REG - Paternoster Res. - Final Results <Origin Href="QuoteRef">PRSPA.L</Origin> - Part 2
29/06/2017 10:40
- Part 2: For the preceding part double click ID:nRSc5766Ja
3 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.
4 NET GAIN/(LOSS) ON INVESTMENTS
2016 2015
£ £
Net realised gains/(losses) on disposal of investments 468,239 (126,021)
Movement in fair value of investments 301,847 102,859
Net gain/(loss) on investments 770,086 (23,162)
5 INVESTMENT INCOME
2016 2015
£ £
Dividends from investments 412 4,874
Deposit interest receivable - 60
Other interest receivable 14,678 1,150
15,090 6,084
6 PROFIT/(LOSS) FOR THE YEAR
2016 2015
£ £
Profit for the year has been arrived at after charging:
Wages and salaries 141,227 135,054
Share based payment expense - 14,995
AUDITOR'S REMUNERATION
During the year the Company obtained the following services from the Company's auditor:
2016 2015
£ £
Fees payable to the Company's auditor for the audit of the parent company and the Company financial statements 12,000 12,000
Fees payable to the Company's auditor and its associates for other services:
Other services relating to taxation 600 2,250
12,600 14,250
8 DIRECTORS' EMOLUMENTS
2016 2015
£ £
Aggregate emoluments 141,749 127,000
Social security costs 8,478 8,054
Share based payment expense - 14,995
150,227 150,049
Name of director Fees Benefits Total2016 Total2015
£ £ £ £
N Lee 72,000 - 72,000 74,000
A van Dyke 20,333 - 20,333 -
G Haselden 8,500 - 8,500 17,000
M Lofgran 40,916 - 40,916 36,000
141,749 - 141,749 127,000
For 2016, no fees in respect of Mr N Lee were paid to ACL Capital Limited
(2015: £2,000).
9 EMPLOYEE INFORMATION
2016 2015
£ £
Wages and salaries 141,749 127,000
Social security costs 8,478 8,054
Share based payment expense - 14,995
150,227 150,049
Average number of persons employed:
2016 2015
Number Number
Office and management 2 3
COMPENSATION OF KEY MANAGEMENT PERSONNEL
There are no key management personnel other than the Directors of the Company.
10 SHARE BASED PAYMENTS
EQUITY-SETTLED SHARE OPTION SCHEME
The Company operates share-based
payment arrangements to remunerate
directors and key employees in the form
of a share option scheme. Equity
-settled share-based payments are
measured at fair value (excluding the
effect of non-market based vesting
conditions) at the date of grant. The
fair value determined at the grant date
of the 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 and adjusted for
the effect of non-market based vesting
conditions.On 26 October 2011, Nicholas
Lee was granted options to subscribe
for 28,000,000 new ordinary shares in
the Company at an exercise price of
0.32p per share. The options are
exercisable for a period of ten years
from the date of grant, with one third
becoming exercisable on the first,
second and third anniversaries of the
date of grant respectively.On 13 March
2012, Nicholas Lee was granted options
to subscribe for 14,000,000 new
ordinary shares in the Company at an
exercise price of 0.48p per share. The
options are exercisable for a period of
ten years from the date of grant, with
one third becoming exercisable on the
first, second and third anniversaries
of the date of grant respectively. The
fair value of these options was
determined using the Black-Scholes
option pricing model and was £0.22p per
option. On 17 September 2014, Matt
Lofgran was granted options to
subscribe for 20,000,000 new ordinary
shares in the Company at an exercise
price of 0.26p per share. The options
are exercisable for a period of ten
years from the date of grant, with one
third becoming exercisable on the
first, second and third anniversaries
of the date of grant respectively. The
fair value of these options was
determined using the Black-Scholes
option pricing model and was 0.14p per
option.
EQUITY-SETTLED SHARE OPTION SCHEME
The significant inputs to the model in
respect of the options granted in 2014,
2012 and 2011 were as follows:
2014 2012 2011
Grant date share price 0.26p 0.48p 0.32p
Exercise share price 0.26p 0.48p 0.32p
No. of share options 20,000,000 14,000,000 28,000,000
Risk free rate 2.5% 3% 3%
Expected volatility 50% 40% 40%
Option life 10 years 10 years 10 years
Calculated fair value per share 0.14p 0.22p 0.15p
The total share-based payment expense
recognised in the income statement for
the year ended 31 December 2016 in
respect of the share options granted
was £Nil (2015: £14,995).
