TIDMMMAT
RNS Number : 9355P
Marwyn Materials Limited
01 April 2009
1 April 2009
Marwyn Materials Limited (the 'Company')
Publication of Annual Report, Notice of Annual General Meeting and Results since
Incorporation
The Directors of Marwyn Materials Limited are pleased to announce that the
Annual Report and Accounts for the period ended 31 December 2008 and the Notice
of the Annual General Meeting have today been posted to all shareholders.
Copies of the Annual Report and Accounts will be available, free of charge, for
a period of one month at the Company's registered office at Elizabeth House, 9
Castle Street, St Helier, Jersey, JE2 3RT.
The Annual General Meeting will be held at Elizabeth House, 9 Castle Street, St
Helier, Jersey, JE2 3RT on Tuesday, 28 April 2009 at 2 p.m. Details of the
results of Marwyn Materials Limited for the period from incorporation to
31December 2008 are given below.
Acquisition strategy
Marwyn Materials Limited was incorporated in August 2007 and listed in June 2008
and it is intended that it will acquire and manage companies and businesses in
the UK and international building materials industry, as described in the
Company's AIM admission document dated 6 June 2008. The Directors' intention is
to acquire controlling stakes in one or more quoted or unquoted profitable
businesses or companies by way of a reverse takeover and to use these as a
platform for further acquisitions.
The Company will need to raise additional funds for these purposes. The Company
may also acquire minority stakes in UK and international quoted companies with
the initial funds raised. It is the Directors' belief that if this strategy is
properly executed, shareholder value can be created through market
consolidation.
The Directors intend to take an active approach to investments made by the
Company and to adhere to the following investment guidelines:
Geographic focus: The Company intends to invest internationally with its focus
being on the UK, European and US building materials markets.
Sector focus: The Company intends to focus on the UK and international building
materials industries. The Directors believe that opportunities exist to create
value for Shareholders through a properly executed, acquisition-led strategy in
these industries.
Target companies: The Company will target companies which are profitable and
which fit into the stated geographic and sector guidelines.
Types of investment and control of investments: It is anticipated that the
Company will acquire controlling stakes in one or more quoted or unlisted
profitable businesses or companies and may also acquire minority stakes in UK
and international quoted companies.
This has continued to be the Company's strategy throughout the period to 31
December 2008.
The existing AIM rules require that where an AIM listed company is an
investing company, shareholder approval for its investing strategy must be
sought on an annual basis. The Board therefore proposes to seek shareholder
approval for the Company to continue its current acquisition strategy at the
forthcoming Annual General Meeting on 28 April 2008. The Board unanimously
recommends that shareholders approve the resolution.
Results
The loss before taxation for the period 31 December 2008 was GBP742,495. As at
31 December 2008, Marwyn Materials Limited's net cash balances amounted
to GBP12.8 million.
Dividends
It is the Board's policy, as described in the Company's AIM admission
document, that prior to making the first acquisition no dividends will be paid.
Following the first acquisition, subject to availability of distributable
reserves, dividends will be paid to shareholders when the Directors believe it
is appropriate and prudent to do so. However, the main focus of the Company will
be delivering capital growth for shareholders.
Outlook
The Group continues vigorously to pursue its stated acquisition strategy. The
deteriorating economic situation has resulted in a significant decline in the
market capitalisation of some companies in the building materials sector and the
announcement of several disposal programmes. The short term trading outlook for
building materials businesses remains difficult and we continue to review a
number of opportunities to acquire attractive assets at a cyclical low point for
the industry. We anticipate that 2009 will present numerous further acquisition
opportunities in our target sector. Certain of these are already under review.
Enquiries:
Marwyn Materials Limited
Peter Tom020 7389 6800
Simon Vivian 020 7389 6800
Cenkos Securities plc
Nicholas Wells 020 7397 8920
CONSOLIDATED BALANCE SHEET
As at 31 December 2008
+------------------------------------------------------------+--------+----------+------------+
| | Note | | 2008 |
+------------------------------------------------------------+--------+----------+------------+
| | | | GBP |
+------------------------------------------------------------+--------+----------+------------+
| Assets | | | |
+------------------------------------------------------------+--------+----------+------------+
| | | | |
+------------------------------------------------------------+--------+----------+------------+
| Receivables | | | 14,195 |
+------------------------------------------------------------+--------+----------+------------+
| Cash and cash equivalents | 14 | | 12,806,100 |
+------------------------------------------------------------+--------+----------+------------+
| Total current assets | | | 12,820,295 |
+------------------------------------------------------------+--------+----------+------------+
| Total assets | | | 12,820,295 |
+------------------------------------------------------------+--------+----------+------------+
| | | | |
+------------------------------------------------------------+--------+----------+------------+
| Equity | | | |
+------------------------------------------------------------+--------+----------+------------+
| Share capital | 16 | | 13,262,480 |
+------------------------------------------------------------+--------+----------+------------+
| Equity-settled employee benefits reserve | 16 | | 680 |
+------------------------------------------------------------+--------+----------+------------+
| Accumulated losses | 16 | | (742,495) |
+------------------------------------------------------------+--------+----------+------------+
| Total equity attributable to the shareholders of the | | | 12,520,665 |
| Company | | | |
+------------------------------------------------------------+--------+----------+------------+
| Total equity | | | 12,520,665 |
+------------------------------------------------------------+--------+----------+------------+
