TIDMPRS
RNS Number : 3059P
Paternoster Resources PLC
05 June 2015
5 June 2015
Paternoster Resources plc
("Paternoster" or the "Company")
Final results for the year ended 31 December 2014
Paternoster Resources plc (AIM: PRS), an investment company
focused on the natural resources sector, is pleased to announce its
audited final results for the year ended 31 December 2014.
Highlights:
-- Loss from continuing operations of GBP120,372 (2013: loss of GBP21,144).
-- Net asset value at 31 December 2014 of GBP2,758,784 (2013: GBP2,644,268).
-- Cash balances and highly liquid investments at 31 December
2014 of GBP576,639 (2013: GBP1,071,921)
Nicholas Lee, Chairman of Paternoster, commented: "The Company
has made good progress with its current portfolio, whilst seeking
to add more interesting and attractive investments. At the same
time, given the current market environment, the Company is keen to
ensure that it maintains a healthy cash balance or cash equivalents
in order to take advantage of new opportunities as they arise.
The current portfolio represents an exciting mix of companies, a
number of which are poised for significant further
developments."
For more information please visit www.PaternosterResources.com
or contact:
Paternoster Resources plc:
Nicholas Lee, Executive Chairman +44 (0) 20 7580 7576
Matt Lofgran, Non-Executive Director +1 480 993 8933 (US)
Nominated Adviser and Joint Broker: +44 (0) 20 7601 6100
Westhouse Securities
Antonio Bossi/David Coaten
Joint Broker: +44 (0) 20 7562 3351
Peterhouse Corporate Finance
Lucy Williams
Executive Chairman's statement
INTRODUCTION
The year ended 31 December 2014, has been a year of significant
progress for the Company within its existing investment portfolio,
with improving liquidity and value appreciation.
FINANCIAL
During 2014, the Company made a loss from continuing operations
of GBP120,372 (2013: loss of GBP21,144). The net asset value of the
Company as at 31 December 2014 was GBP2,758,784 (2013:
GBP2,644,268).
The Company's investment portfolio at 31 December 2014, is
divided into the following categories:
Category Principal investments Cost or valuation
(GBP)
---------------------- ------------------------------- ------------------
Bison Energy Services
Limited, Andiamo Exploration
Unlisted/pre Limited and Elephant
IPO Oil Limited 674,692
Metal Tiger plc, MX
Oil plc, Plutus Powergen
plc, Shumba Coal Limited
Listed special and Northcote Energy
situations plc 1,399,524
Investment portfolio 2,074,216
Cash and highly
liquid listed
investments 576,639
Total 2,650,855
------------------------------------------------------- ------------------
At 31 December 2014, the Company had cash balances and highly
liquid investments amounting to GBP576,639 (2013: GBP1,071,921).
However, it is important to note that a number of investments held
within the listed category can be moved into cash when additional
investment opportunities present themselves.
REVIEW OF THE YEAR
Details of the investments made in the year, together with
development of investments during the year and significant
developments since the year end are set out in the Strategic
Report.
In September 2014, the Board was strengthened with the
appointment of Matt Lofgran as a Director. Mr. Lofgran is also CEO
of AIM listed Nostra Terra Oil and Gas Company plc and brings
global experience in mining and oil and gas, both from the
investment and operational sides.
In December 2014, Paternoster raised gross proceeds of
GBP242,250 via a placing of 95,000,000 new ordinary shares at a
price of 0.255 pence per share, a 7.5% discount to the then
prevailing market price. As a consequence, the Board is very
pleased to welcome a number of investors as new shareholders in the
Company.
OUTLOOK
The Company has made good progress with its current portfolio,
whilst seeking to add more interesting and attractive investments.
At the same time, given the current market environment, the Company
is keen to ensure that it maintains a healthy cash balance or cash
equivalents in order to take advantage of new opportunities as they
arise.
The current portfolio represents an exciting mix of companies, a
number of which are poised for significant further
developments.
Strategic Report
The Directors present their Strategic Report on the Company for
the year ended 31 December 2014.
REVIEW OF THE BUSINESS AND FUTURE DEVELOPMENTS
INVESTMENTS/DISPOSALS MADE
During the year, Paternoster made an investment in Elephant Oil
Limited, an oil and gas exploration company focused on West Africa.
Its current asset is a 100% interest in Block B, onshore Benin, on
the prolific West Africa Transform Margin. Work is taking place in
preparation for a planned seismic acquisition program. Hunt Oil,
operator of Block 2 diagonally adjacent to Elephant Oil's Block B,
commenced drilling operations in October 2014. Shell and Petrobras
have also now begun drilling. Elephant Oil has continued to
progress its work programme in Bénin. The company has recently
begun the Environmental Impact Assessment ("EIA") covering the area
of interest where future surveys and drilling are to be targeted.
The EIA is a prerequisite to the new seismic acquisition programme
planned in 2016. The company has also identified further potential
acquisitions in West Africa and due diligence is being carried out
on selected assets.
The Company has continued to take profits on its investment in
Quadrise Fuels International plc during the year, and has now sold
its entire holding.
