Company Registration Number 3740688
PRIMORUS INVESTMENTS PLC
REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2020
PRIMORUS INVESTMENTS PLC
Contents
COMPANY INFORMATION
CHAIRMAN’S STATEMENT INCORPORATING THE STRATEGIC REPORT
REPORT OF THE DIRECTORS
CORPORATE GOVERNANCE STATEMENT
INDEPENDENT AUDITOR’S REPORT
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 31 DECEMBER 2020
STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020
STATEMENT OF CASH FLOWS YEAR ENDED 31 DECEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2020
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3
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11
16
21
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25
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PRIMORUS INVESTMENTS PLC
COMPANY INFORMATION
Directors
Secretary
Registered Office:
Rupert Labrum (Chairman)
Matthew Beardmore (Non-executive Director)
Hedley Clark (Non-executive Director)
Simon Holden
48 Chancery Lane
London
WC2A 1JF
Company Registration Number:
03740688
Country of Incorporation:
United Kingdom
Nominated Adviser & Broker
Independent Auditor
Bankers
Solicitors
Registrars
Cairn Financial Advisers LLP
Cheyne House, Crown Court
62-63 Cheapside
London
EC2V 6AX
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
Barclays Bank plc
Corporate Banking
One Churchill Place
London
E14 5HP
Keystone Law Limited
48 Chancery Lane
London
WC2A 1JF
Share Registrars Limited
The Courtyard
17 West Street
Farnham
GU9 7DR
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S STATEMENT INCORPORATING THE STRATEGIC REPORT
Overview
I am pleased to present the Chairman’s Statement and Strategic Report for the financial results of Primorus Investments
plc (“Primorus” or the “Company”) for the year ended 31 December 2020.
Introduction
The period under review was one of significant change, both for Primorus and the global economy due to the COVID-19
pandemic. In late October, a newly constituted Board of Directors took over the management and operations of
Primorus with a principal focus on reducing the annual running costs of the Company and changing the strategic focus
of the business to provide stronger growth for the shareholders.
The first step of reducing costs has been accomplished, whereby the new Board implemented changes which equate to
an annual saving of approximately 40% with directors’ salaries and fees having been reduced by 75%. The second step
of changing the Company’s strategic focus involved carrying out a detailed review of each investment held by Primorus.
This involved spending a significant amount of time in discussions with the management teams of the investee
companies.
It was pleasing to learn of the progress which several of the investee companies had achieved, in the face of some
exceptional challenges brought on by the COVID-19 pandemic. This was tempered slightly by the fact that some of the
investee companies had clearly struggled in the economic environment and would need to raise capital.
Concurrent with reviewing existing investments, the management team was also presented with many new proposals
and opportunities during the period. The management team carefully reviewed each opportunity but decided that it
was in the best interests of the shareholders to put in place a robust strategy that underpins all future investments
before committing to new opportunities. Post-financial period, the Company has made two investments, further details
of which are contained in note 16 to the financial statements.
Investment highlights
•
Fully exited investment in Greatland Gold Plc (“GGP”), realising a total return on investment of 746%. At the time
of the new Board taking over at the Company in late October, the Company held 20 million shares in GGP. The
Board felt GGP had enjoyed some significant success during the period, but the timing was right for divesting the
stake in full. The remaining divestment achieved an average sale price of approximately 23 pence per share,
realising gross proceeds of approximately £4.6 million.
Fresho Pty Ltd (“Fresho”) experienced the successful launch of its B2C business, with over 90,000 sign-ups in 2020.
B2B volumes increased significantly in the fourth quarter of the period to be 55% up on the quarter ending
September and over 30% up on the same time in 2019.
The Company subscribed for 2 million shares in Zuuse Limited (“Zuuse”) at a price of A$1 per share in primary stock,
although also subscribed for a portion of this in secondary stock at a slightly lower price. Primorus holds 2,057,205
shares in Zuuse and 1,000,000 options exercisable at A$0.50. Zuuse’s revenue for the period was up by 15%
compared to 2019 despite falling 7% during the second quarter. The business was also EBITDA and cashflow positive
throughout the period, and enjoyed record sales in December 2020.
Engage Technology Partners Limited’s (“Engage”) revenues recovered in the period to pre-COVID levels and the
belief is that revenues will continue to grow due to a strong pipeline of new work. Revenues for the financial period
ending 31 December 2020 were £595,000.
•
•
•
Financial highlights
The operating profit for the year was £4.616 million (2019: £401,000 loss). The net profit after tax was £4.169 million
(2019: £401,000 loss). The profit for the period is attributable to the divestment of the Company’s full stake in GGP.
Total assets including cash at 31 December 2020 amounted to £9.401 million (2019: £4.865 million).
The cash balance was £4.67 million at 31 December 2020.
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S STATEMENT INCORPORATING THE STRATEGIC REPORT (continued)
Investee companies
All the Company’s investments in underlying investee companies are minority investments. Whilst we may offer advice
to management of the investee companies, specifically pertaining to their business objectives and goals, they can and
sometimes do ignore such advice. Similarly, those investee companies which are privately held do not have similar
disclosure obligations to publicly quoted companies and therefore any updates they provide in relation to their
businesses can be piecemeal and, in certain cases, non-existent save where the Board specifically requests an update.
Primorus does not operate its investee companies on a day-to-day basis, and whilst the Board will look to structure
investments in a format where Primorus can have a high degree of oversight, this was not typically done with the
Company’s historic investments and, as such, there are inherent risks in that investee companies are not as accountable
to the Company as the Board would prefer them to be.
Summary
The Board was pleased to learn of the progress achieved by a few of the Company’s investee companies, whilst several
of the investments were clearly struggling, principally due to a lack of funding, the availability of which was hampered
due to the economic environment caused because of the COVID-19 pandemic. We spoke to all our investee companies,
nearly all of which informed us that they would be raising new capital. It became clear to the Board that those investee
companies which had struggled because of the pandemic were not necessarily aligned with the revised strategic focus
of the Company going forward.
The Board decided not to invest further capital in those investee companies which had struggled due to the pandemic
and instead prioritise on those investments which it believed would offer the most upside to our shareholders. The
investments we prioritised were Fresho, Zuuse and Engage. The Board believes each of these investments present
significant upside for our shareholders and we look forward to being able to share further positive news on each of
them as their respective management teams deliver on their ambitious business objectives.
The Board spent a significant amount of time in the last two months of the period not only reviewing existing and new
investment opportunities, but also reviewing the future outlook for Primorus. We noted that the Company had been
fairly sector agnostic in its investment choices notwithstanding that there was a general theme of investing in natural
resource opportunities, which reflected the previous directors’ backgrounds and experience. We believe the current
Board is comprised of individuals with a wider range of sector experience, and we are keen to exploit this for the benefit
of Primorus. As we move forward, the Board is keen to adopt a more holistic approach for Primorus. As we seek to
implement this approach, we would like to share with our shareholders some of the principal items we will focus on, as
noted below.
Board changes
In October 2020, the previous Board members, numbering three, resigned from the Company, following which the
Board was comprised of myself, as Executive Chairman, and Hedley Clark and Matthew Beardmore, each being Non-
Executive Directors. As new directors we are committed to the proper corporate governance of the Company as set out
in the Corporate Governance Statement below.
2021
Moving forward, the Board has set the following strategic criteria for any new investment opportunity which it identifies:
•
It must enable Primorus the opportunity to acquire a meaningful stake in the investee company.