Number ofoptions at 1 Jan 2016 Grantedin the year Exercisedin the year Cancelled in the year Number ofoptions at 31 Dec 2016 Exerciseprice VestingDate Expirydate
9,333,334 - - - 9,333,334 0.32p 26.10.2012 26.10.2021
4,666,667 - - - 4,666,667 0.48p 13.03.2013 13.03.2022
9,333,333 - - - 9,333,333 0.32p 26.10.2013 26.10.2021
4,666,667 - - - 4,666,667 0.48p 13.03.2014 13.03.2022
9,333,333 - - - 9,333,333 0.32p 26.10.2014 26.10.2021
4,666,667 - - - 4,666,666 0.48p 13.03.2015 13.03.2022
6,666,666 - - (6,666,666) - - - -
6,666,667 - - (6,666,667) - - - -
6,666,667 - - (6,666,667) - - - -
62,000,000 - - (20,000,000) 42,000,000 0.37p
11 INCOME TAX EXPENSE
2016 2015
£ £
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:
2016 2015
£ £
Profit/(loss) before tax from continuing operations 486,048 (308,873)
Profit/(loss) before tax multiplied by rate of corporation tax in the UK of 20% (2015: 20%) 97,210 (61,775)
Expenses not deductible for tax purposes 3,034 4,615
Offset against tax losses brought forward (100,244) -
Unrelieved tax losses carried forward - 57,160
Total tax - -
Unrelieved tax losses of £3,366,000 (2015: £3,867,000) 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.
12 EARNINGS PER SHARE
The basic earnings per share is based on the 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 assumes that all shares have been included in the computation based on the weighted average number of days since issue.
2016 2015
£ £
Profit/(loss) attributable to equity holders of the Company:
Profit/(loss) from continuing operations 486,048 (308,873)
Profit/(loss) for the year attributable to equity holders of the Company 486,048 (308,873)
Weighted average number of ordinary shares in issue for basic and fully diluted earnings 959,230,907 698,200,422
EARNINGS/(LOSS) PER SHARE
BASIC AND FULLY DILUTED:
- Basic earnings/(loss) per share from continuing and total operations 0.051p (0.044p)
- Fully diluted earnings/(loss) per share from continuing and total operations 0.049p (0.044p)
* No adjustment to earnings per share for fully diluted earnings has been made as the exercise of options would be anti-dilutive.
13 INVESTMENTS HELD FOR TRADING
2016 2015
£ £
At 1 January - fair value 2,557,659 2,446,761
Acquisitions 677,351 663,828
Disposal proceeds (1,055,579) (529,768)
Net gain/(loss) on disposal of investments 468,239 (126,021)
Movement in fair value of investments 301,847 102,859
.At 31 December - fair value 2,949,517 2,557,659
Categorised as:
Level 1 - Quoted investments 2,557,368 1,455,438
Level 2 - Unquoted investments - -
Level 3 - Unquoted investments 392,149 947,221
2,949,517 2,402,659
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 ASSETSLevel 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 ASSETSReconciliation of Level 3 fair value measurement of financial assets
2016 2015
£ £
Brought forward 947,221 674,692
Reclassified from Level 1 293,295 -
Reclassified to Level 1 (390,320) -
Disposal proceeds (170,698) -
Purchases - 406,017
Loss on disposals (154,095) -
Movement in fair value (133,254) (133,488)
Carried forward 392,149 947,221
In line with the investment strategy adopted by the Company, a Director of the Company is on the boards of the following investee companies:
%age holding
2016 2015
Pires Investments plc 24.8% -
Polemos plc 12.8% -
MX Oil plc 0.9% 2.3%
New World Oil & Gas plc 7.7% 7.7%
Elephant Oil Limited - 5.2%
14 TRADE AND OTHER RECEIVABLES
2016 2015
£ £
Other receivables 20,894 6,078
Prepayments and accrued income 8,248 6,768
29,142 12,846
The Directors consider that the carrying amount of other receivables is
approximately equal to their fair value.
15 CASH AND CASH EQUIVALENTS
2016 2015
£ £
Cash and cash equivalents 648,165 464,570
The Directors consider the carrying amount of cash and cash equivalents
approximates to their fair value.
16 TRADE AND OTHER PAYABLES
2016 2015
£ £
Trade payables 16,920 36,219
Social security and other taxes - 3,086
Other creditors - 5,168
Accrued expenses 25,450 42,196
42,370 86,669
The Directors consider that the carrying amount of trade payables approximates
to their fair value.