| | | | |
+------------------------------------------------------------+--------+----------+------------+
| Non-current liabilities | | | |
+------------------------------------------------------------+--------+----------+------------+
| Taxation | 11 | | 1,913 |
+------------------------------------------------------------+--------+----------+------------+
| Total non-current liabilities | | | 1,913 |
+------------------------------------------------------------+--------+----------+------------+
| | | | |
+------------------------------------------------------------+--------+----------+------------+
| Current liabilities | | | |
+------------------------------------------------------------+--------+----------+------------+
| Trade and other payables | 15 | | 297,717 |
+------------------------------------------------------------+--------+----------+------------+
| Total current liabilities | | | 297,717 |
+------------------------------------------------------------+--------+----------+------------+
| Total liabilities | | | 299,630 |
+------------------------------------------------------------+--------+----------+------------+
| Total equity and liabilities | | | 12,820,295 |
+------------------------------------------------------------+--------+----------+------------+
The Group and the Company financial statements were approved and authorised for
issue by the Board of Directors on 31 March 2009 and signed on its behalf by:
Peter Tom CBE Simon Vivian
Chairman Chief Executive
BALANCE SHEET
As at 31 December 2008
+------------------------------------------------------------+--------+----------+------------+
| | Note | | 2008 |
+------------------------------------------------------------+--------+----------+------------+
| | | | GBP |
+------------------------------------------------------------+--------+----------+------------+
| Assets | | | |
+------------------------------------------------------------+--------+----------+------------+
| | | | |
+------------------------------------------------------------+--------+----------+------------+
| Investment in subsidiaries | 12 | | - |
+------------------------------------------------------------+--------+----------+------------+
| Loan to group company | 13 | | 100,000 |
+------------------------------------------------------------+--------+----------+------------+
| Total non-current assets | | | 100,000 |
+------------------------------------------------------------+--------+----------+------------+
| | | | |
+------------------------------------------------------------+--------+----------+------------+
| Receivables | | | 10,697 |
+------------------------------------------------------------+--------+----------+------------+
| Cash and cash equivalents | 14 | | 12,759,709 |
+------------------------------------------------------------+--------+----------+------------+
| Total current assets | | | 12,770,406 |
+------------------------------------------------------------+--------+----------+------------+
| Total assets | | | 12,870,406 |
+------------------------------------------------------------+--------+----------+------------+
| | | | |
+------------------------------------------------------------+--------+----------+------------+
| Equity | | | |
+------------------------------------------------------------+--------+----------+------------+
| Share capital | 16 | | 13,262,480 |
+------------------------------------------------------------+--------+----------+------------+
| Equity-settled employee benefits reserve | 16 | | 680 |
+------------------------------------------------------------+--------+----------+------------+
| Accumulated losses | 16 | | (753,181) |
+------------------------------------------------------------+--------+----------+------------+
| Total equity attributable to the shareholders of the | | | 12,509,979 |
| Company | | | |
+------------------------------------------------------------+--------+----------+------------+
| | | | |
+------------------------------------------------------------+--------+----------+------------+
| Liabilities | | | |
+------------------------------------------------------------+--------+----------+------------+
| Trade and other payables | 15 | | 360,427 |
+------------------------------------------------------------+--------+----------+------------+
| Total current liabilities | | | 360,427 |
+------------------------------------------------------------+--------+----------+------------+
| Total liabilities | | | 360,427 |
+------------------------------------------------------------+--------+----------+------------+
| Total equity and liabilities | | | 12,870,406 |
+------------------------------------------------------------+--------+----------+------------+
CONSOLIDATED INCOME STATEMENT
For the period from 15 August 2007 to 31 December 2008
+-------------------------------------------------------+---------+------------+-------------+
| | | | 2008 |
+-------------------------------------------------------+---------+------------+-------------+
| | Note | | GBP |
+-------------------------------------------------------+---------+------------+-------------+
| Interest income | 10 | | 249,716 |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Employee expenses | 7 | | (116,764) |
+-------------------------------------------------------+---------+------------+-------------+
| Professional and consultancy expenses | 8 | | (761,317) |
+-------------------------------------------------------+---------+------------+-------------+
| Other expenses | 9 | | (112,217) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | (990,298) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Results from operating activities | | | (740,582) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Loss before income tax | | | (740,582) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Income tax expense | 11 | | (1,913) |
+-------------------------------------------------------+---------+------------+-------------+
| Loss for the period | | | (742,495) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Attributable to: | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Equity holders of the Company | 16 | | (742,495) |
+-------------------------------------------------------+---------+------------+-------------+
| Loss for the period | | | (742,495) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Earnings per share | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Basic and diluted loss per share | 18 | | (1.4p) |
+-------------------------------------------------------+---------+------------+-------------+
All the Group's activities derive from continuing operations.
