Financial Statements for year to 31 December 2017

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Tooru PLC (TOO)

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Category	Principal investments	Cost or valuation (£)
Listed investments	Metal Tiger plc, MX Oil plc, Plutus Powergen plc, Arc Minerals plc, Pires Investments plc, I3 Energy plc, Cora Gold plc and Shumba Energy Limited	1,811,625
Cash resources		211,795
Listed investments and cash		2,023,420
Unlisted investments		440,748
Total		2,464,168

		2017	2016

	Note	£	£
CONTINUING OPERATIONS:
Net (loss)/gain on investments	4	(811,467)	770,086
Investment income	5	11,934	15,090
TOTAL INCOME		(799,533)	785,176
Administrative expenses		(336,152)	(299,128)
(LOSS)/PROFIT BEFORE TAXATION		(1,135,685)	486,048
Taxation	10	-	-
(LOSS)/PROFIT FOR THE YEAR AND TOTAL COMPREHENSIVE INCOME		(1,135,685)	486,048
EARNINGS PER SHARE	11
Basic and fully diluted (loss)/earnings per share		(0.112p)	0.051p

		2017	2016
	Note	£	£
NON-CURRENT ASSETS
Investments held for trading	12	2,252,373	2,949,517
		2,252,373	2,949,517

CURRENT ASSETS
Trade and other receivables	13	37,863	29,142
Cash and cash equivalents	14	211,795	648,165
		249,658	677,307
TOTAL ASSETS		2,502,031	3,626,824
CURRENT LIABILITIES
Trade and other payables	15	53,262	42,370
		53,262	42,370
NET ASSETS		2,448,769	3,584,454
EQUITY
Share capital	16	4,269,546	4,269,546
Share premium account	16	3,191,257	3,191,257
Capital redemption reserve	17	27,000	27,000
Share option reserve	17	73,150	73,150
Retained losses		(5,112,184)	(3,976,499)
TOTAL EQUITY		2,448,769	3,584,454

	Share capital	Share premium	Other reserves (Note 18)	Retained losses	Total equity
	£	£	£	£	£

BALANCE AT 1 JANUARY 2016	4,175,796	3,135,007	119,407	(4,481,804)	2,948,406

Profit for the year and total comprehensive income	-	-	-	486,048	486,048
Share issue	93,750	56,250	-	-	150,000
Transfer on cancellation of options	-	-	(19,257)	19,257	-
Transactions with owners	93,750	56,250	(19,257)	19,257	150,000
BALANCE AT 31 DECEMBER 2016	4,269,546	3,191,257	100,150	(3,976,499)	3,584,454

Loss for the year and total comprehensive expense	-	-	-	(1,135,685)	(1,135,685)
BALANCE AT 31 DECEMBER 2017	4,269,546	3,191,257	100,150	(5,112,184)	2,448,769

		2017	2016
	Note	£	£
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss)/profit before tax - continuing operations		(1,135,685)	486,048
Share based payment expense		-	-
Investment income		(11,934)	(15,090)
Net losses/(gains) on investments		811,467	(770,086)
OPERATING CASH FLOWS BEFORE MOVEMENTS IN WORKING CAPITAL		(336,152)	(299,128)
(Increase) in trade and other receivables		(8,721)	(16,296)
Increase/(decrease) in trade and other payables		10,892	(44,299)
NET CASH USED BY OPERATING ACTIVITIES		(333,981)	(359,723)
INVESTING ACTIVITIES
Purchase of investments		(321,167)	(527,351)
Disposal of investments		206,844	1,055,579
Investment income received		11,934	15,090
NET CASH USED IN INVESTING ACTIVITIES		(102,389)	543,318
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS		(436,370)	183,595

Cash and cash equivalents at the beginning of the year		648,165	464,570

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	14	211,795	648,165

1	NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 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 Company'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 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 (£) which is the functional currency of the Company. The comparative figures are for the year ended 31 December 2016. 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 has 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. The following new and revised Standards and Interpretations have been adopted in the current period by the Company for the first time and do not have a material impact on the group.
	IFRS 12 -	Disclosures of interests in other entities
	A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and not early adopted. None of these are expected to have a significant effect 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.
	CURRENT TAX 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 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, and are recognised in the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument.
	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.
	IMPAIRMENT OF FINANCIAL ASSETS Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. A provision for impairment is made when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. Impaired debts are derecognised when they are assessed as uncollectible.
	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.

4	NET GAIN/(LOSS) ON INVESTMENTS
		2017	2016
		£	£
	Net realised gains/(losses) on disposal of investments	92,473	468,239
	Movement in fair value of investments	(903,940)	301,847
	Net (loss)/gain on investments	(811,467)	770,086

6	PROFIT/(LOSS) FOR THE YEAR
		2017	2016
		£	£
	Profit for the year has been arrived at after charging:
	Wages and salaries	131,329	141,227

	AUDITOR'S REMUNERATION
	During the year the Company obtained the following services from the Company's auditor:
		2017	2016
		£	£
	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	2,100	600
		14,100	12,600

7	DIRECTORS' EMOLUMENTS
				2017	2016
				£	£

	Aggregate emoluments			120,000	141,749
	Social security costs			11,329	8,478
				131,329	150,227

	Name of director	Fees	Benefits	Total 2017	Total 2016
		£	£	£	£

	N Lee	84,000	-	84,000	72,000
	A van Dyke	36,000	-	36,000	20,333
	G Haselden	-	-	-	8,500
	M Lofgran	-	-	-	40,916
		120,00	-	120,00	141,749

8	EMPLOYEE INFORMATION
		2017	2016
		£	£

	Wages and salaries	120,000	141,749
	Social security costs	11,329	8,478
		131,329	150,227
	Average number of persons employed:
		2017	2016
		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.


