TIDMPEBI
RNS Number : 7526S
Port Erin Biopharma Investments Ltd
23 December 2016
Port Erin Biopharma Investments Limited
("Port Erin" or "the Company")
Annual audited results for the year ending 30 June 2016
Notice of AGM
The Board of Port Erin, the AIM quoted company focused on
investing in the biotechnology and biopharmaceutical sectors, is
pleased to announce its annual results for the year ending 30 June
2016.
Copies of the 2016 Audited Report and Financial Statements are
being posted to shareholders and will shortly be available from the
Company's website www.porterinbiopharma.com.
The Company will post its Notice of Annual General Meeting
("AGM") to Shareholders at the same time. The AGM will be held at
the Sanderson Suite, Claremont Hotel, Loch Promenade, Douglas, Isle
of Man IM1 2LX at 10:00 a.m. on Friday, 10 February 2017.
Port Erin Biopharma Northland Capital Partners Peterhouse Capital
Investments Limited Limited Limited
Nominated Adviser and Broker
Joint Broker
Denham Eke Matthew Johnson / David Lucy Williams
+44 (0) 1624 639396 Hignell +44 (0) 207
+44 (0) 203 861 6625 469 0936
Chairman's statement
Introduction
The investment holdings have performed in line with the sector.
Despite our holding of Magna Biopharma Income Fund ("MBIF") having
reduced in value to GBP1.2 million, principally as a result of the
Tender Offer (2015: pre-tender offer GBP2.9 million), we remain
confident that MBIF is well positioned to take advantage in any
market upturn. Of our other investments, we remain positive about
the potential for both Regent Pacific ("Regent") and Summit plc
("Summit").
In November 2015, Plethora Solutions Holdings plc was the
candidate for an offer from Hong Kong listed Regent. The
consideration for the offer was for each share held, the
shareholder received 15.7076 New Regent Pacific Shares.
Summit Therapeutics has recently announced that it has enrolled
its first patients at trial sites in the US into PhaseOut Duchenne
muscular dystrophy ("DMD"), a Phase 2 proof-of-concept clinical
trial of ezutromid in patients with DMD. Ezutromid dosing is
expected to follow within a screening period of up to 28 days.
Enrolment and dosing of patients into PhaseOut DMD in the UK is
ongoing. Ezutromid is a utrophin modulator and represents a
potential disease modifying treatment for all patients with
DMD.
In April 2016, Miraculins Inc announced that it has changed its
name to Luminor Medical Technologies Inc ("Luminor") and commenced
trading on the TSX Venture Exchange, completing a twenty-five to
one consolidation of its common shares. Luminor is a medical
diagnostic company focused on acquiring, developing and
commercialising non-invasive technologies for unmet clinical needs.
The Company's Scout DS(R) device has achieved regulatory approval
for certain markets as a clinical tool to assist in the
identification of both Prediabetes and Type-2 diabetes, and is the
first non-invasive testing system designed to provide a highly
sensitive and convenient method for measuring sugar levels and
oxidative stress. Unlike current testing methods, a Scout DS(R)
test requires no blood draw, no fasting, and no waiting for a
laboratory result. The product has been used and validated in
thousands of patients around the world.
After the year-end, on 13 October 2016, we entered into a loan
agreement with the Diabetic Boot Company Limited ("DBC") to provide
it with a short-term loan of GBP200,000 less expenses, for working
capital purposes. This loan pays a coupon of 7 per cent., is
unsecured and is fully repayable on the earlier of 31 March 2017 or
the date on which DBC secures additional equity funding of
GBP1,000,000. We already hold 7,105 shares in DBC, representing
0.74 per cent. of its issued share capital. In order to provide the
funds for the loan, we sold 21,733 shares of our MBIF holding,
leaving a resultant holding in MBIF of 93,831 shares.
Financial Review
The total comprehensive loss for the year was GBP0.5 million
(2015: loss of GBP0.6 million). The investment loss was GBP0.3
million (2015: loss of GBP0.2 million). Expenses, with no
performance fee charged, were GBP0.2 million (2015: GBP0.4
million).
Total assets stand at GBP2.2 million (2015: GBP2.7 million), of
which our investment holdings represent GBP2.2 million (2015:
GBP2.5 million). Available cash is GBP0.01 million (2015: GBP0.3
million).
Outlook
We continue to seek value enhancing investments to add to our
portfolio to provide a solid platform from which to continue our
strategy for growth.
Jim Mellon
Chairman
Directors' report
The Directors of Port Erin Biopharma Investments Limited (the
"Company") take pleasure in presenting the Directors' report and
financial statements for the year ended 30 June 2016.