INCOME STATEMENT
For the period from 15 August 2007 to 31 December 2008
+-------------------------------------------------------+---------+------------+-------------+
| | | | 2008 |
+-------------------------------------------------------+---------+------------+-------------+
| | Note | | GBP |
+-------------------------------------------------------+---------+------------+-------------+
| Interest income | 10 | | 250,182 |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Employee expenses | 7 | | (23,342) |
+-------------------------------------------------------+---------+------------+-------------+
| Professional and consultancy expenses | 8 | | (912,587) |
+-------------------------------------------------------+---------+------------+-------------+
| Other expenses | 9 | | (67,434) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | (1,003,363) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Results from operating activities | | | (753,181) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Loss before income tax | | | (753,181) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Income tax expense | 11 | | - |
+-------------------------------------------------------+---------+------------+-------------+
| Loss for the period | | | (753,181) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Attributable to: | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Equity holders of the Company | 16 | | (753,181) |
+-------------------------------------------------------+---------+------------+-------------+
| Loss for the period | | | (753,181) |
+-------------------------------------------------------+---------+------------+-------------+
| | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Earnings per share | | | |
+-------------------------------------------------------+---------+------------+-------------+
| Basic and diluted loss per share | 18 | | (1.4p) |
+-------------------------------------------------------+---------+------------+-------------+
All the Company's activities derive from continuing operations.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from 15 August 2007 to 31 December 2008
+--------------------------------------+--------------+----------------+--------------+------------+
| | | | | |
+--------------------------------------+--------------+----------------+--------------+------------+
| | | | | |
+--------------------------------------+--------------+----------------+--------------+------------+
| | Share | Equity-settled | Accumulated | Total |
| | capital | employee | losses | |
| | | benefits | | |
| | | reserve | | |
+--------------------------------------+--------------+----------------+--------------+------------+
| | GBP | GBP | GBP | GBP |
+--------------------------------------+--------------+----------------+--------------+------------+
| | | | | |
+--------------------------------------+--------------+----------------+--------------+------------+
| Balance at 15 August 2007 | - | - | - | - |
+--------------------------------------+--------------+----------------+--------------+------------+
| Loss for the period | - | - | (742,495) | (742,495) |
+--------------------------------------+--------------+----------------+--------------+------------+
| Recognition of share-based payments | - | 680 | - | 680 |
+--------------------------------------+--------------+----------------+--------------+------------+
| Issue of ordinary shares | 13,600,000 | - | - | 13,600,000 |
+--------------------------------------+--------------+----------------+--------------+------------+
| Costs directly related to the issue | (337,520) | - | - | (337,520) |
| of capital | | | | |
+--------------------------------------+--------------+----------------+--------------+------------+
| Balance at 31 December 2008 | 13,262,480 | 680 | (742,495) | 12,520,665 |
+--------------------------------------+--------------+----------------+--------------+------------+
For more detail of the Group's reserves, see Note 16.
All the Group's activities derive from continuing operations.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period from 15 August 2007 to 31 December 2008
+----------------------------------------------+--------+---------------------+-------------+
| | | | 2008 |
+----------------------------------------------+--------+---------------------+-------------+
| | | Note | GBP |
+----------------------------------------------+--------+---------------------+-------------+
| | | | |
+----------------------------------------------+--------+---------------------+-------------+
| Cash flows from operating activities: | | | |
+----------------------------------------------+--------+---------------------+-------------+
| Interest received | | | 239,019 |
+----------------------------------------------+--------+---------------------+-------------+
| Payments to suppliers and employees | | | (695,399) |
+----------------------------------------------+--------+---------------------+-------------+
| Net cash generated by operating activities | | | (456,380) |
+----------------------------------------------+--------+---------------------+-------------+
| | | | |
+----------------------------------------------+--------+---------------------+-------------+
| Cash flows from financing activities: | | | |
+----------------------------------------------+--------+---------------------+-------------+
| Proceeds from issue of share capital | | | 13,600,000 |
+----------------------------------------------+--------+---------------------+-------------+
| Payment for share issue costs | | | (337,520) |
+----------------------------------------------+--------+---------------------+-------------+
| Net cash from financing activities | | | 13,262,480 |
+----------------------------------------------+--------+---------------------+-------------+
| | | | |
+----------------------------------------------+--------+---------------------+-------------+
| Net increase in cash and cash equivalents | | | 12,806,100 |
+----------------------------------------------+--------+---------------------+-------------+
| Cash and cash equivalents on 15 August 2007 | | | - |
+----------------------------------------------+--------+---------------------+-------------+
| Cash and cash equivalents at 31 December | | 14 | 12,806,100 |
| 2008 | | | |
+----------------------------------------------+--------+---------------------+-------------+
NOTES TO THE FINANCIAL STATEMENTS
For the period from 15 August 2007 to 31 December 2008
1. Reporting entity
Marwyn Materials Limited (the "Company") is a company domiciled in Jersey. The
address of the Company's registered office is Elizabeth House, 9 Castle Street,
St Helier, Jersey, JE2 3RT.
The Company was incorporated on 15 August 2007 as Gracechurch Street Capital
Limited and changed its name to Marwyn Materials Limited on 4 June 2008.
The financial statements of the Company as at and for the period ended 31
December 2008 comprise the Company and its subsidiaries (together referred to as
the "Group" and individually as "Group entities"). The Group primarily is
involved in the acquisition of a target investment.
2. Basis of preparation
(a) Statement of compliance
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs).
The financial statements were authorised for issue by the Board of Directors on
31 March 2009.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis.
(c) Functional and presentation currency
These financial statements are presented in Sterling (GBP), which is the
Company's functional currency.
(d) Use of estimates and judgements
The preparation of financial statements in conformity with IFRSs requires
management to make judgements, 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 estimates are
revised and in any future periods affected.
3. Segment reporting
Business segments
The Company raised GBPGBP13.26m net of expenses through an issue of ordinary
shares on its admission to AIM on 12 June 2008. Until such time as an
acquisition is made, the Group's sole operation will remain the seeking of a
suitable target whilst investing shareholders' funds with a focus on investment
return balanced by liquidity and market risk.
Geographical segments
Marwyn Materials Limited is based in Jersey. The Group has established an
operating company in the U.K. to help actively seek an acquisition.