DEVELOPMENTS ON INVESTMENTS
ANDIAMO
Andiamo Exploration Limited continues to progress its Yacob
Dewar deposit in Eritrea. During the year, funding of $1.5 million
has been provided by Ortac Resources Limited, an exploration and
mine development company listed on AIM. Assay results from the
trenching programme confirm high grade gold and oxide copper
mineralisation and the company is confident that it can develop a
commercial gold-copper project.
PLUTUS POWERGEN
Plutus PowerGen plc (formerly Plutus Resources plc) completed
the acquisition of Plutus Energy Limited, a company established for
the purpose of generating power from flexible stand-by power
generation farms and generating revenues through the sale of this
power to large energy supply companies during periods of peak
electricity demand or Grid instability. The company came back onto
the market and raised GBP800,000 to fund the working capital
requirements of the enlarged group. The company has also entered
into funding arrangements with Rockpool Investments to provide the
equity financing component for a number of the company's planned
sites. This would amount to around GBP34 million of equity. The
company is continuing to make good progress in developing 200MW of
flexible energy generation in the UK and now has connection offers
for 180MW of capacity on five sites. It is also in the process of
securing two management contracts which will generate some
immediate income and it has also received two offers of asset
finance for GBP2.5 million to complement equity funding from
Rockpool Investments.
NORTH AMERICAN PETROLEUM/NORTHCOTE ENERGY
North American Petroleum plc started the year by raising
$725,000 in February 2014 and acquiring additional acreage through
acquiring working interests in additional properties. Since then it
has agreed to sell its assets to Northcote Energy in return for
shares. This acquisition has now been completed with Northcote
Energy raising over GBP1.5 million in new funds. Paternoster will
be receiving shares in Northcote Energy in exchange for the shares
it holds in North American Petroleum. This transaction is a very
positive development providing enhanced liquidity for Paternoster's
investment as Northcote Energy is listed on AIM.
Recently, the company contracted a drilling rig for a new well
on its Shoats Creek prospect where it plans to drill shortly. In
addition to its exploration and production operations in the USA,
Northcote has also been increasing its exposure to the oil and gas
sector in Mexico. The company has appointed a new Executive Vice
President for Mexico and has also announced a partnership with Gaia
Ecologica S.A. DE C.V, a Mexican environmental service company in
order to look at new business opportunities together. In May 2015,
the company raised an additional GBP2.8 million and so is well
funded to pursue its current business plan. The Northcote Energy
share price has increased significantly since the announcement of
the acquisition of the North American Petroleum assets.
ASTAR MINERALS/MX OIL
MX Oil (formerly Astar Minerals plc) has made very good progress
in pursuing its strategy of focusing on oil and gas opportunities
in Mexico. In particular, it has raised over GBP3 million this year
and has entered into a joint venture with Geo Estratos, an
established Mexican oil and gas services company.
MX Oil is continuing to work towards securing onshore
conventional acreage in Mexico. The tender, known as Bid Round 1,
for mature onshore conventional fields in the states of Tabasco,
Veracruz and Tamaulipas will open shortly. Furthermore, a recent
announcement by the President of the National Hydrocarbons
Commission has said that for the third phase of Bid Round 1, those
companies that can demonstrate extensive experience in either
working with Pemex, the state owned oil company, or a proven track
record of developing onshore fields will be prioritized. Given the
track record of the company's partner, Geo Estratos, in working
with Pemex, this clearly enhances the likelihood of MX Oil being
able to secure a licence. As well as participating in Bid Round 1,
the company is also working alongside its partner Geo Estratos, to
secure existing fields operated by Pemex, via farm out agreements.
The share price of MX Oil has increased very significantly since
the placing at 1 pence per share in March 2014 when the company
adopted this revised focus and the board was strengthened.
BRADY EXPLORATION/METAL TIGER
Metal Tiger plc (formerly Brady Exploration plc) raised circa
GBP400,000 of new funds in May 2014 to focus on investment
opportunities in the mining sector in the South East Asia region.
Terry Grammer, a highly regarded geologist, has recently been
appointed as Chairman and the company has now entered into a
memorandum of understanding to enable it to access various gold
prospective properties in Thailand.
More recently, the company has revised its strategy and
established two distinct investment divisions. The Direct Equities
Investment division is focused on taking advantage of the low
valuations of many listed junior resource companies. This division
has made investments in companies such as Kibo, Eurasia and Ariana
and has already realised some significant profits. The Direct
Projects Investment division will continue to invest directly in
projects in the natural resources sector. This division has been
progressing a number of its projects - drilling has commenced at
its Lagrosan gold and tungsten project in Spain and operations have
also started at its gold project at Chanthaburi in Thailand. The
company has also raised some additional funding at the prevailing
market price underpinning the company's current valuation.
SHUMBA COAL
Shumba Coal, continues to progress its feasibility studies and
full environmental impact assessment in connection with its 1
billion tonnes JORC resource compliant coal asset in Botswana.
