TIDMMACP
RNS Number : 8470Y
Marwyn Acquisition Company PLC
09 September 2022
LEI number: 2138004EUUU11OVHZW75
Marwyn Acquisition Company plc
(the "Company")
Publication of Annual Report & Financial Statements for the
year ended 30 June 2022
The Company announces the publication of its results for the
year ended 30 June 2022.
The Annual Report & Financial Statements are also available
on the 'Shareholder Documents' page of the Company's website at
www.marwynacplc.com.
Enquiries:
Marwyn Acquisition Company plc
Tel: +44(0)207 004 2700
James Corsellis
Mark Brangstrup Watts
Numis Securities Limited (Nominated Adviser and Broker)
Tel: +44(0)207 260 1000
Kevin Cruickshank
Jamie Loughborough
MARWYN ACQUISITION COMPANY PLC
Annual Report and Audited Consolidated Financial Statements
For the year ended 30 June 2022
CHAIRMAN'S STATEMENT AND STRATEGIC REPORT
I present to shareholders the Annual Report and Consolidated
Audited Financial Statements (the "Financial Statements") of Marwyn
Acquisition Company plc (the "Company") for the year ended 30 June
2022, consolidating the results of the Company and its subsidiary
WHJ Limited (collectively the "Group" or "MAC").
Strategy
Marwyn Acquisition Company plc is listed on AIM of the London
Stock Exchange and was established to provide shareholders with
attractive total returns achieved through capital appreciation. The
Directors believe that opportunities exist to create significant
value for shareholders through properly executed, acquisition-led
growth strategies, in the industrials, manufacturing, engineering,
construction, building products or support services sectors. The
investment policy is included in full on the Company's website at
https://www.marwynacplc.com/investors/investment-policy/default.aspx
.
Overview of the Year
During the year, the Company has primarily focussed on the
progression of various discussions with potential industry leading
executives and management teams ("Management Partners") and with
potential acquisition opportunities across a range of different
sectors that the Directors believe offer the best opportunities for
attractive acquisitions and future value creation. This has
involved performing detailed due diligence on prospective
Management Partners' experience and track records, as well as
desktop and third-party research into specific sectoral
opportunities which have been identified that relate to the
sectoral experience of potential Management Partners.
Outlook
The Directors believe that the recent decline in certain sector
valuations is likely to continue over the short term as a result of
ongoing macroeconomic and geopolitical uncertainty, and as a result
may provide opportunities for more attractively priced platform
assets. In combination with this, the Directors have made good
progress with identifying potential Management Partners who share
in this outlook, and the Directors look forward to updating
shareholders in due course.
Results
The Group's loss after taxation for the year to 30 June 2022 was
GBP0.4 million (2021: GBP0.7 million). The Group incurred GBP0.4
million of administrative expenses during the year (2021: GBP0.7
million), received interest of GBPnil (2021: GBP1k) and at 30 June
2022 held a cash balance of GBP4.8 million (2021: GBP5.2
million).
Dividend policy
It is the Board's policy that prior to the acquisition or
investment in a trading entity, no dividends will be paid. The
Company has not yet acquired a trading operation and we therefore
consider it inappropriate to make a forecast of the likelihood of
any future dividends. Following an acquisition or investment, and
subject to the availability of distributable reserves, dividends
will be paid to shareholders when the Directors believe it is
appropriate and commercially prudent to do so.
James Corsellis
Chairman
8 September 2022
GOVERNANCE - REPORT OF THE DIRECTORS
The Directors present the Financial Statements for the year
ended 30 June 2022.
Principal Activities
The Company's strategy is to acquire a platform trading asset in
the industrials, manufacturing, engineering, construction, building
products or support services sectors.
We believe that opportunities exist to create value for
shareholders through a properly executed, acquisition-led strategy
in one of these sectors. We may either seek to recruit
sector-leading Management Partners in advance of an acquisition, or
alternatively may consider identifying acquisition opportunities
with impressive incumbent management teams that require a catalyst
to unlock growth.
Results and Dividends
For the year to 30 June 2022, the Group's loss was GBP0.4
million (2021: GBP0.7 million).
It is the policy of the Company's board of Directors (the
"Board") that prior to the acquisition or investment in a trading
entity , no dividends will be paid. Following this, and subject to
the availability of distributable reserves, dividends will be paid
to shareholders when the Directors believe it is appropriate and
commercially prudent to do so.
Statement of Going Concern
The Financial Statements have been prepared on a going concern
basis, which assumes that the Group will continue to be able to
meet its liabilities as they fall due for the foreseeable future.
The Group had cash resources of GBP4.8 million at 30 June 2022 and
had net assets of GBP4.9 million. The Directors have considered the
financial position of the Group and have reviewed forecasts and
budgets for a period of at least 12 months following the approval
of the Financial Statements. Subject to the structure of any
potential transaction, the Company may need to raise additional
funds for the acquisition in the form of equity and/or debt, which
has not been factored into the Director's going concern assessment
as this will be dependent on the size and nature of a future
acquisition. Furthermore, the Directors have considered the ongoing
impact of the Covid-19 pandemic, conflict in Ukraine and current
macro-economic factors on the Group's forecast cashflows and
liabilities, concluding that prior to completing a transaction,
these have no material impact on the Group due to the nature of its
operations. As a result, the Directors have concluded that, at the
date of approval of the Financial Statements, the Company and the
Group have sufficient resources for the foreseeable future and can
continue to execute its stated strategy. Accordingly, it is
appropriate to adopt the going concern basis in the preparation of
the Financial Statements.
Financial Risk Profile
The Group's financial instruments are mainly comprised of cash,
payables and receivables that arise directly from the Group's
operations. Details of the risks relevant to the Group are included
on pages 37 to 41.
Substantial Shareholdings
The Company has been notified that the shareholders listed below
held a beneficial interest of 3 per cent. or more of the Company's
issued share capital as at the date of approval of the Financial
Statements.
Ordinary Shares Percentage
Held of Issued
Share Capital
==============================
Marwyn Investment Management
LLP 639,685,278 95.36%
================ ===============
Stated Capital
Details of the stated capital of the Company during the year are
set out in note 14 to the Financial Statements.
Directors
The Directors of the Company who served during the period
are:
James Corsellis, Executive Chairman
James brings extensive public company experience as well as
management and corporate finance expertise across a range of
sectors and an extensive network of relationships with
co-investors, advisers and other business leaders.
Previously he has served as a director of the following
companies: a non-executive director of BCA Marketplace from July
2014 to December 2017 and Advanced Computer Software from October
2006 to August 2008, non- executive chairman of Entertainment One
from January 2007 to March 2014 and remaining on the board as
non-executive director until July 2015, non-executive director of
Breedon Aggregates from March 2009 to July 2011 and as CEO of
icollector Plc from 1994-2001 amongst others. James was educated at
Oxford Brookes University, the Sorbonne and London University.
James is a Managing Partner of Marwyn Capital LLP and Marwyn
Investment Management LLP. James is the Chairman of MAC Alpha
Limited, and Marwyn Acquisition Company III Limited and a Director
of Marwyn Acquisition Company II Limited. James is also an
executive director of Silvercloud Holdings Limited.
Mark Brangstrup Watts, Executive Director
Mark has many years of experience deploying private equity
investment strategies in the public markets. Mark brings his
background in strategic consultancy to the management team having
been responsible for strategic development projects for a range of
international companies including Ford Motor Company (US), Cummins
(Japan) and 3M (Europe).
Previously Mark has served as a director of the following
companies: a non-executive director of Zegona Communications Plc
from January 2015 to May 2020, BCA Marketplace from July 2014 to
December 2017, Advanced Computer Software from October 2006 to
September 2012, Entertainment One from June 2009 to July 2013,
Silverdell Plc from March 2006 to December 2013, Inspicio Holdings
Limited from October 2005 to February 2008 and Talarius Limited
September 2005 to February 2007 amongst others. Mark has a BA in
Theology and Philosophy from King's College, London.
Mark is a Managing Partner of Marwyn Capital LLP and Marwyn
Investment Management LLP and director of AdvancedAdvT Limited, MAC
Alpha Limited, Marwyn Acquisition Company II Limited and Marwyn
Acquisition Company III Limited. Mark is also an executive director
of Silvercloud Holdings Limited .
Sanjeev Gandhi, Non-Executive Director (appointed 24 May
2022)
Sanjeev has managed change, innovation and growth as a Chair,
non-executive and executive director in the media and technology,
consumer, investment management and social impact sectors.
Following an early career as a consultant with the Telecoms
Strategy and Policy Group at Coopers & Lybrand and at the BBC
as Head of Strategic Development, Sanjeev became one of the first
employees of Yahoo! Europe in early 1998 where he led strategy and
distribution and was a key member of the first management team and
European board.
In 2003, as the son of immigrant parents Sanjeev was inspired to
create Reach to Teach, an innovative charity providing primary
education for some of the world's most under privileged communities
in rural India. In 2008 Larry Ellison, the founder of the software
giant Oracle, became his co-founder describing Reach to Teach as
'the most incredible initiative changing the lives of tens of
thousands of children'.
Sanjeev is currently a trustee at the Fidelity Foundation where
he oversees investments and stewardship. Until December 2021 he was
a non-executive director of the England & Wales Cricket Board
where he oversaw the launch of the new '100' super league. Sanjeev
also chaired the Eden Project until the end of 2020 through a time
of enormous change .
Directors' Interests
The Directors have no direct interests in the Ordinary Shares of
the Company. James Corsellis and Mark Brangstrup Watts have
interests in the participation shares, as detailed in note 17 to
the Financial Statements.
James Corsellis and Mark Brangstrup Watts are managing partners
of Marwyn Investment Management LLP which manages the Marwyn Fund
that beneficially owns 95.36 per cent. of the issued share capital
of the Company as at 30 June 2022. James Corsellis and Mark
Brangstrup Watts are also managing partners of Marwyn Capital LLP,
a firm which provides corporate finance and managed services
support to the Group. Details of the related party transactions
which occurred during the period are disclosed in note 18.
