TIDM450
RNS Number : 7429N
450 PLC
27 September 2023
LEI number: 2138004EUUU11OVHZW75
450 plc
(the "Company")
Publication of Annual Report and Financial Statements for the
year ended 30 June 2023
The Company announces the publication of its Annual Report and
Financial Statements for the year ended 30 June 2023.
The Annual Report and Financial Statements are also available on
the 'Shareholder Documents' page of the Company's website at
www.450plc.com.
Enquiries:
450 plc
Tel: +44(0)207 004 2700
Waheed Alli
James Corsellis
Numis Securities Limited (Nominated Adviser and Broker)
Tel: +44(0)207 260 1000
Kevin Cruickshank
Jamie Loughborough
Formerly Marwyn Acquisition Company Plc
Annual Report and Audited Consolidated Financial Statements
For the year ended 30 June 2023
CHAIR'S STATEMENT AND STRATEGIC REPORT
I present to shareholders the Annual Report and Audited
Consolidated Financial Statements (the "Financial Statements") of
450 Plc (the "Company") (formerly Marwyn Acquisition Company Plc)
for the year ended 30 June 2023, consolidating the results of the
Company, MAC (BVI) Limited and WHJ Limited, (collectively, the
"Group" or
"450") . 450 is listed on the Alternative Investment Market ("AIM") of the London Stock Exchange.
Activity in the year and strategy
On 6 November 2022, I was appointed as Chair of the Company. I
have over 30 years' experience across the media, retail,
entertainment and technology sectors, having launched and grown a
number of highly successful private and public businesses in my
career. Following my appointment, in line with my industry
expertise, the Company adopted a new investing policy to focus on
building a market leader in the traditional and digital creative
industries, capitalising on the ongoing transformation of the
content, media and technology sectors.
It is anticipated that the Company will acquire controlling or
non-controlling stakes in one or more businesses or companies
(quoted or private) on a long-term basis, including the
consideration of public offers for, or mergers with, existing
listed businesses. The investments made by the Company may be in
the form of equity or other types of capital investment.
The Directors believe that opportunities exist to create
significant value for shareholders through properly executed,
acquisition-led growth strategies arising within the traditional
and digital creative industries encompassing the content, media and
technology sectors. The Company's principal focus will be on making
investments in the UK, Europe or North America and will target
companies with either a well-established presence in their specific
segments or companies which are in a position to become leaders in
their specific segments.
The ongoing digital transformation of the media and
entertainment industries and widespread adoption of digital media
has led to a fundamental change in the way content is created,
consumed and engaged with. Audiences and consumers are engaging
with content across multiple formats, including experiential and
immersive media, utilising both physical and digital delivery,
alongside the associated emergence of augmented and virtual reality
technologies. The Investing Policy is included in full on the
Company's website at www.450plc.com .
The Company also announced the appointment of Tom Basset as a
non-executive Director and the resignation of Mark Brangstrup Watts
during the period, both effective from 6 November 2022.
During the year to 30 June 2023 WHJ Limited was summarily wound
up and a new subsidiary, MAC (BVI) Limited, was incorporated to
provide the Group's new long term incentive plan. Incentive Shares
were issued during the year to Waheed and Marwyn Long Term
Incentive LP as set out in note 17.
Outlook
The Directors remain excited by the potential opportunities they
are identifying and engaging with in the content, media and
technology sectors. The Directors expect the shift in patterns of
content creation and consumption to continue given technology
tailwinds and changes in consumer habits. Various operational
models and approaches will continue to be assessed to determine
those that are best placed to capture growth and scale profitably.
The Directors remain cautious in relation to valuations given the
current financing and economic environment, with increasing scope
for those opportunities that offer the greatest potential for
shareholder value to emerge.
Results
The Group's loss after taxation for the year to 30 June 2023 was
GBP788,165 (2022: GBP359,101). The Group incurred GBP904,746 of
administrative expenses during the year (2022: GBP359,101),
received interest of GBP116,581 (2022: GBPNil) and at 30 June 2023
held a cash balance of GBP4,148,886 (2022: GBP4,845,891).
Dividend policy
The Company has not yet acquired a trading operation and it is
therefore inappropriate to make a forecast of the likelihood of any
future dividends. The Directors intend to determine the Company's
dividend policy following completion of a platform acquisition and,
in any event, will only commence the payment of dividends when it
becomes commercially prudent to do so.
Waheed Alli
Chair
26 September 2023
GOVERNANCE - REPORT OF THE DIRECTORS
The Directors present the Financial Statements for the year
ended 30 June 2023.
Principal Activities & Strategy
Following the appointment of Waheed Alli, the Company's strategy
was refined to focus on the acquisition of a platform trading asset
within the traditional and digital creative industries encompassing
the content, media and technology sectors. The Company will
consider the acquisition of private companies and public offers
for, and mergers with, existing listed businesses, in the UK and
internationally with the investment objective being to provide
shareholders with attractive total returns through capital
appreciation.
The Directors believe that opportunities exist to create
significant value for shareholders through properly executed,
acquisition-led growth strategies arising within these sectors. The
Company's principal focus will be on making investments in the UK,
Europe or North America and will target companies with either a
well-established presence in their specific segments or companies
which are in a position to become leaders in their specific
segments.