Recently completed mine preliminary feasibility studies have
indicated enough mine reserves to support over 30 years of low cost
mining to supply a 300MW power station. In the short term, it
expects to be able to start supplying coal to the Morupule area by
2016. It is also looking at the possibility of a power plant being
constructed on its site given the high demand for power in the
region, and also at exporting its coal - the Morupule mine is
already exporting coal to Europe via Durban and Maputo. The company
has now achieved its listing on the Stock Exchange of Mauritius and
it has also recently successfully raised $3.1 million from various
institutional investors including some major Mauritian
investors.
More recently, the company has reached an agreement for the
acquisition of the Mabesekwa Prospecting Licence in Botswana. The
estimated JORC in-situ coal resource is over 800 million tonnes,
predominately contained in one coal seam, with an average seam
thicknesses of greater than 18 metres with a flat and consistent
profile with the coal found at average depths of 50-60 metres, to
be accessed by open strip mining. Shumba has also executed an
agreement with Mulilo Renewable Project Developments for the joint
development of the Mabesekwa Export Independent Power Plant at the
Mabesekwa Coal Project. The company has also just raised US$2.75
million to finance this expansion at a 27% premium to the
prevailing share price, demonstrating a good level of support from
investors.
BISON ENERGY SERVICES LIMITED
This company is currently in the process of being reorganized in
order to be better positioned to explore the various options
available to it in order to capitalize on its deposit of frac sand
and associated permits in the US.
KEY PERFORMANCE INDICATORS
The key performance indicators are set out below:
COMPANY STATISTICS 31 December 31 December
2014 2013 Change %
-------------------------------- ------------ ------------ --------
Net asset value GBP2,758,784 GBP2,644,268 +4%
Net asset value - fully diluted
per share 0.404p 0.430p -6%
Closing share price 0.245p 0.340p -28%
Share price discount to net
asset value - fully diluted (39%) (21%)
Market capitalisation GBP1,648,500 GBP1,965,000 -16%
-------------------------------- ------------ ------------ --------
KEY RISKS AND UNCERTAINTIES
Early stage investments in the natural resources sector carry a
high level of risk and uncertainty, although the rewards can be
outstanding. At this stage there can be no certainty of outcome
and, in addition, there is often a lack of liquidity in the
Company's investments that are either unquoted or quoted on AIM,
such that the Company may have difficulty in realising the full
value in a forced sale. Accordingly, a commitment is only made
after thorough research into both the management and the business
of the target, both of which are closely monitored thereafter.
Furthermore, the Company limits the amount of each commitment, both
as to the absolute amount and percentage of the target company.
Details of other financial risks and their management are given in
Note 18 to the financial statements.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Company's financial risk management objectives
and policies are set out in Note 18 to these financial
statements.
GOING CONCERN
The Company's assets comprise mainly cash and quoted securities
and, accordingly, the Company has adequate financial resources to
continue in operational existence for the foreseeable future.
Therefore, the directors believe that as at the date of this report
it is appropriate to continue to adopt the going concern basis in
preparing the financial statements.
Statement of comprehensive income
2014 2013
*Restated
GBP GBP
------------------------------------------ --------- ---------
CONTINUING OPERATIONS:
Consultancy income 4,000 -
Net gains on investments 91,981 164,301
Investment income 25,263 74,110
------------------------------------------- --------- ---------
TOTAL INCOME 121,244 238,411
Operating expenses (241,616) (259,555)
LOSS BEFORE TAXATION (120,372) (21,144)
Taxation - -
------------------------------------------ --------- ---------
LOSS FOR THE YEAR AND TOTAL COMPREHENSIVE
EXPENSE (120,372) (21,144)
------------------------------------------- --------- ---------
EARNINGS PER SHARE
Basic and fully diluted loss per
share (0.021p) (0.004p)
------------------------------------------- --------- ---------
*The results for 2013 have been restated to reflect the results
only of the Company
Statement of changes in equity
Other
reserves
Share Share (Note Retained Total
capital premium 18) losses equity
GBP GBP GBP GBP GBP
-------------------------- ---------- ---------- ----------- ------------ ----------
BALANCE AT 1 JANUARY
2013 3,830,796 2,774,849 70,109 (4,031,415) 2,644,339
Loss for the year
and total comprehensive
expense - - - (21,144) (21,144)
-------------------------- ---------- ---------- ----------- ------------ ----------
Share based payment
costs - - 21,073 - 21,073
-------------------------- ---------- ---------- ----------- ------------ ----------
Transactions with
owners - - 21,073 - 21,073
-------------------------- ---------- ---------- ----------- ------------ ----------
BALANCE AT 31 DECEMBER
2013 3,830,796 2,774,849 91,182 (4,052,559) 2,644,268
Loss for the year
and total comprehensive
expense - - - (120,372) (120,372)
-------------------------- ---------- ---------- ----------- ------------ ----------
Share issue 95,000 147,250 - - 242,250
Share issue costs - (20,592) - - (20,592)
Share based payment
costs - - 13,230 - 13,230
-------------------------- ---------- ---------- ----------- ------------ ----------