4. Employee expenses
+----------------------------------------------------+----------------+----+----------------+
| | 2008 | | 2008 |
+----------------------------------------------------+----------------+----+----------------+
| | Company | | Group |
+----------------------------------------------------+----------------+----+----------------+
| | GBP | | GBP |
+----------------------------------------------------+----------------+----+----------------+
| Wages and salaries | - | | 79,663 |
+----------------------------------------------------+----------------+----+----------------+
| Equity-settled share-based payments | 680 | | 680 |
+----------------------------------------------------+----------------+----+----------------+
| Compulsory social security contributions | - | | 13,759 |
+----------------------------------------------------+----------------+----+----------------+
| Non-executive Directors' fees | 22,662 | | 22,662 |
+----------------------------------------------------+----------------+----+----------------+
| | 23,342 | | 116,764 |
+----------------------------------------------------+----------------+----+----------------+
For details of equity-settled share based payments see Note 19.
5. Professional and consultancy expenses
+----------------------------------------------------+----------------+---+----------------+
| | 2008 | | 2008 |
+----------------------------------------------------+----------------+---+----------------+
| | Company | | Group |
+----------------------------------------------------+----------------+---+----------------+
| | GBP | | GBP |
+----------------------------------------------------+----------------+---+----------------+
| Professional fees | 293,796 | | 295,018 |
+----------------------------------------------------+----------------+---+----------------+
| Consultancy fees | 466,299 | | 466,299 |
+----------------------------------------------------+----------------+---+----------------+
| Consultancy fees paid to Marwyn Materials UK | 144,492 | | - |
| Limited | | | |
+----------------------------------------------------+----------------+---+----------------+
| | 904,587 | | 761,317 |
+----------------------------------------------------+----------------+---+----------------+
6. Other expenses
+----------------------------------------------------+----------------+---+----------------+
| | 2008 | | 2008 |
+----------------------------------------------------+----------------+---+----------------+
| | Company | | Group |
+----------------------------------------------------+----------------+---+----------------+
| | GBP | | GBP |
+----------------------------------------------------+----------------+---+----------------+
| Rent | 8,000 | | 37,250 |
+----------------------------------------------------+----------------+---+----------------+
| Legal fees | 26,550 | | 26,550 |
+----------------------------------------------------+----------------+---+----------------+
| Sundry expenses | 40,884 | | 48,417 |
+----------------------------------------------------+----------------+---+----------------+
| | 75,434 | | 112,217 |
+----------------------------------------------------+----------------+---+----------------+
Marwyn Materials UK Limited has in place an operating lease for office
accommodation with Marwyn Partners Limited until June 2011. Payments made under
operating leases were GBP29,250 during the period. Non-cancellable operating
lease rentals are as follows:
+----------------------------------------------------+----------------+---+----------------+
| | 2008 | | 2008 |
+----------------------------------------------------+----------------+---+----------------+
| | Company | | Group |
+----------------------------------------------------+----------------+---+----------------+
| | GBP | | GBP |
+----------------------------------------------------+----------------+---+----------------+
| Less than one year | - | | 60,000 |
+----------------------------------------------------+----------------+---+----------------+
| Between one and five year | - | | 85,000 |
+----------------------------------------------------+----------------+---+----------------+
| More than five years | - | | - |
+----------------------------------------------------+----------------+---+----------------+
| | - | | 145,000 |
+----------------------------------------------------+----------------+---+----------------+
7. Interest income
+----------------------------------------------------+----------------+---+----------------+
| | 2008 | | 2008 |
+----------------------------------------------------+----------------+---+----------------+
| | Company | | Group |
+----------------------------------------------------+----------------+---+----------------+
| | GBP | | GBP |
+----------------------------------------------------+----------------+---+----------------+
| Interest income on bank deposits | 249,716 | | 249,716 |
+----------------------------------------------------+----------------+---+----------------+
| Interest on loan to Marwyn Materials UK Limited | 466 | | - |
+----------------------------------------------------+----------------+---+----------------+
| | 250,182 | | 249,716 |
+----------------------------------------------------+----------------+---+----------------+
8. Income tax expense
+----------------------------------------------------+----------------+---+----------------+
| | 2008 | | 2008 |
+----------------------------------------------------+----------------+---+----------------+
| | Company | | Group |
+----------------------------------------------------+----------------+---+----------------+
| | GBP | | GBP |
+----------------------------------------------------+----------------+---+----------------+
| Current period tax expense | - | | 1,913 |
+----------------------------------------------------+----------------+---+----------------+
| Income tax expense from continuing operations | - | | 1,913 |
+----------------------------------------------------+----------------+---+----------------+
Reconciliation of effective tax rate:
+--------------------------------------------------------+--------------+----+--------------+
| | 2008 | | 2008 |
+--------------------------------------------------------+--------------+----+--------------+
| | Company | | Group |
+--------------------------------------------------------+--------------+----+--------------+
| | GBP | | GBP |
+--------------------------------------------------------+--------------+----+--------------+
| Loss for the period | (753,181) | | (740,582) |
+--------------------------------------------------------+--------------+----+--------------+
| Income tax at the Company's domestic rate of 0% | - | | - |
+--------------------------------------------------------+--------------+----+--------------+
| Effect of tax rates in foreign jurisdictions* | - | | 1,913 |
+--------------------------------------------------------+--------------+----+--------------+
| Income tax expense recognised | - | | 1,913 |
+--------------------------------------------------------+--------------+----+--------------+
*The parent company is resident in Jersey and has a zero percent tax rate. The
Group has a subsidiary operation in the U.K. which pays tax at a higher rate of
20% on taxable profits of GBP9,566 in the period.
