RNS Number:3867Z
Marwyn Value Investors Ltd
29 June 2007
29 June 2007
Marwyn Value Investors Limited ("The Company")
Final Results
Year ended 31 December 2006
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD FROM 20 JANUARY 2006 TO 31 DECEMBER 2006
Called up Share Special Series Series Capital Revenue Total
share premium distributable One Two reserve reserve
capital reserve Warrant Warrant
reserve reserve
# # # # # # # #
Issue of 1,500,000 12,850,962 396,634 252,404 15,000,000
Ordinary
shares and
warrants
Profit for 7,418,764 (144,074) 7,274,690
the period
Share and (640,980) (17,716) (11,273) (669,969)
warrant issue
costs
Transfer to (12,209,982) 12,209,982 -
special
distributable
reserve (see
note 9)
1,500,000 - 12,209,982 378,918 241,131 7,418,764 (144,074) 21,604,721
NOTES TO THE INTERIM FINANCIAL STATEMENTS
31 DECEMBER 2006
1. ACCOUNTING POLICIES
The financial statements have been prepared in accordance with IFRS, which
comprise standards and interpretations approved by the IASB and IAS and
Standing Interpretations approved by the IASC that remain in effect,
together with the applicable legal and regulatory requirements of the
Companies (Guernsey) Law, 1994 and the AIM rules published by the London
Stock Exchange.
(a) CONVENTION
The financial statements have been prepared under the historical cost
convention, except where stated in (c) below, modified to include the
revaluation of financial assets and financial liabilities held at
fair value through the profit or loss.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and the reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making judgements about the carrying value of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an 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 revision and future periods if the revision affects both
current and future periods.
The Company has not made early adoption of the provisions of IFRS 7:
"Financial Instruments: Disclosues" which will enhance certain requirements
of IAS 32 and IAS 39 for the period commencing on 1 July 2007.
The Directors anticipate that the adoption of this Standard in future
periods will have no material impact on these financial statements except
for additional disclosures.
(b) INCOME
Interest receivable on cash deposits is accounted for on an accruals basis.
(c) UNQUOTED INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
Unquoted investments are stated at fair value as determined by the
Directors using appropriate valuation techniques. Changes in the fair value
of investments held at fair value through the profit or loss are recognised
in the Income Statement. On disposal realised gains and losses are also
recognised in the Income Statement. Unrealised gain and losses on the
disposal of investments are taken to the capital reserve - unrealised.
The Company recognises unquoted investments held at fair value through
profit or loss on the date it commits to purchase the instruments.
Derecognition of investments occurs when the rights to receive cash flows
from the investments expire or are transferred and substantially all of the
risks and rewards of ownership have been transferred.
The Company's interest in the Master Fund will be valued by the Directors
on the basis of the net asset value of the Master Fund as provided by the
Master Fund Administrator at the year end. The net asset value of the
Master Fund, Marwyn Neptune Fund L.P., will be determined by the Master
Fund Administrator by deducting the fair value of the liabilities of the
Master Fund from the fair value of the Master Fund's assets.
(d) EXPENDITURE
All expenses are accounted for on an accruals basis and are charged through
the Income Statement.
The Manager will not receive a management or performance fee from the
Company in respect of funds invested by the Company in the Master Fund. The
Manager will be entitled to fees and expenses from the Master Fund.
The Company will pay brokers' commissions (if any) and any issue or
transfer taxes chargeable in connection with its investment transactions.
Transaction costs incurred on the acquisition or disposal of an investment
are charged to capital through the Income Statement in the period
in which they are incurred.
(e) CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise bank balances and cash held by the
Company including short-term bank deposits with an original maturity of
less than three months. The carrying value of these assets approximates to
their fair value.
(f) SHARE AND WARRANT ISSUE COSTS
The preliminary expenses of the Company directly attributable to the equity
transaction, and costs associated with the establishment of the Company
that would otherwise have been avoided, are taken to the Share Premium and
Warrant Reserve accounts.
(g) 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 (the functional currency). The financial statements are presented
in pounds sterling, which is the Company's functional and presentation
currency.
(h) LIABILITIES
Financial liabilities are recognised when the Company becomes a party to
the contractual agreements of the instrument.