Principal activity
The Company was formed for the purpose of investing in the
biotechnology and biopharmaceutical sector. The Company was
incorporated on 3 May 2011 under the Isle of Man Companies Act 2006
and has no employees other than Directors. On 15 September 2011,
the Company's shares were admitted to AIM.
Results and transfer to reserves
The results and transfers from reserves for the year are set out
on pages 7 and 9.
The Company made a loss for the year after taxation of
GBP534,369 (2015: loss of GBP601,646).
Dividend
The Directors do not propose the payment of a dividend (2015:
GBPnil).
Directors
The Directors who served during the year and to date were:
Jim Mellon
Denham Eke
Anderson Whamond
Auditors
Our auditors, KPMG Audit LLC, being eligible, have expressed
their willingness to continue in office.
Directors' interests
As at 30 June 2016, the interests of the Directors and their
families (as such term is defined in the AIM Rules for Companies)
in the share capital of the Company are as follows:
Number of Ordinary Shares Percentage
of Issued
Capital
Direct Interests Other Interests
Jim Mellon(1)(2) 1,273,960 5,455,313 29.01%
Notes to Directors' Interests:
(1) Galloway Limited, a company where Jim Mellon is considered
to be the ultimate beneficial owner, holds 5,455,313 Ordinary
shares.
(2) Denham Eke is a director of Galloway Limited.
Significant shareholdings
Except for the interests disclosed in this note, the Directors
are not aware of any holding of ordinary shares as at 30 June 2016
representing 3% or more of the issued share capital of the
Company:
Number of Percentage
ordinary of total
shares issued capital
Jim Mellon(1) 6,729,273 29.01%
Vidacos Nominees Limited 1,720,000 7.42%
Share Nominees Ltd 1,356,546 5.85%
The Bank of New York (Nominees) 1,250,000 5.39%
Hargreaves Lansdown (Nominees)
Limited HLNOM 1,217,524 5.25%
Hargreaves Lansdown (Nominees)
Limited VRA 1,097,446 4.73%
Idealing Nominees Limited 827,403 3.57%
Note:
(1) Jim Mellon's shareholding consists of 5,455,313 shares held
by Galloway Limited. Galloway Limited is a company where Jim Mellon
is considered to be the ultimate beneficial owner. The balance of
Jim Mellon's shareholding is held in his own name.
On behalf of the Board
Denham Eke
Director 18 Athol Street
Douglas
23 December 2016 Isle of Man
IM1 1JA
British Isles
Statement of Directors' Responsibilities in Respect of the
Directors' Report and the Financial Statements
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations. In addition, the Directors have elected to
prepare the financial statements in accordance with International
Financial Reporting Standards, for each financial year.
The financial statements are required to give a true and fair
view of the state of affairs of the Company and of the profit or
loss of the Company for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
International Financial Reporting Standards, and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company. They have general responsibility
for taking such steps as are reasonably open to them to safeguard
the assets of the Company and to prevent and detect fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation governing the preparation and
dissemination of financial statements may differ from one
jurisdiction to another.
Report of the Independent Auditors, KPMG Audit LLC, to the
members of Port Erin Biopharma Investments Limited
We have audited the financial statements of Port Erin Biopharma
Investments Limited (the "Company") for the year ended 30 June 2016
which comprise the Statement of Comprehensive Income, the Statement
of Financial Position, the Statement of Changes in Equity and the
Statement of Cash Flows and the related notes. The financial
reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
This report is made solely to the Company's members, as a body.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Directors' Responsibilities
Statement set out on page 5, the Directors are responsible for the
preparation of financial statements that give a true and fair view.
Our responsibility is to audit, and express an opinion on, the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
(APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the Directors; and the
overall presentation of the financial statements.
In addition, we read all the financial and non-financial
information in the Annual Report to identify material
inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect
based on or materially inconsistent with, the knowledge acquired by
us in the course of performing the audit. If we become aware of any
apparent material misstatements or inconsistencies we consider the
implications for our report.
Opinion on the financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 30 June 2016 and of its loss for the year then ended;
and
-- have been properly prepared in accordance with IFRSs.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM99 1HN
23 December 2016
Statement of comprehensive income
for the year ended 30 June 2016
2016 2015
Notes GBP GBP
Investment (loss)/gain 3 (317,873) (190,775)
Operating expenses
Directors' fees 2 (10,000) (7,810)
Performance fee 2 - -
Other costs 4 (210,575) (444,400)
Foreign exchange
gains/(losses) 4,048 41,217
---------------- ----------------
(Loss)/profit from
operating activities 5 (534,400) (601,768)
Interest received/(paid) 31 122
---------------- ----------------
(Loss)/profit before
taxation (534,369) (601,646)
Taxation 1(i) - -
---------------- ----------------
(Loss)/profit for
the year (534,369) (601,646)
Other comprehensive - -
income
---------------- ----------------
Total comprehensive
loss for the year (534,369) (601,646)
Basic and diluted
(loss)/earnings
per share (pence) 11 (2.30) (2.03)
The Directors consider that the Company's activities are
continuing.
