Annual Financial Report

RNS Number : 3273M

Emmerson PLC

28 July 2017

 

Emmerson PLC

Report and Financial Statements

Emmerson PLC announces its annual results for the thirteen month period ended 31 March 2017

For further information please contact:

FIM Capital Limited	Tel: [phone]
Graham Smith

Chairman's Statement

Dear Shareholder

It is with great pleasure that we formally report our first annual accounts for Emmerson Plc ("Emmerson" or the "Company") and update you on our strategy and goals for the coming year.

Our first year has been dominated by Emmerson's IPO on the Main Market of the London Stock Exchange, through a Standard Listing. This was completed in February, following a successful raising of just over £1 million, for the execution of our strategy focusing on acquiring and developing natural resources projects. We believe that now is an excellent time in the resources cycle to search for investment opportunities and that through astute acquisitions and careful stewardship of capital, our Company can quickly grow into an established and valuable natural resources company.

As we approach the end of 2017, market trends have highlighted signs of recovery in areas of the natural resources sector, but there remains significant opportunity for resourceful companies with the capital to unlock value from larger assets. Emmerson in a strong position to capitalise on market opportunities created by the current trends.

With the Board and Advisors wealth of experience in the sector, Emmerson remains open to global projects and has already been approached with a number of attractive investment opportunities, which are currently under careful review.

Critical to the success of the Company's strategy is the harmony between our financial and human resources and we are privileged to enjoy not only the assistance of our Advisors to complement our experienced Board but also the strong support of our shareholders. The Directors share extensive experience of managing companies within the natural resources sector across various jurisdictions, as well as advising both small and large corporations on fund-raising and M&A. The addition of the combined expertise of our Advisors, gives Emmerson another dimension that few companies of our size can boast. Our team has many years of natural resources experience including project management, investment and operational success and their input will be invaluable as the Company identifies and reviews acquisition opportunities.

We have been delighted with the strong support we received from investors during the listing process, which serves as an endorsement of our strategy and the quality of our management and advisors. The enthusiasm of our shareholders confirms that the time is ripe for the entry of new natural resources companies with quality management targeting opportunities. With our IPO completed Emmerson now has a platform from which to review transactions far in excess of our current market capitalisation.

Annual General Meeting

A notice of the AGM (to be held on 12 September 2017), together with explanation of the resolutions to be proposed at the meeting will be sent in a separate circular to shareholders.

Cameron Pearce

Chairman

27 July 2017

Directors' Report

The Directors submit their report with the audited financial statements for the thirteen month period ended 31 March 2017.  A review of the Company's business and results for the period is contained in the Chairman's report, which should be read in conjunction with this report.

Business of the Company

The Company was incorporated in the Isle of Man under the Laws with registered number 013301V on 1 March 2016.  All of the Company's Ordinary Shares were admitted to the London Stock Exchange's Main Market and commenced trading on 15 February 2017.

The Company expects to focus on acquiring an exploration or production company or business in the natural resources sector with either all or a substantial portion of its operations in South East Asia, Africa, and the Middle East.

Results for the period and distributions

The results are set out in the Statements of Comprehensive Income and a review of the business is included in the Chairman's report.

The total comprehensive loss attributable to the equity holders of the Company for the period was  £199,789.

The Company paid no distribution during the period.

Key performance indicators

At this stage in its development, the Company is focusing on the evaluation of various natural resources projects. As and when the Company executes its first substantial acquisition, financial, operational, health and safety and environmental KPIs may become relevant and will be measured and reported as appropriate. As such the only KPI the Company monitors is whether it can successfully identify and secure an investment opportunity.

Subsequent events

There are no subsequent events to report.

Future developments

Details can be found in the Chairman's report, the company has been approached with a number of attractive investment opportunities, which are currently under careful review.

Principal risks and uncertainties

The Company operates in an uncertain environment and is subject to a number of risk factors. The Directors consider the following risk factors are of particular relevance to the Company's activities and to any investment in the Company. It should be noted that the list is not exhaustive and that other risk factors not presently known or currently deemed immaterial may apply.

The Company will be dependent on the ability of the Directors to identify suitable investment opportunities and to implement the Company's strategy. There is no assurance that the Company's activities will be successful in acquiring a suitable investment that will ultimately be developed.

Financial risk management

The Company's principal financial instruments comprise cash balances, accounts payable and accounts receivable arising in the normal course of its operations.

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

As at 31 March 2017 there is no significant exposure to liquidity or price risk the only credit risk applicable is over the cash balance which is held with a reputable bank.