• A clear and realistic exit route must be in place.
•
•
•
•
There should be an opportunity for the Board to play an active role in the investee company’s development.
The Board and the investee company’s management team must share a common vision and strategic alignment.
The investment committed by the Company will be proportionate to the risk/reward opportunity.
There should be a greater opportunity for the Company’s shareholders to benefit directly from the increase in
capital values from each investment.
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PRIMORUS INVESTMENTS PLC
CHAIRMAN’S STATEMENT INCORPORATING THE STRATEGIC REPORT (continued)
The strategic criteria forms part of the rationale for proposing to shareholders for approval an updated investing policy
to be adopted by the Company at the 2021 annual general meeting (“AGM”). The Board believes that by applying the
above criteria to the proposed updated investing policy, the Company can target more capital accretive opportunities
for the benefit of shareholders. Some highlights of the updated investing policy are as follows:
•
•
To establish and/or acquire a diverse portfolio of direct and indirect interests in companies and/or projects at any
stage of their development or operational lifecycle with a particular focus on the natural resources, energy, clean
technology, financial technology, business technology, infrastructure, property, consultancy, brand licensing and
leisure sectors.
Invest by way of outright acquisition of assets, including the intellectual property, of a relevant business, or by
entering into partnerships, joint ventures or other forms of collaborative arrangements.
• Be an active and/or a passive investor depending on the nature of the individual investments, placing no minimum
or maximum limit on the length of time that any investment may be held.
•
Invest, as a founder or co-founder investor, seed investor and/or cornerstone investor in special purpose acquisition
companies (“SPACs”) established for the purpose of identifying suitable acquisition targets; principally SPACs whose
shares are traded on, or are intended to be traded on, the Standard Segment of the Main Market or the AIM market
of the London Stock Exchange.
The full text of the proposed updated investing policy can be seen in the notice of AGM published by the Company on
the same date as the release of these accounts.
Our operational targets for the remainder of 2021, in line with our proposed updated investing policy, are:
•
•
•
•
•
•
•
To continue to focus on applying financial resources diligently, with controlled corporate costs and focused
investment.
To continue to build working capital, preferably through organic means, by exiting investments which have
generated significant returns on investment.
To continue to build our external network and to develop our managerial team to provide confidence in the market
of our abilities to achieve our strategic business objective of identifying significant value-enhancing investment
opportunities.
To proactively continue the work the Board has already started to achieve crystallisation of value from certain
investment opportunities which it has identified, which may be via their own listed entities.
Invest in a series of new special purpose acquisition companies (“SPACs”) with Primorus as a founder investor, or
as a co-founder investor where circumstances permit, where we seek to identify suitable target companies to
reverse into the SPACs.
To invest in third party SPACs, where such opportunities fit within the Company’s investing policy.
To continue to review new opportunities and where financially and operationally practical to acquire additional
investment interests.
Outlook
The Board made excellent progress in addressing what it considered to be excessive historic costs, and alleviating
administrative burdens on Primorus which seemed to offer little benefit to our shareholders. Decisions made in the
period addressing these items included cancellation of the secondary quotation of the Company’s shares on the Aquis
Growth Market and the replacement of the Company’s broker. The Company also cancelled historic share option
awards.
After a period of transition and the divestment of our entire stake in GGP in 2020, we now look forward to 2021 as a
year of growth; growth in those of the Company’s investments which the Board has principally focused on, including its
post-financial year further investment in Fresho and new investment in Mustang Energy PLC, combined with corporate
activity relating to the establishment of our own SPACs. Our objectives are simple, to generate significant value for
shareholders and to build our working capital rapidly and organically, while maintaining the strength of our balance
sheet.
The Board would like to thank all shareholders for their continued support and understanding in these exceptional
circumstances, and wish them well during this time.
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PRIMORUS INVESTMENTS PLC
s172 Statement
The Directors continue to act in a way that they consider, in good faith, to be most likely to promote the success of the
Company for the benefits of the members as a whole, and in doing so have regard, amongst other matters to:
•
•
•
•
•
•
The likely consequences of any decision in the long term;
The interests of the Company’s employees;
The need to foster the Company’s business relationships with suppliers, customers and others;
The impact of the Company’s operations on the community as well as the environment;
The need to act fairly as between members of the Company, and
The desirability of the Company maintaining a reputation for high standards of business conduct
The Board has always recognised the relationships with key stakeholders as being central to the long-term success of
the business and therefore seeks active engagement with all stakeholder groups, to understand and respect their views,
in particular of those with the communities in which it invests, its host governments, employees and suppliers.
Details of the Board’s decisions for the year ending 31 December 2020 to promote long-term success, and how it
engaged with stakeholders and considered their interests when making those decisions, can be found throughout the
Chairman’s Statement, Directors’ Report and Corporate Governance Statements.
Rupert Labrum
Chairman
7th June 2021
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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 2020
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 21 and are stated in UK sterling. The Company made a profit after taxation
of £4.169 million (2019: loss of £401,000). The Directors do not recommend payment of a dividend (2019: £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 3 to 6.
Key Performance Indicators
During the year the Company made purchases of listed and unlisted investments in line with the investment strategy
which resulted in the net asset value of the Company growing to £8.786 million by the year end. In future monitoring
the return on investments will become a Key Performance Indicator (“KPI”) that the board will use as a basis to monitor
the performance of the company, in addition to the overall net asset value of the Company. Further details about the
material investments already name are explained in the Chairman’s Statement.
Going Concern
The Directors have prepared cash flow forecasts for the period ending 30 June 2022 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.
The directors have considered the impact of the coronavirus (COVID-19) in preparing the financial statements. The
directors have also adopted initiatives to mitigate the impact of the pandemic on the business. Having taken into
account all available information about the Company’s trading prospects for 12 months from the date of approval of
the financial statements, the directors consider that the Company is a going concern.
Prior year restatement
During the year, the prior year accounting treatment of the investments held, which were classified as available for sale
investments, has been revisited. The investments should be treated as financial assets at fair value through profit or
loss in accordance with IFRS 9. As a result, a prior year restatement in respect of the classification of the investment
held has been reflected within the financial statements. See note 18 for details of the impact on the financial statements.
Events After the Reporting Period
Events After the Reporting Period are outlined in Note 16 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 Notes 4 and 13 to the Financial Statements.
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PRIMORUS INVESTMENTS PLC
REPORT OF THE DIRECTORS (continued)
All the Directors below served during throughout the period unless otherwise stated:
Executive Chairman
Non-executive Director
Non-executive Director
Rupert Labrum
Matthew Beardmore
Hedley Clark
Jeremy Taylor-Firth
Alastair Clayton
Donald Strang
appointed 27th October 2020
appointed 27th October 2020
appointed 27th October 2020
resigned 12th November 2020
resigned 12th November 2020
resigned 27th October 2020
Each of the current Directors, at the date of this report, hold options over 3.0 million ordinary shares. The option details
are disclosed in Note 13 to the financial statements.