Transactions with
owners 95,000 126,658 13,230 - 234,888
-------------------------- ---------- ---------- ----------- ------------ ----------
BALANCE AT 31 DECEMBER
2014 3,925,796 2,901,507 104,412 (4,172,931) 2,758,784
-------------------------- ---------- ---------- ----------- ------------ ----------
Statement of financial position
2014 2013
GBP GBP
----------------------------- ----------- -----------
NON-CURRENT ASSETS
Investments held for trading 2,291,761 2,028,984
------------------------------ ----------- -----------
2,291,761 2,028,984
----------------------------- ----------- -----------
CURRENT ASSETS
Trade and other receivables 172,626 245,481
Cash and cash equivalents 359,094 400,578
------------------------------ ----------- -----------
531,720 646,059
----------------------------- ----------- -----------
TOTAL ASSETS 2,823,481 2,675,043
------------------------------ ----------- -----------
CURRENT LIABILITIES
Trade and other payables 64,697 30,775
64,697 30,775
----------------------------- ----------- -----------
NET ASSETS 2,758,784 2,644,268
------------------------------ ----------- -----------
EQUITY
Share capital 3,925,796 3,830,796
Share premium account 2,901,507 2,774,849
Capital redemption reserve 27,000 27,000
Share option reserve 77,412 64,182
Retained losses (4,172,931) (4,052,559)
------------------------------ ----------- -----------
TOTAL EQUITY 2,758,784 2,644,268
------------------------------ ----------- -----------
Statement of cash flow
2014 2013
GBP GBP
----------------------------------- --------- -----------
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss before tax - continuing
operations (120,372) (21,144)
Share based payment expense 13,230 21,073
Investment income (25,263) (74,110)
Net gains on investments (91,981) (164,301)
OPERATING CASH FLOWS BEFORE
MOVEMENTS IN WORKING CAPITAL (224,386) (238,482)
Decrease/(increase) in trade
and other receivables 12,855 (137,731)
Increase/(decrease) in trade
and other payables 33,922 (6,197)
NET CASH USED BY OPERATING
ACTIVITIES (177,609) (382,410)
------------------------------------ --------- -----------
INVESTING ACTIVITIES
Purchase of investments (722,826) (892,806)
Disposal of investments 552,030 227,731
Repayment of loans and receivables 60,000 -
Investment income received 25,263 6,886
------------------------------------ --------- -----------
NET CASH USED BY INVESTING
ACTIVITIES (85,533) (658,189)
------------------------------------ --------- -----------
FINANCINGACTIVITIES
Gross proceeds of share
issues 242,250 -
Share issue expenses (20,592) -
------------------------------------ --------- -----------
NET CASH FROM FINANCINGACTIVITIES 221,658 -
------------------------------------ --------- -----------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (41,484) (1,040,599)
Cash and cash equivalents
at the beginning of the
year 400,578 1,441,177
CASH AND CASH EQUIVALENTS
AT THE END OF THE YEAR 359,094 400,578
------------------------------------ --------- -----------
Notes to the financial statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted
in the preparation of these financial statements
are set out below. These policies have been
consistently applied throughout all periods
presented in the financial statements.
As in prior periods, the Company financial
statements have been prepared in accordance
with International Financial Reporting Standards
(IFRS) as adopted by the European Union. The
financial statements have been prepared using
the measurement bases specified by IFRS for
each type of asset, liability, income and
expense. The measurement bases are more fully
described in the accounting policies below.
The financial statements are presented in
pounds sterling (GBP) which is the functional
currency of the Company.
At the year end Paternoster Resources plc
had one wholly owned subsidiary, Viridas Brasil
Agronegocios Ltd, a company incorporated in
Brazil which has not traded since incorporation
and which has no material assets or liabilities.
The Company's only other subsidiary, Viridas
GmbH, a company incorporated in Germany was
dissolved following the payment of a final
distribution to the Company in January 2014,
which was included in the accounts for 2013.
As such, no consolidated financial statements
have been prepared on the basis that in accordance
with section 405 of the Companies Act 2006
the inclusion of these two companies is not
material for the purpose of giving a true
and fair view. The 2013 financial statements
were prepared on a consolidated basis, so
on the income statement the comparative figures
for 2013 have been restated to reflect the
results only of the Company.
An overview of standards, amendments and interpretations
to IFRSs issued but not yet effective, and
which have not been adopted early by the Company
are presented below under 'Statement of Compliance'.
GOING CONCERN
The directors have, at the time of approving
the financial statements, a reasonable expectation
that the Company and the Group have adequate
resources to continue in existence for the
foreseeable future. Thus they continue to
adopt the going concern basis of accounting
in preparing the financial statements.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements in
conformity with IFRS requires the use of estimates
and assumptions that affect the reported amounts
of assets and liabilities at the date of the
financial statements and the reported amounts
of revenues and expenses during the reporting
year. These estimates and assumptions are
based upon management's knowledge and experience
of the amounts, events or actions. Actual
results may differ from such estimates.