17 SHARE CAPITAL
Number of shares Share capital Share
Deferred Ordinary Deferred Ordinary premium
£ £ £
ISSUED AND FULLY PAID:
At 1 January 2015:
Deferred shares of 9.9p each 32,857,956 3,252,938
Ordinary shares of 0.1p each 672,857,956 577,858 2,901,507
At 1 January 2015 32,857,956 672,857,956 3,252,938 672,858 2,901,507
Issue of shares 250,000,000 250,000 250,000
Share issue costs (16,500)
At 31 December 2015 32,857,956 922,857,956 3,252,938 922,858 3,135,007
Issue of shares 93,750,000 93,750 56,250
At 31 December 2016 1,016,607,956 3,191,257
On 11 August 2016, the Company issued 93,750,000 new ordinary shares at 0.16p
per share as consideration for the purchase of 375,000,000 shares in Polemos
plc.
18 OTHER RESERVES
Capital redemption reserve Share option reserve TotalOther reserves
£ £ £
Balance at 1 January 2015 27,000 77,412 104,412
Share based payment costs - 14,995 14,995
Balance at 31 December 2015 27,000 92,407 119,407
Transfer to Profit and loss on cancellation of options - (19,257) (19,257)
Balance at 31 December 2016 27,000 73,150 100,150
19 RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to a variety of financial risks which result from both its operating and investing activities. The
Company's risk management is coordinated by the Board of Directors, and focuses on actively securing the Company's short to
medium term cash flows by minimising the exposure to financial markets.The main risks the Company is exposed to through its
financial instruments are credit risk, foreign currency risk, liquidity risk and market price risk. CAPITAL RISK MANAGEMENTThe
Company's objectives when managing capital are:· to safeguard the Company's ability to continue as a going concern, so that
it continues to provide returns and benefits for shareholders;· to support the Company's growth; and· to provide
capital for the purpose of strengthening the Company's risk management capability.The Company actively and regularly reviews and
manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the
future capital requirements of the Company and capital efficiency, prevailing and projected profitability, projected operating
cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as
capital and reserves, for capital management purposes. The Company is not subject to externally imposed capital
requirements.CREDIT RISKThe Company's financial instruments that are subject to credit risk are cash and cash equivalents and
loans and receivables. The credit risk for cash and cash equivalents is considered negligible since the counterparties are
reputable financial institutions. The credit risk for loans and receivables is mainly in respect of short term loans, made on
market terms, which are monitored regularly by the Board.The Company's maximum exposure to credit risk is £728,165 (2014:
£570,648) comprising cash and cash equivalents and loans and receivables.The ageing profile of trade and other receivables was:
2016 2015
Total book value Total book value
£ £
Current 29,142 12,846
Overdue for less than one year - -
29,142 12,846
LIQUIDITY RISKLiquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. The Company manages this risk through maintaining a positive
cash balance and controlling expenses and commitments. The Directors are confident that adequate resources exist to finance
current operations.
FOREIGN CURRENCY RISKThe Directors do not consider the Company has significant exposure to movements in foreign currency in
respect of its monetary assets.
MARKET PRICE RISKThe Company's exposure to market price risk mainly arises from potential movements in the fair value of its
investments. The Company manages this price risk within its long-term investment strategy to manage a diversified exposure to
the market. If each of the Company's equity investments were to experience a rise or fall of 10% in their fair value, this
would result in the Company's net asset value and statement of comprehensive income increasing or decreasing by £295,000 (2015:
£240,000).
20 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:
2016 2015
£ £
FINANCIAL ASSETS:
Cash and cash equivalents 648,165 464,570
Loans and receivables 20,894 6,078
Investments held for trading 2,949,517 2,402,659
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:
2016 2015
£ £
Trade and other payables 16,920 44,473
21 RELATED PARTY TRANSACTIONS
The compensation payable to Key Management personnel comprised £141,749 (2015: £127,000) 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's directorships of companies in which Paternoster has an investment are detailed in Note 13.
22 Contingent LIABILITIES AND CAPITAL COMMITMENTSThere were no contingent liabilities or capital commitments at 31 December 2016 or 31 December 2015.
23 POST YEAR END EVENTS
There have been no significant events since the year end.
24 ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be a single ultimate controlling party.
A copy of the annual report and the notice of AGM, to be held at the offices
Adams & Remers LLP, Commonwealth House, 55-58 Pall Mall, London SW1Y 5JH on 24
July 2017 at 10.30am, is available from the Company's website at
www.paternosterresources.com and is being posted to shareholders today.
This information is provided by RNS
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