Substantial Shareholding
As at 2nd June 2021, the Company was aware of the following substantial shareholdings in the ordinary share capital,
over 3%;
HSDL Nominees Limited
HSDL Nominees Limited
Interactive Investor Services Nominees Limited
Hargreaves Lansdown (Nominees) Limited
Rock (Nominees) Limited
Hargreaves Lansdown (Nominees) Limited
Barclays Direct Investing Nominees Limited
JIM Nominees Limited
Interactive Investor Services Nominees Limited
JIM Nominees Limited
Hargreaves Lansdown (Nominees) Limited
Wealth Nominees Limited
HSDL Nominees Limited
Number of
ordinary shares
22,072,255
12,293,351
10,475,581
8,833,377
6,761,807
6,119,594
5,956,172
5,655,211
5,335,017
5,007,324
4,958,027
4,907,976
4,849,630
% of issued
share capital
15.78%
8.79%
7.49%
6.32%
4.84%
4.38%
4.26%
4.04%
3.82%
3.58%
3.55%
3.51%
3.47%
The serving directors hold a beneficial interest in the ordinary share capital of the Company as follows:
Rupert Labrum*
Hedley Clark*
Matthew Beardmore
* including connected party holdings
Number of
ordinary shares
29,500,000
993,360
100,000
% of issued
share capital
21.10%
0.71%
0.07%
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.
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PRIMORUS INVESTMENTS PLC
REPORT OF THE DIRECTORS (continued)
Charitable Contributions
During the year the Company made charitable donations amounting to Nil (2019: Nil).
Directors' Indemnities
The Company has put in place qualifying third party indemnity provisions for all of the Directors of the Company which
was in force at the date of approval of this report.
Principal risks and uncertainties
The principal risks and uncertainties facing the are detailed within the Corporate Governance section on pages 11 to 15
of this report.
Internal control
A key objective of the Directors is to safeguard the value of the business and assets of the Company. This requires the
development of relevant policies and appropriate internal controls to ensure proper management of the Company’s
resources and the identification and mitigation of risks which might serve to undermine them. The Directors are
responsible for the Company’s system of internal control and for reviewing its effectiveness. It should, however, be
recognised that such a system can provide only reasonable and not absolute assurance against material misstatement
or loss.
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 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 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.
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 DIRECTORS (continued)
Statement of disclosure of information to auditors
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.
So far as the Directors are aware, there is no relevant audit information of which the Company’s auditors are unaware.
Additionally, the Directors have taken all the necessary steps that they ought to have taken as directors in order to make
themselves aware of all relevant audit information and to establish that the Company’s auditors are aware of that
information.
Statutory auditor
PKF Littlejohn were appointed auditors during the year following the resignation of Chapman Davis LLP and have
expressed their willingness to continue in office as auditors and a resolution proposing their reappointment will be
submitted at the Company’s 2021 annual general meeting (“AGM”).
Annual General Meeting
Notice of the forthcoming AGM will be enclosed separately.
By Order of the Board
Hedley Clark
Director
7th June 2021
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PRIMORUS INVESTMENTS PLC
CORPORATE GOVERNANCE STATEMENT
Changes to corporate governance regime
The Board of Primorus Investments plc are committed to the principles of good corporate governance and believe in
the importance and value of robust corporate governance and in our accountability to our shareholders and
stakeholders.
During the year a new board of directors was appointed and the new directors affirm the principles contained in this
Corporate Governance Statement.
The AIM Rules for companies (as updated on 1st January 2021) required AIM companies to apply a recognised corporate
governance code from 28 September 2018. Primorus has chosen to adhere to the Quoted Company Alliance’s Corporate
Governance Code for Small and Mid-Size Quoted Companies (the “QCA Code”) and listed below are the 10 broad
principles of the QCA Code and the Company’s disclosure with respect to each point.
THE PRINCIPLES OF THE QCA CODE
Principle One
1.
Business Model and Strategy
The Board has concluded that the highest medium and long term value can be delivered to its shareholders by the
adoption of an investing strategy for the Company. 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.
Principle Two
2.
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders.
The Company has close ongoing relationships with its private shareholders. Shareholders and analysts have the
opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are
encouraged to attend the Company’s Annual General Meeting. Investors also have access to current information on the
Company though its website, www.primorusinvestments.com, and via Rupert Labrum, Executive Chairman, who is
available to answer investor relations enquiries.
Principle Three
3.
Considering wider stakeholder and social responsibilities
The Board recognises that the long term success of the Company is reliant upon the efforts of the employees of the
Company and its investee companies and stakeholders. The Board is therefore charged with the responsibility of
ensuring that there is as close as practicable oversight and contact with its key investee companies and shareholder
relationships. Furthermore the Board considers the wider impacts of any investee company in terms of their social and
environmental impacts.
Principle Four
4.
Risk Management
In addition to its other roles and responsibilities, the Audit Committee is responsible to the Board for ensuring that
procedures are in place and are being implemented effectively to identify, evaluate and manage the significant risks
faced by the Company. The risk assessment matrix below sets out those risks, and identifies their ownership and the
controls that are in place. This matrix is updated as changes arise in the nature of risks or the controls that are
implemented to mitigate them. The Audit and Compliance Committee reviews the risk matrix and the effectiveness of
scenario testing on a regular basis. The following principal risks and controls to mitigate them, have been identified:
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PRIMORUS INVESTMENTS PLC
CORPORATE GOVERNANCE STATEMENT (continued)
Activity
Risk
Impact
Control(s)
Financial
Liquidity, market and credit risk
Inability to continue as going
concern
Robust capital management
policies and procedures
Inappropriate controls and
accounting policies
Reduction in asset values
Incorrect reporting of assets
The board agrees and signs
off all annual reports which
detail accounting policies.
Regulatory
adherence
Strategic
Breach of rules
Censure
Damage to reputation
Inadequate disaster recovery
procedures
Inability to secure new
capital or investments
Loss of key operational and
financial data
Due to size of the company –
the board discusses and
agrees all payments over
£25,000.
Audit Committee
Strong compliance regime
instilled at all levels of the
Company
Effective communications
with shareholders coupled
with consistent messaging to
potential investees
Robust compliance
Off-site storage of data
Management
Recruitment and retention of
key people
Reduction in operating
capability
Stimulating and safe working
environment
Balancing salary with longer
term incentive plans
The Directors have established procedures, as represented by this statement, for the purpose of providing a system of
internal control. An internal audit function is not considered necessary or practical due to the size of the Company and
the close day to day control exercised by the Executive Chairman, Rupert Labrum. However, the Board will continue to
monitor the need for an internal audit function. The Board works closely with and has regular ongoing dialogue with
the Company financial controller and has established appropriate reporting and control mechanisms to ensure the
effectiveness of its control systems.
Principle Five
5.
A Well Functioning Board of Directors
As at the date hereof the Board comprised: the Executive Chairman Rupert Labrum, and Independent Non-Executive
Directors, Hedley Clark and Matthew Beardmore. Biographical details of the current Directors are set out within
Principle Six below. Executive and Non-Executive Directors are subject to re-election at intervals of no more than 3
years. The Executive Chairman is considered to be a full time employee whilst the Non-Executive Directors are
considered to be part time but are expected to provide as much time to the Company as is required. The Board elects
a Chairman to chair every meeting.
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PRIMORUS INVESTMENTS PLC
CORPORATE GOVERNANCE STATEMENT (continued)
The Board meets formally at least 3 times per annum but regular contact is maintained so that all directors are informed
of relevant developments and are able to have discussions whenever required. It has established an Audit Committee
and a Remuneration Committee, particulars of which appear hereafter. The Board has agreed that appointments to the
Board are made by the Board as a whole and so has not created a Nominations Committee. Both Non-Executive
Directors are considered to be part time but are expected to provide as much time to the Company as is required. The
Board considers that this is appropriate given the Company’s current stage of operations. It shall continue to monitor
the need to match resources to its operational performance and costs and the matter will be kept under review going
forward.
