Digitalbox Regulatory News (DBOX)

2 May 2013

Polemos Plc

(the "Company")

Final Results for the Year Ended 31 December 2012

Polemos Plc announces its audited final results for the year ended 31 December 2012.

Extracts of the final results appear below and the Company's Annual Report and Notice of AGM will be posted to shareholders today and made available on the Company's website, www.polemos.co.uk, shortly.

For further information, please contact:

EXECUTIVE DIRECTOR'S STATEMENT

Change of Group composition and change of Board

As at the Statement of Financial Position date, following the disposal of substantially all of the Company's operations, the business of the Company had become that of an Investment Company, pursuant to Rule 15 of the AIM Rules. The circumstances of this are set out below:

In February 2012, the former Group - comprising PLUS Stock Exchange plc ("PLUS-SX"), PLUS Derivatives Exchange Limited ("PLUS-DX") and PLUS Trading Solutions Limited ("PLUS-TS") - entered into a formal sale process which included, inter alia, seeking prospective investment from strategic investors. The objective was to seek a partner to help its operations achieve the scale and reach required to maximise value to shareholders while securing the ongoing financial position of the Company and Group and the running of its subsidiary operations. The Group had not secured material new income following implementation of its strategy of diversification, as adopted following the strategic review in 2010.

The Group subsequently announced on 14 May 2012 that, while it had received indicative proposals in response to the formal sale process from a number of parties, none of the parties had been able to progress matters to a position whereby either the parties or the Board, in conjunction with its advisers, were satisfied as to the deliverability to completion of any proposed transaction. Furthermore, due to the ongoing operating costs of its business in the context of both the formal sale process and its regulatory status, and given that PLUS-SX was a Recognised Investment Exchange ("RIE"), the Group's cash balance had reached a level at which the Board was obliged to inform the Financial Services Authority ("FSA") (now known as the Financial Conduct Authority) that it intended to commence a process of orderly closure.

During the orderly closure process, the Company continued to explore all possible avenues to preserve remaining shareholder value, if any, including any offers to acquire the Company's remaining assets as a whole or in parts. 

On 18 May 2012, the Company announced that it had entered into an agreement with ICAP Holdings Limited ("ICAP"), a wholly owned subsidiary of ICAP plc, whereby ICAP would acquire the entire issued share capital of PLUS-SX on a cash-free, debt-free basis for a nominal cash amount of £1, subject to shareholder approval and agreement from the FSA. Further to this, the Group announced on 14 June 2012, that it had agreed with ICAP to increase the consideration payable for PLUS-SX to a total of £500,000 (the "SX Disposal").

Following the receipt of shareholder approval at a general meeting of the Company, and agreement from the FSA to a change of control of the RIE, the SX Disposal completed on 21 June 2012.

The Company separately announced on 15 June 2012, that it had agreed to dispose of PLUS-TS to FORUM Trading Solutions Limited and that subject to completion of the SX Disposal, PLUS-TS would enter into a contract, for a minimum term of nine months, to provide technology platform services to ICAP in continued support of PLUS-SX's markets.

Following the completion of the SX Disposal, the consideration for the PLUS-TS disposal was £281,251, comprising initial consideration of £1 and deferred consideration of £281,250. The deferred consideration was payable as a share of the revenue received by FORUM from ICAP under this contract in equal instalments over the nine month term.

The project name for the disposal of PLUS SX and PLUS TS used by the Board was "Project Chardonnay".

At an Annual General Meeting of the Group on 29 June 2012, shareholders voted to change the Board. Three of the four directors - Malcolm Basing (Non-Executive Chairman), Cyril Theret (Chief Executive Officer) and Nemone Wynn-Evans (Chief Financial Officer) - left the Board. The remaining director, Nicholas Smith (Non-Executive Director) resigned prior to the AGM and left the Board on 22 July 2012. Donald Strang was appointed to the Board on 29 June 2012 and Hamish Harris was appointed on 18 July 2012.

On 3 April 2013, David Lenigas was appointed as Executive Chairman of the Company and Donald Strang moved to the role of Finance Director of the Company.

Following their appointments to the Board, Donald Strang and Hamish Harris initiated an on-going review, on behalf of shareholders, of the significant payments made to advisers, executives and employees which were approved by the previous management team in connection with Project Chardonnay and the previously announced proposed wind-down of the Company.

The review indicated the following fee payments were made or are payable:

Project Chardonnay Fees:

£

Legal 681,677

Financial Advisory and Corporate Finance 370,000

Regulatory 168,907

Public Relations 40,000

Accountancy 29,300

Company Secretarial 19,826

Management Consulting 10,000

Employee Settlement Costs and Associated Payments 481,500

________

Total Costs 1,801,210

________

It would appear that the previous management underestimated the costs of the formal sale process, which ended up being far greater than anticipated.

