Preliminary Results and Notice of AGM

RNS Number : 9897I

Paternoster Resources PLC

06 June 2014

 



6 June 2014

Paternoster Resources plc

("Paternoster" or the "Company")

Preliminary results for the year ended 31 December 2013 and Notice of AGM

Paternoster is pleased to announce its preliminary results for the year ended 31 December 2013.

In addition, the Company is pleased to announce that its Annual General Meeting will be held at Adams & Remers LLP, 32 Duke Street, St James's, London SW1Y 6DF on 30 June 2014 at 10.30 am.

Copies of the annual report and accounts, along with the Notice of Annual General Meeting, will be posted to shareholders shortly and will be made available on the Company's website: www.paternosterresources.com 

For more information please contact:

Paternoster Resources plc:
Nicholas Lee, Chairman	[phone]

Nominated Advisor and Joint Broker:
Westhouse Securities
Antonio Bossi	[phone]

Joint Broker:
Peterhouse Capital Limited
Jon Levinson	[phone]

EXECUTIVE CHAIRMAN'S STATEMENT

INTRODUCTION

The year ended 31 December 2013, has been a year of investment for the Company.  During this period, it has invested over £1 million in opportunities in the natural resources sector.

FINANCIAL

During 2013, no significant investment realisations were made and the running costs of the Company were broadly offset by investment income received, resulting in a small loss from continuing operations of £33,148 (2012: profit of £449,833). The net asset value of the Company as at 31 December 2013 was £2,644,268 (2012: £2,656,343). 

The Company's investment portfolio at 31 December 2013, is divided into the following categories:

Category	Principal investments	Cost or valuation (£)
Unlisted/pre IPO	Bison Energy Services Limited and Andiamo Exploration Limited	374,692
Listed special situations	Brady Exploration plc, Astar Minerals plc, Plutus Resources plc and Shumba Coal Limited	828,816
Listed value opportunities	Glencore Xstrata plc, Quadrise Fuels International plc, Cairn Energy plc, Ophir Energy plc, BG Group plc, Red Rock Resources plc, Jubilee Platinum plc and North American Petroleum plc	825,476
Total investment portfolio		2,028,984
Cash		411,739
Total		2,440,723

The unlisted/pre IPO category includes investments where there are short-term milestones which are either likely to lead to a liquidity event or a significant uplift in value.

The listed special situations category includes investments where the Company has a more significant level of influence and, whilst these companies are listed, it is likely that a significant event will need to take place before returns can be fully realised. 

The listed value opportunities category comprises investments where the Company seeks to take advantage of interesting value plays but in situations that have a good degree of liquidity so that they can be converted to cash quickly and easily when required.

At 31 December 2013, the Company had cash balances of £411,739 (2012: £1,454,495) reflecting the investments made during the year.  However, it is important to note that the majority of investments held in the listed value opportunities category can easily be moved into cash if required.

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.

OUTLOOK

The Company is focused on achieving further returns from within 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.

I firmly believe that shareholders can continue to look forward to a very exciting and financially rewarding future for the Company.

STRATEGIC REPORT

 

The Directors present their Strategic Report on the Group for the year ended 31 December 2013.

 

REVIEW OF THE BUSINESS AND FUTURE DEVELOPMENTS

INVESTMENTS MADE DURING THE YEAR

During the year new investments have been made in:

·       Jubilee Platinum plc - a platinum producer listed on AIM

·       Andiamo Exploration Limited - a private company exploring for copper and gold in Eritrea

·       Plutus Resources plc - a cash shell investment company listed on AIM focused on the natural resources sector

·       Shumba Coal Limited - a private company with a billion tonne JORC coal resource in Botswana

·       North American Petroleum plc - a company newly created on ISDX focused on acquiring oil assets in North America

DEVELOPMENTS ON INVESTMENTS DURING THE YEAR

Astar Minerals plc was re-focused to become an investment company pursuing opportunities in the natural resources sector.  Additional funds of £336,000 were raised to enable it to pursue this new strategy and to settle outstanding creditors.