9. Investment in subsidiaries
Company:
+----------------------------------+-----------------+---------------+-----------+------------+
| | Principal | Country of | Voting | Cost |
| | activity | incorporation | and | |
| | | | ownership | |
| | | | interest | |
+----------------------------------+-----------------+---------------+-----------+------------+
| Marwyn Materials UK Limited* | Acquisition | UK | 100% | GBP1.00 |
| | sourcing | | | |
+----------------------------------+-----------------+---------------+-----------+------------+
| Marwyn Materials Investments | Issue of | Jersey | 100% | GBP0.02 |
| Limited | incentive | | | |
| | shares | | | |
+----------------------------------+-----------------+---------------+-----------+------------+
*Marwyn Materials UK Limited is indirectly held by the Company via Marwyn
Materials Investments Limited.
10. Loan to group company
Company:
+--------------------------------------------------------+---------------+----------------+
| | | 2008 |
+--------------------------------------------------------+---------------+----------------+
| | | GBP |
+--------------------------------------------------------+---------------+----------------+
| Marwyn Materials UK Limited | | 100,000 |
+--------------------------------------------------------+---------------+----------------+
| | | 100,000 |
+--------------------------------------------------------+---------------+----------------+
The loan is unsecured, pays interest at 12m LIBOR plus 150bps and is repayable
on 1 December 2010.
11. Cash and cash equivalents
+----------------------------------------------------+----------------+---+----------------+
| | 2008 | | 2008 |
+----------------------------------------------------+----------------+---+----------------+
| | Company | | Group |
+----------------------------------------------------+----------------+---+----------------+
| | GBP | | GBP |
+----------------------------------------------------+----------------+---+----------------+
| Bank balances | 12,759,709 | | 12,806,100 |
+----------------------------------------------------+----------------+---+----------------+
| Cash and cash equivalents in the statement of cash | 12,759,709 | | 12,806,100 |
| flows | | | |
+----------------------------------------------------+----------------+---+----------------+
The exposure to interest rate risk and a sensitivity analysis for financial
assets and liabilities are disclosed in note 20.
12. Trade and other payables
+--------------------------------------------------------+---------------+---+--------------+
| | 2008 | | 2008 |
+--------------------------------------------------------+---------------+---+--------------+
| | Company | | Group |
+--------------------------------------------------------+---------------+---+--------------+
| | GBP | | GBP |
+--------------------------------------------------------+---------------+---+--------------+
| Professional and consultancy fees | 288,468 | | 288,468 |
+--------------------------------------------------------+---------------+---+--------------+
| Amount due to Marwyn Materials UK Limited | 68,459 | | - |
+--------------------------------------------------------+---------------+---+--------------+
| Liability for Participation Shares | 3,500 | | 3,500 |
+--------------------------------------------------------+---------------+---+--------------+
| Other creditors | - | | 5,749 |
+--------------------------------------------------------+---------------+---+--------------+
| | 360,427 | | 297,717 |
+--------------------------------------------------------+---------------+---+--------------+
13. Capital and reserves
Reconciliation of movement in capital and reserves
Company:
+---------------------------+----------------+----------------+--------------+----------------+
| | Share capital | Equity-settled | Accumulated | Total equity |
| | | employee | losses | |
| | | benefits | | |
| | | reserve | | |
+---------------------------+----------------+----------------+--------------+----------------+
| | GBP | GBP | GBP | GBP |
+---------------------------+----------------+----------------+--------------+----------------+
| Loss for the period | - | - | (753,181) | (753,181) |
+---------------------------+----------------+----------------+--------------+----------------+
| Issue of ordinary shares | 2 | - | - | 2 |
| on incorporation | | | | |
+---------------------------+----------------+----------------+--------------+----------------+
| Recognition of | - | 680 | - | 680 |
| share-based payments | | | | |
+---------------------------+----------------+----------------+--------------+----------------+
| Issue of ordinary shares | 13,599,998 | - | - | 13,599,998 |
| during the period | | | | |
+---------------------------+----------------+----------------+--------------+----------------+
| Costs directly related to | (337,520) | - | - | (337,520) |
| the issue of capital | | | | |
+---------------------------+----------------+----------------+--------------+----------------+
| Balance at 31 December | 13,262,480 | 680 | (753,181) | 12,509,979 |
| 2008 | | | | |
+---------------------------+----------------+----------------+--------------+----------------+
Group:
+----------------------------+---------------+----------------+--------------+----------------+
| | Share capital | Equity-settled | Accumulated | Total equity |
| | | employee | losses | |
| | | benefits | | |
| | | reserve | | |
+----------------------------+---------------+----------------+--------------+----------------+
| | GBP | GBP | GBP | GBP |
+----------------------------+---------------+----------------+--------------+----------------+
| Loss for the period | - | - | (742,495) | (742,495) |
+----------------------------+---------------+----------------+--------------+----------------+
| Issue of ordinary shares | 2 | | - | 2 |
| on incorporation | | | | |
+----------------------------+---------------+----------------+--------------+----------------+
| Recognition of share-based | - | 680 | - | 680 |
| payments | | | | |
+----------------------------+---------------+----------------+--------------+----------------+
| Issue of ordinary shares | 13,599,998 | - | - | 13,599,998 |
| during the period | | | | |
+----------------------------+---------------+----------------+--------------+----------------+
| Costs directly related to | (337,520) | - | - | (337,520) |
| the issue of capital | | | | |
+----------------------------+---------------+----------------+--------------+----------------+
| Balance at 31 December | 13,262,480 | 680 | (742,495) | 12,520,665 |
| 2008 | | | | |
+----------------------------+---------------+----------------+--------------+----------------+
14. Share capital
Company and Group:
+--------------------------------------------------------+---------------+----------------+
| | | Ordinary |
| | | shares |
+--------------------------------------------------------+---------------+----------------+
| | | 2008 |
+--------------------------------------------------------+---------------+----------------+
| Issue of ordinary shares on incorporation | | 2 |
+--------------------------------------------------------+---------------+----------------+
| Issue of ordinary shares on admission to AIM | | 135,999,998 |
+--------------------------------------------------------+---------------+----------------+
| On issue at 31 December | | 136,000,000 |
+--------------------------------------------------------+---------------+----------------+
The Company has no limit to the number of ordinary shares which may be issued.