Statement of financial position
as at 30 June 2016
Notes 2016 2015
GBP GBP
Current assets
Financial assets
at fair value through
profit or loss 7 2,187,075 2,454,953
Trade and other
receivables 7,335 7,646
Cash and cash equivalents 11,985 255,568
---------------- ----------------
Total assets 2,206,395 2,718,167
Equity and liabilities
Capital and reserves
Share capital 6 23 23
Share premium 6 1,890,142 1,890,142
Retained earnings 262,033 796,402
---------------- ----------------
2,152,198 2,686,567
Current liabilities
Trade and other
payables 9 54,197 31,600
---------------- ----------------
Total equity and
liabilities 2,206,395 2,718,167
These financial statements were approved by the Board of
Directors on 23 December 2016 and were signed on their behalf
by:
Denham Eke
Director
Statement of changes in equity
for the year ended 30 June 2016
Share Share Retained
Notes Capital Premium Profit Total
GBP GBP GBP GBP
Balance at 30
June 2015 23 1,890,142 796,402 2,686,567
Total comprehensive
loss for the
year - - (534,369) (534,369)
---------------- ---------------- ---------------- ----------------
Balance at 30
June 2016 23 1,890,142 262,033 2,152,198
Share Share Retained
Notes Capital Premium Profit Total
GBP GBP GBP GBP
Balance at 30
June 2014 34 2,759,551 2,221,841 4,981,426
Shares cancelled
under Tender
Offer 6 (11) (869,409) - (869,420)
Cash distribution
under Tender
Offer 6 - - (823,793) (823,793)
Total
comprehensive
income for the
year - - (601,646) (601,646)
---------------- ---------------- ---------------- ----------------
Balance at 30
June 2015 23 1,890,142 796,402 2,686,567
Statement of cash flows
for the year ended 30 June 2016
Notes 2016 2015
GBP GBP
Cash flows from operating
activities
Loss for the year (534,369) (601,646)
Adjusted for:
Foreign exchange gains/(losses) 4,084 (41,217)
Interest received (31) (122)
Realised and unrealised
losses/(gains) on investments 3 317,873 190,775
-------------- --------------
Operating loss before
changes in working capital (212,443) (452,210)
Change in receivables 311 17,351
Change in payables 22,597 (369,382)
-------------- --------------
Net cash outflow from
operating activities (189,535) (804,241)
-------------- --------------
Cash flows from investing
activities
Purchase of investments (136,486) (124,993)
Proceeds from sale of
investments 86,491 1,439,854
Transfer of shares in
lieu of payments - 870,319
Interest received 31 122
-------------- --------------
(49,964) 2,185,302
-------------- --------------
Cash flows from financing
activities
Shares cancelled under
Tender Offer - (869,420)
Cash distribution under
Tender Offer - (823,793)
-------------- --------------
- (1,693,213)
-------------- --------------
Decrease in cash and cash
equivalents (239,499) (312,152)
Cash and cash equivalents
at beginning of year 255,568 526,503
Effect of exchange rate
differences (4,084) 41,217
-------------- --------------
Cash and cash equivalents
at the end of year 11,985 255,568
Notes
(forming an integral part of the financial statements for the
year ended 30 June 2016)
1 Accounting policies
Port Erin Biopharma Investments Limited is a Company domiciled
in the Isle of Man. The Company's strategy is to create value for
Shareholders through investing in companies that have the potential
to generate substantial revenues through the development of
biopharmaceutical drugs.
The principal accounting policies are set out below.
a) Statement of compliance
The financial statements are prepared on the historical cost
basis except for the valuation of financial assets and liabilities
which are held at fair value through profit or loss and in
accordance with International Financial Reporting Standards (IFRS)
and the interpretations adopted by the European Union.
The financial statements were approved by the Board of Directors
on 23 December 2016.
b) Basis of preparation
Use of estimates and judgment
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision only
affects that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
Going concern
The financial statements have been prepared on a going concern
basis, taking into consideration the level of cash and liquid
investments held by the Company. The Directors have a reasonable
expectation that the Company will have adequate resources for its
continuing existence and projected activities for the foreseeable
future, and for these reasons, continue to adopt the going concern
basis in preparing the financial statements for the year ended 30
June 2016.