As can be seen from the reference to 'Employee settlement costs and associated payments' in the table above, the SX Disposal also invoked a change of control and enhanced notice provisions in the service agreements of the Executive Directors. These contractual provisions were initially entered into between the Company and the Executive Directors (being Cyril Theret and Nemone Wynn-Evans) in 2007, and were then increased in favour of the Executive Directors in 2008. The Non-Executive Directors at the time of the SX Disposal (being Nicholas Smith and Malcolm Basing), reached agreement with the Executive Directors for breach of the contractually enhanced notice provisions on a change of control, whereby the Executive Directors agreed to accept a reduced sum rather than their full and substantial contractual entitlement. In addition, each Executive Director agreed that their employment with the Company would terminate on 30 November 2012.

Following further reviews, salary and settlement costs payable to the two Executive Directors as a result of the termination of their employment and amendments to their terms of employment, as part of the change of control of PLUS-SX, were £444,000. In addition to the £444,000 in salary and settlement payments to the two Executive Directors, the Company was also responsible for employer's national insurance contributions in respect of the sums. The cost of such contributions was estimated to be up to £58,500. The total aggregate payments payable in respect of the executive management therefore totalled up to £502,500, representing approximately 40% of the Group's available cash reserves at that time.

ICAP reimbursed the Company with £150,000 of the costs of the SX Disposal. 

The Company's new Board of Directors will continue to investigate the payments made in relation to the formal sale process and wind-down of the Company and payments made to the executives to ensure that, where possible, an appropriate recovery of funds for the benefit of the Company and its shareholders will be sought. The new Board of Directors continue to investigate the role of the Non-Executive Directors in relation to the SX Disposal.

In addition, the new Board of Directors are continuing its review of the terms of the disposal of PLUS-TS.

Further to the approval of the Company's new Articles of Association by shareholders at the general meeting held on 21 November 2012, the Company changed its name from PLUS Markets Group Plc to Polemos Plc and its Tradable Instrument Display Mnemonic ("TIDM") to PLMO. The change of name on AIM and the TIDM became effective on 29 November 2012.

PLUS DX

Following the disposals outlined above, the only remaining subsidiary in the Company was PLUS-DX, which was set up to provide innovative derivatives trading services with a focus on short to medium term interest rate related products and received FSA authorisation in July 2011. To enable the Boards of the Company and of PLUS-DX to be satisfied that the FSA's ongoing approval requirements are met, both Donald Strang and Hamish Harris executed a deed of undertaking in favour of the Company and PLUS-DX providing that they will not (as a director of the Company) exert any influence over the business and affairs of PLUS-DX.

As announced by the Company on 19 September 2012, the Company and the board of PLUS-DX agreed, subject to regulatory approval, to dispose of PLUS-DX, to Pipeline Capital Inc. ("Pipeline"). The consideration payable on completion of the disposal of PLUS-DX to Pipeline was for a nominal cash amount of £10,000 which is to be used for general working capital purposes by the Company.

The Company received agreement from the FCA for the change of control of PLUS-DX on 28 January 2013 and completed the disposal on the same day.

Following the loss of control, PLUS-DX is no longer a subsidiary undertaking of the Company as it meets the criteria set out in IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations'.

Investment Strategy

At the general meeting of the Company held on 18 June 2012, at which shareholders approved the SX Disposal, shareholders also approved an investing policy for the Company. This policy was to wind up the Company and distribute any residual cash to shareholders. However, as announced on 29 June 2012, the rejection by shareholders at the Annual General Meeting of the Company of the resolution to delist the Company from trading on AIM meant that the previous investing policy was no longer valid.

A general meeting of the Company was held on 21 November 2012 where it was resolved that the Company would complete a Capital Reorganisation (see below) and would operate in line with the investing policy proposed in the circular to shareholders dated 16 October 2012 and set out below.

As an investing company, Polemos Plc is be required to make an acquisition which constitutes a reverse takeover under the AIM Rules or otherwise implement its investing policy on or before the date falling twelve months from the date of the general meeting at which shareholders approved the disposal of PLUS-SX, which occurred on 18 June 2012, failing which, the Company's ordinary shares would then be suspended from trading on AIM. In the event the Company's ordinary shares are suspended and the Company fails to make an acquisition which constitutes a reverse takeover under the AIM Rules or otherwise implement its investing policy, the admission to trading on AIM of the ordinary shares would be cancelled six months from the date of suspension.

Current Investing Policy ("Investing Policy")

The Company's current Investing Policy is to invest in any sector which the Directors consider may potentially create value for its Shareholders. The Directors intend initially to seek to acquire a direct or an indirect interest in projects and assets in the natural resources sector; however, they will consider other sectors as, and when, opportunities arise.

This investment may be in either quoted or unquoted companies; be made by direct acquisition or through farm-ins; may be in companies, partnerships, joint ventures; or direct interests in particular assets or projects. The Company's equity interest in a proposed investment may range from a minority position to 100 per cent. Ownership and may comprise one investment or multiple investments.

Investments in early stage and exploration assets are expected to be mainly in the form of equity, with debt being raised later to fund the development of such assets. Investments in later stage assets are more likely to include an element of debt to equity gearing.