Shumba Coal Limited was successfully listed on the Botswana stock exchange and the company is continuing to progress its listing in Mauritius which is expected to lead to enhanced liquidity.  It is continuing to develop its major coal asset in Botswana.  It has completed additional drilling in order to increase its measured and indicated resources and acquired four new licences.  Opportunities continue to open up for the company regarding local power generation and export opportunities.

North American Petroleum plc continued to acquire acreage within the US onshore oil sector.

The Company's investment in Quadrise Fuels International plc continued to increase in value and the Company has taken the opportunity to realise some significant gains.

DEVELOPMENTS ON INVESTMENTS SINCE THE YEAR END

There have been a number of significant developments within the Company's portfolio since the year end.

On 13 January 2014, Ortac Resources Limited, a mining company listed on AIM, agreed to invest $1.5 million in Andiamo, with an option to invest a further $2 million, to finance its exploration and development activities.  Since then, Andiamo has achieved some very good results from its various drilling activities.

On 16 January 2014, Plutus Resources plc acquired 25% of Attune Energy, a business focused on the generation of power from flexible stand by power generation farms to produce revenues through the sale of this power to established national energy suppliers during periods of peak electricity demand or grid instability. The company is continuing to progress a reverse takeover of this business and expects to make further announcements shortly.

On 18 February 2014, North American Petroleum plc raised an additional £725,000, at the prevailing market price, to finance its continued expansion into US onshore oil assets.  North American Petroleum's current proven reserves have been assigned a value of over US$21 million.  The Company made an additional investment of £50,000 as part of this fund raising.

On 14 March 2014, Astar Minerals plc announced that it has raised around £1 million, implemented its investment policy and strengthened the board.  Furthermore, within the natural resources sector the company has stated its intention to look closely at opportunities in the oil and gas sector in Mexico.  The company recently announced that it had entered into a joint venture with a local partner to further develop these opportunities.

On 21 May 2014, Brady Exploration plc announced that it had raised £400,000 to pursue a revised investment strategy, focusing on opportunities in the Far East.  At the same time the board has been strengthened in order to pursue this strategy.

The investors in Bison Energy Services Limited are continuing to actively work on ways to create value from this investment and expect to be able to announce how this is progressing in due course.

The Company has continued to take profits on its investment in Quadrise Fuels International plc and has now sold its entire holding.

KEY PERFORMANCE INDICATORS

The key performance indicators are set out below: 

COMPANY STATISTICS	31 December 2013	31 December 2012	Change %
Net asset value	£2,644,268	£2,656,343	-0%
Net asset value - fully diluted per share	0.43p	0.43p	+0%
Closing share price	0.34p	0.31p	+10%
Share price discount to net asset value - fully diluted	(21%)	(28%)
Market capitalisation	£1,965,000	£1,791,000	+10%

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 which 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 19 to the financial statements.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Details of the Group's financial risk management objectives and policies are set out in Note 19 to these financial statements.

GOING CONCERN

The Group'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.

ON BEHALF OF THE BOARD

Nicholas Lee

Executive Chairman

5 June 2014

GROUP STATEMENT OF COMPREHENSIVE INCOME

		2013	2012
	Note	£	£
CONTINUING OPERATIONS:
Net gains on investments	4	164,301	690,806
Investment income	5	65,913	1,209
TOTAL INCOME		230,214	692,015
Operating expenses	6	(263,362)	(241,157)
(LOSS)/PROFIT BEFORE TAXATION		(33,148)	450,858
Taxation	10	-	(1,025)
(LOSS)/PROFIT FOR THE YEAR AND TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT		(33,148)	449,833
EARNINGS PER SHARE	11
BASIC:
- Basic (loss)/earnings per share		(0.006p)	0.078p
FULLY DILUTED:
- Fully diluted (loss)/earnings per share		(0.006p)	0.073p