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 2017 in respect of the share options granted was £Nil (2016: £Nil).
Number of options at 1 Jan 2017	Granted in the year	Exercised in the year		Cancelled in the year	Number of options at 31 Dec 2017		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

23	ULTIMATE CONTROLLING PARTY
	The Directors do not consider there to be a single ultimate controlling party.

10	INCOME TAX EXPENSE
		2017	2016
		£	£
	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:
		2017	2016
		£	£
	Profit/(loss) before tax from continuing operations	(1,135,685)	486,048
	Profit/(loss) before tax multiplied by rate of corporation tax in the UK of 19.25% (2016: 20%)	(218,619)	97,210
	Expenses not deductible for tax purposes	2,728	3,034
	Offset against tax losses brought forward	-	(100,244)
	Unrelieved tax losses carried forward	215,891	-
	Total tax	-	-
	Unrelieved tax losses of £4,485,000 (2016: £3,366,000) 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 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.
		2017	2016
		£	£
	Profit/(loss) attributable to equity holders of the Company:
	Profit/(loss) from continuing operations	(1,135,685)	486,048
	Profit/(loss) for the year attributable to equity holders of the Company	(1,135,685)	486,048
	Weighted average number of ordinary shares in issue for basic and fully diluted earnings*	1,016,607,956	959,230,907

	EARNINGS/(LOSS) PER SHARE
	BASIC AND FULLY DILUTED:
	- Basic (loss)/earnings per share from continuing and total operations	(0.112p)	0.051p
	- Fully diluted (loss)/earnings per share from continuing and total operations	(0.112p)	0.051p
	*No adjustment to earnings per share for fully diluted earnings has been made as the exercise of options would be anti-dilutive.


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 loan note valued by reference to its nominal value, and two equity investments whose shares were suspended at the year-end which have been valued at the bid price of the shares on lifting of the suspension subsequent to the year-end.
LEVEL 3 FINANCIAL ASSETS Reconciliation of Level 3 fair value measurement of financial assets
	2017	2016
	£	£
Brought forward	392,149	947,221
Reclassified from Level 1	-	293,295
Reclassified to Level 1	-	(390,320)
Disposal proceeds	-	(170,698)
Loss on disposals	-	(154,095)
Movement in fair value	(214,914)	(133,254)
Carried forward	177,235	392,149
Level 3 valuation techniques used by the Company are explained on page 22 (Fair value of financial instruments)
In line with the investment strategy adopted by the Company, Nicholas Lee is on the boards of the following investee companies:
	%age holding
	2017	2016
Pires Investments plc	24.8%	24.8%
MX Oil plc	0.9%	0.9%
Eridge Capital Limited	7.7%	7.7%

16	SHARE CAPITAL
		Number of shares		Share capital		Share
		Deferred	Ordinary	Deferred	Ordinary	premium
				£	£	£
	ISSUED AND FULLY PAID:
	At 1 January 2016:
	Deferred shares of 9.9p each	32,857,956		3,252,938
	Ordinary shares of 0.1p each		922,857,956		922,858	3,135,007
	At 1 January 2016	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 and 2017	32,857,956	1,016,607,956	3,252,938	1,016,608	3,191,257

17	OTHER RESERVES
		Capital redemption reserve	Share option reserve	Total Other reserves
		£	£	£
	Balance at 1 January 2016	27,000	92,407	119,407
	Transfer to Profit and loss on cancellation of options	-	(19,257)	(19,257)
	Balance at 31 December 2016 and 2017	27,000	73,150	100,150

18	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 MANAGEMENT The 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 RISK The 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 £232,611 (2016: £728,165) comprising cash and cash equivalents and loans and receivables. The ageing profile of trade and other receivables was:
		2017	2016
		Total book value	Total book value
		£	£
	Current	20,816	20,894
	Overdue for less than one year	-	-
		20,816	20,894

18	RISK MANAGEMENT OBJECTIVES AND POLICIES continued
	LIQUIDITY RISK Liquidity 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 RISK The Directors do not consider the Company has significant exposure to movements in foreign currency in respect of its monetary assets.
	MARKET PRICE RISK The 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 £225,000 (2016: £295,000).

19	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:
		2017	2016
		£	£
	FINANCIAL ASSETS:
	Cash and cash equivalents	211,795	648,165
	Loans and receivables	20,816	20,894
	Investments held for trading	2,252,373	2,949,517
	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:
		2017	2016
		£	£
	Trade and other payables	22,067	16,920

Financial Statements for year to 31 December 2017

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