Matthew Beardmore is considered by the Board to be an Independent Director. The Board notes that the QCA
recommends a balance between executive and non-executive Directors and recommends that there be two
independent non-executives. As it has only one independent non-executive director, the Board does not currently fully
comply with this requirement and will consider making further appointments as the scale and complexity of the
Company grows, which is expected to be when the Company achieves a market capitalisation of over £10 million.
Attendance at Board and Committee Meetings
The Company shall report annually on the number of Board and committee meetings held during the year and the
attendance record of individual Directors. To date in the current financial year the Directors have a 100% record of
attendance at such meetings. In order to be efficient, the Directors meet formally and informally both in person and by
telephone. To date there have been at least quarterly formal meetings of the Board, and the volume and frequency of
such meetings is expected to continue at this rate.
Principle Six
6.
Appropriate Skills and Experience of the Directors
The Board currently consists of three Directors. The Company believes that the current balance of skills in the Board as
a whole, reflects a very broad range of commercial and professional skills across geographies and industries and each
of the Directors has experience in public markets.
The Board recognises that it currently has a limited diversity and this will form a part of any future recruitment
consideration if the Board concludes that replacement or additional directors are required.
The Board shall review annually the appropriateness and opportunity for continuing professional development whether
formal or informal. Currently each of the board are involved in financial markets and increase their awareness and skills
via reading and participation in commercial transactions from time to time.
Mr Rupert Labrum
Executive Chairman
Rupert Labrum is a former investment banker, who retired after a successful career in the City of London. He was
involved with Treasury and funding operations of international banks and building societies. He worked as a fund
manager at Gartmore Investment Management and previously ran a proprietary derivatives trading desk at Deutsche
Bank. Over the last several years, Mr Labrum has been an active investor in multiple private and publicly quoted
companies. He has held notifiable positions in several AIM-quoted companies, and is the Company’s largest shareholder,
holding an aggregate interest in its shares of approximately 21%.
Mr Hedley Clark
Non-executive Director
Hedley Clark is a Fellow of the Institute of Chartered Accountants in England and Wales. After nine years working in
private practice, the last five at KPMG, he left to take up senior financial and management roles in various companies
where he gained a wealth of international business experience. This included two successful start-ups. For the last 11
years, Mr Clark’s principal role has been as the managing director of Credence Background Screening Limited, a
successful background screening company which, since his initial involvement in 2009, has seen significant revenue and
profits growth.
13
PRIMORUS INVESTMENTS PLC
CORPORATE GOVERNANCE STATEMENT (continued)
Mr Matthew Beardmore
Independent Non-executive Director
Matthew Beardmore is a practising solicitor and commercial manager. He has acted on many investments, commercial
transactions, property transactions and major projects amounting to several billion pounds during his career. Mr
Beardmore was previously a non-executive director of AIM-quoted lnfraStrata plc, where he was instrumental in both
completing and managing the company’s EU grant applications.
7.
Principle Seven
Evaluation of Board Performance
Internal evaluation of the Board, the Committee and individual Directors is undertaken on an annual basis in the form
of informal discussions.
The annual report details the progress which the board and company has made for the year.
No succession planning is deemed necessary at this point due to the small size of the company.
Each director is also assessed by shareholders on a three year rotation basis at AGM when their re-appointment is due.
Principle Eight
8.
Corporate Culture
The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Company as
a whole and that this will impact the performance of the Company. The Board is aware that the tone and culture set by
the Board will greatly impact all aspects of the Company as a whole and the way that employees behave. The corporate
governance arrangements that the Board has adopted are designed to ensure that the Company delivers long term
value to its shareholders and that shareholders have the opportunity to express their views and expectations for the
Company in a manner that encourages open dialogue with the Board.
A large part of the Company’s activities are centred upon what needs to be an open and respectful dialogue with
investee companies and investors and other stakeholders. Therefore, the importance of sound ethical values and
behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places
great import on this aspect of corporate life and seeks to ensure that this flows through all that the Company does.
The directors consider that at present the Company has an open culture facilitating comprehensive dialogue and
feedback and enabling positive and constructive challenge. The Company has adopted a code for Directors’ and
employees’ dealings in securities which is appropriate for a company whose securities are traded on AIM and is in
accordance with the requirements of the Market Abuse Regulation which came into effect in 2016.
Principle Nine
9.
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Company’s activities rests with the Board, the respective responsibilities of the
Chairman and Executive Director arising as a consequence of delegation by the Board. The Board has adopted
appropriate delegations of authority which set out matters which are reserved to the Board. The Chairman is responsible
for the effectiveness of the Board, management of the Company’s business and primary contact with shareholders.
14
PRIMORUS INVESTMENTS PLC
CORPORATE GOVERNANCE STATEMENT (continued)
Audit Committee
During the current financial year, the Audit Committee comprised of Hedley Clark (Chairman) and Rupert Labrum. This
committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial
performance of the Company is properly measured and reported. It receives reports from the executive management
and auditors relating to the interim and annual accounts and the accounting and internal control systems in use
throughout the Company. Following the resignation of the previous auditors the Audit Committee recommended to
the board of directors to appoint PKF Littlejohn LLP as auditors of the Company. The Audit Committee shall meet not
less than twice in each financial year and it has unrestricted access to the Company’s auditors.
Remuneration Committee
The Remuneration Committee comprises Matthew Beardmore (Chairman) and Hedley Clark. The Remuneration
Committee reviews the performance of the executive directors and employees and makes recommendations to the
Board on matters relating to their remuneration and terms of employment. The Remuneration Committee also
considers and approves the granting of share options pursuant to the share option plan and the award of shares in lieu
of bonuses pursuant to the Company’s Remuneration Policy. Sees notes 4 and 13 below regarding directors
remuneration.
Nominations Committee
The Board has agreed that appointments to the Board will be made by the Board as a whole and so has not created a
Nominations Committee.
Non-Executive Directors
The Board has appointed 2 Non-Executive Directors.
Due to the small size of the Company, it is deemed not necessary to appoint further non-executive directors until the
Company’s market capitalisation is over £10m.
In accordance with the Companies Act 2006, the Board complies with: a duty to act within their powers; a duty to
promote the success of the Company; a duty to exercise independent judgement; a duty to exercise reasonable care,
skill and diligence; a duty to avoid conflicts of interest; a duty not to accept benefits from third parties and a duty to
declare any interest in a proposed transaction or arrangement. There is no plans at this stage to increase the governance
framework until the company achieves minimum £10m market capitalisation.
Principle Ten
10.
Shareholder Communication
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders.
The Company has close ongoing relationships with its private shareholders. shareholders and analysts have the
opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are
encouraged to attend the Company’s Annual General Meeting (subject to any COVID restrictions which may prevail at
the time).
Investors also have access to current information on the Company though its website, www.primorusinvestments.com,
and via Rupert Labrum, Executive Chairman, who is available to answer investor relations enquiries. The company is
currently considering , subject to the necessary formalities, to move to electronic communications with shareholders in
order to maximise efficiency. The company’s website details various information: annual reports, AGM notice of
meetings and RNS announcements detailing results of meetings and other relevant information.
The Company shall include, when relevant, in its annual report, any matters of note arising from the audit or
remuneration committees.
15
PRIMORUS INVESTMENTS PLC
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
2020 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 significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law and international
accounting standards in conformity with the requirements of the Companies Act 2006.