The ordinary shares have no par value. All issued shares are fully paid.
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company.
15. Earnings per share
Group:
Basic earnings per share
The calculation of basic earnings per share at 31 December 2008 (1.4p loss) was
based on the loss attributable to ordinary shareholders of GBP742,495 and a
weighted average number of ordinary shares outstanding of 54.6m.
Diluted earnings per share
The calculation of diluted earnings per share at 31 December 2008 (1.4p loss)
was based on the loss attributable to ordinary shareholders of GBP742,495 and
the weighted average outstanding ordinary shares of 54.6m. The Participation
Shares in issuance during the period are not included in the calculation of
weighted average outstanding ordinary shares for the diluted earnings per share
calculation as the effect is anti-dilutive.
Company:
Basic earnings per share
The calculation of basic earnings per share at 31 December 2008 (1.4p loss) was
based on the loss attributable to ordinary shareholders of GBP753,181 and a
weighted average number of ordinary shares outstanding of 54.6m.
Diluted earnings per share
The calculation of diluted earnings per share at 31 December 2008 (1.4p loss)
was based on the loss attributable to ordinary shareholders of GBP753,191 and
the weighted average outstanding ordinary shares of 54.6m. The Participation
Shares in issuance during the period are not included in the calculation of
weighted average outstanding ordinary shares for the diluted earnings per share
calculation as the effect is anti-dilutive.
16. Share-based payment arrangements
Under share-based payment arrangements established by the Group to incentivise
Directors, key employees and others providing similar services, Participation
Shares were issued, via the Company's subsidiary, Marwyn Materials Investments
Limited, to Directors and key employees ("Management Participation Shares") and
Marwyn Management Partners LLP ("Marwyn"), a related party ("Marwyn
Participation Shares"); together "the Participation Shares".
On being offered, the Company may purchase the Participation Shares either for
cash or for the issue of new Ordinary Shares at its discretion. The value of the
Participation Shares is discussed below. The Participation Shares may only be
sold on this basis if both the Growth and Vesting Conditions have been
satisfied. If these conditions have not been satisfied the Participation Shares
must be sold to the Company for a nominal amount.
Details of the Participation Shares issued during and outstanding at the period
end are shown below. None of the Participation Shares were forfeited, exercised
or expired during the period.
Growth Condition
The Growth Condition is that the compound annual growth of the Company's equity
value must be at least 12.5% per annum. The Growth Condition takes into account
new shares issued, dividends and capital returned to Shareholders.
Vesting Condition
The Participation Shares are subject to a vesting period ending on 6 June 2011.
If however, the Growth Condition is not met on 6 June 2011, it will be extended
to 6 June 2013, or if earlier, when the Growth Condition is met. The vesting
period will also end on the sale or change of control of the Company.
Value
Subject to the provisions detailed above, the Management Participation Shares
and Marwyn Participation Shares can each be sold to the Company for an aggregate
value equivalent to 10% of the increase in "Shareholder Value" in the Company.
Shareholder Value is broadly defined as the increase in market capitalisation of
all Ordinary Shares of the Company issued up to the date of sale, allowing for
any dividends and other capital movements.
Management Participation Shares
Under a management incentive scheme, 10,000 Management Participation Shares have
been created and Directors and key employees have been allotted and purchased a
number of those shares, as shown in the table below.
The following table shows the Management Participation Shares issued to
employees:
+--------------------------------+------------------+------------+---------------+---------------+
| Issued to: | Participation in | Issue | Number of | Nominal |
| | increase in | price | Participation | value of |
| | "Shareholder | | shares | Participation |
| | Value" | | | shares |
+--------------------------------+------------------+------------+---------------+---------------+
| Peter Tom | 4% | GBP0.50 | 2,000 | GBP1,000 |
+--------------------------------+------------------+------------+---------------+---------------+
| Simon Vivian | 4% | GBP0.50 | 2,000 | GBP1,000 |
+--------------------------------+------------------+------------+---------------+---------------+
| Ian Peters | 2% | GBP0.50 | 1,000 | GBP500 |
+--------------------------------+------------------+------------+---------------+---------------+
| | | | 5,000 | GBP2,500 |
+--------------------------------+------------------+------------+---------------+---------------+
Marwyn Participation Shares
The Group has entered into a performance participation agreement with Marwyn
Management Partners LLP ("Marwyn") under which Marwyn has agreed to assist the
Company in meeting its business strategy. In exchange, the Group has issued
Participation Shares to Marwyn, a related party, as shown in the table below:
+--------------------------------+------------------+----------+---------------+---------------+
| Issued to: | Participation in | Issue | Number of | Nominal |
| | increase in | price | Participation | value of |
| | "Shareholder | | shares | Participation |
| | Value" | | | shares |
+--------------------------------+------------------+----------+---------------+---------------+
| Marwyn Management Partners LLP | 10% | GBP0.10 | 10,000 | GBP1,000 |
+--------------------------------+------------------+----------+---------------+---------------+
Valuation of Participation Shares
When the Participation Shares were issued, the Company was an unlisted
shell-company and had not entered into any transactions up to that date other
than the issue of 2 Ordinary Shares for GBP2. The fair value estimation placed
on the Participation Shares took into account the lack of trading history of the
Company and the absence of any deals or transactions to date. The total amount
paid for the Participation Shares, being the nominal value of GBP3,500, was
considered to be the best estimation of the fair value.