Save for the issue of participation shares as disclosed in note
17, no Director has or has had any interest in any transaction
which is or was unusual in its nature or conditions or significant
to the business of the Group. There were no loans or guarantees
granted or provided by the Company and/or any of its subsidiaries
to or for the benefit of any of the Directors.
Directors' Emoluments
Directors' emoluments during the year are disclosed on page
17.
Statement of Directors' Responsibilities
The directors are responsible for preparing financial statements
for each financial year which give a true and fair view, in
accordance with applicable Jersey law and International Financial
Reporting Standards ("IFRS"), of the state of affairs of the
Company and of the profit or loss of the Company for that period.
In preparing those financial statements, the directors are required
to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The directors confirm that they have complied with the above
requirements in preparing the financial statements.
The directors are responsible for keeping proper accounting
records that disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with The Companies (Jersey) Law,
1991. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
So far as the directors are aware, there is no relevant audit
information of which the Company's auditors are unaware, and each
director has taken all the steps that he or she ought to have taken
as a director in order to make himself or herself aware of any
relevant audit information and to establish that the Company's
auditors are aware of that information.
Independent Auditor
Baker Tilly Channel Islands Limited ("BTCI") were appointed as
the Company's independent auditor during the year. BTCI has
expressed its willingness to continue to act as auditor to the
Group, a resolution in relation to their appointment will be put to
shareholders at the next Annual General Meeting.
Disclosure of Information to Auditor
Each of the Directors in office at the date the Report of the
Directors is approved, whose names and functions are listed in the
Report of the Directors confirm that, to the best of their
knowledge:
-- the Group Financial Statements, which have been prepared in
accordance with IFRS as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
loss of the Group;
-- the Report of the Directors includes a fair review of the
development and performance of the business and the position of the
Group and Company, together with a description of the principal
risks and uncertainties that it faces;
-- so far as they are aware, there is no relevant audit
information of which the Group's auditor is unaware; and
-- they have taken all the steps that they ought to have taken
as a Director in order to make themself aware of any relevant audit
information and to establish that the Group's auditor is aware of
that information.
On behalf of the Board
James Corsellis
Chairman
8 September 2022
GOVERNANCE - CORPORATE GOVERNANCE REPORT
Overview
The Directors recognise the importance of sound corporate
governance commensurate with the size and current nature of the
Company. The Company has adopted the Quoted Companies Alliance
Corporate Governance Code ("QCA Code" or the "Code") and
established an Audit and Risk Committee and Nomination and
Remuneration Committee.
The Company is led by its Executive Chairman James Corsellis,
Independent Non-Executive Director Sanjeev Gandhi (appointed 24 May
2022) and Executive Director Mark Brangstrup Watts, who are highly
experienced and knowledgeable and are considered to be best placed
to lead the Company at this particular time as the Company pursues
the identification and execution of an acquisition or investment in
a trading entity and the appointment of Management Partners . The
biographies of the Directors are detailed on pages 4 and 5 . The
Company's Chairman has responsibility for leading the Board
effectively and overseeing the Company's corporate governance
model.
Based on the current composition of the Board and the nature of
the Company's ongoing activities, the Board have implemented
simplified corporate governance arrangements to best meet the needs
of the business at this time. The Directors are committed to
maintaining the appropriate levels of corporate governance for the
nature and extent of the activities of the Company and will
therefore revisit the corporate governance arrangements as the
business further evolves.
The membership of the board committees during the year was as
follows:
Audit and Risk Committee Nomination and Remuneration Committee
Mark Brangstrup Watts (Chairman until 24 May 2022, and Mark Brangstrup Watts (Chairman until 24 May 2022, and
subsequently a member of the committee). subsequently a member of the committee).
----------------------------------------------------------
James Corsellis (member of the committee until 24 May James Corsellis (member of the committee until 24 May
2022). 2022).
----------------------------------------------------------
Sanjeev Gandhi (appointed as Chairman of the committee Sanjeev Gandhi (appointed as Chairman of the committee
effective 24 May 2022). effective 24 May 2022).
----------------------------------------------------------
The Directors are aware that Committee composition should differ
to that of the Board and where possible should consist of a
majority of independent directors. The Directors are committed to
re-considering the Board and Committee composition as the nature
and activities of the Company evolves.
The purpose of this report is to broadly set out how the Company
complies with the QCA Code and explain the areas of non-compliance
(see the 'Deviations from the Code' section below). The Company
provides a detailed assessment of its compliance with the Code on
its website
https://www.marwynacplc.com/investors/Corporate-Governance/default.aspx
and will continue to provide updates on its compliance with the QCA
Code via the website and in each annual report.
Detail on the Company's strategy is included on page 2 and the
Group's principal risks are described on pages 37 to 41
Board and Committee updates
On 24 May 2022, Sanjeev Gandhi was appointed as Independent
Non-Executive Director and chairman of the Audit and Risk Committee
and Nomination and Remuneration Committee. The appointment of
Sanjeev Gandhi strengthens the corporate governance arrangements of
the Company.
The Company is currently pursuing its investment strategy, which
is set out on page 2, and it is believed that the current Directors
experience makes them best placed to lead the Company in
identifying, evaluating and completing its initial acquisition and
the appointment of Management Partners.
The Director's biographies are detailed on pages 4 and 5 of
these Financial Statements.
The strategy of the business will be refined once a sector
leading Management Partner, or an acquisition opportunity with an
impressive incumbent management team is identified and the
Directors are committed to further re-considering the Board and
Committee composition at that time.
Board Interaction
The Board meets formally at least four times a year, but the
Directors also regularly meet on an informal basis. The Chairman is
primarily responsible for the running of the Board. The Board
understands that it is critical for Board meetings to be well
managed and balanced in order for the business to successfully
deliver and achieve its strategy. The Chairman is responsible for
the Board meeting agenda, which, for periodic meetings, is agreed
in advance of each Board meeting and prepared based on the board
annual agenda cycle. For ad hoc meetings this is agreed in advance
and published as soon as practicable. Board packs are circulated to
the Board in advance of each meeting and capture all ongoing
corporate governance requirements. The Board is presented with
papers to support its discussions including timely financial
information, investor relations information, subsidiary management
reporting and details of potential acquisition targets and deal
progress.
The Group's culture is to openly and frequently discuss any
important issues both at and outside of formal meetings.
All Board members have full access to the Group's advisers for
seeking professional advice at the Company's expense.
Board Attendance
Formal Board meetings Ad hoc Board meetings
Held Attended Held Attended
======================================== ======== ======== ==============
Mark Brangstrup Watts 3 3 1 1
======== ============== ======== ==============
James Corsellis 3 3 1 1
======== ============== ======== ==============
Sanjeev Gandhi (appointed 24 May 2022) - - - -
======== ============== ======== ==============
Deviations from the Code
One of the ten principles of the QCA Code is to maintain the
board as a well-functioning, balanced team led by the chair. To
achieve this principle, the QCA Code requires a balance between
executive and non-executive Directors and at least two independent
non-executive directors to be in place. The Company deviates from
the QCA Code in this respect, as the Company's Board currently
consists of two Executive Directors and one Independent
Non-Executive Director. The Board believes that the Board
composition is appropriate for the Company's current operations and
provides an appropriate mix of experience, expertise and skills to
support the business of the Group in its current form. The Board
remains committed to reviewing its composition to ensure it remains
appropriate as the Company's operations evolve.
The QCA Code states that companies should have in place a board
evaluation process based on clear and relevant objectives. The
Directors consider that the board is not yet of a sufficient size
for a full board evaluation to make commercial and practical sense.
In frequent Board meetings and calls, the Directors can discuss any
areas where they feel a change would be beneficial for the Company,
and the Company Secretary and specialist external advisers remain
on hand to provide impartial advice. As the Company grows, it
intends to expand the composition of the Board and, with this
expansion, intends to establish a formal board effectiveness
review.
Board Committees
The Board established two principal committees, the Audit and
Risk Committee and the Nomination and Remuneration Committee (the
"Committees"), to assist the Board in the execution of its duties.
If the need should arise, the Board may set up additional
committees as appropriate. The Committees' terms of reference are
available on the Company's website, www.marwynacplc.com, or by
request from the Company Secretary. Each of the Committees is
authorised, at the Company's expense, to obtain legal or other
professional advice to assist in carrying out its duties. No person
other than a Committee member is entitled to attend the meetings of
these Committees, except by invitation of the Chairman of that
Committee. The Company's auditors BTCI are invited to attend
meetings of the Audit and Risk Committee as appropriate.
Mark Brangstrup Watts stepped down as chairman of the Committees
on 24 May 2022 and was replaced by Sanjeev Gandhi. Mark Brangstrup
Watts remains a member of the Committees and James Corsellis
resigned from his position as a member of the Committees on 24 May
2022. The Directors are aware that Committee composition should
differ to that of the Board and where possible should consist of a
majority of independent directors. The Directors are committed to
re-considering the Board and Committee composition as the nature
and activities of the Company evolves.
For the year ended 30 June 2022 the following committee meetings
were held:
Audit and Risk Committee meetings Nomination and Remuneration Committee meetings
Held Attended Held Attended
======================= ============= ================= ==============================
Mark Brangstrup Watts 3 3 2 2
============= ===================== ================= ==============================
James Corsellis 3 3 2 2
============= ===================== ================= ==============================
Sanjeev Gandhi - - - -
============= ===================== ================= ==============================
The Audit and Risk Committee report and Nomination and
Remuneration Committee report are included on pages 15 and 16
respectively of these Financial Statements.
The Company also recognises the importance of having systems and
procedures in place to ensure compliance by the Board, the Company,
and its applicable employees in relation to dealings in securities
of the Company and the management of inside information in
accordance with the UK market abuse regime ("UK MAR"). The Board
has established a Disclosure Committee, which currently consists of
Mark Brangstrup Watts and James Corsellis and has adopted a share
dealing code for this purpose. The Directors believe that these
procedures and policies adopted by the Board are appropriate for
the Company's size and complexity and that it complies with UK
MAR.
Board Diversity
The Board considers diversity to be much broader than the
traditional definition which focuses on, amongst other things:
race, gender, age, beliefs, disability, ethnic origin, marital
status, religion and sexual orientation. Productive Board
discussions require a breadth of experience and perspectives
achieved through hiring board members with diverse experience.