During the period since Waheed's appointment, the Company has
worked to identify and pursue potential acquisition opportunities
within its sectoral focus but remains diligent on value.
Results and Dividends
For the year to 30 June 2023, the Group's loss was GBP788,165
(2022: GBP359,101) .
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 net assets of GBP4,093,022 at the statement of
financial position date, which included a cash balance of
GBP4,148,886. The Directors have considered the financial position
of the Group and reviewed forecasts and budgets for a period of at
least 12 months following the approval of these financial
statements.
The Directors have considered macro environmental factors that
have impacted both the global and domestic economy, including the
ongoing war in Ukraine, the high rates of inflation being
experiences by the UK economy and the related increase in interest
rates. 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.
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 44 to 47.
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 of
Held 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
Mark Brangstrup Watts, Executive Director, resigned from his
position on 6 November 2022. Tom Basset was appointed as a
Non-Executive Director on 6 November 2022. Waheed Alli was
appointed as Chair on 6 November 2022. Further information on the
Directors of the Company at the date of this report are:
Waheed Alli, Chair
Waheed has over 30 years' experience across the media, retail,
entertainment, and technology sectors, having launched and grown a
number of highly successful private and public businesses in his
career.
Waheed co-founded Planet 24, a TV production company which
produced shows such as The Big Breakfast, The Word and Survivor
(created by Charlie Parsons). Planet 24 was sold to Carlton
Productions, now known as ITV Studios, in 1999.
Waheed co-founded TV production company, Shine, and was Chair of
production company Chorion plc, including during its time as a
listed business between 2003 and 2006 delivering share price growth
of over 275%.
As Founder and CEO of Silvergate Media, Waheed acquired the IP
and distribution rights to The Octonauts in 2011, establishing
international partnerships with Netflix, Disney, and Nickelodeon
before selling Silvergate Media to Sony in 2019.
Waheed was also Chair of ASOS plc between 2001 and 2012 where he
oversaw market capitalisation growth from GBP12.3 million at IPO to
GBP1.9 billion.
Waheed Alli has served as a member of the House of Lords since
1998.
James Corsellis, Director
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 James has served as a director of the following
companies: a non-executive director of BCA Marketplace Limited
(formerly BCA Marketplace Plc) from July 2014 to December 2017,
Advanced Computer Software from October 2006 to August 2008,
non-executive chairman of Entertainment One Limited from January
2007 to March 2014 and remaining on the board as a non-executive
director until July 2015, non-executive director of Breedon
Aggregates Limited 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 currently managing partner of Marwyn Capital LLP and
Marwyn Investment Management LLP, an executive director of
Silvercloud Holdings Limited, the chairman of MAC Alpha Limited and
Marwyn Acquisition Company III Limited, and a director of Marwyn
Acquisition Company II Limited and Palmer Street Limited.
Sanjeev Gandhi, Independent Non-Executive Director
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 .
Tom Basset, Non-Executive Director
Tom has extensive experience working across a range of sectors
in the origination and assessment of new investment opportunities,
transaction execution, coordinating capital market and M&A
processes and providing strategic corporate advice to management
teams. Tom joined Marwyn in 2010, where he now leads the Investment
Team and is also a member of the Investment Committee. Prior to
Marwyn, Tom spent six years at Deloitte across the Assurance &
Advisory and Private Equity Transaction Services groups. Tom is a
qualified Chartered Accountant and graduated from Durham University
with a BA (Hons) in Economics.
Tom is a non-executive director of Marwyn Acquisition Company
III limited and MAC Alpha Limited and a director of Silvercloud
Holdings Limited.
Directors' Interests
James Corsellis and Tom Basset have an indirect beneficial
interest in the A ordinary shares issued by MAC (BVI) Limited which
were issued during the year to Marwyn Long Term Incentive LP and
are disclosed in note 17 of these Financial Statements.
Waheed Alli has a direct interest in the A ordinary shares
issued by MAC (BVI) Limited, as disclosed in note 17.
James Corsellis is the managing partner of Marwyn Investment
Management LLP ("MIM LLP"), and Tom Basset is a partner of MIM LLP.
MIM LLP is the manager of the Marwyn Fund (the "Marwyn Fund"
comprises of Marwyn Value Investors II LP, MVI II Co-invest LP,
Marwyn Value Investors LP and Marwyn Value Investors Limited), the
Marwyn Fund holds 95.36% of the Company's issued ordinary shares.
Mark Brangstrup Watts was a director of the Company until 6
November 2022, up until this date Mark Brangstrup Watts was also a
managing partner of MIM LLP.
James Corsellis is the managing partner of Marwyn Capital LLP
("MC LLP"), and Tom Basset is a partner of MC LLP. MC LLP provides
corporate finance and managed services support to the Group.
The Directors hold no other direct interests in the Ordinary
Shares of the Company.
Save for the issues as disclosed above, 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
19.
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 and IFRS Interpretations Committee
interpretations as adopted by the European Union (collectively, "EU
adopted IFRS" or "IFRS"), of the state of affairs of the Company
and of the profit or loss of the Company for that year. 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.