Functional and presentation currency
These financial statements are presented in Pound Sterling (GBP)
which is the Company's functional currency and rounded to the
nearest pound.
c) Investment income
Any realised and unrealised gains and losses on investments are
presented within 'Investment (loss)/gain'.
Interest income earned during the period, is accrued on a time
apportionment basis, by reference to the principal outstanding and
the effective rate applicable.
Dividend income is recognised when a security held goes
ex-dividend. Dividends are shown as net cash received, after the
deduction of withholding taxes.
d) Financial instruments
Classification
The Company classifies its investments in equity securities as
financial assets at fair value through profit or loss. These
financial assets are classified as held for trading or designated
at fair value through profit or loss at inception.
Financial assets held for trading are acquired or incurred
principally for the purpose of selling in the short term.
Financial assets designated at fair value through profit or loss
are those that are managed and their performance evaluated on a
fair value basis in accordance with the Company's documented
investment strategy.
Financial assets that are classified as loans and receivables
include amounts due from brokers, other receivables.
Recognition/de-recognition
Purchases and sales of investments are recognised on their trade
date, which is the date on which the Company commits to purchase or
sell the asset. Investments are initially measured at fair value.
Investments are derecognised when the rights to receive cash flows
from the investments have expired or the Company has transferred
substantially all risks and rewards of ownership.
Measurement
Subsequent to initial recognition, all financial assets and
financial liabilities at fair value through profit or loss are
measured at fair value. Any gains and losses arising from changes
in 'financial assets at fair value through profit or loss' are
included in profit or loss in the period in which they arise.
Interest from financial assets at fair value through profit or loss
is recognised in the Statement of Comprehensive Income using the
effective interest rate method. Dividend income from financial
assets at fair value through profit or loss is recognised in the
Statement of Comprehensive Income when the Company's right to
receive payment is established.
Fair value measurement principles
The fair value of investment holdings is based on their quoted
market prices at the reporting date on a recognised exchange or in
the case of non-exchange traded instruments, sourced from a
reputable counterparty, without any deduction for estimated future
selling costs. Financial assets are priced at their closing bid
prices, while financial liabilities are priced at their closing
offer prices.
Company assets may, at any time include securities and other
financial instruments or obligations that are thinly traded or for
which no market exists and/or which are restricted as to their
transferability under securities laws.
If a quoted market price is not available on a recognised stock
exchange, or a market is not sufficiently active for the market
price to be considered reliable, or if a price is not available
from a reputable counterparty, fair value of the financial
instruments may be estimated by the Directors using valuation
techniques, including use of recent arm's length market
transactions, reference to the current fair value of another
instrument that is substantially the same, discounted cash flow
techniques, option pricing models or any other valuation technique
that provides a reliable estimate of prices obtained in actual
market transactions.
The Company recognizes transfers between levels of the fair
value hierarchy as at the end of the reporting period during which
the change occurred.
Impairment of financial assets
The Company assesses at each reporting date whether a financial
asset is impaired. A financial asset is deemed to be impaired if,
and only if, there is objective evidence of impairment as a result
of one or more events that have occurred after the initial
recognition of the asset and that loss event has an impact on the
estimated future cash flows of the financial asset that can be
reliably estimated.
If there is objective evidence that an impairment loss has been
incurred, the amount of the loss is measured as the difference
between the assets' carrying amount and the present value of
estimated future cash flows discounted using the asset's original
effective interest rate.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits with maturities of three months or less from the
acquisition date that are subject to an insignificant risk of
changes in fair value.
Trade and other receivables
Trade and other receivables originated by the Company are
initially recognised at fair value and subsequently stated at
amortised cost less impairment losses.
Trade and other payables
Trade and other payables are initially recognised at fair value
less directly attributable transaction costs. Subsequently they are
measured at amortised cost using the effective interest method.
e) Share capital and share premium
Ordinary shares are classified as equity. The ordinary shares of
the Company have a par value of GBP0.000001 each. Excess proceeds
received for the issue of shares has been credited to share
premium. Incremental costs directly attributable to the issue of
ordinary shares are recognised as a deduction from equity, net of
any tax effects.
f) Warrants
The fair value of warrants is calculated using the Black-Scholes
option pricing model (where no fair value of the service or assets
provided is evident) and is recognised as expense over the vesting
period where applicable with a corresponding increase in equity. On
determining fair values, terms and conditions attaching to the
warrants are taken into account. Management is also required to
make certain assumptions and estimates regarding such items as the
life of warrants, volatility and forfeiture rates. Changes in the
assumptions used to estimate fair value could result in materially
different results.
g) Foreign currencies
Transactions in foreign currencies are translated into the
functional currency at the rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated into functional currency at the rate of
exchange ruling at the reporting date. All differences are taken to
the income statement.