Estimates and judgements are continually evaluated
and are based on historical experience and
other factors, including expectations of future
events that are believed to be reasonable
under the circumstances.
In certain circumstances, where fair value
cannot be readily established, the Company
is required to make judgements over carrying
value impairment, and evaluate the size of
any impairment required.
SHARE BASED PAYMENTS
The calculation of the fair value of equity-settled
share based awards and the resulting charge
to the statement of comprehensive income requires
assumptions to be made regarding future events
and market conditions. These assumptions include
the future volatility of the Company's share
price. These assumptions are then applied
to a recognised valuation model in order to
calculate the fair value of the awards.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company holds investments that have been
designated as held for trading on initial
recognition. Where practicable the Company
determines the fair value of these financial
instruments that are not quoted (Level 3),
using the most recent bid price at which a
transaction has been carried out. These techniques
are significantly affected by certain key
assumptions, such as market liquidity. Other
valuation methodologies such as discounted
cash flow analysis assess estimates of future
cash flows and it is important to recognise
that in that regard, the derived fair value
estimates cannot always be substantiated by
comparison with independent markets and, in
many cases, may not be capable of being realised
immediately.
STATEMENT OF COMPLIANCE
The financial statements comply with IFRS
as adopted by the European Union. At the date
of authorisation of these financial statements
the following Standards and Interpretations
affecting the Company, which have not been
applied in these financial statements, were
in issue, but not yet effective. The company
does not plan to adopt these standards early.
-- IFRS 9 Financial Instruments
-- IFRS 15 Revenue from Contracts with Customers
-- IFRS 11 (amendments) Accounting for Acquisitions
of Interests in Joint Operations
-- IAS 16 and IAS 38 (amendments) Clarification
of Acceptable Methods of Depreciation and
Amortisation
-- IAS 19 (amendments) Defined Benefit Plans:
Employee Contributions
-- IAS 27 (amendments) Equity Method in Separate
Financial Statements
-- IFRS 10 and IAS 28 (amendments) Sale or
Contribution of Assets between an Investor
and its Associate or Joint Venture
-- Annual Improvements to IFRSs: 2010-2012
Amendments to: IFRS 2 Share-based Payment,
IFRS 3 Business Combinations, IFRS 8 Operating
Segments, IFRS 13 Fair Value Measurement,
IAS 16 Property, Plant and Equipment, IAS
24 Related Party Disclosures and IAS 38 Intangible
Assets
-- Annual Improvements to IFRSs: 2011-2013
Amendments to: IFRS 3 Business Combinations,
IFRS 13 Fair Value Measurement and IAS 40
Investment Property
-- Annual Improvements to IFRSs: 2012-2014
Cycle Amendments to: IFRS 5 Non-current Assets
Held for Sale and Discontinued Operations,
IFRS 7 Financial Instruments: Disclosures,
IAS 19 Employee Benefits and IAS 34 Interim
Financial Reporting
The Directors anticipate that the adoption
of the above Standards and Interpretations
in future periods will have little or no impact
on the financial statements of the Company.
REVENUE RECOGNITION
INVESTMENT INCOME
Dividend income from financial assets at fair
value through profit or loss is recognised
in the statement of comprehensive income on
an ex-dividend basis. Interest on fixed interest
debt securities is recognised using the effective
interest rate method. Bank deposit interest
is recognised on an accruals basis.
CONSULTANCY INCOME
Consultancy fees are recognised over the period
that the services are provided.
TAXATION
Current taxation is the taxation currently
payable 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 an asset or liability
unless the related transaction is a business
combination or affects tax or accounting profit.
Temporary differences include those associated
with shares in subsidiaries and joint ventures
and are only not recognised if the Company
controls the reversal of the difference and
it is not expected for the foreseeable future.
In addition, tax losses available to be carried
forward as well as other income tax credits
to the Company are assessed for recognition
as deferred tax assets.
Deferred tax liabilities are provided in full,
with no discounting. Deferred tax assets are
recognised to the extent that it is probable
that the underlying deductible temporary differences
will be able to be offset against future taxable
income. Current and deferred tax assets and
liabilities are calculated at tax rates that
are expected to apply to their respective
period of realisation, provided they are enacted
or substantively enacted at the statement
of financial position 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 to equity in which case
the related deferred tax is also charged or
credited directly to equity.
SEGMENTAL REPORTING
The accounting policy for identifying segments
is now based on internal management reporting
information that is regularly reviewed by
the chief operating decision maker, which
is identified as the Board of Directors.
In identifying its operating segments, management
generally follows the Company's service lines
which represent the main products and services
provided by the Company. The Directors believe
that the Company's continuing investment operations
comprise one segment.
FINANCIAL ASSETS
The Company's financial assets comprise investments
held for trading, associated undertakings,
cash and cash equivalents and loans and receivables.
INVESTMENTS HELD FOR TRADING
All investments determined upon initial recognition
as held at fair value through profit or loss
were designated as investments held for trading.