In our opinion, the financial statements:
•
•
•
give a true and fair view of the state of the company’s affairs as at 31 December 2020 and of its profit for the
year then ended;
have been properly prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the
company’s ability to continue to adopt the going concern basis of accounting included:
• Reviewing the cash flow forecasts prepared by management for the period up to June 2022 corroborating,
providing challenge to key assumptions and reviewing for reasonableness;
• A comparison of actual results for the year to past budgets to assess the forecasting ability/accuracy of
management;
• Reviewing post-year end RNS announcements and holding discussions with management on future plans; and
• Assessing the adequacy of going concern disclosures within the Annual Report and Financial Statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for
a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it could
reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the financial statements as a whole to be
£130,000 based on approximately 1.5% of gross assets on the basis that the Company’s investments are the main
components of the Statement of Financial Position.
16
PRIMORUS INVESTMENTS PLC
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based on 60% of overall materiality as adjusted for the
judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the
internal control environment.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party
transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £6,500, which is based on 5% of
overall materiality. Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was
required on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular we looked at areas involving significant accounting estimates and judgements by the Directors
in respect of the carrying values of the Company’s investments and considered future events that are inherently
uncertain. We also addressed the risk of management override of internal controls, including evaluation whether there
was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Key Audit Matter
How our scope addressed this matter
Valuation, classification and impairment of investments
(Note 7)
The Company held investments with a value of £4.6m
as at 31 December 2020. These are valued in accordance
with IFRS 13 and the fair value hierarchy; and classified
as per IFRS 9.
There is the risk that these investments have not been
valued in accordance with IFRS 13 and IFRS 9 and
require impairment.
Our work in this area included;
• Reviewing the valuation methodology for the
investments held and ensuring that the carrying
sufficient and
values are
appropriate audit evidence;
supported by
•
Ensuring that all asset types are categorised
according to IFRS, including the accounting
disclosures as required under IFRS 9;
• Reviewing the movement in investments to
ensure they are accounted for and disclosed
correctly in line with IFRS 9;
• Reviewing disclosures in relation to said assets;
•
•
Ensuring that Primorus Investments Plc has full
title to the investments held;
Ensuring
disclosures
surrounding the estimates made in respect of
appropriate
that
17
PRIMORUS INVESTMENTS PLC
any valuations are included in the financial
statements; and
• Considering whether the transactions have
been accounted for correctly within the financial
statements.
As a result of the procedures performed above, a prior
year restatement in respect of the classification of the
investments held, was reflected within the financial
statements.
The conclusion of our work was that the investments are
fairly stated in the financial statements, and we consider
that management’s judgement in respect of the carrying
value and classification of financial
is
materially reasonable.
investments
Other information
The other information comprises the information included in the annual report, other than the financial statements and
our auditor’s report thereon. The directors are responsible for the other information contained within the annual
report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us
to report to you if, in our opinion:
•
adequate accounting records have not been kept, or returns adequate for our audit have not been received
from branches not visited by us; or
•
the financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
18
PRIMORUS INVESTMENTS PLC
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
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• We obtained an understanding of the company and the sector in which it operates to identify laws and
regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained
our understanding in this regard through discussions with management, industry research, application of
cumulative audit knowledge and experience of the sector etc. This is evidenced by discussion of laws and
regulations with the management, reviewing minutes of meetings of those charged with governance and RNSs
and review of legal or professional expenditures.
• We determined the principal laws and regulations relevant to the company in this regard to be those arising
from Companies Act 2006, AIM rules, GDPR, Employment Law, Health and Safety Law, Anit-Bribery and Money
Laundering Regulations and QCA compliance.
• We designed our audit procedures to ensure the audit team considered whether there were any indications of
non-compliance by the company with those laws and regulations. These procedures included, but were not
limited to:
o Discussion with management regarding potential non-compliance;
o Review of legal and professional fees to understand the nature of the costs and the existence of any
non-compliance with laws and regulations; and
o Review of minutes of meetings of those charged with governance and RNSs
• We also identified the risks of material misstatement of the financial statements due to fraud. We considered,
in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls,
that the potential for management bias was identified in relation to the carrying value of the investments.
• As in all of our audits, we addressed the risk of fraud arising from management override of controls by
performing audit procedures which included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business and review of bank statements during the year to
identify any large and unusual transactions where the business rationale is not clear.
19
PRIMORUS INVESTMENTS PLC
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those
leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases
the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding
irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion,
omission or misrepresentation.
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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an 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.
Zahir Khaki (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
7 June 2021
15 Westferry Circus
Canary Wharf
London
E14 4HD
20
PRIMORUS INVESTMENTS PLC
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 DECEMBER 2020
Notes
2
2
2
3
7
5
Income
Investment income
Realised gain/lLoss) on financial investments
Unrealised (loss)/gain on financial investments
Operating expenses
Operating costs
Impairment of financial investments
Profit/(Loss) before tax
Taxation
Profit/(Loss) for the year attributable to equity
shareholders of the company
Other comprehensive income for the year net of tax
Total comprehensive income/(expenditure) for the year
2020
£'000
14
6,033
(323)
5,724
(475)
(475)
(633)
4,616
(447)
4,169
-
4,169
2019
£'000
24
(62)
228
190
(591)
(591)
-
(401)
-
(401)
-
(401)
Profit/(Loss) per Share
Basic and diluted (loss) per share (pence)
6
2.98
(0.29)
The Accounting Policies and Notes on pages 25 to 39 form an integral part of these Financial Statements.
21
PRIMORUS INVESTMENTS PLC
STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2020
Company Number 03740688
ASSETS
Notes
Non-Current Assets
Financial Investments
Current Assets
Investments
Trade and other receivables
Cash and cash equivalents
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Loans and borrowings
Total Liabilities
Net Assets
EQUITY
Equity Attributable to Equity Holders
of the Company
Share capital
Share premium account
Share based payment reserve
Retained earnings
7
7
8
9
10
10
12
2020
£'000
4,612
4,612
113
3
4,673
4,789
9,401
(502)
(113)
(615)
2019
(Restated)
£'000
4,805
4,805
-
15
45
60
4,865
(108)
-
(108)
8,786
4,757
15,391
35,296
-
(41,901)
15,391
35,296
683
(46,613)
Total Equity
8,786
4,757
These Financial Statements were approved by the Board of Directors and authorised for issue on 7th June 2021.
Rupert Labrum
Director
Hedley Clark
Director
The Accounting Policies and Notes on pages 25 to 39 form an integral part of these Financial Statements.
22
PRIMORUS INVESTMENTS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Share
capital
£'000
Share
premium
£'000
Share
based
payment
reserve
£'000
Total
attributable
to owners of
the
company
£'000
Retained
earnings
£'000
Balance at 31 December 2018
15,391
35,296
683
(46,212)
5,158
Loss for the year
Total comprehensive income for
the year
-
-
-
-
-
-
(401)
(401)
(401)
(401)
Balance at 31 December 2019
15,391
35,296
683
(46,613)
4,757
Profit for the year
Total comprehensive income for
the year
Termination and settlement of
share options
Cancellation of share options
-
-
-
-
-
-
-
-
-
-
(140)
(543)
4,169
4,169
-
543
4,169
4,169
(140)
-
Balance at 31 December 2020
15,391
35,296
-
(41,901)
8,786
The accounting policies and notes on pages 25 to 39 form part of these financial statements.