Financial liabilities are derecognised from the balance sheet only when the
obligations are extinguished either through discharge, cancellation or
expiration.
(i) EQUITY
Called up share capital is determined using the nominal value of shares
that have been issued.
Special distributable reserve is a reserve to allow, amongst other things,
the buy-back and cancellation of up to 14.99% of ordinary shares.
Capital reserve comprises gains and losses due to the revaluation of
unquoted investments held at fair value through profit or loss.
Revenue reserve includes all current and prior period results of operations
as disclosed in the Income Statement.
(j) SEGMENT REPORTING
The Directors are of the opinion that the Company is engaged in a single
geographic and economic business segment. The Company holds one investment
in a Cayman Island Fund.
(k) PRESENTATION OF INFORMATION
In order to better reflect the activities of an investment company and in
accordance with the guidance issued by the Association of Investment
Companies ("AIC"), supplementary information which analyses the Income
Statement between items of a revenue and capital nature has been presented
alongside the Income Statement.
These are the inaugural financial statements for the Company and therefore
there are no comparatives available.
2. TAXATION
The company has been granted exempt status under the Income Tax (Exempt
Bodies) (Guernsey) Ordinance 1989, and is therefore subject to the payment
of an annual fee which is currently #600.
3. UNQUOTED INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Marwyn Neptune Fund L.P.
#
Class A GBP - at 14,000,000
cost
Unrealised gain 7,418,764
At fair value 21,418,764
The Company's investment in Class A of the Marwyn Neptune Fund L.P.
("Master Fund") represents 38.6% of the Class A net assets and 35.3% of the
Master Fund.
4. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the net revenue
deficit, and net capital gain, on ordinary activities for the period and on
15,000,000 Ordinary Shares in issue throughout the period.
As at 31 December 2006 the price of the Ordinary Shares was 118.5p which is
in excess of the exercise price of the Series One Warrants (115p). However,
as the average price of the Ordinary Shares during the period was less than
the exercise price of the Series One Warrants there was no dilution in the
Earnings per Ordinary Share in respect of the Series One Warrants.
As at 31 December 2006 the price of the Ordinary Shares was 118.5p and at
no point during the period did the share price reach the exercise price of
the Series Two Warrants (130p). As the average price of the Ordinary Shares
during the period was less than the exercise price of Series Two Warrants
there was no dilution in the Earnings per Ordinary Share in respect of the
Series Two Warrants.
5. NET ASSET VALUE
The calculation of net asset value is based on the net assets of
#21,604,721 and on the ordinary shares in issue of 15,000,000 at the
balance sheet date.
As the price of the Ordinary Shares (118.5p) was above the exercise price
of the Series One Warrants (115p), but below the exercise price of the
Series Two Warrants (130p) there was a dilution in the net asset value per
ordinary share in respect to the Series One Warrants only. The diluted net
asset value is based on net assets #30,229,721 and on ordinary shares in
issue of 22,500,000.
6. RECONCILIATION OF NET PROFIT FOR THE PERIOD TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
#
Net profit for the period 7,274,690
Gains on investments held at fair value through profit (7,418,764)
or loss
Decrease/(increase) in (718)
Debtors
Increase/(decrease) in 32,687
creditors
Net cash outflow from operating (112,105)
activities
7. WARRANTS
At the placing on 23 February 2006, for each Ordinary Share the subscriber
also received one half Series One Warrant and one half Series Two Warrant.
Exercise End of
price subscription
pence period Allotted
Series One 115 22 February 7,500,000
Warrants 2008
Series Two 130 22 February 7,500,000
Warrants 2009
Accelerated Call Feature
If the mid-market closing price on AIM as shown by Bloomberg shall be 130p
or more in the case of the Series One Warrants, or 150p or more in the case
of the Series Two Warrants for any twenty or more trading days out of a
period of thirty consecutive trading days, the Company shall become
entitled at the close of AIM on the thirtieth consecutive trading day to
give notice to the relevant holders of Series One Warrants or Series Two
warrants, as applicable.
The notice referred to in the paragraph above must be sent in writing by
the Company to the relevant holders within two Trading Days of the
thirtieth consecutive Trading Day, stating that the Company will treat the
Series One Warrants or Series Two Warrants as appropriate as exercised at
the relevant subscription price on the date falling 21 days from the date
of the notice.