Independent Auditor
Baker Tilly Channel Islands Limited ("BTCI") was re-elected 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
Waheed Alli
Chair
26 September 2023
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 Chair Waheed Alli (appointed 6
November 2022), Director James Corsellis, Independent Non-Executive
Director Sanjeev Gandhi and Non-Executive Director Tom Basset
(appointed 6 November 2022), 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 . The biographies of the Directors are detailed on
pages 5 and 6 . The Company's Chair 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 has 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
Chair: Chair:
Sanjeev Gandhi (appointed as Chair of the committee Sanjeev Gandhi (appointed as Chair of the committee
effective 24 May 2022). effective 24 May 2022).
Members: Members:
James Corsellis James Corsellis
Waheed Alli Waheed Alli
----------------------------------------------------------
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.450plc.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 44 to 47.
Board and Committee updates
Sanjeev Gandhi is the Independent Non-Executive Director and
chair of the Audit and Risk Committee and Nomination and
Remuneration Committee.
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. The
Directors' biographies are detailed on pages 5 and 6 of these
Financial Statements.
The Directors are committed to further re-considering the Board
and Committee composition as the business evolves.
Board Interaction
The Board meets formally at least four times a year, but the
Directors also regularly meet on an informal basis. The Chair 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 Chair 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, 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
================================================== ======== ======== ==============
Waheed Alli (appointed 6 November 2022) 3* 3 -* -
================================================== ======== ============== ======== ==============
Mark Brangstrup Watts (resigned 6 November 2022) 2* 2 2* 2
======== ============== ======== ==============
James Corsellis 5 5 2 2
======== ============== ======== ==============
Sanjeev Gandhi 5 5 2 2
======== ============== ======== ==============
Tom Basset (appointed 6 November 2022) 3* 3 -* -
======== ============== ======== ==============
* meetings held since the director's appointment date or until
their resignation date.
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 is currently
one Executive Director, two Non-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 as is discussed further below. 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.
During the 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.450plc.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 Chair of that Committee.
The Company's auditors BTCI are invited to attend meetings of the
Audit and Risk Committee as appropriate.
Sanjeev Gandhi is the chair of the Committees. 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 2023 the following committee meetings
were held:
Audit and Risk Committee meetings Nomination and Remuneration Committee meetings
Held Attended Held Attended
Waheed Alli 2* 2 1* 1
Mark Brangstrup Watts 2* 2 2* 2
James Corsellis 2* 2 2* 2
Sanjeev Gandhi 4 4 4 4
* meetings held since the date of the director's appointment to
the Committee, or until the date of their resignation from the
Committee.
The Audit and Risk Committee report and Nomination and
Remuneration Committee report are included on pages 16 to 17 and 18
to 20 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
Tom Basset 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.
Following Waheed's appointment to the Board and the refinement
of the Company's investing strategy, the Board now comprises
individuals that collectively have the experience within the
sectoral focus, but also the expertise through many years of
experience in identifying, executing and developing businesses.
Waheed, Sanjeev and James have held a number of previous senior
positions across the media, technology, consumer, investment
management and social impact sectors, and all four directors have
extensive experience of identifying, pursuing and executing
acquisition opportunities. As a Board, it is believed that they
collectively provide the Company with the necessary mix of
experience, skills and personal qualities required to deliver on
the Company's strategy.
Details on the experience of the Directors are included on pages
5 to 6 of these Financial Statements.
Once an acquisition opportunity is 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. On at least an annual basis (or more
frequently should the activities of the business require), the
Audit and Risk Committee formally reviews the risk register and
considers whether any updates to the relevant risks or their
mitigation is required.
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 Board considers the effectiveness of its risk management
processes, procedures and internal control systems through its
monthly review and challenge of the financial information prepared
for the Group, discussion of the quarterly information presented at
formal board meetings, and consideration of the audit findings
memorandum prepared by the Auditor in respect of the audit of the
annual financial statements.
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 periodically 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 44 to 47. 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:
-- continuing to perform thorough due diligence of potential
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 is 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 four directors. The Company's culture is therefore set by the
Board and demonstrated through Board interaction. The Chair 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 year since the previous annual general meeting shall stand for
election at the subsequent annual general meeting.
The Directors' service contracts establish the time commitment
each Director must devote to the Company. Waheed Alli, Tom Basset
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 .
Chair
The Chair 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 ("MC LLP") which
provides company secretarial and governance support.
Together, Crestbridge and MC LLP 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.
MC 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
48.
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 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 2023.
The Financial Statements and related papers will be available on
the Company's website at www.450plc.com when published.
GOVERNANCE - AUDIT AND RISK COMMITTEE REPORT
Audit and Risk Committee Chair's Statement
I present the Audit and Risk Committee Report for the year ended
30 June 2023. I have chaired the committee since my appointment 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 four times in the year to
30 June 2023. 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 2022, including the Audit and
Risk Committee Report;
-- review of the Company's interim financial statements for the
six-month period ended 31 December 2022;
-- review of the audit planning documentation, reporting
timeline and audit fees for the 30 June 2023 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 director changes in November 2022;
-- review and consideration of 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 2023, 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 Chair
26 September 2023
GOVERNANCE - NOMINATION AND REMUNERATION REPORT
Nomination and Remuneration Committee Chair's Statement
I present the Nomination and Remuneration Report for the year
ended 30 June 2023. 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.