Board directors shall be appointed in order to bring required
skills, knowledge and experience and are expected to positively
impact the chemistry and dynamics of the Board.
The appointment of Sanjeev Gandhi expands the experience and
expertise of the Board. Sanjeev has held non-executive and director
positions across the media, technology, consumer, investment
management and social impact sectors. Sanjeev is the son of
immigrant parents, which was the inspiration to create Reach to
Teach, an innovative charity providing primary education for some
of the world's most under privileged communities in rural
India.
It is believed that the Board has the experience and skills for
the Group to either identify a sector-leading Management Partner or
an acquisition opportunity with an impressive incumbent management
team. Details on the experience of the Directors are included on
pages 4 to 5 of these Financial Statements.
Once a Management Partner is in place/acquisition opportunity
progressed the Board and committee composition will be revisited to
ensure that it meets the changing needs of the business. During the
recruitment process for new directors, the Nomination and
Remuneration Committee will ensure that the diversity of the Board
is considered.
Risk Management and Internal Controls
The Board is responsible for establishing and maintaining the
Company's systems for both risk management and internal controls
and reviewing the effectiveness of both. Internal control systems
are designed to meet the particular needs of the Company and Group
and the particular risks to which it is exposed. The procedures are
designed to manage rather than eliminate risk and, by their nature,
can only provide reasonable but not absolute assurance against
material misstatement or loss.
The role of reviewing and challenging the risk identification
and risk management process across the business including the risks
in connection with a potential acquisition has been delegated to
the Audit and Risk Committee.
The Group does not have a separate internal audit function as
the Board does not feel this is necessary due to the current size
of the business and the simplicity and low volume of transactions,
coupled with the nature and the extent of internal controls and
Board oversight and involvement.
The Group has a formal and informal risk management process. The
size of the Board and the frequency in which they interact ensures
that identified risks are communicated both formally, upon review
and consideration of the risk register, and informally in regular
conversations between Directors on business operations and
strategic progress.
The risk register categorises risks into key business risks,
risks associated with the successful completion of an acquisition,
shareholder risks and financial and procedural risks. A risk
assessment has been performed identifying the potential impact and
likelihood of each risk and mitigating factors/actions have also
been identified. The risk register, including the risk assessment
is reviewed and discussed by the Audit and Risk Committee who
propose to the Board any updates for formal adoption.
Principal risks faced by the Group are explained in detail on
pages 37 to 41. The main risks faced by the Group are those which
might jeopardise the successful completion of an acquisition. The
Group has previously come within days of successfully completing
two transactions and as such have incurred significant transaction
related costs.
Whilst the risk remains that future losses arise from the
pursuit of future transactions, the Directors consider the
management of the Company's exposure to financial costs of
progressing and securing a successful acquisition a key priority
and as such have implemented the following robust risk mitigation
procedures:
-- reducing the target size of potential acquisitions to
consider taking one or more controlling or noncontrolling stakes,
in businesses with an enterprise value generally expected to be up
to GBP500 million;
-- continuing to perform thorough due diligence of potential
management partners and acquisition targets prior to materially
progressing third party advisers and incurring incremental
costs;
-- seeking appropriate risk-sharing measures with professional
service providers and, to the extent possible, with vendors;
-- continuing the model of early stage market sounding and
consultation with potential investors throughout the transaction
process; and
-- maintaining a flexible attitude to which international
capital markets/exchanges would provide the optimal environment for
initial and future capital raising.
The Company also continues to implement financial procedures
including controls over cash management, the safeguarding of cash,
and monthly cash forecasting and budgeting. The Company also has in
place numerous internal controls in relation to financial
reporting, such as the segregation of roles between those preparing
and those reviewing financial information. In addition, the Company
has established a multi-tier review process with reviews undertaken
by individuals with the appropriate level of seniority and
experience, reducing the risk of misstatement and fraud.
Currently, the Directors are provided with summary financial
information, including a balance sheet, profit and loss and cash
flow information.
The Board is aware of the importance of an effective risk
management process reflective of the size and complexity of the
business and believes that the processes described above are
suitable for the business in its current form. At or around the
time an operating business is acquired, the Board will review the
risks to which the new enlarged group is exposed, and an enhanced
risk management process will be put in place.
Company Culture
The Board promotes a dynamic, entrepreneurial and transparent
culture. The recruitment of highly skilled, adaptable, driven and
experienced directors are fundamental to executing the Company's
strategy. The Board therefore fosters a forum whereby openness,
constructive challenge and innovation are actively encouraged.
The Company is small, and as at the date of this report consists
of three directors. The Company's culture is therefore set by the
Board and demonstrated through Board interaction. The Chairman in
his role of leading the Board, managing Board meetings and
encouraging constructive challenge between Board members is central
to setting the tone from the top.
Once additional directors are appointed, a Board effectiveness
review will be the key method in which the Company's culture is
monitored and reviewed.
Succession Planning
Given the size, composition and nature of the Company at this
stage in its evolution, the creation and implementation of
succession plans are not considered to be appropriate or relevant
and as such no succession planning is in place. Once an initial
acquisition has been made, succession planning will be revisited by
the Board.
Directors' Terms of Service
The Articles of Association of the Company require that, at each
annual general meeting of the Company, one third of the Directors
retire from office and offer themselves for re-election, and each
Director shall retire from office and stand for re-election at
least every three years. Furthermore, each Director appointed in
the period since the previous annual general meeting shall stand
for election at the subsequent annual general meeting. Accordingly,
Sanjeev Gandhi will retire from office at the Company's forthcoming
annual general meeting and seek to be re-elected by the Company's
shareholders. The Company is satisfied that Sanjeev Gandhi's
performance is effective and demonstrates his commitment to the
role and as such supports his re-election.
The Directors' service contracts establish the time commitment
each Director must devote to the Company. Mark Brangstrup Watts and
James Corsellis are to devote the time necessary to ensure the
proper performance of their duties. Sanjeev Gandhi's time
commitment is expected to be a minimum of two to three days per
month, however, is expected to increase during times of increased
activity.
Continued Professional Development
The Board considers and reviews the requirement for continued
professional development. The Board undertakes to ensure that their
awareness of developments in corporate governance and the
regulatory framework is current, as well as remaining knowledgeable
of any industry specific updates. The Company's professional
advisers and Nomad all serve to strengthen this development by
providing guidance and updates as required.
Chairman
The Chairman is responsible for leading the Board effectively
and overseeing the adoption, delivery and communication of the
company's corporate governance model. The Chairman displays a clear
vision and focus on strategy, capitalising on the skills,
experience, characteristics and qualities of the Board and
fostering a positive governance culture throughout the Group.
Company Secretary
The QCA Code provides details on the roles and responsibilities
of the Company Secretary within a Company. The Company Secretary
for the Group is Crestbridge Corporate Services Limited
("Crestbridge") which was appointed on 31 December 2020,
Crestbridge is supported by Marwyn Capital LLP ("MCLLP") which
provides company secretarial and governance support.
Together, Crestbridge and MCLLP perform the function of Company
Secretary as outlined in the Code. The role includes preparing for
and running effective Board and Committee meetings, including the
timely dissemination of appropriate information. In addition, the
Company Secretary is responsible for assisting the Directors in
ensuring that the Group entities are managed, controlled and
administered within the parameters of their governing documents and
are compliant with regulatory compliance and filing
obligations.
Marwyn Capital LLP further supports the role of Crestbridge
ensuring open lines of communication between all professional
advisers, shareholders and the Board.
External Advisors
Since listing, the Company has pursued its investment strategy
and as such has engaged several advisors to facilitate this. A list
of current key external service providers is included on page
42.
Relationships with key resources and external advisers are
developed and maintained through an open dialogue to ensure that
the Company is able to draw upon their expertise and assistance
when required.
Conflicts of Interest
The Articles of Association of the Company provide for a
procedure for the disclosure and management of risks associated
with Directors' conflicts of interest. At each Board meeting, a
list of directorships for each Director is tabled to the meeting
with any potential conflicts being discussed in detail.
Notwithstanding that no material conflict of interest has arisen
during the year and to date, the Board considers these procedures
to have operated effectively.
Relations with Shareholders
The Board is always available for communication with
shareholders and the Executive Directors frequently encourage
engagement constructively with current and potential shareholders.
All shareholders have the opportunity, and are encouraged, to
attend and vote at the annual general meeting of the Company during
which the Board will be available to discuss issues affecting the
Company.
Annual General Meeting
The AGM is an opportunity for shareholders to vote on certain
aspects of the Company's business. The next AGM of the Company will
be scheduled in due course and held on or before 31 December 2022.
The Financial Statements and related papers will be available on
the Company's website at www.marwynacplc.com .
GOVERNANCE - AUDIT AND RISK COMMITTEE REPORT
Audit and Risk
I present the Audit and Risk Committee Report for the year ended
30 June 2022. I have chaired the committee since my appointment on
24 May 2022, prior to my appointment Mark Brangstrup Watts was
chair of the committee. Mark Brangstrup Watts continues to serve as
a member of the committee and James Corsellis resigned as a member
of the Committee on 24 May 2022. The roles and responsibilities of
the Audit and Risk Committee are set out in its terms of reference,
which are available on the Company's website and from the Company
Secretary. The Audit and Risk Committee are responsible for
the:
-- review and challenge of the risk identification and risk
management process across the business including the risks in
connection with a potential acquisition;
-- management of relations with the external auditor to ensure
that the annual audit is effective, objective, independent and of
high quality;
-- oversight of the relationship with the external auditor to
ensure it remains appropriate and, that the service is
appropriately priced; and
-- review of the Company's draft corporate reporting, including
the annual report and financial statements.
The Audit and Risk Committee has met three times in the year to
30 June 2022. The key matters we have discussed during this period
were the:
-- review of the Company's annual report and financial
statements for the year to 30 June 2021, including the Audit and
Risk Committee Report;
-- review of the Company's interim financial statements for the
six-month period ended 31 December 2021
-- review of the audit planning documentation, reporting
timeline and audit fees for the 30 June 2022 year end audit;
-- review of risk identification and risk management processes,
including review of updates to the Company's risk register;
-- review of updates to the Company's Financial Position and
Prospects Procedures Memorandum and revised QCA Code summary,
including related updates made to the Company's website following
the appointment of myself;
-- review and consideration the Company's policies and
procedures including Market Abuse Regulations policy, the
associated share dealing code, tax evasion risk assessment and
whistleblowing policy; and
-- consideration of the need for an internal audit department.