In the current period, GBP680 has been recognised in total as an expense in the
income statement in respect of Participation Shares.
17. Financial instruments
Significant accounting policies
Details of the significant accounting policies and methods adopted, including
the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in note 3 to the
financial statements.
Categories of financial instruments
Carrying amount of financial assets:
+----------------------------------------------------+---+---------------+---+----------------+
| | | 2008 | | 2008 |
+----------------------------------------------------+---+---------------+---+----------------+
| | | GBP | | GBP |
+----------------------------------------------------+---+---------------+---+----------------+
| | | Company | | Group |
+----------------------------------------------------+---+---------------+---+----------------+
| Loan and receivables (including cash and cash | | 12,870,406 | | 12,820,295 |
| equivalents) | | | | |
+----------------------------------------------------+---+---------------+---+----------------+
| | | 12,870,406 | | 12,820,295 |
+----------------------------------------------------+---+---------------+---+----------------+
Carrying amount of financial liabilities:
+---------------------------------------------+----------+---------------+---+----------------+
| | | 2008 | | 2008 |
+---------------------------------------------+----------+---------------+---+----------------+
| | | Company | | Group |
+---------------------------------------------+----------+---------------+---+----------------+
| | | GBP | | GBP |
+---------------------------------------------+----------+---------------+---+----------------+
| Amortised cost | | 360,427 | | 299,630 |
+---------------------------------------------+----------+---------------+---+----------------+
| | | 360,427 | | 299,630 |
+---------------------------------------------+----------+---------------+---+----------------+
Credit risk
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:
+--------------------------------------------+----------+---------------+----+---------------+
| | | 2008 | | 2008 |
+--------------------------------------------+----------+---------------+----+---------------+
| | | Company | | Group |
+--------------------------------------------+----------+---------------+----+---------------+
| | | GBP | | GBP |
+--------------------------------------------+----------+---------------+----+---------------+
| Cash and cash equivalents | | 12,759,709 | | 12,806,100 |
+--------------------------------------------+----------+---------------+----+---------------+
| Loans and receivables | | 110,697 | | 14,195 |
+--------------------------------------------+----------+---------------+----+---------------+
| | | 12,870,406 | | 12,820,295 |
+--------------------------------------------+----------+---------------+----+---------------+
Impairment losses
There was no impairment on receivables during the period and there are no
overdue or impaired receivables at the period end.
Liquidity risk
The following are the contractual maturities of financial liabilities and
excluding the impact of netting agreements:
Company:
+--------------------------------+--------------+---------------+--------------+--------------+
| | Carrying | Contractual | 6 months | |
+--------------------------------+--------------+---------------+--------------+--------------+
| | amount | cash flows | or less | 2-5 years |
+--------------------------------+--------------+---------------+--------------+--------------+
| Accruals | 360,427 | 360,427 | 360,427 | - |
+--------------------------------+--------------+---------------+--------------+--------------+
| | 360,427 | 360,427 | 360,427 | - |
+--------------------------------+--------------+---------------+--------------+--------------+
Group:
+--------------------------------+--------------+---------------+--------------+--------------+
| | Carrying | Contractual | 6 months | |
+--------------------------------+--------------+---------------+--------------+--------------+
| | amount | cash flows | or less | 2-5 years |
+--------------------------------+--------------+---------------+--------------+--------------+
| Accruals | 299,630 | 299,630 | 297,717 | 1,913 |
+--------------------------------+--------------+---------------+--------------+--------------+
| | 299,630 | 299,630 | 297,717 | 1,913 |
+--------------------------------+--------------+---------------+--------------+--------------+
Currency risk
Exposure to currency risk
All of the Group's transactions and balances are in Sterling and therefore the
Group has no exposure to currency risk.
Interest rate risk
Profile
At the reporting date the interest rate profile of interest-bearing financial
instruments was:
+--------------------------------+--------------------------+--------------+----+--------------+
| | | Carrying | | Carrying |
| | | amount | | amount |
+--------------------------------+--------------------------+--------------+----+--------------+
| | | Company | | Group |
+--------------------------------+--------------------------+--------------+----+--------------+
| | | GBP | | GBP |
+--------------------------------+--------------------------+--------------+----+--------------+
| Fixed rate instruments | | | | |
+--------------------------------+--------------------------+--------------+----+--------------+
| Financial assets (time | | 12,677,207 | | 12,677,207 |
| deposits) | | | | |
+--------------------------------+--------------------------+--------------+----+--------------+
| | | 12,677,207 | | 12,677,207 |
+--------------------------------+--------------------------+--------------+----+--------------+
| | | | | |
+--------------------------------+--------------------------+--------------+----+--------------+
| Variable rate instruments | | | | |
+--------------------------------+--------------------------+--------------+----+--------------+
| Financial assets | | 82,502 | | 128,893 |
+--------------------------------+--------------------------+--------------+----+--------------+
| | | 82,502 | | 128,893 |
+--------------------------------+--------------------------+--------------+----+--------------+
All financial assets and liabilities, other than those shown in the table above
are non-interest bearing.