GROUP STATEMENT OF CHANGES IN EQUITY

	Share   capital	Share premium	Other reserves (Note 18)	Retained losses	Total equity
	£	£	£	£	£
BALANCE AT 1 JANUARY 2012	3,830,796	2,774,849	31,690	(4,469,244)	2,168,091
Profit for the year and total comprehensive income	-	-	-	449,833	449,833
Share based payment costs	-	-	38,419	-	38,419
Transactions with owners	-	-	38,419	-	38,419
BALANCE AT 31 DECEMBER 2012	3,830,796	2,774,849	70,109	(4,019,411)	2,656,343
Loss for the year and total comprehensive expense	-	-	-	(33,148)	(33,148)
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

COMPANY STATEMENT OF CHANGES IN EQUITY

	Share   capital	Share premium	Other reserves (Note 18)	Retained losses	Total equity
	£	£	£	£	£
BALANCE AT 1 JANUARY 2012	3,830,796	2,774,849	31,690	(4,479,175)	2,158,160
Profit for the year and total comprehensive income	-	-	-	447,760	447,760
Share based payment costs	-	-	38,419	-	38,419
Transactions with owners	-	-	38,419	-	38,419
BALANCE AT 31 DECEMBER 2012	3,830,796	2,774,849	70,109	(4,031,415)	2,644,339
Profit for the year and total comprehensive income	-	-	-	(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

STATEMENTS OF FINANCIAL POSITION

			GROUP					COMPANY
		2013		2012			2013		2012
	Note	£		£			£		£
NON-CURRENT ASSETS
Investment in subsidiary undertakings	12	-		-			-		-
Investments held for trading	13	2,028,984		1,199,608			2,028,984		1,199,608
		2,028,984		1,199,608			2,028,984		1,199,608
CURRENT ASSETS
Trade and other receivables	14	237,284		41,680			245,481		40,526
Cash and cash equivalents	15	411,739		1,454,495			400,578		1,441,177
		649,023		1,496,175			646,059		1,481,703
TOTAL ASSETS		2,678,007		2,695,783			2,675,043		2,681,311
CURRENT LIABILITIES
Trade and other payables	16	33,739		39,440			30,775		36,972
		33,739		39,440			30,775		36,972
NET ASSETS		2,644,268		2,656,343			2,644,268		2,644,339
EQUITY
Share capital	17	3,830,796		3,830,796			3,830,796		3,830,796
Share premium account		2,774,849		2,774,849			2,774,849		2,774,849
Capital redemption reserve	18	27,000		27,000			27,000		27,000
Share option reserve	18	64,182		43,109			64,182		43,109
Retained losses		(4,052,559)		(4,019,411)			(4,052,559)		(4,031,415)
TOTAL EQUITY		2,644,268		2,656,343			2,644,268		2,644,339

These Financial Statements were approved by the Board of Directors on 4 June 2014 and were signed on its behalf by:

N Lee

Director

Company number: 269566

STATEMENTS OF CASH FLOWS

			GROUP					COMPANY
		2013		2012			2013		2012
	Note	£		£			£		£
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss)/profit before tax - continuing operations		(33,148)		450,858			(21,144)		447,760
Share based payment expense		21,073		38,419			21,073		38,419
Investment income		(65,913)		(1,209)			(74,110)		(1,174)
Net gains on investments		(164,301)		(690,806)			(164,301)		(690,806)
Increase in trade and other receivables		(136,577)		(20,982)			(137,731)		(21,646)
Decrease in trade and other payables		(5,701)		(13,384)			(6,197)		(6,246)
		(384,567)		(237,104)			(382,410)		(233,693)
Tax paid		-		(1,025)			-		-
NET CASH USED BY OPERATING ACTIVITIES		(384,567)		(238,129)			(382,410)		(233,693)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments		(892,806)		(1,185,435)			(892,806)		(1,185,435)
Disposal of investments		227,731		2,501,269			227,731		2,501,269
Interest received		6,886		1,131			6,886		1,096
NET CASH FROM INVESTING ACTIVITIES		(658,189)		1,316,965			(658,189)		1,316,930
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS		(1,042,756)		1,078,836			(1,040,599)		1,083,237
Cash and cash equivalents at the beginning of the year		1,454,495		375,659			1,441,177		357,940
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	15	411,739		1,454,495			400,578		1,441,177