In addition to the above, the Audit and Risk Committee
recommended the re-appointment of Baker Tilly Channel Islands
Limited as the Company's external auditor. Auditor independence,
reputation, experience and fee quote among other factors were
considered by the Board in determining the external auditor
appointment. The total amount recognised for non-audit services
during the year was GBPnil.
Subsequently to 30 June 2022, in respect of the Financial
Statements, the Audit and Risk Committee evaluated the audit
process and the external auditor, reviewed the going concern
assumption, and considered whether the Annual Report and Financial
Statements are fair, balanced and understandable. As part of the
review, the Board received a report from the external auditor on
its audit.
Sanjeev Gandhi
Committee Chairman
8 September 2022
GOVERNANCE - NOMINATION AND REMUNERATION REPORT
Nomination and Remuneration Committee Chairman's Statement
I present the Nomination and Remuneration Report for the year
ended 30 June 2022. The Report includes a summary of the
committee's work during the year, details of the Company's
application of its remuneration philosophy, and amounts earned by
the Directors during the current year.
I have chaired the committee since my appointment on 24 May
2022, prior to my appointment Mark Brangstrup Watts was chair of
the committee. Mark Brangstrup Watts continues to serve as a member
of the committee and James Corsellis resigned from his role as a
member of the Committee on 24 May 2022.
The roles and responsibilities of the Nomination and
Remuneration Committee are set out in its terms of reference, which
are available on the Company's website and from the Company
Secretary. The Nomination and Remuneration Committee are
responsible for making recommendations to the Board for the matters
set out in its terms of reference, whilst the responsibility for
establishing the Company's overall approach to remuneration lies
with the Board.
During the year, prior to my appointment, the Nomination and
Remuneration Committee met twice. The committee discussed and
agreed the nomination and remuneration report included in the 30
June 2021 annual report and financial statements and undertook the
recruitment process to appoint a high quality independent
non-executive director to support the company in achieving its
stated strategy. Following this process, I was appointed as an
Independent non-executive director and as the chairman of both the
Audit and Risk and Nomination and Remuneration Committees. The
existing committee members at that time were also responsible for
agreeing the terms of my appointment including remuneration, based
on market data for comparable roles.
Looking Forward
Given the current nature and activities of the Company there are
no significant proposed changes to the executive director
remuneration packages for the year ahead. However, to the extent
that the nature and size of the business changes going forward, the
Board composition will be revisited and appointments reflective of
the roles undertaken.
Sanjeev Gandhi
Committee Chairman
8 September 2022
Introduction to Directors' Remuneration Report
The information included in this report is not subject to audit
unless specifically indicated.
The remuneration philosophy of the Company is that executive
remuneration should be aligned with the long-term interest of the
shareholders. The Company also believes that remuneration should be
proportionate, transparent, performance based, encourage
sustainable value creation and support the delivery of the business
strategy by attracting the highest calibre personnel. This
philosophy is reflected in our remuneration structure.
The Board feels very strongly that the Directors' remuneration
should be linked to the creation and delivery of attractive returns
to shareholders. Although the Board feels it is important to
remunerate senior executives through their basic pay and benefits
at market levels commensurate with their peers, the participation
share scheme currently in place was designed to provide ongoing
remuneration in alignment with shareholders' interests. The
participation share scheme has been in place since before the
Company's IPO, however, given the capital deployed in the
unsuccessful pursuit of transactions under the previous investment
strategy focused on opportunities in the specialty chemical sector,
the scheme is no longer considered fit-for-purpose in providing a
suitable and market competitive long term incentive to attract and
retain industry-leading Management Partners to deliver future
growth for shareholders. As such, it is intended that a new
participation scheme be put in place at the time of appointing a
Management Partner or an acquisition opportunity with an impressive
incumbent management team. The new participation scheme will be
designed on the same general principles as the current scheme,
these are detailed below.
Participation Share Scheme
The Directors believe that the success of the Company will
depend to a high degree on the future performance of its management
team. The Company has established incentive arrangements which will
only reward the participants if shareholder value is created,
thereby aligning the interests of management directly with those of
shareholders (the "Participation Share Scheme"). It is intended
that an updated Participation Share Scheme be put in place at the
time of appointing a Management Partner or an acquisition
opportunity with an impressive incumbent management team. The
Company's prior year financial statements set out the details of
the existing Participation Share Scheme, and are available on the
Company's website, and are therefore not detailed within this
report.
Mark Brangstrup Watts and James Corsellis have an indirect
beneficial interest in the existing Participation Share Scheme, as
disclosed in note 17.
The existing Participation Share Scheme and any replacement
scheme will be designed to align the Company's shareholders'
interests and the shareholders' expected typical ownership period,
and which reflects the high competition for the best executive
management, often against private equity firms offering these
executives carried interest structures and other structures found
in listed companies. The general principles of the Company's
compensation strategy for the new Participation Share Scheme will
be:
-- Proportionate: to the role being undertaken by the
participants and reflecting the participants' value to delivering
outstanding, sustainable shareholder returns;
-- Transparent: the compensation structure and its associated
terms should be transparent to investors and the impact of the
scheme clearly communicated to investors on an ongoing basis;
-- Performance Based: minimum performance criteria should be
based on equity profits generated, taking into account all equity
issuance over the lifetime of the relevant measurement period,
subject to minimum preferred returns; and
-- Encourage Sustainable Value Creation: incentive arrangements
should be structured to encourage the creation of sustainable
returns through long term vesting and performance measurement
periods.
The Board strongly believes that such a clear and transparent
incentive framework will be aligned with the Company's strategy for
growth and provides a strong platform for the future success of the
Company.
More detail on the existing Participation Share Scheme is
included in note 17 of these Financial Statements.
Directors' Basic and Performance Related Pay:
The below table sets out the remuneration of each Director
during the year and prior period:
For the year ended 30 June 2022 James Corsellis Mark Brangstrup Sanjeev Gandhi
GBP'000 Watts (appointed 24 May 2022)
GBP'000 GBP'000
Salary 8 8 5
================ ================ =========================
8 8 5
================ ================ =========================
For the year ended 30 June James Corsellis Mark Brangstrup
2021 GBP'000 Watts
GBP'000
Salary 8 8
================ ================
8 8
================ ================
There was no change to the remuneration package of James
Corsellis and Mark Brangstrup Watts during the year. Neither James
nor Mark receive any taxable benefits.
Sanjeev Gandhi was appointed as a Non Executive Director on 24
May 2022. His annual salary is GBP50,000 which is considered to be
market rate for an independent non-executive director of a business
of this nature.
Director Service Contract Provisions
New director and senior management service contracts are
prepared alongside the Company's legal counsel, and new
practices/guidance are considered at the point these are
drafted.
The employment contracts set out clearly the notice period,
termination clauses and claw black clauses for each of the
Directors. In all instances directors are required to step down
from their position should this be voted for by the
shareholders.
Shareholder Vote
At the 2021 AGM, 99.99% of shareholders who voted on the
resolution for the re-election of James Corsellis voted in
favour.
Performance Evaluation
Set out on page 9 of the Report of the Directors, the Directors
consider that the board is not yet of a sufficient size for a full
board evaluation to make commercial and practical sense. In
frequent Board meetings and calls, the Directors can discuss any
areas where they feel a change would be beneficial for the Company,
and the Company Secretary and specialist external advisers remain
on hand to provide impartial advice. As the Company grows, it
intends to expand the composition of the Board and, with this
expansion, intends to establish a formal board effectiveness
review.
Comparison Against Market Performance
The Company does not yet own an operating business, and as such
an illustration of the Company's share price as a comparison to the
market is not presented within this report. No performance related
bonuses have been paid within the year or prior year.
Risks
The Board are mindful of the potential risks associated with its
remuneration policy. The Board aims to provide a structure that
encourages an acceptable level of risk-taking (by benchmarking
against shareholder returns) and an optimal remuneration mix. The
Board has considered the risk involved in the Participation Share
Scheme and is satisfied that the Company's governance procedures
mitigate these risks appropriately.
The Board seeks to ensure that its approach to remuneration
drives behaviour aligned to the long-term interests of the Company
and its shareholders.
Looking Ahead
The Directors are seeking to identify a sector-leading
Management Partner in advance of an initial Acquisition or identify
acquisition opportunities with impressive incumbent management
teams.
Once the Company has made its first acquisition, the objectives
of the enlarged Group will be established; at this point the
Directors' service contracts will be revisited and as part of this
process the Nomination and Remuneration Committee will consider the
most appropriate key performance indicators for the Directors.
On behalf of the Board
Sanjeev Gandhi
Committee Chairman
8 September
2022
INDEPENT AUDITOR'S REPORT
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF MARWYN ACQUISITION
COMPANY PLC
Opinion
We have audited the consolidated financial statements of Marwyn
Acquisition Company PLC (the "Company" and, together with its
subsidiary WHJ Limited, the "Group"), which comprise the
consolidated statement of financial position as at 30 June 2022,
and the consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying consolidated financial
statements:
-- give a true and fair view of the consolidated financial
position of the Group as at 30 June 2022, and of its consolidated
financial performance and its consolidated cash flows for the year
then ended in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs); and
-- have been prepared in accordance with the requirements of the
Companies (Jersey) Law 1991, as amended.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are
relevant to our audit of the consolidated financial statements in
Jersey, including the FRC's Ethical Standard, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, are of most significance in our audit of the
consolidated financial statements of the current period and include
the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of
the engagement team. We have determined that there are no key audit
matters to be communicated in our report.
Our Application of Materiality
Materiality for the consolidated financial statements as a whole
was set at GBP120,000 (PY: GBP52,000), determined with reference to
a benchmark of Net Assets, of which it represents 2.5% (PY: 1% of
Gross Assets).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an
acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a material
amount across the consolidated financial statements as a whole.