23
PRIMORUS INVESTMENTS PLC
STATEMENT OF CASH FLOWS
YEAR ENDED 31 DECEMBER 2020
Cash Flows from Operating Activities
Profit/(Loss) before tax
(Profit)/Loss on disposal of financial investments
Fair value movements on listed investments
Impairment provision on unlisted investments
Decrease in trade and other receivables
Decrease in trade and other payables
Foreign exchange gain
Share based payment
Taxation (paid)
Net Cash used in Operating Activities
Cash follow from investing activities
Disposal proceeds from sale of financial investments
Payments for financial investments
Cash Flows from Financing Activities
Net Cash in generated from Financing Activities
2020
£'000
4,616
(6,033)
323
633
12
(53)
(65)
(140)
-
(707)
6,939
(1,717)
2019
£'000
(401)
62
(228)
-
72
(10)
1
-
-
(504)
663
(522)
-
-
Net Change in Cash and Cash Equivalents
4,515
(363)
Cash and Cash Equivalents at beginning of year
Cash and Cash Equivalents at end of year
Cash and Cash equivalents comprise:
Cash and cash in bank
Bank loans and overdrafts
45
4,560
4,673
(113)
4,560
4
408
45
45
-
45
The accounting policies and notes on pages 25 to 39 form part of these financial statements.
24
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020
1 Accounting Policies
Basis of Preparation
Primorus Investments plc is a company incorporated in the United Kingdom. The Company’s registered office is 48
Chancery Lane, London, WC2A 1JF. The Company's shares are listed on the AIM market of the London Stock Exchange.
The Financial Statements are for the year ended 31 December 2020 and have been prepared under the historical cost
convention).
The financial statements have been prepared in accordance with the Companies Act 2006 and International Accounting
Standards (IAS) and International Financial Reporting Standards (IFRS) and related interpretations.
These Financial Statements (the "Financial Statements") have been prepared and approved by the Directors on 7th June
2021 and signed on their behalf by Rupert Labrum and Hedley Clark.
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 current 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.
25
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
1
Accounting Policies (continued)
Going Concern
The Directors noted the profits that the Company has made for the Year Ended 31 December 2020. The Directors have
prepared cash flow forecasts for the period ending 30 June 2022 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 2020 the
Company had cash and cash equivalents of £4.560m, net of borrowings. The Company has minimal contractual
expenditure commitments and the Board considers the present funds together with future disposals of its financial
investments 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
The company has applied the following standards and amendments for the first time for its annual reporting period
commencing 1 January 2020:
•
•
•
•
•
Definition of Material – Amendments to IAS 1 and IAS 8;
Definition of a Business – Amendments to IFRS 3;
Interest Rate Benchmark Reform – Amendments to IFRS 9 , IAS 39 and IFRS 7;
Revised Conceptual Framework for Financial Reporting;
Annual Improvements to IFRS Standards 2018-2020 Cycle; and COVID-19 related rent concessions –
amendments to IFRS 16
Other than the treatment of financial assets at fair value through profit or loss in accordance with IFRS 9, the adoption
of the above has not had any material impact on the disclosures or amounts reported in the financial statements.
New standards, amendments and interpretations not yet adopted
There are no IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact
on the Company.
Key accounting judgements and estimates
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. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision only affects that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
26
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
1
Accounting Policies (continued)
Unlisted investments
The Company is required to make judgments over the carrying value of investments in unquoted companies where fair
values cannot be readily established and evaluate the size of any impairment required. It is important to recognise that
the carrying value of such investments cannot always be substantiated by comparison with independent markets and,
in many cases, may not be capable of being realised immediately. Management’s significant judgement in this regard
is that the value of their investment represents their cost less previous impairment. Further details relating to
management’s assessment of the carrying value of unlisted investments can be found in the Chairman’s Report.
Income
Income is measured by reference to the fair value of consideration received or receivable by the Company for services
provided, excluding VAT and trade discounts. Income is credited to the Income Statement in the period it is deemed to
be earned.
Interest income from financial assets at FVPL is included in the net fair value gains/(losses) on these assets. Interest
income on financial assets at amortised cost and financial assets at, available-for-sale securities, held-to-maturity
investments and loans and receivables is calculated using the effective interest method is recognised in the statement
of profit or loss as part of investment or other income.
Finance Income and Costs
Finance income and costs are reported on an accruals basis.
Segment reporting
Segmental analysis is not applicable as there is only one operating segment of the continuing business – investment
activities.
Prior year restatement
During the year, the prior year accounting treatment of the investments held, which were classified as available for sale
investments, has been revisited. The investments should be treated as financial assets at fair value through profit or
loss in accordance with IFRS 9. As a result, a prior year restatement in respect of the classification of the investment
held has been reflected within the financial statements. See note 18 for details of the impact on the financial statements.
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.
27
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
1
Accounting Policies (continued)
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.
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.
•
•
Share capital
Financial instruments issued by the Company are treated as equity only to the extent that they do not meet the
definition of a financial liability. The Company’s ordinary shares are classified as equity instruments.
Fair value measurement
IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity
is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is
required or permitted. The resulting calculations under IFRS 13 affected the principles that the Company uses to assess
the fair value, but the assessment of fair value under IFRS 13 has not materially changed the fair values recognised or
disclosed. IFRS 13 mainly impacts the disclosures of the Company. It requires specific disclosures about fair value
measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards.
28
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
1
Accounting Policies (continued)
Financial instruments
Financial investments
Non-derivative financial assets comprising the Company’s strategic financial investments in entities not qualifying as
subsidiaries, associates or jointly controlled entities. These assets are classified as financial assets at fair value through
profit or loss. They are carried at fair value with changes in fair value recognised through the income statement. Where
there is a significant or prolonged decline in the fair value of a financial investment (which constitutes objective evidence
of impairment), the full amount of the impairment is recognised in the income statement.
Due to the nature of these assets being unlisted investments or held for the longer term, the investment period is likely
to be greater than 12 months and therefore these financial assets are shown as non-current assets in the Statement of
financial position.
Listed investments are valued at closing bid price on 31 December 2020. For measurement purposes, financial
investments are designated at fair value through income statement. Gains and losses on the realisation of financial
investments are recognised in the income statement for the period. The difference between the market value of
financial instruments and book value to the Company is shown as a gain or loss in the income statement for the period.
Trade and other receivables
Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost
using the effective interest rate method. Trade and other receivables are accounted for at original invoice amount less
any provisions for doubtful debts. Provisions are made where there is evidence of a risk of non-payment, taking into
account the age of the debt, historical experience and general economic conditions. If a trade debt is determined to be
uncollectable, it is written off, firstly against any provisions already held and then to the statement of comprehensive
income. Subsequent recoveries of amounts previously provided for are credited to the statement of comprehensive
income.
Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss in accordance with the
expected credit loss model under IFRS 9. For trade and other receivables which do not contain a significant financing
component, the Company applies the simplified approach. This approach requires the allowance for expected credit
losses to be recognised at an amount equal to lifetime expected credit losses. For other debt financial assets the
Company applies the general approach to providing for expected credit losses as prescribed by IFRS 9, which permits
for the recognition of an allowance for the estimated expected loss resulting from default in the subsequent 12-month
period. Exposure to credit loss is monitored on a continual basis and, where material, the allowance for expected credit
losses is adjusted to reflect the risk of default during the lifetime of the financial asset should a significant change in
credit risk be identified.