NOTES TO THE FINANCIAL STATEMENTS

1	GENERAL INFORMATION
	Paternoster Resources plc is a public limited company incorporated in the United Kingdom.  The shares of the Company are listed on the AIM stock exchange. The address of its registered office is 30 Percy Street, London W1T 2DB.  The Group's principal activities are described in the Directors' Report.
2	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 Group 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 (£) which is the functional currency of the parent company. An overview of standards, amendments and interpretations to IFRSs issued but not yet effective, and which have not been adopted early by the Group 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.
	BASIS OF CONSOLIDATION The consolidated income statement and statement of financial position include the financial information of the Company and its subsidiary undertakings made up to 31 December 2013.  Acquisitions of subsidiaries are dealt with by the purchase method. The purchase method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated statement of financial position at their fair values, which are also used as the bases for subsequent measurement in accordance with the Group accounting policies. Goodwill is stated after separating out identifiable intangible assets of the acquired subsidiary at the date of acquisition.
	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 Group, 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.
			Effective for accounting periods beginning on or after:
	IFRS 2,8,16,24,36	Amendments resulting from Annual Improvements 2010-2012 Cycle	1 July 2014
	IFRS 3,13, IAS 40	Amendments resulting from Annual Improvements 2011-2013	1 July 2014
	IFRS 7	Deferral of mandatory effective date of IFRS 7 and amendments to transition disclosures	1 January 2015
	IFRS 9	Deferral of mandatory effective date of IFRS 9 and amendments to transition disclosures	1 January 2015
	IFRS 10	Consolidated Financial Statements - Amendments for investment enttites	1 January 2014
	IFRS 11	Joint arrangements	1 January 2014
	IFRS 12	Disclosure of Interest in Other Entities - Amendments for investment entities	1 January 2014
	IAS 19	Employee Benefits - Amended to clarify the requirements that relate to how contribution from employees or third parties that are linked to service should be attributed to periods of service	1 July 2014
	IAS 27	Amendments for investment entities	1 January 2014
	IAS 28	Investment in associates	1 January 2014
	IAS 32	Financial Instruments: Presentation - Amendments to application guidance on the offsetting of financial assets and financial liabilities	1 January 2014
	IAS 36	Impairment of assets	1 January 2014
	IAS 38	Amendments resulting from Annual Improvements 2010-2012 Cycle	1 July 2014
	IAS 39	Financial Instruments: Recognition and Measurement - Amendments for novation of derivatives	1 January 2014
	IFRIC 21	Levies	1 January 2014
	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.
	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 Group 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 Group holds investments that have been designated as held for trading on initial recognition. Where practicable the Group 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.
	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 Group 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 Group 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.
	FOREIGN CURRENCY TRANSLATION Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction.  Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the statement of financial position reporting date. All exchange differences are dealt with through the profit or loss as they arise except where they arise from translation on consolidation, where they are recognised in other comprehensive income and reclassified to profit or loss on the disposal of the foreign operation.
	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 Group's service lines which represent the main products and services provided by the Group. The Directors believe that the Group's continuing investment operations comprise one segment.
	FINANCIAL ASSETS The Group's financial assets comprise investments held for trading, associated undertakings, cash and cash equivalents and loans and receivables.
	INVESTMENTS HELD FOR TRADING All investments are 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 Group has significant influence, but not control, over the financial and operating policies.  Investments that are held as part of the Group's investment portfolio are carried in the statement of financial position at fair value even though the Group 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 Group 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 Group's financial liabilities comprise trade payables.  Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group 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.