Performance materiality was set at 70% (PY: 70%) of materiality
for the consolidated financial statements as a whole, which equates
to GBP84,000 (PY: GBP36,000). We applied this percentage in our
determination of performance materiality as the Company is listed
on AIM of the London Stock Exchange which raises our risk
profile.
We report to the Audit and Risk Committee any uncorrected
omissions or misstatements exceeding GBP6,000 (PY: GBP2,600), as
well as those that warranted reporting on qualitative grounds.
In addition, we have allocated specific materiality for
administrative expenses, other receivables and trade and other
payables. We considered a threshold of GBP6,500 to be an indicator
of materiality for these specific areas based on 1.8% of total
expenses. Specific materiality has been used in these areas due to
their lower value and to ensure we have performed adequate audit
work in these areas. The specific performance materiality for these
areas was also set at 70% and equates to GBP4,500. We report, to
the Audit and Risk Committee, all corrected and uncorrected
misstatements we identified through our audit, in these areas, with
a value in excess of GBP300 as well as other audit misstatements
below that threshold that we believe warranted reporting on
qualitative grounds.
Conclusions relating to Going Concern
In auditing the consolidated financial statements, we have
concluded that the Directors' use of the going concern basis of
accounting in the preparation of the consolidated financial
statements is appropriate.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and Company's ability to continue as a going concern for a
period of at least twelve months from when the consolidated
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Other Information
The other information comprises the information included in the
annual report other than the consolidated financial statements and
our auditor's report thereon. The Directors are responsible for the
other information contained within the annual report. Our opinion
on the consolidated financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our
knowledge obtained in the course of the audit, or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in
the consolidated financial statements themselves. If, based on the
work performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to Report by Exception
In the light of the knowledge and understanding of the Group and
its environment obtained in the course of the audit, we have not
identified material misstatements in the Directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies (Jersey) Law 1991, as amended,
requires us to report to you if, in our opinion:
-- proper accounting records have not been kept;
-- proper returns adequate for the audit have not been received
from branches not visited by us;
-- the consolidated financial statements are not in agreement
with the accounting records and returns; or
-- we have not obtained all information and explanation that, to
the best of our knowledge and belief, was necessary for the
audit.
Responsibilities of the Directors
As explained more fully in the Statement of Directors'
responsibilities statement set out on pages 6 and 7 the Directors
are responsible for the preparation of consolidated financial
statements that give a true and fair view in accordance with IFRSs,
and for such internal control as the Directors determine is
necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, the
Directors are responsible for assessing the Group and Company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and
using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or
has no realistic alternative but to do so.
The Directors are responsible for overseeing the Group's
financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
an auditor's report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these
consolidated financial statements.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below:
-- Enquiry of management to identify any instances of
non-compliance with laws and regulations, including actual,
suspected or alleged fraud;
-- Reading minutes of meetings of the Board of Directors;
-- Review of legal invoices;
-- Review of management's significant estimates and judgements for evidence of bias;
-- Review for undisclosed related party transactions;
-- Obtain and review ledgers and minutes to ensure revenue is
complete and as per our expectation;.
-- Using analytical procedures to identify any unusual or unexpected relationships; and
-- Undertaking journal testing, including an analysis of manual
journal entries to assess whether there were large and/or unusual
entries pointing to irregularities, including fraud.
A further description of the auditor's responsibilities for the
audit of the financial statements is located at the Financial
Reporting Council's website at
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor's report.
Use of this Report
This report is made solely to the Members of the Company, as a
body, in accordance with Article 113A of the Companies (Jersey) Law
1991, as amended. Our audit work has been undertaken so that we
might state to the Members those matters we are required to state
to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and its Members, as
a body, for our audit work, for this report, or for the opinions we
have formed.
Sandy Cameron
For and on behalf of Baker Tilly Channel Islands Limited
Chartered Accountants
St Helier, Jersey
Date 8 September 2022
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
30 June 30 June
2022 2021
Note GBP'000 GBP'000
Administrative expenses 7 359 699
----------- -----------
Operating loss 359 699
Finance income 5 - 1
Loss before income taxes 359 698
----------- -----------
Income tax 8 - -
----------- -----------
Loss for the year 359 698
=========== ===========
Loss per ordinary share GBP GBP
Basic and diluted 8 (0.0005) (0.001)
The Group's activities derive from continuing operations.
The notes on pages 26 to 36 form an integral part of these
Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at
30 June 2022 30 June 2021
Note GBP'000 GBP'000
Assets
Current assets
Other receivables 11 25 29
Cash and cash equivalents 12 4,846 5,222
Total current assets 4,871 5,251
Total assets 4,871 5,251
============= =============
Equity and liabilities
Equity
Stated capital 14 30,792 30,792
Share-based payment reserve 15 205 205
Accumulated losses (26,196) (25,837)
------------- -------------
Total equity attributable
to equity holders 4,801 5,160
Current liabilities
Trade and other payables 13 70 91
------------- -------------
Total liabilities 70 91
-------------
Total equity and liabilities 4,871 5,251
============= =============
The notes on pages 26 to 36 form an integral part of these
Financial Statements.
The Financial Statements were approved by the Board of Directors
on 8 September 2022 and were signed on its behalf by:
James Corsellis Mark Brangstrup Watts
Chairman Executive Director
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share based
Stated payment Accumulated Total
capital reserve losses equity
---------- ------------ ------------ --------
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 July
2020 30,792 205 (25,139) 5,858
Loss and total comprehensive
loss for the year - - (698) (698)
---------- ------------ ------------ --------
Balance as at 30 June
2021 30,792 205 (25,837) 5,160
========== ============ ============ ========
Share based
Stated payment Accumulated Total
capital reserve losses equity
---------- ------------ ------------ --------
GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 July
2021 30,792 205 (25,837) 5,160
Loss and total comprehensive
loss for the period - - (359) (359)
---------- ------------ ------------ --------
Balance as at 30 June
2022 30,792 205 (26,196) 4,801
========== ============ ============ ========
The notes on pages 26 to 36 form an integral part of these
Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the For the year
year ended ended
30 June 30 June
Note 2022 2021
GBP'000 GBP'000
Operating activities
Loss for the period (359) (698)
Adjustments to reconcile
total operating loss to net
cash flows:
Deduct finance income - (1)
Working capital adjustments:
Decrease/(increase) in receivables 4 (9)
Decrease in trade and other
payables (21) (33)
Interest received - 1
Net cash flows used in operating
activities (376) (740)
------------ -------------
Net decrease in cash and cash
equivalents (376) (740)
Cash and cash equivalents
at the beginning of the year 5,222 5,962
------------ -------------
Cash and cash equivalents
at the end of the year 11 4,846 5,222
============ =============
The notes on pages 26 to 36 form an integral part of these
Financial Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Marwyn Acquisition Company Plc (the "Company"), an "investing
company" for the purposes of the AIM Rules for Companies ("AIM
Rules"), is incorporated in Jersey (company number 123424) and
domiciled in the United Kingdom. It is a public limited company
with its registered office at 47 Esplanade, St Helier, Jersey, JE1
0BD and is registered as a UK establishment (BR019423) with its
address at 11 Buckingham Street, London, WC2N 6DF. The Company is
the parent of one subsidiary (together with the Company,
collectively the "Group") as detailed in note 10. The activity of
the Company is the acquisition and subsequent development of assets
engaged in the industrials, manufacturing, engineering,
construction, building products or support services sectors.
2. ACCOUNT ING POLICIES
(a) Basis of preparation
The Financial Statements for the year ended 30 June 2022 and the
comparative year to 30 June 2021 have been prepared in accordance
with International Financial Reporting Standards and IFRS
Interpretations Committee interpretations as adopted by the
European Union (collectively, "IFRS") and are presented in British
pounds sterling, which is the functional currency and
presentational currency of the Company. All values are rounded to
the nearest thousand (GBP000) except where otherwise indicated. The
Financial Statements have been prepared under the historical cost
convention.
The principal accounting policies adopted in the preparation of
the Financial Statements are set out below. The policies have been
consistently applied throughout the periods presented.
(b) Going concern
The Financial Statements have been prepared on a going concern
basis, which assumes that the Group will continue to be able to
meet its liabilities as they fall due for the foreseeable future.
The Group has net assets of GBP4.9m at the statement of financial
position date, which includes cash of GBP4.8m. The Directors are
confident that prior to completing a transaction, the Covid-19
pandemic has no material impact on the Group due to the nature of
its operations and that the entity is able to continue through any
periods of restricted movement. The Directors have also considered
the macro environmental factors that have impacted both the global
and domestic economy in recent months, in particular the war in
Ukraine and the inflationary pressure to the UK economy. The
Directors are comfortable that the Company has significant and
sufficient cash reserves to pursue its investment strategy and have
concluded that it remains appropriate to use the going concern
basis of accounting for the Financial Statements. Subject to the
structure of an acquisition, the Company may need to raise
additional funds for an acquisition in the form of equity and/or
debt.
(c) New standards and amendments to International Financial Reporting Standards
Standards, amendments and interpretations effective and adopted
by the Group:
The accounting policies adopted in the presentation of these
Financial Statements reflect the adoption of the below listed new
standards, amendments and interpretations effective for periods
beginning on or after 1 January 2021: Interest rate benchmark
reform (Phase 2 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and
IFRS 16) and Covid-19 related rent concessions (Amendments to IFRS
16 and amendments to IFRS 4 Insurance Contracts - deferral of IFRS
9). None of these new standards, amendments or interpretations have
had a material impact on the Group.
Standards, amendments and interpretations issued but not yet
effective:
The following standards are issued but not yet effective. The
Group intends to adopt these standards, if applicable, when they
become effective. It is not currently expected that these standards
will have a material impact on the Group.