The majority of the Company's financial assets are expected to have a low risk of default. A review of the historical
occurrence of credit losses indicates that credit losses are insignificant due to the size of the Company's clients and the
nature of its activities. The outlook for the natural resources industry is not expected to result in a significant change in
the Company's exposure to credit losses. As lifetime expected credit losses are not expected to be significant the
Company has opted not to adopt the practical expedient available under IFRS 9 to utilise a provision matrix for the
recognition of lifetime expected credit losses on trade receivables. Allowances are calculated on a case-by-case basis
based on the credit risk applicable to individual counterparties.
Trade and other payables
Trade and other payables are held at amortised cost which equates to nominal value.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, current balances with banks and similar institutions and liquid
investments generally with maturities of 3 months or less. They are readily convertible into known amounts of cash
and have an insignificant risk of changes in values.
29
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
1
Accounting Policies (continued)
Share-Based Payments
The Company has a share-based compensation plan, 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, which is calculated by reference to Black Scholes model:
•
•
•
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.
Segment Reporting
2
The Company operates a single primary activity to invest in businesses so as to generate a return for the shareholders.
Income
Investment income – interest received on loan notes
Realised gain/(loss) on financial investments
Unrealised (loss)/gain on financial investments
2020
£000
14
6,033
(323)
5,724
2019
£000
24
(62)
228
190
30
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
3 Profit/(Loss) for the year
Included within results from operating activities are the following:
Fees payable to the Company’s auditors for audit of the Company’s financial
statements:
-
-
Total auditor’s fees
Previous auditors
Current auditors
Other costs
Operating lease rentals – land and buildings
Legal fess
Foreign exchange (gain)/loss
Other general overheads
Total other costs
4
Information Regarding Directors and Employees
Employment costs, including Directors, during the year:
Wages and salaries
Social security costs
Average number of persons, including Directors employed
Administration
Directors’ remuneration
Emoluments
Social security costs
2020
£000
2019
£000
-
18
18
9
7
(65)
506
457
2020
£000
283
31
314
No.
4
4
£000
269
30
10
-
10
9
2
2
568
581
2019
£000
343
39
382
No.
4
4
£000
323
37
360
The Company operates only the basic pension plan required under UK legislation, contributions thereto during
the year amounted to £1,400 (2019: £nil).
299
31
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
4
Information Regarding Directors and Employees (continued)
Emoluments of the Individual Directors
2020
A Clayton1
D Strang2
J Taylor Firth1
R Labrum3
M Beardmore3
H Clark3
2019
A Clayton
J Taylor Firth
D Strang
1 Resigned 12th November 2020
2 Resigned 27th October 2020
3 Appointed 27th October 2020
Fees and
salaries
Share based
payments
£'000
157
47
48
6
4
4
269
£'000
200
60
63
323
£'000
-
-
-
-
-
-
-
£'000
-
-
-
-
Total
£'000
157
47
48
6
4
4
269
£'000
200
60
63
323
Pension contributions of £1,400 were paid on behalf of the former directors (2019: £nil).
Directors’ fees totalling £nil have been accrued and remain unpaid as at 31 December 2020 (2019: £43,000). This
amount is included within trade and other payables, Note 10.
Directors’ interest in share options is set out in Note 13.
Key Management Personnel
The key management personnel are considered to be the Directors. Their remuneration is included in Note 4 above.
5
Taxation
Profit/(loss) for the year before tax
Tax rate
Expected tax charge/(credit)
Expenses not deductible for tax purposes
Income not taxable for tax purposes
Set off against tax losses
Deferred tax asset not recognised
Other deductions for tax purposes
Current tax charge
2020
£000
4,616
19%
877
184
(1,146)
(431)
990
(27)
447
2019
£000
(401)
19%
(76)
-
-
76
-
-
-
32
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
5
Taxation (continued)
Deferred Tax
The amount of approximate unused tax losses for which no deferred tax asset is recognised in the statement of financial
position is £nil (2019: £1,835,000).
Weighted average number of shares
139,830,968
6 Profit per Share
2020
Profit after tax
Earnings attributable to ordinary shareholders
Weighted average number of shares
Total basic and diluted loss per share
2019
Loss after tax
Earnings attributable to ordinary shareholders
£000
4,169
4,169
£000
(401)
(401)
Total basic and diluted loss per share
7
Financial investments
Financial assets at fair value through profit or loss:
Fair Value at 31 December 2019
Additions
Fair value changes
Gains on disposals
Disposal
Impairment provision
Foreign Exchange
Fair Value at 31 December 2020
The financial assets splits are as below:
Non-current assets - listed
Non-current assets - unlisted
Non-current assets – unlisted convertible loans
Total
Gains on investments held at fair value through profit or loss
Fair value gain on investments
Realised gain on disposal of investments
Net gain on investments held at fair value
through profit or loss
£000
Level 1
1,205
252
(325)
6,033
(6,939)
-
-
226
226
-
-
226
323
6,033
6,356
Weighted average
No. of shares
Basic per share
amount
(pence)
139,830,968
2.98
(pence)
(0.2868)
£000
Total
4,805
1,606
(325)
6,033
(6,939)
(633)
65
4,612
£000
Level 2
-
-
-
-
-
-
-
-
£000
Level 3
3,600
1,354
-
-
-
(633)
65
4,386
-
-
-
-
-
-
-
-
4,365
21
4,386
226
4,365
21
4,612
-
-
-
323
6,066
6,356
33
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
7
Financial investments (continued)
Level 1
Level 2
Level 3
represents those assets, which are measured using unadjusted quoted prices for identical
assets.
applies inputs other than quoted prices that are observable for the assets either directly (as
prices) or indirectly (derived from prices).
applies inputs, which are not based on observable market data.
Investments are held at fair value through profit and loss using a three-level hierarchy for estimating fair value.
The Directors have reviewed the carrying value of the unlisted investments, and have determined an impairment is
required of £633,000 (2019: £nil).
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.
Significant additions and disposals during the year
Further investment in Zuuse Limited
In September 2020 the Company completed a subscription for 2,000,000 share in Zuuse Limited for £1,034,344.
Following the completion of the investment the company held, along with an option to acquire a further 1,000,000
share at A$0.50, approximately 1.7% of Zuuse Limited’s share capital on a fully diluted basis.
Disposal in Greatland Gold PLC
During the year the Company disposed of the remainder of its holding in Greatland Gold PLC for an average realised
prices of 17.91p per share. The disposal proceeds received were £6.6m resulting in a gain on disposal of £5.8m.
8
Trade and Other Receivables
Current trade and other receivables
Other receivables
Prepayments and accrued income
2020
£000
1
2
3
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
9 Cash at Bank and Cash Equivalents
Cash at Bank
Reconciliation to statement of cash flows
Balance as above
Bank loans and overdrafts
Balances per statement of cash flows
2020
£000
4,673
2020
£000
4,673
(113)
4,560
2019
£000
4
11
15
2019
£000
45
2019
£000
45
-
45
34
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
10 Trade and Other Payables
•
• Current trade other payables
•
• Bank Loans and Overdrafts
•
Trade payables
• Other payables
•
• Corporation tax payable
• Accruals and deferred income
•
Taxation and social security
2020
£000
113
20
1
-
447
34
615
2019
£000
-
20
43
26
-
19
108
All amounts are short term and the carrying values are considered to be a reasonable approximation of fair value.