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 the Nomination and Remuneration Committee met
four times. The committee discussed and agreed the nomination and
remuneration report included in the 30 June 2022 annual report and
financial statements and undertook the work required in relation to
the appointment of Waheed Alli and Tom Basset in November 2022.
Looking Forward
Given the current nature and activities of the Company there are
no significant proposed changes to the 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.
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. Accordingly, a new
Long-Term Incentive Plan ("LTIP") was put in place in conjunction
with the appointment of Waheed Alli to provide an incentive that is
aligned with shareholders' interests.
Long Term Incentive Arrangements
The Directors believe that the success of the Company will
depend to a high degree on the future performance of its management
team. In conjunction with the appointment of Waheed Alli, the Group
has put in place the new LTIP, to ensure alignment between
Shareholders, and those responsible for delivering the Company's
strategy and attract and retain the best executive management
talent. The LTIP will only reward the participants if shareholder
value is created. This ensures alignment of the interests of
management directly with those of Shareholders.
Waheed Alli, James Corsellis and Tom Basset have a beneficial
interest in the LTIP as disclosed in note 17.
The general principles of the LTIP are:
-- 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 LTIP 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 year:
For the year *Waheed James *Tom **Mark Sanjeev
ended 30 June Alli Corsellis Basset Brangstrup Gandhi
2023 Watts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- ----------- -------- ------------ --------
Fees - 9 - 3 50
--------- ----------- -------- ------------ --------
- 9 - 3 50
-------------------------- ----------- -------- ------------ --------
For the year James Mark Brangstrup Sanjeev
ended 30 June Corsellis Watts Gandhi
2022
GBP'000 GBP'000 GBP'000
----------- ---------------- --------
Fees 8 8 5
----------- ---------------- --------
8 8 5
----------- ---------------- --------
*Waheed Alli and Tom Basset were appointed on 6 November
2022.
**Mark Brangstrup Watts resigned on 6 November 2022.
Included in Director fees and employee salary costs is GBP61,914
for director fees of which GBP8,888 was paid to James Corsellis,
GBP3,026 was paid to Mark Brangstrup Watts and GBP50,000 was paid
to Sanjeev Gandhi. Tom Basset does not receive a fee for his role
as director of the Company.
Waheed Alli does not receive a fee for his directorship,
however, under the terms of his appointment letter if a platform
acquisition is completed during his appointment, Waheed Alli is
entitled to the payment of a one-off transaction fee of an amount
equal to GBP25,000 per calendar month elapsed between the date of
his appointment and a platform acquisition being completed. This is
disclosed in further detail in note 17.
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 appointment letters for all directors 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 2022 AGM held on 5 December 2022, 100% of shareholders
who voted, voted in favour on the resolution for the re-election of
James Corsellis, Sanjeev Gandhi, Waheed Alli and Tom Basset.
Details on the final results of the AGM including all voting
information can be found on the Company's website.
Performance Evaluation
Set out on page 11 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 risks relating to the LTIP 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 an initial
Acquisition.
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.
Sanjeev Gandhi
Committee Chair
26 September
2023
INDEPENT AUDITOR'S REPORT
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF 450 PLC
We have audited the consolidated financial statements of 450
Plc, formerly Marwyn Acquisition Company plc (the "Company" and,
together with its subsidiaries, MAC (BVI) Limited and WHJ Limited ,
the "Group"), which comprise the consolidated statement of
financial position as at 30 June 2023, 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 2023, 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 (EU adopted IFRS);
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 year 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 GBP163,000 (PY: GBP120,000), determined with reference
to a benchmark of Net Assets, of which it represents 4% (PY:
2.5%).
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 GBP114,000 (PY: GBP84,000). 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 GBP8,000 (PY: GBP6,000), as
well as those that 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 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 page 7 the Directors are
responsible for the preparation of consolidated financial
statements that give a true and fair view in accordance with EU
adopted IFRS, 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 reviewed bank statements and recalculated
the finance income in line with the relevant agreement to ensure it
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.
Other Matters which we are Required to Address
We were appointed by 450 Plc to audit the consolidated financial
statements. Our total uninterrupted period of engagement is 3
years.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the Group and we remain independent of the
Group in conducting our audit. Our audit opinion is consistent with
the additional report to the audit committee in accordance with
ISAs.
Use of this Report
This report is made solely to the Members of the Company, as a
body, in accordance with our letter of engagement dated 5 September
2023. 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
26 September 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
30 June 30 June
2023 2022
Notes GBP'000 GBP'000
Administrative expenses 7 (905) (359)
Total Operating loss (905) (359)
Finance income 5 117 -
Loss before income taxes (788) (359)
Income tax 8 - -
========== ==========
Loss for the year (788) (359)
Total other comprehensive income - -
Total comprehensive loss for the
year (788) (359)
Loss per ordinary share
Basic and diluted (pence) 9 (0.1175) (0.0535)
The Group's activities derive from continuing operations.