Standard Effective
date
Onerous Contracts - Cost of Fulfilling a Contract 1 January
(Amendments to IAS 37); 2022
Property, Plant and Equipment: Proceeds before 1 January
Intended Use (Amendments to IAS 16); 2022
Annual Improvements to IFRS Standards 2018-2020 1 January
(Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 2022
41);
Amendments to IFRS 3: References to Conceptual 1 January
Framework; 2022
Amendments to IAS 1 Presentation of Financial 1 January
Statements: Classification of Liabilities as Current 2023
or Non-current*;
Disclosure of accounting policies (Amendments 1 January
to IAS 1); 2023
Extension of temporary exemption of applying IFRS 1 January
9 (Amendments to IFRS 4) 2023
Deferred Tax relating to Assets and Liabilities 1 January
arising from a Single Transaction (Amendments 2023
to IAS 12);
Initial Application of IFRS 17 and IFRS 9 - Comparative 1 January
Information Amendment to IFRS 17)*; 2023
Definition of accounting estimates (Amendments 1 January
to IAS 8); 2023
Amendments to IFRS 17 Insurance contracts 1 January
2023
* Subject to EU endorsement
(d) Basis of consolidation
Subsidiaries are entities controlled by the Company. Control
exists when the Company is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. The
financial information of subsidiaries is fully consolidated from
the date that control commences until the date that control
ceases.
Intragroup balances, and any gains and losses or income and
expenses arising from intragroup transactions, are eliminated in
preparing the consolidated financial information.
(e) Financial instruments - initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as
subsequently measured at fair value through profit or loss
("FVPL"), amortised cost, or fair value through other comprehensive
income ("FVOCI").
The classification of financial assets at initial recognition
depends on the financial asset's contractual cash flow
characteristics and the Group's business model for managing them.
In order for a financial asset to be classified and measured at
amortised cost or FVOCI, it needs to give rise to cash flows that
are 'solely payments of principal and interest' on the principal
amount outstanding (the "SPPI Criterion").
Financial assets are initially measured at their fair value
plus, for those financial assets not at fair value through profit
or loss, transaction cost.
Subsequent measurement
For the purposes of subsequent measurement, all of the Group's
financial assets to date have been classified as financial assets
at amortised cost. Financial assets at amortised cost comprise of
assets that are held within a business model with the objective to
hold the financial assets in order to collect contractual cash
flows that meet the SPPI Criterion. This category includes the
Group's cash and cash equivalents and other receivables. These
assets are subsequently measured at amortised cost using the
effective interest method. The amortised cost is reduced by
impairment losses, interest income, foreign exchange gains and
losses and impairment losses are recognised in profit or loss. Any
gain or loss on derecognition is recognised in profit or loss.
The Group has not classified any assets as being financial
assets at FVOCI or FVPL.
Derecognition
A financial asset is primarily derecognised and removed from the
consolidated statement of financial position when the rights to
receive cash flows from the asset have expired.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings or as payables, as appropriate. All financial
liabilities are recognised initially at fair value and, in the case
of payables, net of directly attributable transaction costs. The
Group's financial liabilities comprise of trade and other
payables.
Subsequent measurement
Financial liabilities are subsequently measured at amortised
cost and in the case of interest-bearing financial liabilities at
amortised cost using the effective interest rate method. Gains and
losses are recognised in the Statement of Comprehensive Income when
the liabilities are derecognised.
Derecognition
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash balances at banks.
(g) Stated capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are recognised in
stated capital as a deduction from the proceeds.
(h) Corporation tax
Corporation tax for the period presented comprises current and
deferred tax.
Current tax is the expected tax payable on the taxable income
for the period. Taxable profit differs from profit reported in the
consolidated statement of comprehensive income because some items
of income and expense are taxable or deductible in different years,
or may never be taxable or deductible. Current tax is the expected
tax payable on the taxable income for the period. The Group's
current tax is calculated using tax rates enacted or substantially
enacted at the balance sheet date, and any adjustment to taxes
payable in respect of previous periods.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised. Deferred tax assets are reduced to
the extent that it is no longer probable that the related tax
benefit will be realised.
(i) Loss per ordinary share
The Group presents basic earnings per ordinary share ("EPS")
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is calculated by
adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary
shares.
(j) Share based payments
The A1 Shares in WHJ Limited ("WHJL") (the "A1 Shares" or the
"Participation Shares") and the A2 Shares in WHJL (the "A2 Shares")
represent equity-settled share-based payment arrangements under
which the Group receives services as a consideration for the
additional rights attached to these equity shares, over and above
their nominal price.
Equity-settled share-based payments to certain of the Directors
and others providing similar services are measured at the fair
value of the equity instruments at the grant date. The fair value
is expensed, with a corresponding increase in equity, on a
straight-line basis from the grant date to the expected exercise
date. Where the equity instruments granted are considered to vest
immediately, the services are deemed to have been received in full,
with a corresponding expense and increase in equity recognised at
grant date.
The dilutive effect of outstanding share-based payments is
reflected as share dilution in the computation of diluted EPS.
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group's Financial Statements under IFRS
requires the Directors to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
Significant estimates
For the year ended 30 June 2022 and the comparative year end,
the Directors do not consider that they have made any significant
estimates which would materially affect the balances and results
reported in these Financial Statements.
Significant judgements
For both the year ended 30 June 2022 and the comparative year
end, the Directors do not consider that they have made any
significant judgements which would materially affect the balances
and results reported in these Financial Statements.
4. SEGMENT INFORMATION
The Board of Directors is the Group's chief operating
decision-maker. As the Group has not yet acquired an operating
business, the Board of Directors considers the Group as a whole for
the purposes of assessing performance and allocating resources, and
therefore the Group has one reportable operating segment.
5. FINANCE INCOME
For the year For the year
ended 30 June ended 30 June
2022 20 21
GBP'000 GBP'000
Interest on bank deposits - 1
-------------- --------------
- 1
============== ==============
6. EMPLOYEES AND DIRECTORS
(a) Employment costs for the Group during the year:
For the year For the year
ended 30 June ended 30 June
2022 2021
GBP'000 GBP'000
Wages and salaries 22 16
Social security costs 1 -
--------------- ---------------
Total employment costs expense 23 16
=============== ===============
Included within wages and salaries is GBP22,000 for director
fees, which were paid to James Corsellis, Mark Brangstrup Watts and
Sanjeev Gandhi (2021: GBP16,000).
(b) Key management compensation
The Board considers the Directors of the Company to be the key
management personnel of the Group. Details of the amounts paid to
key management personnel are detailed in the Nomination and
Remuneration Report on pages 15 to 18.
(c) Employed persons
The average monthly number of persons employed by the Group
(including Directors) during the year was as follows:
For the year For the year
ended 30 June ended 30 June
2022 2021
number number
Directors 2 2
2 2
============== ==============
7. ADMINISTRATIVE EXPENSES
For the year For the year
ended 30 June ended 30 June
2022 2021
GBP'000 GBP'000
Group expenses by nature
Employment costs 23 16
Office costs - 1
Professional support 327 672
Other expenses 9 10
--------------- ---------------
359 699
=============== ===============
8. INCOME TAX
For the year For the year
ended 30 June ended 30 June
2022 2021
GBP'000 GBP'000
Analysis of tax in period
Current tax on profits for the period - -
--------------- ---------------
Total current tax - -
=============== ===============
Reconciliation of effective rate and tax charge:
For the year For the year
ended 30 June ended 30 June
2022 2021
GBP'000 GBP'000
Loss on ordinary activities before tax (359) (698)
--------------- ---------------
Loss on ordinary activities multiplied by the rate of (68) (133)
corporation tax in the UK of 19% (2021: 19%)
Effects of:
Expenses not deductible for tax - 13
Tax losses not utilised 68 120
Total taxation charge - -
=============== ===============
The Group is tax resident in the UK. As at 30 June 2022,
cumulative tax losses available to carry forward against future
trading profits were GBP26.2m (2021: GBP25.8m) subject to agreement
with HM Revenue & Customs. Prior to an initial Acquisition,
there is no certainty as to future profits and no deferred tax
asset is recognised in relation to these carried forward losses.
Under UK Law, there is no expiry for the use of tax losses.
9. LOSS PER ORDINARY SHARE
Basic EPS 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 period. Diluted EPS is
calculated by adjusting the weighted average number of ordinary
shares outstanding to assume conversion of all dilutive potential
ordinary shares. The weighted average number of shares has not been
adjusted in calculating diluted EPS as there are no instruments
which have a current dilutive effect.
Refer to note 17 for instruments that could potentially dilute
basic EPS in the future.
For the year For the year
ended 30 June ended 30 June
2022 2021
Loss attributable to owners of the parent (GBP'000) (359) (698)
Weighted average number of ordinary shares in issue 670,833,336 670,833,336
Weighted average number of ordinary shares for diluted EPS 670,833,336 670,833,336
Basic and diluted loss per ordinary share (GBP) (0.0005) (0.001)
10. SUBSIDIARY
Subsidiary undertaking of the Group
The Company owns, directly or indirectly, the whole of the
issued and fully paid ordinary share capital of its subsidiary
undertaking. The subsidiary undertaking of the Company as at 30
June 2022 is:
Proportion of ordinary Proportion of ordinary
Subsidiary Nature of business Country of incorporation shares held by parent shares held by the Group
-------------- -------------------- -------------------------- ------------------------- -------------------------
WHJ Limited Incentive vehicle Jersey 100% 100%
There are no restrictions on the Company's ability to access or
use the assets and settle the liabilities of the Company's
subsidiary.
The registered office of WHJ Limited is 47 Esplanade, St Helier,
Jersey, JE1 0BD.
11. OTHER RECEIVABLES
As at As at
30 June 30 June
2022 2021
GBP'000 GBP'000
Amounts receivable within one year:
Prepayments 19 19
VAT receivable 6 10
--------- ---------
25 29
========= =========
12. CASH AND CASH EQUIVALENTS
As at As at
30 June 30 June
2022 2021
GBP'000 GBP'000
Cash and cash equivalents
Cash at bank 4,846 5,222
--------- ---------
4,846 5,222
========= =========
Credit risk arises from cash and cash equivalents and deposits
with banks and financial institutions. For banks and financial
institutions, only independently rated parties with a minimum
short-term credit rating of P-1, as issued by Moody's, are
accepted.