3	SEGMENTAL INFORMATION
	The Group 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 GAINS ON INVESTMENTS
		2013	2012
		£	£
	Net realised gains on disposal of investments	33,641	1,922,265
	Movement in fair value of investments	130,660	(1,231,459)
	Net gain on investments	164,301	690,806

5	INVESTMENT INCOME
		2013	2012
		£	£
	Dividends from investments	5,491	-
	Deposit interest receivable	1,395	1,209
	Other interest receivable	59,027	-
		65,913	1,209

6	OPERATING EXPENSES
		2013	2012
		£	£
	Operating expenses include:
	Wages and salaries	141,173	94,580
	Share based payment expense	21,073	38,419
	AUDITOR'S REMUNERATION
	During the year the Group obtained the following services from the Company's auditor:
		2013	2012
		£	£
	Fees payable to the Company's auditor for the audit of the parent company and the Group 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

7	DIRECTORS' EMOLUMENTS
				2013		2012
				£		£
	Aggregate emoluments			131,000		89,334
	Social security costs			10,173		5,246
	Share based payment expense			21,073		38,419
				162,246		132,999
	Name of director	Fees	Benefits		Total 2013	Total 2012
		£	£		£	£
	N Lee	114,000	-		114,000	72,334
	G Haselden	17,000	-		17,000	17,000
		131,000	-		131,000	89,334

£42,000 of the fees in respect of Mr N Lee was paid to ACL Capital Limited.

8	EMPLOYEE INFORMATION
		2013	2012
		£	£
	Wages and salaries	131,000	89,334
	Social security costs	10,173	5,246
	Share based payment expense	21,073	38,419
		162,246	132,999
	Average number of persons employed:
		2013	2012
		Number	Number
	Office and management	2	2

	COMPENSATION OF KEY MANAGEMENT PERSONNEL
	There are no key management personnel other than the Directors of the Company.
9	SHARE BASED PAYMENTS
	WARRANTS In 2010 the Company issued warrants, each entitling the holder to subscribe in cash for one share at a price of 10p per share:
	Number of warrants at 1 Jan 2013	Issued in the year	Exercised in the year			Number of warrants at 31 Dec 2013		Exercise price		Vesting Date		Expiry date
	2,125,000	-	-			2,125,000		10p		20.11.2011		20.11.2014
	The Directors do not consider the fair value of warrants to be material to the Company accordingly a charge has not been recognised in accordance with IFRS.
	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. The significant inputs to the model in respect of the options granted in 2012 and 2011 were as follows:
					2012						2011
	Grant date share price				0.48p						0.32p
	Exercise share price				0.48p						0.32p
	No. of share options				14,000,000						28,000,000
	Risk free rate				3%						3%
	Expected volatility				40%						40%
	Option life				10 years						10 years
	Calculated fair value per share				0.22p						0.15p
	The total share-based payment expense recognised in the income statement for the year ended 31 December 2013 in respect of the share options granted was £21,073 (2012:  £38,419).
	Number of options at 1 Jan 2013	Issued in the year		Exercised in the year			Number of options at 31 Dec 2013		Exercise price		Vesting Date		Expiry date
	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
	42,000,000	-		-			42,000,000		0.37p

10	INCOME TAX EXPENSE
		2013	2012
		£	£
	Current tax - continuing operations	-	1,025
	The tax on the Group'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:
		2013	2012
		£	£
	(Loss)/profit before tax from continuing operations	(33,148)	450,858
	(Loss)/profit before tax multiplied by rate of corporation tax in the UK of 20% (2012: 24.5%)	(6,630)	110,460
	Expenses not deductible for tax purposes	800	543
	Unrelieved tax losses carried forward	5,830	-
	Brought forward tax losses utilised	-	(109,978)
	Total tax	-	1,025
	Unrelieved tax losses of £3,555,000 (2012: £3,525,000) 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.

