or
expired
during
the year
No.
At
31 December
2017
No.
Exercise
price
Date from
which
exercisable
£
Expiry
date
Share options
D. Strang
D. Strang
A Clayton
J Taylor-Firth
Consultants
D Strang
A Clayton
Warrants
Various
10,000,000
12,000,000
12,000,000
12,000,000
10,000,000
-
-
-
-
-
-
-
75,000,000
75,000,000
56,000,000 150,000,000
4,075,000
4,075,000
-
-
-
-
-
-
-
-
-
-
-
-
10,000,000
12,000,000
12,000,000
12,000,000
10,000,000
75,000,000
75,000,000
206,000,000
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
0.003 03/08/2017 03/08/2022
0.003 03/08/2017 03/08/2022
0.004 29/10/2013 14/11/2018
The share price range during the year was £0.00075 to £0.0036 (2016 - £0.0014 to £0.0030).
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
2017
0.30p
2016
-
0.31p
4.43 years
0.33p
5.03 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
3 August 2017
0.75%
108.7%
5.00 years
£0.0027
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 £311,000 (2016: £nil) 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 (2016: nil options) during the year (2016: £nil).
32
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
15. Capital Commitments
The directors have confirmed that there were no contingent liabilities or capital commitments which should
be disclosed at 31 December 2017. 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”)
2017
£’000
683
2016
£’000
658
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 9 January 2018, the Company announced that it had agreed to grant 75 million share options each to
Alastair Clayton and Jeremy Taylor-Firth ("New Options"). Each New Option will entitle the holder to subscribe
for new ordinary shares of 0.01p each in the Company ("Shares") at an exercise price of 0.3 pence per Share
and are exercisable at any time until 9 January 2025, which represented a premium of circa 67 per cent over
the closing mid-price on 8 January 2018.
On 9 March 2018, the Company announced it had completed the disposal of a 5% interest in Horse Hill
Developments Limited for consideration of £1m in cash and publicly trading shares.
On 13 March 2018, the Company announced it had invested a further £500,000 in an existing investment,
Engage Technology Partners Limited.
18. Ultimate Controlling Party
There is not considered to be an ultimate controlling party of the company.
33