13. TRADE AND OTHER PAYABLES
As at As at
30 June 30 June
2022 2021
GBP'000 GBP'000
Amounts falling due within one year:
Trade payables 39 53
Accruals 31 38
--------- ---------
70 91
========= =========
14. STATED CAPITAL
As at As at
30 June 30 June
2022 2021
Authorised
Unlimited ordinary shares of no par value - -
Issued
Ordinary shares of no par value 670,833,336 670,833,336
Stated capital (GBP'000) 30,792 30,792
The holders of ordinary shares are entitled to receive dividends
as declared and are entitled to one vote per ordinary share at
meetings of the Company.
15. RESERVES
The following describes the nature and purpose of each reserve
within shareholders' equity:
Accumulated losses
Cumulative losses recognised in the Consolidated Statement of
Comprehensive Income.
Share based payment reserve
The share based payment reserve is the cumulative amount
recognised in relation to the equity-settled share based payment
scheme as further described in note 17.
16. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The Group has the following categories of financial instruments
as at 30 June 2022:
As at As at
30 June 30 June
2022 2021
GBP'000 GBP'000
Financial assets measured at amortised cost
Cash and cash equivalents 4,846 5,222
4,846 5,222
--------- ---------
Financial liabilities measured at amortised cost
Trade payables 70 91
--------- ---------
70 91
========= =========
All financial instruments are classified as current assets and
current liabilities. There are no non-current financial instruments
as at 30 June 2022 (Nil: 30 June 2021).
The fair value and book value of the financial assets and
liabilities are materially equivalent.
The Group has exposure to the following risks from its use of
financial instruments:
-- Market risk;
-- Liquidity risk; and
-- Credit risk
This note presents information about the Group's exposure to
each of the above risks and the Group's objectives, policies and
processes for measuring and managing these risks.
The Group's risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk
limits and controls and to monitor risks and adherence limits. Risk
management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group's activities.
Treasury activities are managed on a Group basis under policies
and procedures approved and monitored by the Board. These are
designed to reduce the financial risks faced by the Group which
primarily relate to movements in interest rates.
Market risk
The Group's activities primarily expose it to the risk of
changes in interest rates due to the significant cash balance held;
however, any change in interest rates wi ll not have a material
effect on the Group. The Group's operations are predominately in
GBP, its functional currency and accordingly minimal translation
exposures arise in receivables or payables.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the
Group's reputation. The Group currently meets all liabilities from
cash reserves.
Credit risk
Credit risk is the risk that one party to a financial instrument
will cause a financial loss for the other party by failing to
discharge an obligation. The main credit risk relates to the cash
held with financial institutions. The Company manages its exposure
to credit risk associated with its cash deposits by selecting
counterparties with a high credit rating with which to carry out
these transactions. The counterparty for these transactions is
Barclays Bank plc, which holds a short-term credit rating of P-1,
as issued by Moody's. The Group's maximum exposure to credit risk
is the carrying value of the cash on the Consolidated Statement of
Financial Position.
Capital management
The Board's policy is to maintain a strong capital base so as to
maintain creditor and market confidence and to sustain future
development of the business. Capital includes stated capital, and
all other equity reserves attributable to the equity holders of the
Company and totals GBP4.9 million as at 30 June 2022 (GBP5.2
million as at 30 June 2021). There were no changes in the Group's
approach to capital management during the year and the Company's
capital management policy will be revisited once an initial
acquisition has been identified.
17. SHARE-BASED PAYMENTS
As set out on page 16 in the Directors' Remuneration Report it
is intended that an updated Participation Share Scheme be put in
place at the time of appointing a Management Partner or an
acquisition opportunity with an impressive incumbent management
team. The Company's prior year financial statements set out the
details of the existing Participation Share Scheme, and are
available on the Company's website, and are therefore not detailed
within this report.
The only shares in issue under the existing Participation Share
Scheme have been issued to Marwyn Long Term Incentive LP (" MLTI
"), in which James Corsellis and Mark Brangstrup Watts are
beneficially interested. MLTI has subscribed for all of the A2
Shares in WHJL (the " Marwyn Performance Shares "). The Marwyn
Performance Shares, which were issued prior to the initial public
offering of the Company on AIM, were intended to reward Marwyn for
its key contribution in the creation of shareholder value, taking
into account Marwyn's track record of shareholder value creation.
Further details on the Marwyn Performance Shares are set out in
note 17 of the prior year annual report and financial statements,
which are available on the Company's website.
Nominal price Issue Price Number of A2 Shares Fair value at grant date
Per A2 Share
Marwyn Long Term Incentive LP GBP1 GBP72.32 500 GBP205,465
As the Marwyn Performance Shares do not have any service
conditions, their fair value on grant date was recognised
immediately as an expense in the year ended 30 June 2018.
Consequently, there is no expense in relation to the Marwyn
Performance Shares in the current or prior year.
18. RELATED PARTY TRANSACTIONS
The AIM Rules define a related party as any (i) director of the
Company or its subsidiary, (ii) a substantial shareholder, being
any shareholders holding at least 10 per cent. of a share class or
(iii) an associate of those parties identified in (i) or (ii).
James Corsellis and Mark Brangstrup Watts are the managing
partners of the Marwyn Group. Funds managed by Marwyn Investment
Management LLP of which James Corsellis and Mark Brangstrup Watts
are both managing partners, hold 95.36 per cent. of the Company's
issued ordinary shares. Marwyn Investment Management LLP incurred
fees of GBP6,000 on behalf of the Company during the year, which
were recharged in full.
James Corsellis and Mark Brangstrup Watts have an indirect
beneficial interest in the A2 Shares as described in note 17.
James Corsellis and Mark Brangstrup Watts are the managing
partners of Marwyn Capital LLP which provides corporate finance
support and effective 1 January 2021 managed services support to
the Company. During the year, Marwyn Capital LLP charged GBP149,000
(2021: GBP326,000) in respect of services supplied, and GBP16,000
(excluding VAT) (2021: GBP16,000) for James Corsellis' and Mark
Brangstrup Watts' directors' fees. Marwyn Capital LLP was owed an
amount of GBP25,000 at the balance sheet date (2021:
GBP30,000).
Compensation of key management personnel of the Group is
included in the Nomination and Remuneration Report. Holdings of
Participation Shares are detailed in Note 17.
19. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding
at 30 June 2022 which would require disclosure or adjustment in
these Financial Statements.
20. INDEPENT AUDITORS' REMUNERATION
BTCI was reappointed as auditor at the AGM on 17 December 2021.
BTCI is expected to incur audit fees for the year ended 30 June
2022 of GBP16,775 (2021: GBP15,325). BTCI has charged GBPnil in
2022 for non-audit services to the Group (2021: GBPnil).
21. POST BALANCE SHEET EVENTS
There have been no material post balance sheet events that would
require disclosure or adjustment to these Financial Statements.
RISKS
Risks applicable to investing in the Company
An investment in the ordinary shares involves a high degree of
risk. No assurance can be given that shareholders will realise a
profit or will avoid loss on their investment. The Board has
identified a wide range of risks, and the risks considered most
relevant to the Company, based on its current status are detailed
on the following pages. The risks referred to below, do not purport
to be exhaustive and are not set out in any order of priority. If
any of the following events identified below occur, the Company's
business, financial condition, capital resources, results and/or
future operations and prospects could be materially adversely
affected.
Risks rating to the Company's future business and potential
structure
-- The Company's ability to complete an acquisition
Although the Company has historically identified a number of
potential investment opportunities, it does not currently have an
investment opportunity that is materially progressed and is not
currently in formal or exclusive discussions with any asset
vendors. The Company's future success is dependent upon its ability
to not only identify opportunities but also to execute successful
acquisitions and/or investments. There can be no assurance that the
Company will be able to conclude agreements with any target
business and/or shareholders in the future and failure to do so
could result in the loss of an investor's investment. In addition,
the Company may not be able to raise the additional funds required
to acquire any target business and fund its working capital
requirements in accordance with its Investment Policy.
Pursuant to the AIM Rules for Companies, as MAC has not yet
substantially implemented its investment policy its investment
policy is now subject to shareholder approval
Should shareholders reject the investment policy and elect to
wind up the Company and return funds (after payment of the expenses
and liabilities of the Company) to Shareholders, there can be no
assurance as to the particular amount or value of the remaining
assets at such future time of any such distribution either as a
result of costs from an unsuccessful acquisition or from other
factors, including disputes or legal claims which the Company is
required to pay out, the cost of the liquidation event and
dissolution process, applicable tax liabilities or amounts due to
third party creditors. Upon distribution of assets on a liquidation
event, such costs and expenses will result in investors receiving
less than the initial subscription price and investors who acquired
Ordinary Shares after Admission potentially receiving less than
they invested.
-- The Company may face significant competition for acquisition opportunities
There may be significant competition in some or all of the
acquisition opportunities that the Company may explore. Such
competition may for example come from strategic buyers, sovereign
wealth funds, special purpose acquisition companies and public and
private investment funds, many of which are well established and
have extensive experience in identifying and completing
acquisitions. A number of these competitors may possess greater
technical, financial, human and other resources than the Company.
The Company cannot assure investors that it will be successful
against such competition. Such competition may cause the Company to
be unsuccessful in executing an acquisition or may result in a
successful acquisition being made at a significantly higher price
than would otherwise have been the case which could materially
adversely impact the business, financial condition, result of
operations and prospects of the Company.
-- Need for additional funding and dilution
The Company has insufficient funds to fund in full suitable
acquisitions and/or investments identified by the Board.
Accordingly, the Company intends to seek additional sources of
financing (equity and/or debt) to implement its strategy. There can
be no assurance that the Company will be able to raise those funds,
whether on acceptable terms or at all. If further financing is
obtained or the consideration for an acquisition is provided by
issuing equity securities or convertible debt securities,
Shareholders at the time of such future fundraising or acquisition
may be diluted and the new securities may carry rights, privileges
and preferences superior to the Ordinary Shares.
The Company may seek debt financing to fund all or part of any
future acquisition. The incurrence by the Company of substantial
indebtedness in connection with an acquisition could result in:
(i) default and foreclosure on the Company's assets, if its cash
flow from operations was insufficient to pay its debt obligations
as they become due; or
(ii) an inability to obtain additional financing, if any
indebtedness incurred contains covenants restricting its ability to
incur additional indebtedness.