The Company intends to deliver Shareholder returns principally through capital growth rather than income distribution via dividends, although it may become appropriate to distribute funds to Shareholders once the investment portfolio matures.

The Company may be both an active and a passive investor depending on the nature of the individual investments in its portfolio. Although the Company intends to be a long-term investor, the Directors will place no minimum or maximum limit on the length of time that any investment may be held.

There is no limit on the number of projects into which the Company may invest or the proportion of the Company's gross assets that any investment may represent at any time and the Company will consider possible opportunities anywhere in the world.

The Directors may offer new Ordinary Shares by way of consideration as well as cash, thereby helping to preserve the Company's cash for working capital and as a reserve against unforeseen contingencies including by way of example, and without limit, delays in collecting accounts receivable, unexpected changes in the economic environment and unforeseen operational problems.

The Company may, in appropriate circumstances, issue debt securities or otherwise borrow money to complete an investment. There are no borrowing limits in the Company's articles of association. The Directors do not intend to acquire any cross-holdings in other corporate entities that have an interest in the Company's ordinary shares.

Capital Reorganisation

To facilitate the implementation of the Investment Policy, the Board proposed to reorganise the share capital of the Company and Shareholders' consent was obtained on 21 November 2012.

The share capital of the Company was re-organised by subdividing its ordinary shares into one ordinary share of 0.01 pence each and one deferred share of 4.99 pence each. The deferred shares carry negligible value and are not admitted to trading on AIM or any other Stock Exchange. The interests of existing Shareholders (both in terms of their economic interest and voting rights) have not been diluted by the implementation of the Capital Reorganisation.

The deferred shares do not carry voting rights or a right to receive dividends or any part of the assets of the Company on a return of capital or winding up. The holders of deferred shares do not have the right to receive notice of any general meeting of the Company, nor have any right to attend, speak or vote at any such meeting. Accordingly, the deferred shares do not have any economic value.

Following the completion of the Capital Reorganisation, the Company has 386,907,464 ordinary shares of 0.01 pence each in issue. Admission to trading on AIM in respect of the revised issued share capital of the Company took place on 22 November 2012.

Financial Performance

As at the Statement of Financial Position date, owing to the sale of two of the Company's three subsidiaries and the loss of control of the remaining subsidiary, the Company changed from a group to a standalone holding company. The Company's loss for the year is £96,000. Net assets of £0.8 million included £0.9 million of cash and cash equivalents.

Board Re-organisation and Outlook

The current Board considers that the adoption of the Investing Policy, which was approved by shareholders on 21 November 2012, is in the best interests of the Company and its shareholders as a whole. The Board acknowledges this exciting period for the Company as it looks to implement its Investing Policy and continues to evaluate new investment opportunities as they arise. In the short term, the Company may look to make investments in listed securities with high levels of liquidity within the natural resources sector. The Board considers this approach to be in the best interest of shareholders as it believes that expected returns would be higher than on cash held at the bank. This approach will also allow flexibility to evaluate investments in other opportunities within the natural resources sector.

On 3 April 2013, David Lenigas was appointed as Executive Chairman with immediate effect and Donald Strang moved to the role of Finance Director on the same date. Polemos Plc looks forward to David Lenigas taking the position of Executive Chairman of the Company and the Board intends to focus its investment strategy by seeking investments in oil and gas royalty income streams on a global basis.

The current Board would like to take this opportunity to thank our shareholders for their continued support.

I look forward to reporting further progress over the next period and beyond.

Mr Donald Strang

Director

1 May 2013

STATEMENT OF COMPREHENSIVE INCOME

YEAR ENDED 31 DECEMBER 2012

The accounting policies and notes form part of these Financial Statements.

STATEMENT OF COMPREHENSIVE INCOME

YEAR ENDED 31 DECEMBER 2012

Earnings per Share from Continuing and Discontinued Operations

Attributable to the Equity Holders of the Company during the Year

The accounting policies and notes form part of these Financial Statements.

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

The Financial Statements were approved and authorised for issue by the board of Directors on 1 May 2013, and were signed on its behalf by:

Donald Strang

Director

The accounting policies and notes form part of these Financial Statements.

STATEMENT OF CHANGES IN EQUITY

YEAR ENDED 31 DECEMBER 2012

Attributable to equity shareholders

The accounting policies and notes form part of these Financial Statements.