Investment transactions are accounted for
on a trade date basis. Assets are de-recognised
at the trade date of the disposal. Assets
are sold at their fair value, which comprises
the proceeds of sale less any transaction
cost. The fair value of the financial instruments
in the balance sheet is based on the quoted
bid price at the balance sheet date, with
no deduction for any estimated future selling
cost. Unquoted investments are valued by the
directors using primary valuation techniques
such as recent transactions, last price and
net asset value. Changes in the fair value
of investments held at fair value through
profit or loss and gains and losses on disposal
are recognised in the consolidated statement
of comprehensive income as "Net gains on investments".
Investments are initially measured at fair
value plus incidental acquisition costs. Subsequently,
they are measured at fair value in accordance
with IAS 39. This is either the bid price
or the last traded price, depending on the
convention of the exchange on which the investment
is quoted.
ASSOCIATED UNDERTAKINGS
Associated undertakings are those entities
in which the Company has significant influence,
but not control, over the financial and operating
policies. Investments that are held as part
of the Company's investment portfolio are
carried in the statement of financial position
at fair value even though the Company may
have significant influence over those companies.
This treatment is permitted by IAS 28 "Investment
in Associates", which requires investments
held by a company as a venture capital provider
to be excluded from its scope where those
investments are designated, upon initial recognition,
as at fair value through profit or loss and
accounted for in accordance with IAS 39, with
changes in fair value recognised in the statement
of comprehensive income in the period of the
change. The Company has no interests in associates
through which it carries on its business.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on
hand and demand deposits, together with other
short-term, highly liquid investments that
are readily convertible into known amounts
of cash and which are subject to an insignificant
risk of changes in value.
LOANS AND RECEIVABLES
Loans and receivables from third parties are
initially recognised at fair value and subsequently
carried at amortised cost using the effective
interest rate method.
FINANCIAL LIABILITIES
The Company's financial liabilities comprise
trade payables. Financial liabilities are
obligations to pay cash or other financial
assets and are recognised when the Company
becomes a party to the contractual provisions
of the instruments.
TRADE PAYABLES
Trade payables are initially measured at fair
value and are subsequently measured at amortised
cost, using the effective interest rate method.
SHARE-BASED PAYMENTS
All share based payments are accounted for
in accordance with IFRS 2 - "Share-based payments".
The Company issues equity-settled share based
payments in the form of share options to certain
directors and employees. Equity settled share
based payments are measured at fair value
at the date of grant. The fair value determined
at the grant date of equity-settled share
based payments is expensed on a straight line
basis over the vesting period, based on the
Company's estimate of shares that will eventually
vest.
Fair value is estimated using the Black-Scholes
valuation model. The expected life used in
the model has been adjusted, on the basis
of management's best estimate for the effects
of non-transferability, exercise restrictions
and behavioural considerations. At each balance
sheet date, the Company revises its estimate
of the number of equity instruments expected
to vest as a result of the effect of non-market
based vesting conditions. The impact of the
revision of the original estimates, if any,
is recognised in profit or loss such that
the cumulative expense reflects the revised
estimate, with a corresponding adjustment
to retained earnings.
DIVIDENDS
Dividend distributions payable to equity shareholders
are included in "current financial liabilities"
when the dividends are approved in general
meeting prior to the statement of financial
position date.
EQUITY
Equity comprises the following:
* "Share capital" represents the nominal value of
equity shares.
* "Share premium" represents the excess over nominal
value of the fair value of consideration received for
equity shares, net of expenses of the share issue.
* "Capital redemption reserve" represents the nominal
value of shares repurchased or redeemed by the
Company.
* "Option reserve" represents the cumulative cost of
share based payments.
* "Retained losses" represents retained losses.
SEGMENTAL INFORMATION
The Company is organised around business class
and the results are reported to the Chief
Operating Decision Maker according to this
class. There is one continuing class of business,
being the investment in the natural resources
sector.
Given that there is only one continuing class
of business, operating within the UK no further
segmental information has been provided.