Non-monetary assets and liabilities that are measured in terms
of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction.
h) New standards and interpretations not yet adopted
A number of new standards and amendment to standards and
interpretation are not yet effective for the year ended 30 June
2016, and have not been applied in preparing these financial
statements.
New/Revised International Financial Reporting Standards (IAS/IFRS) EU Effective Date
(accounting periods
commencing on or after)
IFRS 9 Financial Instruments. Not yet endorsed. IASB
effective date 1
January 2018.
Amendments to IAS 1: Disclosure Initiative (issued on 18 December Not yet endorsed. IASB
2014). effective date 1
January 2016.
Annual Improvements to IFRSs 2012-2014 Cycle (issued on 25 September Not yet endorsed. IASB
2014). effective date 1
January 2016.
The Directors do not expect the adoption of the standards and
interpretations to have a material impact on the Company's
financial statements in the period of initial application.
There has been no material impact on the Company's financial
statements of new standards or interpretations that have come into
effect during the current reporting period.
i) Taxation
The Company is subject to income tax at a rate of 0% in the Isle
of Man, and accordingly, no tax has been provided for in these
financial statements.
The Company may be subject to withholding taxes in relation to
income from investments, or investment realisation proceeds or
gains, and such amounts will be accounted for as incurred.
2 Directors' and performance fees
The fees of Directors who served during the year ended 30 June
2016 were as follows:
2016 2015
GBP GBP
Jim Mellon - -
Denham Eke - -
Alexander Anderson Stuart Whamond 10,000 7,810
-------------- --------------
10,000 7,810
On 6 May 2011, Shellbay Investments Limited entered into a
Letter of Appointment with the Company to provide the services of
Jim Mellon as Non-Executive Chairman of the Company. The Letter of
Appointment was for an initial period of twelve months, from 16 May
2011 and was renewed on 1 June 2012, and may be terminated on not
less than one month's notice given by either party at any time. The
Letter of Appointment contains provisions for early termination,
inter alia, in the event of a breach by Jim Mellon. Remuneration
under the Letter of Appointment shall be payable to Shellbay
Investments Limited and shall be satisfied by the issue of such
number of Ordinary Shares equivalent to 15.0 per cent. of any
increase in the Net Asset Value of the Company over each quarterly
period, subject to an initial high watermark of 10 pence per share.
This fee is recorded as a performance fee since it is based on the
performance of the Company. There are no provisions providing for
any benefit to Shellbay Investments Limited or Jim Mellon on the
termination of the engagement. Total fees payable to Shellbay
Investments Limited for the year under this arrangement were GBPNil
(2015: GBPNil) with no balance remaining outstanding at the
year-end (2015: GBPNil).
Denham Eke was appointed a Director on 30 May 2012 and currently
receives no remuneration for providing his services.
Alexander Anderson Stuart Whamond was appointed as a
Non-Executive Director of the Company on 12 April 2013 and is
entitled to receive a fee of GBP10,000 per annum.
3 Investment income
Derived from financial assets held at fair value through profit
or loss at initial recognition:
2016 2015
GBP GBP
Net realised (losses)/gains
on sale of investments (108,533) 374,588
Net unrealised losses
on investments (209,340) (565,363)
-------------- --------------
(317,873) (190,775)
4 Performance and other costs
2016 2015
GBP GBP
Auditors' fees 18,699 16,746
Bank charges 212 272
Insurance 5,829 5,551
Marketing - 5,130
Performance fee paid
to Shellbay Investments - -
Limited (Note 2)
Professional fees 185,365 412,263
Sundry expenses 4,700 4,438
-------------- --------------
214,805 444,400
The Company has no employees other than the Directors.
5 Profit from operating activities
Profit from operating activities is stated after charging:
2016 2015
GBP GBP
Auditors' fees 18,699 16,746
Directors' fees 10,000 7,810
6 Share capital and share premium
Each share in the Company confers upon the shareholder:
-- the right to one vote at a meeting of the shareholders or on any resolution of shareholders;
-- the right to an equal share in any dividend paid by the Company, and
-- the right to an equal share in the distribution of the
surplus assets of the Company on its liquidation.