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities
at fair value through profit or loss. Therefore a change in interest rates at
the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have
increased (decreased) equity and profit or loss for 12 months on
interest-bearing instruments by the amounts shown below. This analysis assumes
that all other variables remain constant.
+--------------------------------+--------------+---------------+--------------+--------------+
| | Profit or loss and equity | Profit or loss and equity |
+--------------------------------+------------------------------+-----------------------------+
| | Company | Company | Group | Group |
+--------------------------------+--------------+---------------+--------------+--------------+
| | 100 bp | 100 bp | 100 bp | 100 bp |
| | increase | decrease | increase | decrease |
+--------------------------------+--------------+---------------+--------------+--------------+
| | GBP | GBP | GBP | GBP |
+--------------------------------+--------------+---------------+--------------+--------------+
| Time deposits | 127,597 | (127,597) | 128,061 | (128,061) |
+--------------------------------+--------------+---------------+--------------+--------------+
Fair values
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the carrying
amounts shown in the balance sheet, are as follows:
+--------------------------------+--------------+---------------+--------------+--------------+
| | Carrying | Fair | Carrying | Fair |
| | amount | value | amount | value |
+--------------------------------+--------------+---------------+--------------+--------------+
| | Company | Company | Group | Group |
+--------------------------------+--------------+---------------+--------------+--------------+
| | GBP | GBP | GBP | GBP |
+--------------------------------+--------------+---------------+--------------+--------------+
| Loans and receivables | 110,697 | 102,940 | 14,195 | 14,195 |
+--------------------------------+--------------+---------------+--------------+--------------+
| Cash and cash equivalents | 12,759,709 | 12,759,709 | 12,806,100 | 12,806,100 |
+--------------------------------+--------------+---------------+--------------+--------------+
| Payables | (356,927) | (356,927) | (296,132) | (296,132) |
+--------------------------------+--------------+---------------+--------------+--------------+
| | 12,513,479 | 12,505,722 | 12,524,163 | 12,524,163 |
+--------------------------------+--------------+---------------+--------------+--------------+
The carrying value of receivables, cash and payables are a reasonable
approximation of fair value due to their short-term maturity. For details of the
Participation Shares issued, excluded from the above table, see Note 19.
Interest rates used for determining fair value
The interest rate used to discount the redemption cash flow of the loan to the
subsidiary is calculated by adding a credit spread to the yield on a UK
government bond maturing at 2 years post the reporting date; being the closest
date to the loan repayment date. The subsidiary has received no quotes for
commercial loans and therefore has estimated a relevant credit spread based on
market knowledge.
+--------------------------------------+--------+---------------+--------------+--------------+
| | | Yield on | Credit | Discount |
| | | Government | spread | rate |
| | | security | | |
+--------------------------------------+--------+---------------+--------------+--------------+
| Loan to Marwyn Materials UK Limited | | 1.3% | 3% | 4.3% |
+--------------------------------------+--------+---------------+--------------+--------------+
18. Related parties
Parent and ultimate controlling party
The Company is listed on AIM and as such there is no controlling party.
Marwyn Investment Management LLP is the investment manager to the Marwyn Neptune
Fund LP which has a significant shareholding in the Company. James Corsellis and
David Williams are partners in Marwyn Investment Management LLP, and are
directors of various Marwyn group companies and Marwyn Materials Limited. The
following Marwyn companies are therefore deemed to be related parties of the
Group.
Marwyn Partners Limited was paid GBPGBP25,000 (excluding VAT) in respect of
office accommodation and Marwyn Capital LLP was paid GBPGBP100,000 in respect of
corporate finance and administrative services. At the balance sheet date
Marwyn Partners Limited was owed an amount of GBP20,000 in respect of services
supplied during the period.
At the balance sheet date the Marwyn Neptune Fund LP held 50,010,000 ordinary
shares in Marwyn Materials Limited. Marwyn Management Partners LLP held Marwyn
Participation Shares in the Group, details of which are disclosed in Note 19.
Transactions with directors
As well as Management Participation Share disclosed in Note 19, the Group also
made the following payments to Directors or companies connected with Directors:
+--------------------------------------------------------+------------------+---------------+
| | Payments for | Amounts owed |
| | services during | at period end |
| | the period | |
+--------------------------------------------------------+------------------+---------------+
| | GBP | GBP |
+--------------------------------------------------------+------------------+---------------+
| Consultancy fees | 97,531 | - |
+--------------------------------------------------------+------------------+---------------+
| Director salary payments | 50,000 | 10,000 |
+--------------------------------------------------------+------------------+---------------+
| Non-executive fees | 22,662 | 4,166 |
+--------------------------------------------------------+------------------+---------------+
| | 170,193 | 14,166 |
+--------------------------------------------------------+------------------+---------------+
Directors' shareholdings
The following Directors held the indicated number of shares in the Company as at
the period end:
+--------------------------------------------------------------------------+---------------+
| Director: | Shares held |
| | at 31 |
| | December 2008 |
+--------------------------------------------------------------------------+---------------+
| | |
+--------------------------------------------------------------------------+---------------+
| Peter Tom CBE | 22,350,000 |
+--------------------------------------------------------------------------+---------------+
| Simon Vivian | 2,500,000 |
+--------------------------------------------------------------------------+---------------+
| David Williams | 11,000,000 |
+--------------------------------------------------------------------------+---------------+
| James Corsellis | 5,500,000 |
+--------------------------------------------------------------------------+---------------+
| David Warr | 2,500,000 |
+--------------------------------------------------------------------------+---------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSMFDFSUSEEL
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