STATEMENT OF CASH FLOWS

YEAR ENDED 31 DECEMBER 2012

Note 2012 2011

£'000 £'000

Cash Flows from Operating Activities

Loss before tax including discontinued operations (96) (4,266)

Finance income (5) (10)

Adjustments for non-cash items:

Provision for intercompany receivables - 3,050

Recovery of provision for intercompany receivable 15 (2,961) -

Costs incurred directly by subsidiaries 1,021 -

Impairment of investment in subsidiaries 13 390 928

Loss on disposal of subsidiaries 1,012 -

Share-based payment charge 21 -

_____ _____

Operating cash flows before movements in working capital (618) (298)

(Increase)/decrease in trade and other receivables (95) 180

Increase in trade and other payables 214 127

_____ _____

Net Cash (Used in)/Generated from Operating Activities (499) 9

_____ _____

Cash Flows from Investing Activities

Proceeds from disposal of subsidiaries 528 -

Interest received 5 10

_____ ___

Net Cash Generated from Investing Activities 533 10

_____ ___

Net Increase in Cash

 and Cash Equivalents 34 19

Cash and cash equivalents at beginning of year 16 862 843

____ ____

Cash and Cash Equivalents at End of Year 16 896 862

____ ____

Major non cash transactions:

During the year ended 31 December 2012, costs totalling £2.96 million were paid on behalf of the Company by subsidiaries. The intra group receivable balances from these subsidiaries had previously been written down to £nil. Of the amount recovered, £1.021 million was expensed to operating activities, £0.4 million was capitalised as additional share capital in PLUS-DX and £1.54 million was expensed as part of the cost of disposal of subsidiaries. The additional share capital in PLUS-DX was subsequently impaired by £0.39 million during the year. Expenses totalling £0.15 million in connection with the disposal of a subsidiary were settled on behalf of the Company by the acquirer.

The accounting policies and notes form part of these Financial Statements.

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 DECEMBER 2012

1. General Information

Polemos Plc is a public limited company which is quoted on AIM and incorporated and domiciled in the UK. During the year, it has disposed of all the operating subsidiaries; the business of Polemos Plc has become that of an Investment Company, pursuant to Rule 15 of the AIM Rules.

Following the re-structure, the Company plans to acquire a diverse portfolio of direct and indirect interests in exploration, development and production of oil and gas assets on a global basis. Both on-shore and off-shore interests will be considered.

2. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these Financial Statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of Preparation

The Financial Statements of Polemos Plc have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), the Companies Act 2006 that applies to companies reporting under IFRS, and IFRIC interpretations.

The Financial Statements have been prepared under the historical cost convention.

The preparation of Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant in the Financial Statements are disclosed in Note 4.

Going Concern

It is the prime responsibility of the Board to ensure the Company remains a going concern. At 31 December 2012 the Company had cash and cash equivalents of £896,000 and no borrowings. The Company has minimal contractual expenditure commitments and the Board considers the present funds sufficient to maintain the working capital of the Company for a period of at least 12 months from the date of signing the Annual Report and Financial Statements. For these reasons the Directors adopt the going concern basis in the preparation of the Financial Statements.

Accounting Policies

a) New and amended standards adopted by the Company

There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 January 2012 that would be expected to have a material impact on the Company.

b) New and amended standards, and interpretations mandatory for the first time for the financial year beginning 1 January 2012, but not currently relevant to the Company

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2012, and have not been applied in preparing these Financial Statements. None of these is expected to have a significant effect on the Financial Statements of the Company.

Amendments to IFRS 1, 'First time adoption' on fixed dates and hyperinflation. The first amendment replaces references to a fixed date of 1 January 2004 with "the date of transition to IFRSs", thus eliminating the need for companies adopting IFRSs for the first time to restate derecognition transactions that occurred before the date of transition to IFRSs. The second amendment provides guidance on how an entity should resume presenting financial statements in accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its functional currency was subject to severe hyperinflation.

IFRS 7, 'Financial instruments: Disclosures' was amended in October 2012 for the transfer of financial assets. These amendments are as part of the IASB's comprehensive review of off Statement of Financial Position activities. The amendments promote transparency in the reporting of transfer transactions and improve users' understanding of the risk exposures relating to transfers of financial assets and the effect of those risks on an entity's financial position, particularly those involving securitisation of financial asset.

Amendments to IAS 12, 'Income Taxes' on deferred tax. Currently IAS 12 requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in IAS 40 Investment Property. Hence this amendment introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. As a result of the amendments, SIC 21, 'income taxes - recovery of revalued non-depreciable assets', would no longer apply to investment properties carried at fair value. The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC 21, which is accordingly withdrawn.

c) New and amended standards and interpretations issued but not yet effective for the financial year beginning 1 January 2012 and not early adopted

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Financial Statements are disclosed below. The Company intend to adopt these standards, if applicable, when they become effective.

Amendment to IAS 1, 'Financial statement presentation' regarding other comprehensive income. The main change resulting from these amendments is a requirement for entities to group items presented in 'other comprehensive income' (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in OCI. The amendment becomes effective for annual periods beginning on or after 1 July 2012.

IAS 19, 'Employee benefits', was amended in June 2011. The amendments eliminate the option to defer the recognition of gains and losses, known as the "corridor method"; streamline the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring re-measurements to be presented in other comprehensive income; and enhance the disclosure requirements for defined benefit plans, providing better information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in those plans. The amendment becomes effective for annual periods beginning on or after 1 January 2013. The amendment has no impact on the Company.