11	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.
		2013	2012
		£	£
	(Loss)/profit attributable to equity holders of the Group:
	(Loss)/profit from continuing operations	(33,148)	449,833
	(Loss)/profit for the year attributable to equity holders of the Group	(33,148)	449,833
	Weighted average number of ordinary shares in issue for basic earnings	577,857,956	577,857,956
	Weighted average number of ordinary shares in issue for fully diluted earnings*	577,857,956	616,797,847
	(LOSS)/EARNINGS PER SHARE
	BASIC:
	- Basic (loss)/earnings per share from continuing and total operations	(0.006p)	0.078p
	FULLY DILUTED:
	- Fully diluted (loss)/earnings per share from continuing and total operations	(0.006p)	0.073p
	For 2013 the share options in issue are anti-dilutive in respect of the loss per share calculation and have therefore not been included.

12	INVESTMENT IN SUBSIDIARY UNDERTAKINGS
						COMPANY
						2013		2012
						£		£
	COST
	As at 1 January and 31 December					1,480,098		1,480,098
	PROVISIONS
	As at 1 January and 31 December					1,480,098		1,480,098
	NET BOOK VALUE					-		-
	The Company has investments in the following subsidiary undertakings :
	Name of subsidiary undertaking	Status of Company	Country of incorporation	Nature of business	Description of holding		Proportion  held
	Viridas GmbH	Private	Germany	Dormant	EURO 25,000 Registered shares		100%
	Viridas Brasil Agronegocios Ltd	Private	Brazil	Dormant	R$ 100,000		100%

Viridas GmbH was dissolved in January 2014.

ASSOCIATED UNDERTAKINGS

At the year end the Company held 27% of the issued share capital of Brady Exploration plc ("Brady"), 29% of the issued share capital of Astar Minerals plc ("Astar") and 28% of the issued share capital of Plutus Resources plc (Plutus").  Nicholas Lee is a director of Brady and Astar.  The extent of the Group's involvement in these companies allows it to participate in their financial and operating policies and it is presumed that it is possible to exert significant influence when the equity holding is greater than 20%.  These investments have not been equity accounted for (as permitted by IAS 28), and have been included in investments held for trading (Note 13). Brady and Astar are considered to be related parties (Note 21).

13	INVESTMENTS HELD FOR TRADING
		GROUP		COMPANY
		2013	2012	2013	2012
		£	£	£	£
	At 1 January - fair value	1,199,608	1,760,086	1,199,608	1,760,086
	Acquisitions	892,806	1,249,985	892,806	1,249,985
	Disposal proceeds	(227,731)	(2,501,269)	(227,731)	(2,501,269)
	Net gain on disposal of investments	33,641	1,922,265	33,641	1,922,265
	Movement in fair value of investments	130,660	(1,231,459)	130,660	(1,231,459)
	.At 31 December - fair value	2,028,984	1,199,608	2,028,984	1,199,608
	Categorised as:
	Level 1 - Quoted investments	1,554,292	1,029,011	1,554,292	1,029,011
	Level 2 - Unquoted investments	100,000	-	100,000	-
	Level 3 - Unquoted investments	374,692	170,597	374,692	170,597
		2,028,984	1,199,608	2,028,984	1,199,608

13	INVESTMENTS HELD FOR TRADING (continued)
	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
		2013	2012
		£	£
	Brought forward	170,597	-
	Purchases	204,095	170.597
	Carried forward	374,692	170,597
	Level 3 valuation techniques used by the Group are explained on page 20 (Fair value of financial instruments)

14	TRADE AND OTHER RECEIVABLES
		GROUP		COMPANY
		2013	2012	2013	2012
		£	£	£	£
	Other receivables	169,846	-	169,846	-
	Amounts owed by group company	-	-	8,197	-
	Prepayments and accrued income	67,438	8,374	67,438	8,374
		237,284	41,680	245,481	40,526

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.

15	CASH AND CASH EQUIVALENTS
		GROUP		COMPANY
		2013	2012	2013	2012
		£	£	£	£
	Cash and cash equivalents	411,739	1,454,495	400,578	1,441,177

The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.