11 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
Trade and other receivables
Cash
2020
£000
3
4,673
4,676
2019
£000
15
45
60
Financial Liabilities by Category
The categories of financial liability included in the balance sheet and the headings in which they are included are as
follows:
Current liabilities
Bank loans and overdrafts
Trade and other payables
Corporation tax payable
2020
£000
113
55
447
615
2019
£000
-
108
-
108
The Company is exposed to market risk through its use of financial instruments 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. In order to provide on-going working capital the Company engages in the short term trading of financial assets
but 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
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.
35
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
11 Risk Management Objectives and Policies (continued)
Currency risk
The Company holds certain financial investments in foreign currencies, notably US Dollars and Australian Dollars, which
expose the Company to the risk that the exchange rates against pound sterling will change in a manner which adversely
impacts the Company’s net profit and net assets attributable to shareholders. A 10% decrease in the value of sterling
would result in an increase in fair value of financial investments by £191,000 and a corresponding increase in the value
of sterling would result in a decrease in the value of financial investments by £156,000.
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
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 capital structure of the Company consists of total shareholders’ equity as set out in the ‘Consolidated statement of
changes in equity’. All working capital requirements are financed from existing cash resources.
Capital is managed on a day to day basis to ensure the Company is able to operate as a going concern.
Market risk
Market price risk arises from uncertainty about the future valuations of financial instruments held in accordance with
the Company’s investment objectives. These future valuations are determined by many factors but include the
operational and financial performance of the underlying investee companies, as well as market perceptions of the future
of the economy and its impact upon the economic environment in which these companies operate.
Fair value of financial assets and liabilities
Financial assets and liabilities are carried in the Statement of Financial Position at either their fair value (financial
investments) or at a reasonable approximation of the fair value (trade and other receivables, trade and other payables
and cash at bank).
The fair values are included at the amount at which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale.
36
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
12 Share capital and share premium account
Share capital issued and fully paid
At 31 December 2018
At 31 December 2019
At 31 December 2020
Allotted, issued and fully paid
Ordinary shares of 0.20p each
Deferred shares of 45p each
A deferred shares of 4p each
B deferred shares of 0.99p each
Number
of shares
290,015,115
290,015,115
290,015,115
Ordinary
share
capital
£000
279
279
279
Deferred
share
capital
£000
15,112
15,112
15,112
Number of
Shares
139,830,968
28,976,581
28,976,581
92,230,985
2020
£000
279
13,040
1,159
913
15,391
Share
premium
£000
35,296
35,296
35,296
2019
£000
279
13,040
1,159
913
15,391
Movements in equity
Share capital represents the nominal value of the amount subscribed for shares. Share premium represents the amount
subscribed for shares in excess of their nominal value less costs of subscription. Ordinary shares carry the rights to one
vote per share at general meetings of the Company and the rights to share in any distributions of profits or returns of
capital and to share in any residual assets available for distribution in the event of a winding up.
The share-based payment reserve represents amounts arising from the requirement to expense the fair value of share-
based remuneration in accordance with IFRS 2 ‘Share-based Payments’.
Retained earnings are the cumulative net losses recognised in the income statement and other comprehensive income.
Movements on these reserves are set out in the statement of changes in equity.
37
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
13 Share schemes
During the year no options were granted (2019: nil), exercised or expired.
During the year the Company entered into a deed of termination and settlement with individual option holders (the
"Option holders") who held options to subscribe for ordinary shares of 0.2 pence each in the capital of the Company
(the "Share Options"), pursuant to which all Share Options in issue, being an aggregate of 17,800,000 Share Options,
were cancelled.
Full details of the Share Options, including their exercise prices and periods, are set out below:
At 1 January
2020
Issued during
the year
Terminated
during the
year
At 31
December
2020
Exercise
Price
Date from
which
exercisable
Expiry date
No.
No.
No.
No.
£
Share options
D. Strang
D. Strang
A Clayton
J Taylor-Firth
Consultants
D Strang
A Clayton
A Clayton
J Taylor-Firth
500,000
600,000
600,000
600,000
500,000
3,750,000
3,750,000
3,750,000
3,750,000
17,800,000
-
-
-
-
-
-
-
-
-
-
500,000
600,000
600,000
600,000
500,000
3,750,000
3,750,000
3,750,000
3,750,000
17,800,000
0.08
0.06
0.06
0.06
0.08
0.06
0.06
0.06
0.06
-
-
-
-
-
-
-
-
-
-
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
14/11/2013
30/11/2015
30/11/2015
30/11/2015
14/11/2013
03/08/2017
03/08/2017
09/01/2018
09/01/2018
14/11/2023
31/12/2020
31/12/2020
31/12/2020
14/11/2023
03/08/2022
03/08/2022
09/01/2025
09/01/2025
2020
0.00p
2019
6.11p
0.00p
0 years
6.11p
3.53 years
The Company paid £140,000 (2019: nil) relating to the termination and settlement of the Share Options.
Following the year end the company granted 3 million share options to each of the directors and the company secretary,
a total of 12 million share options.
The share options are exercisable at a price of £0.041 per Ordinary Share. One-third of the share options shall vest when
the mid-market closing price of the Ordinary Shares ("Closing Price") reaches £0.06; one-third of the share options shall
vest when the Closing Price reaches £0.08; and one-third of the share options shall vest when the Closing Price reaches
£0.10. The share options are exercisable at any time, following vesting, prior to (and including) the day falling on the
fifth anniversary of grant. If an option holder leaves the Company, such option holder shall retain any vested share
options but any unvested share options shall lapse unless otherwise decided by the Board at its absolute discretion.
The share options represent approximately 8.58 per cent. of the current issued share capital of the Company. On a fully
diluted basis, the share options represent approximately 7.9 per cent. of the enlarged issued share capital of the
Company.
14 Capital Commitments
The Directors have confirmed that there were no contingent liabilities or capital commitments which should be
disclosed at 31 December 2020. 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.
38
PRIMORUS INVESTMENTS PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020 (continued)
15 Related Party Transactions
Key Management Personnel
The key management personnel are considered to be the Directors. Included in their remuneration in Note 4 to the
accounts, is an amount of £24,000 paid as consultancy fees to NW Consulting, a company controlled by Mr D Strang.
There was no balance outstanding at the end of the year.
During the year, the Company sold shares it held in Doriemus PLC, a company in which Mr D Strang was a director.
Furthermore, the Company also purchased and sold shares in Artemis Resources Limited, a company in which Mr A
Clayton was a director, having been appointed on 29th January 2020.
16 Events after the end of the reporting period
Since the year end the Company made a further investment in Fresho Pty Limited (“Fresho”) by way of a subscription
for 2,000,000 new shares for total consideration of A$1,150,000 (approximately £637,000), thereby increasing its
holding to approximately 5% on a fully diluted basis. The Company now holds, in aggregate, 3,415,723 shares in the
issued share capital of Fresho.
Since the year end the Company made a US$2,500,000 investment in Mustang Energy PLC by way of a subscription of
50 convertible loan notes of US$50,000 each.
Following the year end the company granted 3 million share options to each of the directors and the company secretary,
a total of 12 million share options. See note 13 above for more detailed information.
17 Ultimate Controlling Party
It is considered that there is no ultimate controlling party of the Company.
18 Prior year restatement
During the year, the prior year accounting treatment of the investments held, which were classified as available for sale
investments, has been revisited. The investments should be treated as financial assets at fair value through profit or
loss in accordance with IFRS 9.
The impact of the prior year restatement in respect of the classification of the investments held are as follows:
Available for Sale Investments
Financial investments
2019
As presented
£000
4,805
-
Restatement
£000
(4,805)
4,805
2019
As restated
£000
-
4,805
39