NET GAINS ON INVESTMENTS
2014 2013
GBP GBP
-------------------------------------- -------- -------
Net realised gains on disposal
of investments 124,383 33,641
Movement in fair value of investments (32,402) 130,660
Net gain on investments 91,981 164,301
-------------------------------------- -------- -------
INVESTMENT INCOME
2014 2013
GBP GBP
-------------------------------- ------ ------
Dividends from investments 6,975 5,491
Deposit interest receivable - 1,395
Other interest receivable 18,288 59,027
Final distribution from Viridas
GmbH - 8,197
-------------------------------- ------ ------
25,263 74,110
-------------------------------- ------ ------
OPERATING EXPENSES
2014 2013
GBP GBP
------------------------------------- -------- -------
Operating expenses include:
Wages and salaries 126,504 141,173
Share based payment expense 13,230 21,073
------------------------------------- -------- -------
AUDITOR'S REMUNERATION
During the year the Company obtained the following
services from the Company's auditor:
2014 2013
GBP GBP
------------------------------------- -------- -------
Fees payable to the Company's
auditor for the audit of the
parent company and the Company
financial statements 10,000 10,000
Fees payable to the Company's
auditor and its associates
for other services:
Other services relating to
taxation 2,000 2,000
------------------------------------- -------- -------
12,000 12,000
------------------------------------- -------- -------
INCOME TAX EXPENSE
2014 2013
GBP GBP
---------------------------------------- ----------- ---------
Current tax - continuing operations - -
---------------------------------------- ----------- ---------
The tax on the Company's profit before tax
differs from the theoretical amount that would
arise using the weighted average rate applicable
to profits of the Consolidated entities as
follows:
2014 2013
GBP GBP
---------------------------------------- ----------- ---------
Loss before tax from continuing
operations (120,372) (21,144)
---------------------------------------- ----------- ---------
Loss before tax multiplied by
rate of corporation tax in the
UK of 20% (2013: 20%) (24,074) (4,229)
Expenses not deductible for tax
purposes 523 800
Unrelieved tax losses carried
forward 23,551 3,429
Total tax - -
---------------------------------------- ----------- ---------
Unrelieved tax losses of GBP3,582,000 (2012:
GBP3,555,000) remain available to offset against
future taxable trading profits. No deferred
tax asset has been recognised in respect of
the losses as recoverability is uncertain.
EARNINGS PER SHARE
The basic earnings per share is based on the
profit/(loss) for the year divided by the
weighted average number of shares in issue
during the year. The weighted average number
of ordinary shares for the year ended 31 December
2013 assumes that all shares have been included
in the computation based on the weighted average
number of days since issue.
2014 2013
GBP GBP
---------------------------------------- ----------- -----------
(Loss)/profit attributable to
equity holders of the Company:
(Loss)/profit from continuing
operations (120,372) (21,144)
(Loss)/profit for the year attributable
to equity holders of the Company (120,372) (21,144)
---------------------------------------- ----------- -----------
Weighted average number of ordinary
shares in issue for basic earnings 579,940,148 577,857,956
Weighted average number of ordinary
shares in issue for fully diluted
earnings* 579,940,148 577,857,956
(LOSS)/EARNINGS PER SHARE
BASIC:
- Basic (loss)/earnings per
share from continuing and total
operations (0.021p) (0.004p)
FULLY DILUTED:
- Fully diluted (loss)/earnings
per share from continuing and
total operations (0.021p) (0.004p)
---------------------------------------- ----------- -----------
For 2014 and 2013 the share options in issue
are anti-dilutive in respect of the loss per
share calculation and have therefore not been
included.
INVESTMENTS HELD FOR TRADING
2014 2013
GBP GBP
-------------------------------------- --------- ---------
At 1 January - fair value 2,028,984 1,199,608
Acquisitions 722,826 892,806
Disposal proceeds (552,030) (227,731)
Net gain on disposal of investments 124,383 33,641
Movement in fair value of investments (32,402) 130,660
-------------------------------------- --------- ---------
.At 31 December - fair value 2,291,761 2,028,984
-------------------------------------- --------- ---------
Categorised as:
Level 1 - Quoted investments 1,617,069 1,554,292
Level 2 - Unquoted investments - 100,000
Level 3 - Unquoted investments 674,692 374,692
-------------------------------------- --------- ---------
2,291,761 2,028,984
-------------------------------------- --------- ---------
ASSOCIATED UNDERTAKINGS
MX OIL PLC
At the year end, the Company held 4.3% of the issued share
capital of MX Oil plc, a company of which Nicholas Lee is a
director.
ELEPHANT OIL LIMITED
At the year end, the Company held 5.5% shareholding in Elephant
Oil Limited, a company of which Matt Lofgran is a director and a
significant shareholder.
The table of investments sets out the fair
value measurements using the IFRS 7 fair value
hierarchy. Categorisation within the hierarchy
has been determined on the basis of the lowest
level of input that is significant to the
fair value measurement of the relevant asset
as follows:
Level 1 - valued using quoted prices in active
markets for identical assets.
Level 2 - valued by reference to valuation
techniques using observable inputs other than
quoted prices included within Level 1.
Level 3 - valued by reference to valuation
techniques using inputs that are not based
on observable market data.
The valuation techniques used by the company
are explained in the accounting policy note,
"Investments held for trading".
LEVEL 2 FINANCIAL ASSETS
Level 2 financial assets comprise a convertible
instrument valued by reference to the bid
price of the underlying equity and taking
into account the contractual arrangements
in place regarding the asset.
LEVEL 3 FINANCIAL ASSETS
Reconciliation of Level 3 fair value measurement
of financial assets
2014 2013
GBP GBP
Brought forward 374,692 170,597
Purchases 300,000 204,095
--------------------------- ------------- ------------
Carried forward 674,692 374,692
--------------------------- ------------- ------------
Level 3 valuation techniques used by the Company
are explained on page 17 (Fair value of financial
instruments)
TRADE AND OTHER RECEIVABLES
2014 2013
GBP GBP
------------------------------- ------- -------
Other receivables 108,630 178,043
Prepayments and accrued income 63,996 67,438
------------------------------- ------- -------
172,626 245,481
------------------------------- ------- -------
Other receivables include short term loans made on normal market
terms. The Directors consider that the carrying amount of short
term loans and other receivables is approximately equal to their
fair value.