The notes on pages 29 to 43 form an integral part of these
Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at
30 June 30 June
2023 2022
Notes GBP '000 GBP '000
Assets
Current assets
Other receivables 11 55 25
Cash and cash equivalents 12 4,149 4,846
-------- --------
Total current assets 4,204 4,871
Total assets 4,204 4,871
======== ========
Equity and liabilities
Equity
Stated capital 14 30,792 30,792
15,
Share-based payment reserve 17 80 205
Accumulated losses 15 (26,779) (26,196)
-------- --------
Total equity attributable to equity
holders 4,093 4,801
Current liabilities
Trade and other payables 13 111 70
-------- --------
Total liabilities 111 70
Total equity and liabilities 4,204 4,871
======== ========
The notes on pages 29 to 43 form an integral part of these
Financial Statements.
The Financial Statements were approved and authorised for issue
by the Board of Directors on 26 September 2023 and were signed on
its behalf by:
Waheed Alli James Corsellis
Chairman Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Stated based payment Accumulated Total
capital reserve losses equity
---------- ----------------- ------------ --------
Notes 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 year - - (359) (359)
Balance as at 30
June 2022 30,792 205 (26,196) 4,801
========== ================= ============ ========
Share
Stated based payment Accumulated Total
capital reserve losses equity
---------- ----------------- ------------ --------
Notes GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1
July 2022 30,792 205 (26,196) 4,801
Dissolution of WHJ
Limited 17 - (205) 205 -
Share based payment 17 - 80 - 80
Loss and total comprehensive
loss for the year - - (788) (788)
Balance as at 30
June 2023 30,792 80 (26,779) 4,093
========== ================= ============ ========
The notes on pages 29 to 43 f orm an integral part of these
Financial Statements
CONSOLIDATED STATEMENT OF CHANGES IN CASH FLOWS
For the For the
year ended year ended
30 June 30 June
Notes 2023 2022
GBP'000 GBP'000
Operating activities
Loss for the year (788) (359)
Adjustments to reconcile total operating
loss to net cash flows:
Deduct finance income 5 (117) -
Add back share based payment expense 17 59 -
Working capital adjustments:
(Increase)/decrease in receivables
and prepayments (30) 4
Increase/(decrease) in trade and other
payables 20 (21)
Net cash flows used in operating activities (856) (376)
Investing activities
Interest received 5 117 -
----------- -----------
Net cash flows used in investing activities 117 -
Financing activities
Proceeds from issue of A Shares in
MAC (BVI) Limited 42 -
----------- -----------
Net cash flows from financing activities 42 -
Net decrease in cash and cash equivalents (697) (376)
Cash and cash equivalents at the beginning
of the year 4,846 5,222
----------- -----------
Cash and cash equivalents at the end
of the year 12 4,149 4,846
=========== ===========
The notes on pages 29 to 43 form an integral part of these
Financial Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
450 Plc ("450", or the "Company") (formerly Marwyn Acquisition
Company Plc) , 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 has had two wholly owned subsidiaries
during the year (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
media, retail, entertainment and technology sectors.
2. ACCOUNT ING POLICIES
(a) Basis of preparation
The Financial Statements for the year ended 30 June 2023 and the
comparative year to 30 June 2022 have been prepared in accordance
with International Financial Reporting Standards and IFRS
Interpretations Committee interpretations as adopted by the
European Union (collectively, "EU adopted IFRS" or "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 years 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 GBP4,093,022 at the statement of
financial position date, which includes a cash balance of
GBP4,148,886. The Directors have considered the financial position
of the Group and reviewed forecasts and budgets for a period of at
least 12 months following the approval of these financial
statements.
The Directors have considered macro environmental factors that
have impacted both the global and domestic economy, including the
ongoing war in Ukraine, the high rates of inflation being
experiences by the UK economy and the related increase in interest
rates. 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 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
Extension of temporary exemption of applying IFRS 1 January
9 (Amendments to IFRS 4); 2023
Amendments to IFRS 17 Insurance contracts; 1 January
2023
Disclosure of accounting policies (Amendments to 1 January
IAS 1); 2023
Definition of accounting estimates (Amendments 1 January
to IAS 8); 2023
Deferred Tax relating to Assets and Liabilities 1 January
arising from a Single Transaction (Amendments to 2023
IAS 12);
International Tax Reform - Pillar Two Model Rules 1 January
(Amendments to IAS 12); 2023
Initial Application of IFRS 17 and IFRS 9 - Comparative 1 January
Information Amendment to IFRS 17); 2023
Supplier Finance Arrangements (Amendments to IAS 1 January
7 and IFRS 7); 2024
Non-current Liabilities with Covenants (Amendments 1 January
to IAS 1); 2024
Amendment to IFRS 16 Leases: Lease Liability in 1 January
a sale & leaseback; 2024
Amendments to IAS 1 Presentation of Financial Statements: 1 January
Classification of Liabilities as Current or Non-current*; 2024
and
Amendments to IAS 21- Effects of Changes in Foreign 1 January
Exchange Rates : Lack of Exchangeability* 2025
* 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
Financial assets and financial liabilities are recognised in the
Group's statement of financial position when the Group becomes a
party to the contractual provisions of the instrument.
Financial assets are initially measured at their fair value plus
transaction costs. Financial assets are subsequently carried at
amortised cost using the effective interest rate method less
provision for impairment.
Financial liabilities are initially measured at their fair value
plus transaction costs. Financial liabilities are subsequently
carried at amortised cost using the effective interest rate
method.
The Group does not hold any financial instruments that are
classified at fair value through the profit and loss or at fair
value through other comprehensive income.