Amendment to IFRS 1, 'First-time Adoption of International Financial Reporting Standards' on government loans. This amendment addresses how first-time adopters would account for a government loan with a below-market rate of interest when transitioning to IFRS. It also adds an exception to the retrospective application of IFRS, which provides the same relief to first time adopters granted to existing preparers of IFRS Financial Statements when the requirement was incorporated into IAS 20 'Accounting for Government Grants and Disclosure of Government Assistance' in 2008. The amendment is effective for the accounting period beginning on or after 1 January 2013, subject to endorsement by the EU. The amendment has no impact on the Company.

IFRS 7, 'Financial Instruments: Disclosures' was amended for asset and liability offsetting. This amendment requires disclosure of information that will enable users of financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity's recognised financial assets and recognised financial liabilities, on the entity's financial position. The amendment is effective for the accounting period beginning on or after 1 January 2013, subject to endorsement by the EU.

IFRS 10, 'Consolidated financial statements', builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The Company is yet to assess IFRS 10's full impact and intends to adopt IFRS 10 no later than the accounting period beginning on or after 1 January 2013.

IFRS 11, 'Joint Arrangements' provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. There are two types of joint arrangement; joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and therefore accounts for its share of assets, liabilities, revenue and expenses. Joint ventures arise where the joint venture has rights to the net assets of the arrangement and therefore equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed. The Company is yet to assess IFRS 11's full impact and intends to adopt IFRS 11 no later than the accounting period beginning on or after 1 January 2013.

IFRS 12, 'Disclosures of interests in other entities', includes the disclosure requirements for all forms of interests in entities, including joint arrangements, associates, special purpose vehicles and other off Statement of Financial Position vehicles. The Company is yet to assess IFRS 12's full impact and intends to adopt IFRS 12 no later than the accounting period beginning on or after 1 January 2013.

Amendments to IFRS 10, 'Consolidated Financial Statements', IFRS 11, 'Joint Arrangements and IFRS 12, 'Disclosure of Interests in Other Entities', provide additional transition relief to IFRSs 10,11 and 12 by limiting the requirement to provide adjusted comparative information to only the preceding comparative period. For disclosures related to unconsolidated structured entities, the amendments will remove the requirement to present comparative information for periods before IFRS 12 is first applied. The Company is yet to assess the full impact of these amendments and intends to adopt the amended standards no later than the accounting period beginning on or after 1 January 2013, subject to endorsement by the EU.

IFRS 13, 'Fair value measurement', aims to provide consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRS and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards with IFRSs or US GAAP. The standard becomes effective for annual periods beginning on or after 1 January 2013.

IAS 27, 'Separate Financial Statements', replaces the current version of IAS 27, 'Consolidated and Separate Financial Statements' as a result of the issue of IFRS 10. The revised standard includes the requirements relating to separate financial statements. The revised standard becomes effective for annual periods beginning on or after 1 January 2013.

IAS 28, 'Investments in Associates and Joint Ventures', replaces the current version of IAS 28,'Investments in Associates', as a result of the issue of IFRS 11. The revised standard includes the requirements for associates and joint ventures that have to be equity accounted following the issue of IFRS 1. The Company is yet to assess full impact of the revised standard and intends to adopt IAS 28 (revised) no later than the accounting period beginning on or after 1 January 2013.

IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics for the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity's own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The Company is yet to assess IFRS 9's full impact and intends to adopt IFRS 9 no later than the accounting period beginning on or after 1 January 2015, subject to endorsement by the EU. The Company will also consider the impact of the remaining phases of IFRS 9 when completed by the Board.

Amendments to IAS 32, 'Financial Instruments: Presentation', add application guidance to address inconsistencies identified in applying some of the criteria when offsetting financial assets and financial liabilities. This includes clarifying the meaning of "currently has a legally enforceable right of set-off" and that some gross settlement systems may be considered equivalent to net settlement. The Company is yet to assess the full impact of the amendments to IAS 32 and intends to adopt the amended standard no later than the accounting period beginning on or after 1 January 2014.

'Annual Improvements 2009 - 2011 Cycle' sets out amendments to various IFRSs as follows:

·; An amendment to IFRS 1, 'First-time Adoption' clarifies whether an entity may apply IFRS 1:

(a) if the entity meets the criteria for applying IFRS 1 and has applied IFRS 1 in a previous reporting period; or

(b) if the entity meets the criteria for applying IFRS 1 and has applied IFRSs in a previous reporting period when IFRS 1 did not exist.

·; The amendment to IFRS 1 also addresses the transitional provisions for borrowing costs relating to qualifying assets for which the commencement date for capitalization was before the date of transition to IFRSs.

·; An amendment to IAS 1, 'Presentation of Financial Statements' clarifies the requirements for providing comparative information:

(a) for the opening Statement of Financial Position when an entity changes accounting policies, or makes retrospective restatements or reclassifications; and

(b) when an entity provides Financial Statements beyond the minimum comparative information requirements.

·; An amendment to IAS 16, 'Property, Plant and Equipment' addresses a perceived inconsistency in the classification requirements for servicing equipment.

·; An amendment to IAS 32, 'Financial Instruments: Presentation' addresses perceived inconsistencies between IAS 12, 'Income Taxes' and IAS 32 with regard to recognizing the consequences of income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction.