Directors

The Directors who held office during the period and to the date of this report, together with details of their interest in the shares of the Company at 31 March 2017 and the date of this report were:

		Number of ordinary shares
Cameron Pearce (Chairman)	Appointed 1 March 2016	6,000,001
Sam Quinn	Appointed 1 March 2016	3,000,001
Ed McDermott	Appointed 21 June 2016	-

Details of the Directors' fees are given in note 5 to the accounts.

Substantial shareholders

No single person directly or indirectly, individually or collectively, exercises control over the Company. The Directors are aware of the following persons, who had an interest in 3% or more of the issued ordinary share capital of the Company as at 31 March 2017:

Shareholder	% of issued share capital of the Company
Jim Nominees Limited	32.18%
Cameron Pearce	12.45%
Beaufort Nominees Limited	9.73%
Pershing Nominees Limited	8.99%
Sam Quinn	6.23%
Stifel Nicolaus Europe Limited	3.39%

 

Statement of Directors'

Corporate Governance

As a company with a Standard Listing, the Company is not required to comply with the provisions of the Corporate Governance Code. Although, the Company does not comply with the UK Corporate Governance Code, the Company intends to adopt corporate governance procedures as are appropriate for the size and nature of the Company and the size and composition of the Board. These corporate governance procedures have been selected with due regard to for the provisions of the Corporate Governance Code insofar as is appropriate. A description of these procedures is set out below:

·      No Director will be required to submit for re-election until the first annual general meeting of the Company following the Acquisition.

·    Until the Acquisition is made, the Company will not have nomination, remuneration, audit or risk committees. The Board as a whole will instead review its size, structure and composition, the scale and structure of the Directors' fees (taking into account the interests of Shareholders and the performance of the Company), take responsibility for the appointment of auditors and payment of their audit fee, monitor and review the integrity of the Company's financial statements and take responsibility for any formal announcements on the Company's financial performance. Following the Acquisition, the Board intends to put in place nomination, remuneration, audit and risk committees.

·    The Board has a share dealing code that complies with the requirements of the Market Abuse Regulations. All persons discharging management responsibilities  comply with the share dealing code from the date of Admission.

·    Following the Acquisition and subject to eligibility, the Directors may, in future, seek to transfer the Company from a Standard Listing to either a Premium Listing or other appropriate listing venue, based on the track record of the company or business it acquires, subject to fulfilling the relevant eligibility criteria at the time. However, in addition to or in lieu of a Premium Listing, the Company may determine to seek a listing on another stock exchange. Following such a Premium Listing, the Company would comply with the continuing obligations contained within the Listing Rules and the Disclosure and Transparency Rules in the same manner as any other company with a Premium Listing.

The company has not chosen a apply a particular corporate governance code, as the directors consider that the most widely recognised codes are not appropriate for companies with limited board resources.

The Directors are responsible for internal control in the Company and for reviewing its effectiveness. Due to the size of the Company, all key decisions are made by the Board in full. The Directors have reviewed the effectiveness of the Company's systems during the period under review and consider that there have been no material losses, contingencies or uncertainties due to the weakness in the controls. The Board will be responsible for taking all proper and reasonable steps to ensure compliance with the Model Code by the Directors.

Auditors and disclosure of information to auditors

So far as the Directors are aware, there is no relevant audit information of which the auditors are unaware and each Director has taken all reasonable steps to make himself aware of any relevant audit information and to establish that the auditors are aware of that information.

Reappointment of auditor

The auditors, Crowe Clark Whitehill LLP, have indicated their willingness to continue in office and a resolution seeking to reappoint them will be proposed at the Annual General Meeting.

On behalf of the Board

Cameron Pearce

Director
27 July 2017

Statement of Directors' responsibilities

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 ("IFRSs"), as adopted by the European Union ("EU").

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, as adopted by the EU; 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 its financial position. 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; the work carried out by the auditors does not involve the consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website.  Legislation governing the preparation and dissemination of financial statements may differ from one jurisdiction to another.

We confirm that to the best of our knowledge: ·      the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU,  give a true and fair view of the assets, liabilities, financial position and profit or loss of the company;

·    the director's report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties that they face.

By Order of the Board

Cameron Pearce

Director
27 July 2017

Independent Audit's Report to the Members of Emmerson PLC

We have audited the financial statements of Emmerson PLC for the period ended 31 March 2017 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and the statement of cashflows and the related notes numbered 1 to 9.

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 auditors

As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they 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 Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate.