(f) Finance Income
Finance income comprises interest income on funds deposited.
Interest income is recognised as it accrues in the profit and loss
using the effective interest method.
(g) Cash and cash equivalents
Cash and cash equivalents comprise cash balances at banks.
(h) 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.
(i) Corporation tax
Corporation tax for the year 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.
(j) 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 year. Diluted EPS is calculated by adjusting
the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares.
(k) Share based payments
The Redeemable A Shares issued by MAC (BVI) Limited ("Incentive
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 judgements
For both the year ended 30 June 2023 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.
Significant estimates
There are significant estimates and assumptions used in the
valuation of the Incentive Shares which have been issued in the
year. Management has considered at the grant date, the probability
of a successful first acquisition by the Group and the potential
range of value for the Incentive Shares, based on the circumstances
on the grant date. The fair value of the Incentive Shares and
related share-based payment expense was calculated using a Monte
Carlo valuation model. Further details of the issuance of incentive
shares during the year is disclosed in note 17 of 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 For the
year year
ended 30 ended 30
June June
2023 20 22
GBP'000 GBP'000
Interest on bank deposits 117 -
--------- ---------
117 -
========= =========
6. EMPLOYEES AND DIRECTORS
(a) Employment costs for the Group during the year:
For the For the
year year
ended 30 ended 30
June June
2023 2022
GBP'000 GBP'000
Director fees and employee salaries 81 22
Social security costs 8 1
Total employment costs expense 89 23
========= =========
As at 30 June 2023 the Group had one employee (2022: no
employees). During the year ended 30 June 2023, the Company had the
following directors: James Corsellis, Mark Brangstrup Watts
(resigned 6 November 2022), Waheed Alli (appointed 6 November
2022), Tom Basset (appointed 6 November 2022) and Sanjeev
Gandhi.
Included in Director fees and employee salary costs is GBP61,914
for director fees of which GBP8,888 was paid to James Corsellis,
GBP3,026 was paid to Mark Brangstrup Watts, and GBP50,000 was paid
to Sanjeev Gandhi. Tom Basset does not receive a fee for his role
as director of the Company.
Waheed Alli does not receive a fee for his directorship,
however, under the terms of his appointment letter if a platform
acquisition is completed during his appointment, Waheed Alli is
entitled to the payment of a one-off transaction fee of an amount
equal to GBP25,000 per calendar month elapsed between the date of
his appointment and a platform acquisition being completed. This is
disclosed in further detail in note 19.
(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 18 to 20.
(c) Employed persons
The average monthly number of persons employed by the Group
(including Directors) during the year was as follows:
For the For the
year year
ended 30 ended 30
June June
2023 2022
number number
Employees 1 -
Directors 4 2
5 2
========= =========
7. ADMINISTRATIVE EXPENSES
For the For the
year year
ended 30 ended 30
June June
2023 2022
GBP'000 GBP'000
Group expenses by nature
Employment costs 89 23
Non-recurring project, professional
and diligence costs 222 -
Professional support 523 327
Share-based payment expenses (Note
17) 59 -
Other expenses 12 9
905 359
========= =========
8. INCOME TAX
For the For the
year year
ended 30 ended 30
June June
2023 2022
GBP'000 GBP'000
Analysis of tax in year
Current tax on loss for the year - -
--------- ---------
Total current tax - -
========= =========
Reconciliation of effective rate and tax charge:
For the For the
year year
ended 30 ended 30
June June
2023 2022
GBP'000 GBP'000
Loss on ordinary activities before
tax (788) (359)
--------- ---------
Loss multiplied by the rate of corporation
tax in the UK of 25 percent (2022:
19 percent). (197) (68)
Effects of:
Expenses not deductible for tax 15 -
Tax losses not utilised 182 68
Total taxation charge - -
========= =========
On 22 December 2022, the Group disposed of its WHJ Limited, its
wholly owned subsidiary. The effect of this was the of loss of
brought forward tax losses of GBP2,415,000.
The Group is tax resident in the UK. As at 30 June 2023,
cumulative tax losses available to carry forward against future
trading profits were GBP24,176,730 (2022: GBP26,164,000) subject to
agreement with HM Revenue & Customs. Prior to a Platform
Acquisition, there is no certainty as to future profits and no
deferred tax asset is recognised in relation to these carried
forward 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 year. Diluted EPS is calculated
by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary
shares.
For the For the
year year
ended 30 ended 30
June June
2023 2022
Loss attributable to owners of the
parent (GBP'000) (788) (359)
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 (pence) (0.1175) (0.0535)
Refer to note 17 for instruments that could potentially dilute
basic EPS in the future.
10. INVESTMENTS
Principal subsidiary undertaking
The Company is the parent of the Group, the Group comprises of
the Company and during the year the following subsidiaries. As at
30 June 2023, WHJ Limited had been summarily wound up and therefore
MAC (BVI) was the sole subsidiary:
Subsidiary Nature of business Country of Proportion of Dissolution Date Proportion of
incorporation ordinary shares ordinary shares
held by parent held by the Group
------------------ ------------------- ------------------- ------------------ ---------------- ------------------
WHJ Limited Incentive vehicle Jersey 100% 22 December 2022 100%
British Virgin
MAC (BVI) Limited Incentive vehicle Islands 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 was 47 Esplanade, St
Helier, Jersey, JE1 0BD. The registered office of MAC (BVI) Limited
is Commerce House, Wickhams Cay 1, Road Town, Tortola, British
Virgin Islands, VG1110.