The Company may by resolution of Directors redeem, purchase or
otherwise acquire all or any of the shares in the Company subject
to regulations set out in the Company's Articles of
Association.
2016 2015
GBP GBP
Authorised
2,000,000,000 Ordinary
shares of GBP0.000001 2,000 2,000
No. of Share Share
Shares Capital Premium
Issued
Balance at 01 July
2015 23,195,558 23 1,890,142
---------------- ---------------- ----------------
Balance at 30 June
2016 23,195,558 23 1,890,142
---------------- ---------------- ----------------
Balance at 30 June
2015 23,195,558 23 1,890,142
Capital management
The Company manages its capital to maximise the return to
shareholders through the optimisation of equity. The capital
structure of the Company as at 30 June 2016 consists of equity
attributable to equity holders of the Company, comprising issued
capital, reserves and retained earnings as disclosed.
The Company manages its capital structure and makes adjustments
to it in light of economic conditions and the strategy approved by
shareholders. To maintain or adjust the capital structure, the
Company may make dividend payments to shareholders, return capital
to shareholders or issue new shares and release the share premium
account. No changes were made in the objectives, policies or
processes during the year under review.
7 Financial assets at fair value through profit or loss
2016 2015
GBP GBP
Quoted 1,785,204 2,145,661
Unquoted 401,871 309,292
-------------- --------------
2,187,075 2,454,953
Equities 2,185,960 2,377,468
Warrants 1,115 77,485
-------------- --------------
2,187,075 2,454,953
These financial instruments were designated as at fair value
through profit or loss on initial recognition.
8 Financial instruments
Financial Risk Management
The Company has risk management policies that systematically
view the risks that could prevent it from achieving its objectives.
These policies are intended to manage risks identified in such a
way that opportunities to deliver the Company's objectives are
achieved. The Company's risk management takes place in the context
of day-to-day operations and normal business processes such as
strategic and business planning. The Directors have identified each
risk and are responsible for coordinating and continuously
improving risk strategies, processes and measures in accordance
with the Company's established business objectives.
The Company's principal financial instruments consist of
investments, cash, receivables and payables arising from its
operations and activities. The main risks arising from the
Company's financial instruments and the policies for managing each
of these risks are summarised below.
Credit Risk
Credit risk is the risk of loss associated with the
counterparty's inability to fulfil its obligations. The Company's
credit risk is primarily attributable to investments, receivables
and cash balances with the maximum exposure being the reported
balance in the statement of financial position. The Company has a
nominal level of debtors and as such the Company believes that the
credit risk to these is minimal. The Company holds available cash
and securities with licensed banks and financial institutions. The
Company considers the credit ratings of banks in which it holds
funds in order to reduce exposure to credit risk. The funds are
available on demand.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date was:
Carrying Carrying
amount amount
2016 2015
GBP GBP
Investments:
Quoted 1,785,204 2,145,661
Unquoted 401,871 309,292
Cash and cash equivalents 11,985 255,568
Receivables 7,335 7,646
-------------- --------------
2,206,395 2,711,167
Market price risk
Market price risk is the risk that the market price will
fluctuate due to macro-economic issues such as changes in market
factors specific to that security, market interest rates and
foreign exchange rates.
The Company is exposed to significant market price risks as
financial instruments recognised are linked to market price
volatility.
A 1% increase/decrease in market value of investments would
increase/decrease equity and profit by GBP21,871.
Liquidity risk
The Company is exposed to liquidity risk to the extent that it
holds investments that it may not be able to sell quickly at close
to fair value.
The risk is managed by the Company by means of cash flow
planning to ensure that future cash requirements are anticipated
and, where financial instruments have to be sold to meet these
requirements, the process is carried out in a controlled manner
intended to minimise the liquidity risk involved.
The residual undiscounted contractual maturities of financial
liabilities are as follows:
30 June 2016
Less 1-3 3 months 1-5 Over No stated
than months to 1 years 5 years maturity
1 month GBP year GBP GBP GBP
GBP GBP
Financial liabilities
Trade and other 54,197 - - - - -
payables
---------------------- --------- -------- --------- ------- --------- ----------
54,197 - - - - -
---------------------- --------- -------- --------- ------- --------- ----------
30 June 2015
Less 1-3 3 months 1-5 Over No stated
than months to 1 years 5 years maturity
1 month GBP year GBP GBP GBP
GBP GBP
Financial liabilities
Trade and other 31,600 - - - - -
payables
---------------------- --------- -------- --------- ------- --------- ----------
31,600 - - - - -
---------------------- --------- -------- --------- ------- --------- ----------
Interest rate risk
A significant share of the Company's assets can be comprised of
cash held at banks. As a result, the Company is subject to risk due
to fluctuations in the prevailing level of market interest rates.