Opinion on financial statements

In our opinion the financial statements:

·      give a true and fair view of the state of the company's affairs as at 31 March 2017 and of its loss for the period then ended;

·      have been properly prepared in accordance with IFRSs as adopted by the European Union;

Matthew Stallabrass

Responsible Individual

Crowe Clark Whitehill LLP

Statutory Auditor

St Bride's House

10 Salisbury Square

London

EC4Y 8EH

27 July 2017

Statements of Comprehensive Income
for the thirteen month period ended 31 March 2017

			2017
	Notes		GBP
Administrative fees and other expenses	5		(199,801)
Operating loss			(199,801)
Finance revenue			12
Finance expense			-
Loss before tax			(199,789)
Income tax			-
Loss for the period and total comprehensive loss for the period			(199,789)
Basic and diluted loss per share (pence)	6		(1.21)

There was no other comprehensive income for the year ended 31 March 2017.

The accompanying notes form an integral part of the financial statements.

Statements of Financial Position as at 31 March 2017

	Notes		2017
			GBP
Current assets
Cash and cash equivalents			796,961
Prepayments			7,053
Total current assets			804,014
Current liabilities
Trade and other payables			36,931
Total current liabilities			36,931
Net assets			767,083
Equity
Stated capital	7		966,872
Retained earnings			(199,789)
Total equity			767,083

The accompanying notes form an integral part of the financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 27 July 2017 and were signed on its behalf by:

Cameron Pearce                                   Sam Quinn

Director                                                Director

Statements of Changes in Equity
for the thirteen month period ended 31 March 2017

	Share premium	Retained earnings	Total equity
	GBP	GBP	GBP
Balance as at 1 March 2016 on incorporation	2	-	2
Total comprehensive loss during 2017
Loss for the period	-	(199,789)	(199,789)
Total comprehensive loss	-	(199,789)	(199,787)
Contributions to equity holders
New shares issued (note 7)	1,132,997	-	1,132,997
Share issue costs (note 7)	(166,127)	-	(166,127)
Total contributions to equity holders	966,870	-	966,870
Balance as at 31 March  2017	966,872	(199,789)	767,083

The accompanying notes form an integral part of the financial statements.

Statements of Cash Flows
for the thirteen month period ended 31 March 2017

	Notes		2017
			GBP
Operating activities
Loss after tax			(199,789)
Changes in working capital
Increase in trade and other receivables			(7,053)
Increase in trade and other payables			36,931
Net cash flows from operating activities			(169,911)
Financing activities
Shares issued (net of issue costs)	7		966,872
Net cash flows from financing activities			966,872
Increase in cash and short-term deposits			796,961
Cash and short-term deposits as at 1 March 2016			-
Cash and short-term deposits at 31 March 2017			796,961

The accompanying notes form an integral part of the financial statements.

Notes to the Financial Statements
for the thirteen month period ended 31 March 2017

1.   General information

Emmerson plc (the "Company") is a company incorporated and domiciled in the Isle of Man.

The principal activities of the Company are described in Directors' report.  The Company had no employees during the period other that Directors.

2.   Basis of preparation

2.1     Statement of compliance

These financial statements have been prepared in accordance with and comply with International Financial Reporting Standards ("IFRS") as adopted by the European Union, International Financial Reporting Interpretations Committee ("IFRIC") interpretations and the Isle of Man Companies Act 2006.

2.2     Basis of preparation

The financial statements have been prepared on a historical cost basis.

2.3     Going concern

The Company's business activities, together with the factors likely to affect its future development, performance and positions are set out in the Chairman's Statement.

The Company is an investment company, and currently has no income stream until a suitable acquisition is identified, it is therefore dependent on its cash reserves to fund ongoing costs.

The Directors have reviewed the Company's ongoing activities including its future intentions in respect of acquisitions and having regard to the Company's existing working capital position and its ability to potentially raise finance, if required, the Directors are of the opinion that the Group has adequate resources to enable it to continue in existence for a period of at least 12 months from the date of these financial statements.

2.4     Use of estimates and judgments

The preparation of financial statements in accordance with the standards and interpretations noted in section 2.1 above requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.  The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 4.

2.5     Future changes in accounting policies

At the date of authorisation of this financial information, the directors have reviewed the Standards in issue by the International Accounting Standards Board ("IASB") and IFRIC, which are effective for annual accounting periods ending on or after the stated effective date. In their view, none of these standards would have a material impact on the financial reporting of the Company.

The directors do not expect that the adoption of these standards will have a material impact on the financial statements of the company except that IFRS 9 will impact both the measurement and disclosures of financial instruments.

3.   Significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below:

3.1     Foreign currency

Transactions in foreign currencies are translated to the functional currency at the exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Exchange differences arising on translation are recognised in profit or loss.

3.2     Earnings per share

The Company presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.  Diluted EPS is calculated by adjusting the earnings and number of shares for the effects of dilutive potential ordinary shares.