·; An amendment to IAS 34, 'Interim Financial Reporting' clarifies the requirements on segment information for total assets and liabilities for each reportable segment.

The Company intends to adopt the amended standards no later than the accounting period beginning on or after 1 January 2013, subject to endorsement by the EU. These improvements are not expected to have an impact on the Company.

Investments in Subsidiaries

Investments in subsidiaries are stated at cost less provisions for impairment.

Non-Current Assets held for Sale and Discontinued Operations

The Company classifies non-current assets as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

Financial Instruments

The Company determines the classification of its financial assets at initial recognition. The subsequent measurement of financial assets depends on their classification as described below.

Loans and Receivables

The Company's loans and receivables comprise 'trade and other receivables' and 'cash and cash equivalents'. Trade and other receivables are initially measured at fair value, based on their invoice value and subsequently measured at amortised cost using the effective interest method. Appropriate allowances for estimated irrecoverable amounts are recognised in the Statement of Comprehensive Income when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the estimated recoverable amount.

The Company determines the classification of its financial liabilities at initial recognition. The Company's financial liabilities comprise 'trade and other payables'.

Trade and Other Payables

Trade and other payables are initially measured at fair value and are subsequently measured at amortised cost using the effective interest method.

Foreign Currency Translation

(a) Functional and Presentation Currency

Items included in the Financial Statements of the Company are measured using the currency of the primary economic environment in which the entity operates ("functional currency"). The Financial Statements are presented in Pounds Sterling (£), which is the Company's functional and presentation currency.

(b) Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. Foreign exchange gains and losses are presented in the Statement of Comprehensive Income.

Share Capital

Ordinary Shares are classified as equity. Share premium is shown as an addition to the shareholders' equity and represents the premium amount paid on the issue of new shares. External costs directly attributable to the issue of new shares are shown as a deduction, net of tax, in equity from the proceeds.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and demand deposits.

Taxation

The tax expense represents the sum of the tax payable for the current period and deferred tax.

The tax payable in the current period is based on taxable profit for the period. Taxable profit differs from profit for the year as reported in the Statement of Comprehensive Income because it excludes items of income or expenditure which are taxable or deductible in other periods. It further excludes items that are never taxable or deductible. The Company's liability for tax in the current period is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Comprehensive Income.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current assets and liabilities on a net basis.

Share Based Payments

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value excludes the effect of non market-based vesting conditions. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 6.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of equity instruments that will eventually vest. At each Statement of Financial Position 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 the equity-settled employee benefits reserve.

Fair value is measured by use of the Monte Carlo Model. The expected life used in the model is adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

Operating Leases

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Where the terms of a lease become onerous, provision or accrual is made for all future costs net of any estimated future recoveries.

3. Financial Risk Management

Financial Risk Factors

The Company's activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk. The Company's overall risk management programme focuses on the unpredictability of financial markets, and seeks to minimise potential adverse effects on the Company's financial performance.

Risk management is carried out by the Directors under policies approved by the Board of Directors which include continuous assessments of interest rate, credit risk and liquidity risk.

(a) Market Risk

(i) Foreign Exchange Risk

The Company operates mainly in the UK, and has limited exposure to foreign exchange risk. Following the new strategies post re-structure, the Company may have greater currency risk should it develop an international investment portfolio.

(ii) Interest Rate Risk

The Company does not have any borrowing at the year end and hence has limited exposure to interest rate risk. Should borrowing become necessary, the Directors will assess the instruments required to meet the Company's financing needs.

(b) Credit Risk

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk. The Group will only bank with financial institutes that have a credit rate of A- or better.

(c) Liquidity Risk

The Company seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Cash is invested in commercial call accounts which provide a modest return on the cash resources whilst ensuring there is limited risk of loss.

There is no difference between the book values and fair values of the financial instruments in the current year or prior year.

Capital Risk Management

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.

4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty

The preparation of the financial information in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

(i) Critical Accounting Estimates and Assumptions

Share Based Payments

The Company has made awards of options over its unissued share capital to the former employees.

The fair value of share based payments is calculated by reference to a Monte Carlo simulation model. Inputs into the model are based on management's best estimates of appropriate volatility, dividend yields, discount rate and share price growth.

During the year, the Company incurred an accelerated share based payment charge of £21,000 in respect of the cancellation of its existing share option scheme. The share based payment charges in the prior periods had been included within PLUS Stock Exchange plc ('PLUS SX') as this company maintained the payroll for the group companies and employed all the staff members. Following the sale of PLUS SX in June 2012, the share based payment charge has been included within Polemos Plc.

5. Segment Information

No segmental analysis has been disclosed as the Company has no operating segments. As noted in the Executive Director's Statement, it is the intention of the Company to acquire interests in exploration, development and production oil and gas assets on a global basis.

6. Share Based Payments

During the year, all of the existing EMI options outstanding as at 1 January 2012 were cancelled. The Company incurred an accelerated share based payment charge of £21,000 in respect of the cancellation.