However, income earned from bank interest is not considered
material to the Company's performance or financial position.
Fair values of financial instruments
At 30 June 2016, the carrying amounts of cash resources, trade
and other receivables, and trade and other payables approximate
fair value due to their short-term maturities.
Foreign currency risk
The Company is exposed to foreign currency risk on fluctuations
related to financial assets and liabilities that are denominated in
a number of currencies.
GBP equivalents as at 30 June 2016
Cash Total
Investments at bank by currency
GBP GBP GBP
USD 70,641 747 71,388
CAD 10,629 - 10,629
EUR 1,231,912 - 1,231,912
HKD 249,594 - 249,594
-------------- -------------- --------------
1,562,776 747 1,563,523
GBP equivalents as at 30 June 2015
Cash Total
Investments at bank by currency
GBP GBP GBP
USD 86,922 226,951 313,873
CAD 155,479 - 155,479
EUR 1,238,846 - 1,238,846
-------------- -------------- --------------
1,481,247 226,951 1,708,198
The following significant exchange rates applied during the
year:
Average rate Average rate
for for
active year active year
2016 2015
EUR 1.3377 1.4033
USD 1.4841 1.5778
CAD 1.9680 1.9429
HKD 11.5104 12.2125
Year-end rate Year-end rate
2016 2015
EUR 1.206 1.416
USD 1.339 1.572
CAD 1.735 1.962
HKD 10.387 12.1908
Sensitivity analysis
A 5% percent strengthening of Sterling against the Euro, Hong
Kong Dollar, US Dollar and Canadian Dollar at 30 June 2016 would
have decreased equity and profit for the year by the amounts shown
below. The analysis assumes that all other variables, in particular
interest rates, remain constant.
Equity Profit or loss
EUR (GBP58,628) (GBP58,628)
HKD (GBP11,887) (GBP11,887)
USD (GBP3,398) (GBP3,398)
CAD (GBP506) (GBP506)
For example, a 5% percent weakening of Sterling against the Euro
and US Dollar at 30 June 2016 would have the equal but opposite
effect on the basis that all other variables, in particular
interest rates, remain constant.
Fair value of financial instruments
The fair values of financial assets and financial liabilities
that are traded in an active market are based on quoted market
prices. For all other financial instruments, the Group determines
fair values using other valuation techniques, based on the British
Private Equity & Venture Capital Association ("BVCA") and
International Private Equity and Venture Capital Valuation
Guidelines ("IPEV").
For financial instruments that trade infrequently and have
little price transparency, fair value is less objective, and
requires varying degrees of judgement depending on liquidity,
uncertainty of market factors, pricing assumptions and other risks
affecting the specific instrument.
The Group measures fair values using the following fair value
hierarchy that reflects the significance of the inputs used in
making the measurements:
-- Level 1: Inputs that are quoted market prices (unadjusted) in
active markets for identical instruments;
-- Level 2: Inputs other than quoted prices included within
Level 1 that are observable either directly (i.e. as prices) or
indirectly (i.e. derived from prices).This category includes
instruments valued using; quoted market prices in active markets
for similar instruments; quoted prices for identical or similar
instruments in markets that are considered less than active; or
other valuation techniques in which all significant inputs are
directly or indirectly observable from market data;
-- Level 3: Inputs that are unobservable. This category includes
all instruments for which the valuation technique includes inputs
not based on observable data and the unobservable inputs have a
significant effect on the instrument's valuation. This category
includes instruments that are valued based on quoted prices for
similar instruments but for which significant unobservable
adjustments or assumptions are required to reflect differences
between the instruments.
Various valuation techniques may be applied in determining the
fair value of investments held as Level 3 in the fair value
hierarchy. The objective of valuation techniques is to arrive at a
fair value measurement that reflects the price that would be
received to sell the asset or paid to transfer the liability in an
orderly transaction between market participants at the measurement
date.