3.3     Income tax

Income tax expense comprises current tax and deferred tax.

Current income tax

Current tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

Being resident in the Isle of Man, a 0% rate of corporate income tax applies to the Company.

Deferred income tax

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.  Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply to the period when the related asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the date of the Statement of Financial Position.

3.4     Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of a financial instrument. Financial assets and financial liabilities are offset if there is a legally enforceable right to set off the recognised amounts and interests and it is intended to settle on a net basis.

3.5     Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at bank balances only. For the purpose of the statement of cash flows, cash and cash equivalents consist of bank balances only.

4.   Significant accounting judgements, estimates and assumptions

Key sources of estimation uncertainty

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of income, expenditure, assets and liabilities. Estimates and judgements are continually evaluated, including expectations of future events to ensure these estimates to be reasonable.

At present the Company is looking to acquire an exploration or production company or business in the natural resources sector therefore the Directors do not consider there to be any significant accounting estimates or judgements other than the allocation of joint costs between the issuing of equity and acquiring the exchange listing as part of the admission process. The Directors had regard to the number of shares issued on listing as a proportion of the total shares in issue after the listing and following this exercise £109,000 was recognised in the statement of comprehensive income and £166,000 directly in equity.

5.   Administrative fee and other expenses

	13 Months ended 31 March 2017
	GBP
Directors' remuneration	50,000
Professional fees	77,646
Listing fees	31,755
Audit fees	14,400
Administration fees	11,250
Broker fees	2,964
Miscellaneous fees	11,786
Total	199,801

The company did not employ any staff during the period other than Directors. The Directors are the only members of Key Management and their remuneration related solely to short term employee benefits.

6.   Loss per share

The calculation of the basic and diluted loss per share is based on the following data:

		13 Months ended 31 March 2017
		GBP
Earnings
Loss from continuing operations for the period attributable to the equity holders of the Company		(199,789)
Number of shares
Weighted average number of ordinary shares for the purpose of basic and diluted earnings per share
		16,505,162
Basic and diluted loss per share (pence)		(1.21)

There are no potentially dilutive shares in issue.

7.   Stated capital

	Number of Ordinary shares issued and fully paid	Share premium	Share issued costs	Total share capital
		GBP	GBP	GBP
At 1 March 2016	-	-	-	-
Issue of shares	48,183,344	1,132,999	(166,127)	966,872
At 31 March 2017	48,183,344	1,132,999	(166,127)	966,872

The Ordinary Shares issued by the Company have a no par value and each Ordinary Share carries one vote on a poll vote.

On incorporation on 1 March 2016, the Company issued 2 Ordinary Shares of no par value to the Founders at par for cash consideration of £nil.

On 6 April 2016, the Company issued 9,000,000 Ordinary Shares of no par value to the Founders at 0.5p each for cash consideration of £45,000.

During the period from 19 April 2016 to 15 August 2016, the Company issued 8,750,100 Ordinary Shares of no par value to certain unrelated investors at 2p each for cash consideration of £175,000.

On 15 February 2017, on admission to the standard list of the London Stock Exchange, the company issued 30,433,242 of no par value at 3p each for cash consideration of £912,997.

8.   Financial instruments

8.1     Categories of financial instruments

			13 Months ended 31 March 2017
			£
Financial assets
Loans and receivables			-
Cash and cash equivalents			796,961
Financial liabilities
At amortised cost			36,931

Financial liabilities held at amortised cost are made up of trade and other payables of £6,351 and accruals of £28,400.

8.2     Financial risk management objectives and policies

The Company's major financial instruments include bank balances, trade and other payables and accrued expense. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments, and the policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

Currency risk

As all monetary assets and liabilities and all transaction of Company are denominated in its functional currency, the director considers the Company is not exposed to significant foreign currency risk.

9.   Events after the reporting date

There were no significant subsequent events.

Emmerson PLC

Company Information

Directors	Registered Office
Sam Quinn	IOMA House
Cameron Pearce	Hope Street
Edward McDermott	Douglas
	Isle of Man IM1 1AP
	Company No. 012926V
Administrator	Auditors
FIM Capital Limited	Crowe Clark Whitehill LLP
IOMA House	St Bride's House
Hope Street	10 Salisbury Square
Douglas	London
Isle of Man IM1 1AP	EC4Y 8EH
Joint-Broker	Joint-Broker
Optiva Securities Ltd	Peterhouse Corporate Finance
2 Mill Street	New Liverpool House
London	15 Eldon Street
W1S 2AT	London
	EC2M 7LD
Registrars
Share Registrars Limited The Courtyard 17 West Street Farnham Surrey GU9 7DR

 

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