Success of investment policy not guaranteed
The Company's level of profit will be reliant upon the
performance of the assets acquired and the Investment Policy. The
success of the Investment Policy depends on the Directors' ability
to identify investments in accordance with the Company's investment
objectives and to interpret market data correctly. No assurance can
be given that the strategy to be used will be successful under all
or any market conditions or that the Company will be able to
generate positive returns for Shareholders. If the Investment
Policy is not successfully implemented, this could adversely impact
the business, development, financial condition, results of
operations and prospects of the Company.
-- Changes in Investment Policy may occur
The Company's Investment Policy may be modified and altered from
time to time with the approval of Shareholders, so it is possible
that the approaches adopted to achieve the Company's investment
objectives in the future may be different from those the Directors
currently expect to use and which are disclosed in these Financial
Statements. Any such change could adversely impact the business,
development, financial condition, results of operations and
prospects of the Company.
-- The Company could incur costs for transactions that may ultimately be unsuccessful
The Company has pursued a number of potential acquisitions and
as a result incurred substantial legal, financial and advisory
expenses. In December 2019, the Company was recapitalised and as a
result the business has sufficient funds to continue to identify
investment opportunities/a management team.
There is a risk that the Company may again incur substantial
legal, financial and advisory expenses arising from unsuccessful
transactions which may include public offer and transaction
documentation, legal, accounting and other due diligence which
could have a material adverse effect on the business, financial
condition, results of operations and prospects of the Company.
-- Potential dilution from the incentivisation of management and Marwyn
The Company has in place an incentivisation scheme through which
members of management that may be employed by the Company, certain
employees of the Company and MLTI will be rewarded for increases in
shareholder value, subject to certain conditions and performance
hurdles, as disclosed on page 16 the current incentive scheme will
be replaced with a revised scheme which is expected to have the
same potential dilutive impact. For example under the current
incentive scheme, MLTI has subscribed for A2 Shares as part of the
incentivisation scheme. In certain circumstances, the Company may
purchase the A2 Shares either for the issue of new Ordinary Shares
or for cash. There is discretion for the holders of A2 Shares to
exchange each A2 Share that would otherwise have been redeemed for
Ordinary Shares or cash.
If Ordinary Shares are to be issued in order to satisfy the
incentivisation scheme, the existing Shareholders may face
significant dilution. If the Company has sufficient cash resources
the incentivisation scheme may be settled with cash, thereby
reducing the Company's cash resources.
-- Industry specific risks
It is anticipated that the Company will invest in businesses in
varying sectors within the UK, Europe and North America. The
performance of sectors in which the Company may invest may be
cyclical in nature, with some correlation to gross domestic product
and, specifically, levels of demand within targeted end-markets. As
a result, the identified sector may be affected by changes in
general economic activity levels which are beyond the Company's
control but which may have a material adverse effect on the
Company's financial condition and prospects. Current
macro-environmental factors, such as the war in Ukraine and the
COVID-19 pandemic may result in greater demand in certain sectors,
and fewer opportunities in others. The Company has a broad
investment strategy, which is not restricted by either sector or
geographic focus.
The Company may acquire or make investments in companies and
businesses that are susceptible to economic recessions or
downturns. During periods of adverse economic conditions, the
markets in which the Company operates may decline, thereby
potentially decreasing revenues and causing financial losses,
difficulties in obtaining access to, and fulfilling commitments in
respect of, financing, and increased funding costs. In addition,
during periods of adverse economic conditions, the Company may have
difficulty accessing financial markets, which could make it more
difficult or impossible for the Company to obtain funding for
additional investments and negatively affect the Company's net
asset value and operating results. Accordingly, adverse economic
conditions could adversely impact the business, development,
financial condition, results of operations and prospects of the
Company.
In addition, the political risks associated with operating
across a broad number of jurisdictions and markets could affect the
Company's ability to manage or retain interests in its business
activities and could have a material adverse effect on the
profitability of its business following an acquisition.
Shareholder risks
-- Trading on AIM
The Ordinary Shares are admitted to trading on AIM. An
investment in shares quoted on AIM may be less liquid and may carry
a higher risk than an investment in shares quoted on the Official
List. The AIM Rules for Companies are less demanding than those
which apply to companies traded on the Premium Segment of the
Official List. Further, the FCA has not itself examined or approved
the contents of this document. A prospective investor should be
aware of the risks of investing in such shares and should make the
decision to invest only after careful consideration and, if
appropriate, consultation with an independent financial adviser
authorised under FSMA.
-- Value and liquidity of the Ordinary Shares
It may be difficult for an investor to realise his, her or its
investment. The shares of publicly traded companies can have
limited liquidity and their share prices can be highly
volatile.
The price at which the Ordinary Shares are traded and the price
at which investors may realise their investment are influenced by a
large number of factors, some specific to the Company and its
operations and others which may affect companies operating within a
particular sector or quoted companies generally. A relatively small
movement in the value of an investment or the amount of income
derived from it may result in a disproportionately large movement,
unfavourable as well as favourable, in the value of the Ordinary
Shares or the amount of income received in respect thereof.
Shareholders should be aware that the value of the Ordinary
Shares could go down as well as up, and investors may therefore not
recover their original investment. Furthermore, the market price of
the Ordinary Shares may not reflect the underlying value of the
Company's net assets.
The investment opportunity offered in this document may not be
suitable for all recipients of this document. Shareholders are
therefore strongly recommended to consult an independent financial
adviser authorised under FSMA who specialises in advising on
investments of this nature before making an investment
decision.
-- Investing Company status
The Company is currently considered to be an Investing Company
for the purposes of the AIM Rules. As a result, it may benefit from
certain partial carve-outs to the AIM Rules, such as those in
relation to the classification of Reverse Takeovers. Were the
Company to lose Investing Company status for any reason, such
carve-outs would cease to apply. It is anticipated that an
acquisition may constitute a Reverse Takeover.
-- The interests of significant Shareholders may conflict with those of other Shareholders
Approximately 95 per cent. of the Company's issued share capital
is held by one Shareholders. Such Shareholders are as a result able
to exercise sufficient control over the Company's corporate actions
so as not to require the approval of the Company's other
Shareholders. The interests of such significant Shareholders may
conflict with those of other holders of Ordinary Shares.
-- Dilution of Shareholders' interest as a result of additional equity fundraising
The Company intends to issue additional Ordinary Shares in
subsequent public offerings or private placements to fund
acquisitions or as consideration for acquisitions. As Jersey law
does not grant Shareholders the benefit of pre-emption rights in
relation to a further issue of Ordinary Shares, pre- emption rights
have been included in the Company's Articles. However, it is
possible that existing Shareholders may not always be offered the
right or opportunity to participate in such future share issues,
which may dilute the existing Shareholders' interests in the
Company.
The Group may need to raise additional funds in the future to
finance, amongst other things, working capital, expansion of the
business, new developments relating to existing operations or new
acquisitions. If additional funds are raised through the issuance
of new equity or equity-linked securities of the Company other than
on a pro rata basis to existing Shareholders, the percentage
ownership of the existing Shareholders may be reduced. Shareholders
may also experience subsequent dilution and/or such securities may
have preferred rights, options and pre-emption rights senior to the
Ordinary Shares.
-- The Company has a controlling Shareholder
Marwyn Investment Management LLP ("MIM"), the manager of the
Company's largest shareholder controls approximately 95 per cent.
of the issued Ordinary Shares of the Company. As a result, MIM is
able to exercise significant influence to pass or veto matters
requiring Shareholder approval, including future issues of Ordinary
Shares and the election of directors and to veto or seek to approve
fundamental changes of business. This concentration of ownership
may have the effect of delaying, deferring, deterring or preventing
a change in control, depriving Shareholders of the opportunity to
receive a premium for their Ordinary Shares as part of a sale of
the Company. The interests of MIM may not necessarily be aligned
with those of the other Shareholders. Accordingly, MIM could
influence the Company's business in a manner that may not be in the
interests of other Shareholders. For example, MIM can approve a
change of Investment Policy, can prevent special resolutions of the
Company being passed and can approve ordinary resolutions of the
Company without the assent of any other Shareholders. The
concentration of ownership could also affect the market price and
liquidity of the Ordinary Shares. If MIM seeks to influence the
Company's business in a manner that may not be in the interests of
other Shareholders, the Company's business, results of operations,
financial condition and prospects, and the trading price of the
Ordinary Shares could be adversely affected.
Risks relating to legislation and regulations
-- Legislative and regulatory risks
Any investment is subject to changes in regulation and
legislation. As the direction and impact of changes in regulations
can be unpredictable, there is a risk that regulatory developments
will not bring about positive changes and opportunities, or that
the costs associated with those changes and opportunities will be
significant. In particular, there is a risk that regulatory change
will bring about a significant downturn in the prospects of one or
more acquired businesses, rather than presenting a positive
opportunity.
-- Taxation
There can be no certainty that the current taxation regime in
England and Wales or overseas jurisdictions in which the Company
may operate in the future will remain in force or that the current
levels of corporation taxation will remain unchanged. Any change in
the tax status of the Company or to applicable tax legislation may
have a material adverse effect on the financial position of the
Company.
ADVISORS
Nominated Adviser and Broker
Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square
London, EC4M 7LT
Corporate Finance Adviser
Marwyn Capital LLP
11 Buckingham Street
London, WC2N 6DF
Registrar
Link Market Services (Jersey) Limited
12 Castle Street
St Helier, Jersey, JE2 3RT
Company Secretary
Crestbridge Corporate Services Limited
47 Esplanade
St Helier, Jersey, JE1 0BD
Principal Banker
Barclays Bank plc
5 Esplanade
St Helier, Jersey, JE2 3QA
Solicitors to the Company
Travers Smith
10 Snow Hill
London, EC1A 2AL
Independent Auditor
Baker Tilly Channel Islands Limited
First Floor, Kensington Chambers
46-50 Kensington Place
St Helier
Jersey, JE4 0ZE
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END
FR BKFBBOBKDFCK
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September 09, 2022 02:01 ET (06:01 GMT)
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