Fair value hierarchy measurement at 30 June 2016
Investments in securities at fair value:
Quoted Significant Significant
prices other unobservable
In active observable Inputs
markets inputs
Total for identical
assets (Level (Level
(Level 2) 3)
1)
Investments
Quoted 1,785,204 1,785,204 - -
Unquoted 401,871 - 1,115 400,756
-------------- -------------- -------------- --------------
2,187,075 1,785,204 1,115 400,756
Reconciliation of Level 3 investments:
Opening balance 231,807
Changes due to fluctuations
in foreign currency 5,534
Purchases 94,995
Transfers in fair 68,420
value hierarchy --------------
Closing balance 400,756
Fair value hierarchy measurement at 30 June 2015
Investments in securities at fair value:
Quoted Significant Significant
prices other unobservable
In active observable Inputs
markets inputs
Total for identical
assets (Level (Level
(Level 2) 3)
1)
Investments
Quoted 2,145,661 2,145,661 - -
Unquoted 309,292 - 77,845 231,807
-------------- -------------- -------------- --------------
2,454,953 2,145,661 77,845 231,807
Reconciliation of Level 3 investments:
Opening balance 376,102
Changes due to fluctuations
in foreign currency 618
Transfers in fair (144,931)
value hierarchy --------------
Closing balance 231,807
There have been no disposals or reclassifications of investments
classified as Level 3 during the financial year ending 30 June
2016.
Where applicable, the Company's Level 3 investments are valued
at the price of each funding round of the respective companies
entered into with their shareholders. From the date of acquisition
of the investments, no additional funding rounds occurred to the
date of these financial statements, and thus the investments are
held at cost. The only change in the value of these occur if the
investments are not denominated in Sterling, and will thus be
subject to foreign exchange rate fluctuations. The Directors do not
consider any of the investments to be impaired and due to the
nature of the investments deem them to be at fair value.
IFRS 13 requires disclosure, by class of financial instrument,
if the effect of changing one or more inputs to reasonably possible
alternative assumptions would result in a significant change to the
fair value measurement. The information used in determination of
the fair value of Level 3 investments is chosen with reference to
the specific underlying circumstances and position of the investee
company. On that basis, the Directors believe that the impact of
changing one or more of the inputs to reasonably possible
alternative assumptions would not change the fair value
significantly.
9 Trade and other payables
2016 2015
GBP GBP
Provision for audit fee 16,746 15,000
Other provisions 12,370 5,771
Trade creditors 25,081 10,829
------------ --------------
54,197 31,600
10 Related party transactions
Under an agreement dated 1 December 2011, Burnbrae Limited, a
Company related to both Jim Mellon and Denham Eke, provide certain
services, principally accounting and administration, to the
Company. This agreement may be terminated by either party on three
months' notice. The charge for services provided in the year in
accordance with the contract was GBP30,000 (2015: GBP30,000) of
which GBP9,000 was outstanding as at the year-end (2015:
GBP3,024).
Under an agreement dated 6 May 2011, Shellbay Investments
Limited, a Company related to both Jim Mellon and Denham Eke,
provide the services of Jim Mellon as Non-Executive Chairman of the
Company (see note 2). The charge for services provided in the year
was GBPNil (2015: GBPNil) of which GBPNil was outstanding at the
year-end (2015: GBPNil).
Burnbrae Media Limited, a Company to both Jim Mellon and Denham
Eke, paid GBP4,200 for a stand at the Master Investor Show on 23
April 2016.
The Company entered into a Letter of Engagement with
Mediqventures Limited in July 2014 to research and propose
potential investment opportunities for the Company. Under the
agreement, Mediqventures Limited is paid US$ 60,000 per annum. Jim
Mellon is a controller of Mediqventures Limited and both Jim Mellon
and Denham Eke are directors.
11 Basic and diluted earnings per share
The calculation of basic earnings per share of the Company is
based on the loss for the year of GBP534,369 and the weighted
average number of shares of 23,195,558 in issue during the
year.
Diluted earnings per share are calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares such as
warrants and options. There is no dilutive effect as at 30 June
2016.
12 Subsequent events
After the year end, on 13 October 2016, the Company entered into
a loan agreement with the Diabetic Boot Company Limited ("DBC") to
provide it with a short-term loan of GBP200,000 less expenses, for
working capital purposes. This loan pays a coupon of 7 per cent.,
is unsecured and is fully repayable on the earlier of 31 March 2017
or the date on which DBC secures additional equity funding of
GBP1,000,000. The Company already holds 7,105 shares in DBC,
representing 0.74 per cent. of the issued share capital of DBC. In
order to provide the funds for the loan, the Company sold 21,733
shares of its MBIF holding, leaving a resultant holding in MBIF of
93,831 shares.
13 Commitments and contingent liabilities
There are no known commitments or contingent liabilities as at
the year-end.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR TJBBTMBJTBIF
(END) Dow Jones Newswires
December 23, 2016 07:00 ET (12:00 GMT)
Agronomics (LSE:ANIC)
Historical Stock Chart
From Sep 2024 to Oct 2024
Agronomics (LSE:ANIC)
Historical Stock Chart
From Oct 2023 to Oct 2024