16	TRADE AND OTHER PAYABLES
		GROUP		COMPANY
		2013	2012	2013	2012
		£	£	£	£
	Trade payables	11,406	24,972	11,406	24,972
	Social security and other taxes	-	1,017	-	-
	Accrued expenses	22,333	13,451	19,369	12,000
		33,739	39,440	30,775	36,972

The Directors consider that the carrying amount of trade payables approximates to their fair value.

17	SHARE CAPITAL
		Number of shares		Share capital
		Deferred	Ordinary	Deferred	Ordinary
				£	£
	ISSUED AND FULLY PAID:
	At 1 January 2012:
	Deferred shares of 9.9p each	32,857,956	-	3,252,938	-
	Ordinary shares of 0.1p each	-	577,857,956	-	577,858
	At 31 December 2012 and 2013	32,857,956	577,857,956	3,252,938	577,858

18	OTHER RESERVES
		Capital redemption reserve	Share  option reserve	Total Other reserves
		£	£	£
	Balance at 1 January 2012	27,000	4,690	31,690
	Share based payment costs	-	38,419	38,419
	Balance at 31 December 2012	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

19	RISK MANAGEMENT OBJECTIVES AND POLICIES
	The Group is exposed to a variety of financial risks which result from both its operating and investing activities.  The Group's risk management is coordinated by the Board of Directors, and focuses on actively securing the Group's short to medium term cash flows by minimising the exposure to financial markets. The main risks the Group is exposed to through its financial instruments are credit risk, foreign currency risk, liquidity risk and market price risk. CAPITAL RISK MANAGEMENT The Group's objectives when managing capital are: ·      to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders; ·      to support the Group's growth; and ·      to provide capital for the purpose of strengthening the Group's risk management capability. The Group 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 Group 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. CREDIT RISK The Group'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 Group's maximum exposure to credit risk is £581,585 (2012: £1,487,801) comprising cash and cash equivalents and loans and receivables.
	LIQUIDITY RISK Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group 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 RISK The Group's foreign currency risk arises from financial assets held in currencies other than pounds sterling
	Net foreign currency monetary assets:	Euro	Total
	Functional currency of the operation	£	£
	Sterling	11,161	11,161
	The Directors do not consider the Group has significant exposure to movements in foreign currency in respect of its monetary assets.
	MARKET PRICE RISK The Group's exposure to market price risk mainly arises from potential movements in the fair value of its investments.  The Group manages this price risk within its long-term investment strategy to manage a diversified exposure to the market.  If each of the Group's equity investments were to experience a rise or fall of 10% in their fair value, this would result in the Group's net asset value and statement of comprehensive income increasing or decreasing by £155,000 ( 2012:  £103,000).

20	FINANCIAL INSTRUMENTS
	The Group uses financial instruments, other than derivatives, comprising cash to provide funding for the Group'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:
		2013	2012
		£	£
	FINANCIAL ASSETS:
	Cash and bank balances	411,739	1,454,495
	Loans and receivables	169,846	33,306
	Investments held for trading	2,028,984	1,199,608
	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:
		2013	2012
		£	£
	Trade and other payables	11,406	25,989

21

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 £131,000 (2012: £89,334) paid by the Group to the Directors in respect of services to the Group.  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 £42,000 in respect of consultancy fees due for the year (2012: £37,000).  £3,500 of this amount was invoiced and paid after the year end.  No other amounts were owed at 31 December 2013. Nicholas Lee is also a director of Brady Exploration plc ("Brady") and Astar Minerals plc ("Astar"). The Company has a 27% shareholding in Brady.  In addition the Company made a loan in April 2013 of £60,000 to Brady on open market terms, which was repayable on 29 April 2014.  Since the year end the repayment date has been extended to 29 October 2014. During the year the Company subscribed £111,000 for 74,000,000 shares as part of a placing of Astar Minerals plc shares and at the year end held 29% of Astar's issued share capital.

22	POST YEAR END EVENTS
	There were no significant post year end events.

 

END

 

 

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