11. OTHER RECEIVABLES
As at As at
30 June 30 June
2023 2022
GBP'000 GBP'000
Amounts receivable within one year:
Prepayments 26 19
VAT receivable 29 6
-------- --------
55 25
======== ========
12. CASH AND CASH EQUIVALENTS
As at As at
30 June 30 June
2023 2022
GBP'000 GBP'000
Cash and cash equivalents
Cash at bank 4,149 4,846
-------- --------
4,149 4,846
======== ========
Credit risk is managed on a group basis. 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
2023 2022
GBP'000 GBP'000
Amounts falling due within one year:
Trade payables 6 39
Accruals 50 31
A Ordinary share liability (Note 17) 21 -
Amounts due to related parties (Note
18) 34 -
-------- --------
111 70
======== ========
14. STATED CAPITAL
As at As at
30 June 30 June
2023 2022
GBP'000 GBP'000
Authorised
Unlimited ordinary shares of no par - -
value
Issued and fully paid
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. No shares were issued in the year ended 30
June 2023, or during the year ended 30 June 2022.
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 2023:
As at As at
30 June 30 June
2023 2022
GBP'000 GBP'000
Financial assets measured at amortised
cost
Cash and cash equivalents (Note 12) 4,149 4,846
4,149 4,846
======== ========
Financial liabilities measured at
amortised cost
Trade and other payables (Note 13) 77 70
Due to related parties (Note 18) 34
-------- --------
111 70
======== ========
All financial instruments are classified as current assets and
current liabilities. There are no non-current financial instruments
as at 30 June 2023 (2022: None).
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 GBP4,093,022 as at 30 June 2023 (2022:
GBP4,800,905). 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
Management Long Term Incentive Arrangements
On 3 November 2022, the Company incorporated a new subsidiary,
MAC (BVI) Limited (the " Subsidiary "), whose purpose is to create
the new LTIP, to ensure alignment between Shareholders, and those
responsible for delivering the Company's strategy and attract and
retain the best executive management talent.
The LTIP will only reward the participants if shareholder value
is created. This ensures alignment of the interests of management
directly with those of Shareholders. Under the LTIP, Redeemable A
Shares (" Incentive Shares ") are issued by the Subsidiary.
Waheed Alli and MLTI (in which James Corsellis and Tom Basset
are beneficially interested) have acquired Incentive Shares in
accordance with the Group's new LTIP. The Company's previous
incentive plan was terminated during the year through the winding
up of WHJ Limited, a direct subsidiary of the Company.
Waheed Alli and MLTI are the only participants in the LTIP, but
it is the expectation that participants in the LTIP may ultimately
include any further members of the Company's management team as
well as senior executives of the acquired businesses or companies
as part of their respective executive compensation schemes.
Preferred Return
The incentive arrangements are subject to the Company's
shareholders achieving a preferred return of at least 7.5 per cent.
per annum on a compounded basis on the basis of a starting net
asset value of GBP 4,800,905 , being the audited net asset value of
the Company as at 30 June 2022 (the " Starting NAV "), through to
the date of exercise (with dividends and returns of capital being
treated as a reduction in the amount invested at the relevant time)
(the " Preferred Return ").
Incentive Value
Subject to a number of provisions detailed below, if the
Preferred Return and at least one of the vesting conditions have
been met, the holders of the Incentive Shares c an give notice to
redeem their Incentive Shares for Ordinary Shares for an aggregate
value equivalent to a maximum of 20 per cent. of the "Growth",
where Growth means the excess of the total equity value of the
Company and other shareholder returns over and above the Starting
NAV (20 per cent. of the Growth being the " Incentive Value "). The
Incentive Value will be shared between holders of the l n c e ntive
Shares pro rata to their holdings.
Save where vesting is as a result of an in-specie distribution,
or as a result of aggregate cash dividends and cash capital returns
to the Shareholders being greater than or equal to aggregate
subscription proceeds received by the Company, the total equity
value of the Company is based on the live takeover offer, sale
price or merger value, or, absent such an exit event, the market
value of the Company based on the preceding 30 day volume weighted
average price of the Ordinary Shares (excluding any trades made by
persons discharging managerial responsibility or persons closely
associated with them). Where vesting is because of an in-specie
distribution or as a result of aggregate cash dividends and cash
capital returns to the Shareholders being greater than or equal to
aggregate subscription proceeds received by the Company, the total
equity value of the Company is based on the post-distribution
market value. Shareholder returns take account of prior dividends
and other capital returns to shareholders.
The value of the Incentive Shares is reduced to the extent that
their value would otherwise prevent Shareholders from achieving the
Preferred Return.
Grant date
The grant date of the Incentive Shares is the date that such
shares are issued.