7. Directors and Employees (Continuing and discontinued operations)

2012 2011

Employee Benefit Expense £'000 £'000

Wages and salaries 701 104

Social security costs 71 14

____ ____

772 118

____ ____

Average number of employees No. No.

Average number of employees (including Directors)

during the year was: 3 1

___ ___

£'000 £'000

Emoluments of the Directors 485 128

____ ___

Directors' Emoluments

There were no pension scheme contributions on behalf of Directors during the years 2011 or 2012.

8. Operating Loss (Continuing and discontinued operations) 2012 2011

£'000 £'000

The operating loss was arrived at after charging:

Operating lease rentals 123 -

Directors' emoluments (note 7) 485 128

Auditor's remuneration:

- Fees payable for the audit of the Company 11 6

- Audit related assurance services 6 -

___ ___

2012 2011

£'000 £'000

Expenses by nature (excluding write-downs in investments)

Staff costs 772 118

Professional fees 320 157

Other expenses 81 2

Accountancy fees 97 5

Premises related expenses 245 -

Insurance costs 108 -

Marketing costs 26 16

_____ ____

1,649 298

_____ ____

9. Profit/(loss) from Discontinued Operations

Recovery of 2011 provision for intercompany receivables (note 15) 2,961 -

Provision for intercompany receivables (note 13) - (3,050)

Impairment of investment in subsidiaries (note 13) (390) 928

Loss on disposal of subsidiaries (1,012) -

Administrative expenses (1,330) (65)

_____ _____

229 (4,043)

_____ _____

Operating cash flows - (65)

Investing cash flows 528 -

Financing cash flows - -

10. Finance Income

Interest income on short-term bank deposits 5 10

___ ___

5 10

___ ___

11. Tax on Loss on Ordinary Activities

UK Corporation Tax at standard rate of UK small companies

Corporation Tax rate of 20% (2011 - 20%) - -

___ ___

Deferred tax:

Origination and reversal of temporary differences - -

___ ___

2012 2011

£'000 £'000

Income Tax Expense

The tax on the Company's loss before tax differs from the theoretical amount

that would arise using the weighted average tax rate applicable to loss of the

Company as follows:

Loss on ordinary activities before tax (Continuing operations) (325) (223)

____ _____

Current tax at 20% (2011 - 20%) (65) (45)

Tax effects of:

- Expenses not deductible for tax purposes 10 2

- Tax losses for which no deferred income tax asset is recognised 55 43

___ ___

Tax charge/(credit) - -

___ ___

The Company does not anticipate a corporation tax charge due to the availability of tax losses. A deferred income tax asset has not been recognized in respect of excess management expenses carried forward of approximately £410,000 (2011 - £81,000) as there is insufficient evidence that the asset will be recoverable. The asset would be recoverable if sufficient taxable profits are made in the future.

12. Earnings per Share

Basic loss per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

2012 2011

Loss attributable to equity holders of the Company (£'000) (96) (4,266)

Weighted average number of ordinary shares in issue (thousands) 386,907,464 386,907,464

Basic and diluted loss per share (0.02) (1.10)

__________ __________

Diluted

The basic and diluted earnings per share for the years ended 31 December 2012 and 2011 are the same as the effect of the exercise of share options would be anti-dilutive. 

13. Investment in Subsidiaries 2012 2011

£'000 £'000

Opening balance - 928

Additions 400 -

Impairment (note 9) (390) (928)

Reclassified to assets held for sale (note 14) (10) -

____ ____

Closing balance - -

____ ____

Investments in subsidiaries comprise PLUS Stock Exchange plc ("PLUS-SX"), PLUS Trading Solutions Limited ("PLUS-TS") and PLUS Derivatives Exchange Limited ("PLUS-DX").

During the year ended 31 December 2011, the remaining value of the investment in PLUS-SX of £928,000 was written down to £Nil to reflect the operating loss in the subsidiary. The value of the investments in PLUS-TS and PLUS-DX had been fully written down to £Nil as at 1 January 2011 to reflect the operating losses in those subsidiaries.

In January 2012 the Company subscribed for 400,000 new ordinary shares of PLUS-DX at £1 each, which increased the Company's total shareholding in PLUS-DX from 80% to 99.99995%. In September 2012, a sale and purchase agreement was signed between the Company and Pipeline Capital Inc. to dispose of the entire shareholding for cash consideration of £10,000, subject to regulatory approval. Accordingly, the investment in PLUS-DX was impaired down to the recoverable amount and reclassified as held for sale as at 31 December 2012.

PLUS-SX and PLUS-TS were disposed of in May and June 2012 respectively.

14. Assets Classified as Held for Sale

The major classes of assets and liabilities classified as held for sale are as follows:

15. Trade and Other Receivables 2012 2011

£'000 £'000

Prepayments 7 3

Other debtors 117 126 VAT recoverable 107 7

____ ____

231 136

____ ____

During the year ended 31 December 2011, other debtors included an inter-company loan of £2.62 million owed by PLUS-SX and £0.43 million owed by PLUS-DX, in respect of which a 100% provision was made in that year. During the year ended 31 December 2012, £2.96 million of these fully provided loans were recovered through the payment of certain Company costs by those subsidiaries. The recovery of these loans has been included in the 'Profit/(loss) on disposal of discontinued operations' in the Statement of Comprehensive Income.