CASH AND CASH EQUIVALENTS
2014 2013
GBP GBP
---------------------------- ------- -------
Cash and cash equivalents 359,094 400,578
---------------------------- ------- -------
The Directors consider the carrying amount of cash and cash
equivalents approximates to their fair value.
TRADE AND OTHER PAYABLES
2014 2013
GBP GBP
-------------------------------- ------ ------
Trade payables 29,278 11,406
Social security and other taxes - -
Accrued expenses 35,419 19,369
-------------------------------- ------ ------
64,697 30,775
-------------------------------- ------ ------
The Directors consider that the carrying amount of trade
payables approximates to their fair value.
SHARE CAPITAL
Number of shares Share capital Share
Deferred Ordinary Deferred Ordinary premium
GBP GBP GBP
----------------- ------------ ----------- ---------- ---------- ---------
ISSUED AND FULLY
PAID:
At 1 January
2013:
Deferred shares
of 9.9p each 32,857,956 - 3,252,938 -
Ordinary shares
of 0.1p each - 577,857,956 - 577,858 2,774,849
----------------- ------------ ----------- ---------- ---------- ---------
At 31 December
2013 32,857,956 577,857,956 3,252,938 577,858 2,774,849
Issue of shares 95,000,000 95,000 147,250
Share issue
costs (20,592)
----------------- ------------ ----------- ---------- ---------- ---------
At 31 December
2014 32,857,956 95,000,000 3,252,938 672,858 2,901,507
----------------- ------------ ----------- ---------- ---------- ---------
On 23 December 2014 the Company issued 95,000,000 new ordinary
shares for cash at 0.255p per share, raising GBP242,250 before
expenses.
OTHER RESERVES
Capital Share Total
redemption option Other
reserve reserve reserves
GBP GBP GBP
--------------------------- ------------ --------- ----------
Balance at 1 January 2013 27,000 43,109 70,109
Share based payment costs - 21,073 21,073
Balance at 31 December
2013 27,000 64,182 91,182
Share based payment costs - 13,230 13,230
Balance at 31 December
2014 27,000 77,412 104,412
--------------------------- ------------ --------- ----------
FINANCIAL INSTRUMENTS
The Company uses financial instruments, other
than derivatives, comprising cash to provide
funding for the Company's operations.
CATEGORIES OF FINANCIAL INSTRUMENTS
The IAS 39 categories of financial asset included
in the statement of financial position and
the headings in which they are included are
as follows:
2014 2013
GBP GBP
----------------------------------- --------- ---------
FINANCIAL ASSETS:
Cash and cash equivalents 359,094 400,578
Loans and receivables 108,630 178,043
Investments held for trading 2,291,761 2,028,984
----------------------------------- --------- ---------
FINANCIAL LIABILITIES AT AMORTISED
COST:
The IAS 39 categories of financial liabilities
included in the statement of financial position
and the headings in which they are included
are as follows:
2014 2013
GBP GBP
----------------------------------- --------- ---------
Trade and other payables 29,278 11,406
----------------------------------- --------- ---------
RELATED PARTY TRANSACTIONS
Transactions between the company and its subsidiaries,
which are related parties, have been eliminated
on consolidation and are not disclosed in
this note.
The compensation payable to Key Management
personnel comprised GBP118,400 (2013: GBP131,000)
paid by the Company to the Directors in respect
of services to the Company. Full details of
the compensation for each Director are provided
in Note 7.
Nicholas Lee is a director and controlling
shareholder of ACL Capital Limited which invoiced
the Company GBP19,000 in respect of consultancy
fees due for the year (2013: GBP42,000). GBP2,000
of this amount was invoiced and paid after
the year end. No other amounts were owed at
31 December 2014.
Nicholas Lee is also a director of MX Oil
plc ("MX Oil"), in which the Company has a
4.3% shareholding. During the year, the Company
invoiced MX Oil plc GBP2,000 (2013: GBPnil)
for consultancy services.
The loan to Brady Exploration plc (subsequently
renamed Metal Tiger plc) of GBP60,000 which
was outstanding at 31 December 2013 was settled
partly in cash and partly in shares during
the year. In June 2014, Nicholas Lee resigned
as a director of Metal Tiger plc. At the year
end, the Company had a 10.8% shareholding
in Metal Tiger plc.
In September 2014, the Company acquired a
5.5% shareholding in Elephant Oil Limited,
a company of which Matt Lofgran is a director
and a significant shareholder. Subsequent
to Paternoster's acquisition of its shareholding
Matt Lofgran was appointed a director of the
Company.
A copy of the annual report and of the notice
of AGM to be held at the offices Adams & Remers
LLP, Dukes Court, 32 Duke Street St James's,
London SW1Y 6DF on 29 June 2015 at 11.30 am
is available from the Company's website at
www.paternosterresources.com and is being
posted to shareholders today.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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