On exercise of the Warrants, the Company will sell any shares that would
have been issued on exercise and (after deducting the costs of exercise),
remit the proceeds to the holder and after this time all rights
under those Warrants will cease.
For full details of the rights of the Warrants, please see the Admission
document or contact the administrator.
The Series One Warrants were called at the option of the Company on 22
March 2007.
8. CALLED UP SHARE CAPITAL
Authorised #
200,000,000 ordinary shares of 20,000,000
#0.10 each
Allotted and fully #
paid
15,000,000 ordinary shares of 1,500,000
#0.10 each
9. SHARE PREMIUM ACCOUNT
#
Premium on new share issues 12,850,962
Share and warrant issue (640,980)
costs
Transferred to special (12,209,982)
distributable reserve
Balance at 31 December 2006 -
A special distributable reserve was created when, as stated in the
Admission Document, the company cancelled all of its share premium account
(as approved in the Royal Court of Guernsey on 31 March 2006), transferring
it to a distributable reserve to allow, amongst other things, the buy-back
and cancellation of up to 14.99% of the Ordinary Shares.
10. WARRANT RESERVES
The proceed from the issue of the placing were split between the Ordinary
Shares (share capital and share premium account), the Series One Warrant
reserve and the Series Two Warrant reserve based on the weighted average
value of the Ordinary Shares and Warrants in issue at the close of business
on the first day of trading. The weighted average value was calculated
using the mid prices of the Ordinary Shares and Warrants as quoted
on AIM.
11. RISK PROFILE OF FINANCIAL ASSETS AND LIABILITIES
The main risks arising from the Company's financial instruments are market
price risk, interest rate risk and liquidity risk.
Market price risk
The Company's exposure to market price risk consists mainly of movements in
the value of the investment in the Master Fund. The Company's investment
portfolio complies with the investment parameters as disclosed in its
Admission document. The board manages the market price risks inherent in
the investment portfolio by ensuring full and timely access to relevant
information from the Investment Manager. The board meets regularly
and at each meeting review investment performance.
A 10% increase/decrease in the market price of the Master Fund would result
in a 9.9 % increase/decrease in the basic net asset value per Ordinary
Share as at the balance sheet date.
Interest rate risk
The Company finances its operations through a mixture of shareholders'
capital and retained returns. With the exception of cash at bank, which
receives interest at a floating rate, all assets and liabilities of the
Company are non-interest bearing. No further interest rate risk disclosure
has been provided as all material amounts, with the exception of cash at
bank, are non-interest bearing.
Liquidity risk
The Company's investment in the Master Fund is relatively illiquid as it
invests a significant part of its assets in illiquid investments. The
Master Fund and/or Company may not be able to readily dispose of such
illiquid investments and, in some cases, may be contractually prohibited
from disposing of such investments for a specified period of time.
12. MATERIAL CONTRACTS
Manager
The Manager does not receive a management or performance fee from the
Company in respect of funds invested by the Company.
Investment Manager
The Investment Manager does not receive a management or performance fee
from the Company or Manager in respect of funds invested by the Company in
the Master Fund.
Collins Stewart Europe Limited ("Collins Stewart")
Under an engagement letter dated 12 January 2006 from Collins Stewart to
the Company, Collins Stewart has agreed to act as nominated advisor and
broker to the Company for the purposes of the AIM Rules for an annual fee
of #35,000. The appointment may be terminated at any time by either party
immediately on written notice being received and the letter contains
certain indemnities given by the Company in favour of
Collins Stewart.
Directors
Each Director will be paid a fee of #15,000 per annum.
Administrator
The Administrator performs the necessary secretarial and administrative
services for the Company under the Administration Agreement. The
Administrator is paid an annual fee of #20,000. The Administrator is also
entitled to reimbursement of certain expenses incurred by it in connection
with its duties.
13. RELATED PARTIES
During the period fees of #17,956 were payable to the Administrator, Fortis
Fund Services (Guernsey) Limited, with #10,000 outstanding at the period
end. Ian Clarke is a Director of both the Company and the Administrator.
All Directors are entitled to receive an annual fee of #15,000 and to be
reimbursed for all travel and other costs incurred as a direct result of
carrying out their duties as Directors.
This information is provided by RNS
The company news service from the London Stock Exchange
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