16. Cash and Cash Equivalents 2012 2011

£'000 £'000

Cash at bank and in hand 896 862

____ ____

17. Trade and Other Payables

Trade payables 31 116

Other payables 100 -

Social security and other taxes 19 13

Accruals 215 22

____ ____

365 151

____ ____

The Directors consider the carrying amount of trade payables is approximately equal to their fair value.

18. Share Capital and Premium

Number of Share Share

shares capital premium Total

(thousands) £'000 £'000 £'000

At 1 January 2012 - ordinary shares 386,907 19,345 18,021 37,366

______ ______ _____ ______

At 31 December 2012 - ordinary shares 386,907 38 18,021 18,059

- deferred shares 386,907 19,307 - 19,307

_______ ______ ______ ______

773,814 19,345 18,021 37,366

_______ ______ ______ ______

The issued share capital at 1 January 2012 consisted of 386,907,464 shares of 5p per share. On 21 November 2012, the share capital of the Company was reorganised by subdividing each existing ordinary share of 5p each into one ordinary share of 0.01p each and one deferred share of 4.99p each. The issued share capital at 31 December 2012 consists of 386,907,464 ordinary shares of 0.01p each and 386,907,464 deferred shares of 4.99p each.

The deferred shares do not entitle their holders to receive dividends or other distributions, receive notice of or to attend and vote at any general meeting or receive a return of capital on a winding up. The deferred shares are redeemable at the option of the Company at any time on giving 7 days written prior notice.

No share options were outstanding at 31 December 2012 (2011 - 16,499,868).

19. Commitments

Operating Lease Commitments

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

20. Related Party Transactions

On 21 June 2012, the Company sold PLUS Stock Exchange plc, a subsidiary of the Company, to ICAP Holdings Limited, a subsidiary of ICAP Holdings plc, for £500,000. ICAP Holdings Limited also reimbursed £150,000 of the Company's costs incurred in connection with the disposal. Cyril Theret, Nicholas Smith, Malcolm Basing and Ahmed al Asfour, Directors of the Company up to their respective dates of resignation, were also Directors of ICAP Securities & Derivatives Exchange Limited, a subsidiary of ICAP Holdings plc, in the year. The Directors resigned their positions as directors at ICAP Securities & Derivatives Exchange Limited in the weeks preceding the completion of the sale. No balance is outstanding at the year end.

During the year, consultancy fees of £48,000 (2011 - £nil) were charged to the Company by Marlin Atlantic Finance Limited, a company in which Mr Harris is also a director. No balance is outstanding at the year end.

On 14 June 2012, the Company sold PLUS Trading Solutions Limited to Forum Trading Solutions Limited for initial consideration of £1 and deferred consideration of £281,250. Cyril Theret and Nemone Wynn-Evans, directors of the Company, and Gerald Tucker, key management personnel, were directors of Forum Trading Solutions Limited. The balance receivable by the Company at 31 December 2012 was £106,251. The Company also paid £3,000 for technology services in the year.

21. Events after the Reporting Period

Disposal of investment in PLUS Derivatives Exchange Limited

On 19 September 2012, the Board of Directors announced that it had agreed, subject to regulatory approval and other customary conditions to dispose of PLUS Derivatives Exchange Limited ("PLUS-DX"), its wholly owned subsidiary, to Pipeline Capital Inc. As a condition of sale, the Board of Directors undertook an agreement not to exert influence or control over PLUS-DX during the approval period.

As PLUS-DX is a FSA regulated, the disposal was subject to agreement, for change of control, from the FSA. On 28 January 2013, the FSA granted agreement for change of control, and the disposal was duly completed.

Issue of Options

On 1 March 2013, the Company issued options to Directors over a total of 16 million new ordinary shares of 0.01p each at an exercise price of 0.2 pence per share. These options vested immediately and expire on 31 December 2020.

The options represent in aggregate 4.14% of the Company's existing ordinary share capital.

The options were issued as follows

Name of Director Options issued Existing options Ordinary shares Total

Donald Strang 8,000,000 - - 8,000,000

Hamish Harris 8,000,000 - - 8,000,000

22. Ultimate Controlling Party

The Directors believe there to be no ultimate controlling party.

23. Externally Exposed Regulatory Requirements

The Company is required to implement its Investing Policy within 12 months of the date of the general meeting at which shareholders approved the disposal of PLUS-SX, which occurred on 18 June 2012, failing which the ordinary shares of the Company will be suspended from trading on AIM. If the investing policy has not been implemented within 18 months of that general meeting, the admission to trading on AIM of the ordinary shares of the Company will be cancelled.

The Directors of the Company have actively undertaken strategic exploration of potential investment opportunities as an investing company under the AIM Rules.