Redemption/exercise
Unless otherwise determined and subject to the redemption
conditions having been met, the Company and the holders of the
Incentive Shares have the right to exchange each Incentive Share
for Ordinary Shares, which will be dilutive to the interests of the
holders of Ordinary Shares. However, if the Company has sufficient
cash resources and the Company so determines, the Incentive Shares
may instead be redeemed for cash. It is currently expected that in
the ordinary course, Incentive Shares will be exchanged for
Ordinary Shares. However, the Company retains the right to redeem
the Incentive Shares for cash instead. Circumstances where the
Company may exercise this right include, but are not limited to,
where the Company is not authorised to issue additional Ordinary
Shares or on the winding-up or takeover of the Company.
Any holder of Incentive Shares who exercises their Incentive
Shares prior to other holders is entitled to their proportion of
the Incentive Value to the date that they exercise but no more.
Their proportion is determined by the number of Incentive Shares
they hold relative to the total number of issued shares of the same
class.
Vesting Conditions and Vesting Period
The Incentive Shares are subject to certain vesting conditions,
at least one of which must be (and continue to be) satisfied in
order for a holder of Incentive Shares to exercise its redemption
right.
The vesting conditions are as follows:
i. it is later than the third anniversary of the initial acquisition;
ii. a sale of all or substantially all of the revenue or net
assets of the business of the Subsidiary in combination with the
distribution of the net proceeds of that sale to the Company and
then to its shareholders;
iii. a sale of all of the issued ordinary shares of the
Subsidiary or a merger of the Subsidiary in combination with the
distribution of the net proceeds of that sale or merger to the
Company's shareholders;
iv. where by corporate action or otherwise, the Company effects
an in-specie distribution of all or substantially all of the assets
of the Group to the Company's shareholders;
v. aggregate cash dividends and cash capital returns to the
Company's Shareholders are greater than or equal to aggregate
subscription proceeds received by the Company;
vi. a winding-up of the Company;
vii. a winding-up of the Subsidiary; or
viii. a sale, merger or change of control of the Company.
If any of the vesting conditions described in paragraphs (ii) to
(viii) above are satisfied before the third anniversary of the
initial acquisition, the Incentive Shares will be treated as having
vested in full.
Compulsory redemption
If the Preferred Return is not satisfied on the seventh
anniversary of the date of the initial acquisition, the Incentive
Shares must be sold to the Company or, at its election, redeemed by
the Subsidiary, in both cases at a price per Incentive Share equal
to 1 penny, unless and to the extent that the Company's Nomination
and Remuneration Committee determines otherwise.
Leaver, lock-in and clawback provisions
In addition to the vesting conditions above, it is expected that
a lock-in period, leaver provisions, and malus and clawback
provisions, in relation to the Incentive Shares may be set out in
acquisition agreements which management participants in the LTIP
will be asked to enter into to acquire their shares.
Waheed Alli has agreed that his Incentive Shares will vest on a
straight-line basis over 3 years from the date of the Business
Acquisition, s a v e on an exit event when the Incentive Shares
will vest in full (subject to the wider vesting conditions that
apply to all of the Incentive Shares). If Waheed Alli is deemed a
good leaver, he will keep his vested Incentive Shares, but
otherwise (including if there has been no Business Acquisition) he
will forfeit all of his Incentive Shares upon his departure from
the Group.
Either the Ordinary Shares received upon exercise of the
Incentive Shares and/or the remaining Incentive Shares held by
Waheed Alli may be clawed back if Waheed Alli commits: (i) gross
misconduct; (ii) fraud (iii) a criminal act, or (iv) a material
breach of any post termination covenants or restrictions in his
contract with the Company (if applicable), in each case as
determined by the Board in its absolute discretion (acting
reasonably and in good faith); or if the Company materially
restates the audited consolidated accounts of the Group (excluding
for any reason of change in accounting practice or accounting
standards) and the Nomination & Remuneration Committee of the
Company (acting in good faith) concludes that, had such audited
consolidated accounts been correct at the time of exchange of such
Incentive Shares, Waheed Alli would not have received the full
payment which he was owed (or the full number of Ordinary Shares he
was issued). In such circumstances, it is also possible for the
nomination & r e muneration committee to require Waheed Alli to
pay to the Company or the Subsidiary an amount equal to any cash
received by him in exchange for some or all of his Incentive Shares
together with the net proceeds of the sale of any securities
received by him (i.e., through a distribution in specie) less any
tax paid or payable.
Waheed Alli has agreed that if he exchanges some or all of his
Incentive Shares for an allotment of Ordinary Shares, he shall not
be permitted to enter into any agreement to give effect to any
transfer of the Ordinary Shares so allotted at any time during the
period of 12 months and one day following the date of such
allotment save in certain limited circumstances.
As there are conditions whereby the unvested portion of the
Incentive Shares issued to Waheed Alli can be redeemed or acquired
at the lower of the (i) the subscription price or (ii) the market
value for such Incentive Shares, the amount received on the issue
of Incentive Shares to Waheed Alli of GBP21,000 is recognised as a
liability in the Financial Statements.
The Incentive Shares in which MLTI holds its interest are not
subject to any such vesting provisions, and therefore the
unrestricted market value received on the issue of Incentive Shares
to MLTI is recorded in the share-based payment reserve with the
corresponding expense being recognised on the date of issue.
Holding of Incentive Shares
MLTI and Waheed Alli hold Incentive Shares entitling them to
aggregate to 100 per cent. of the Incentive Value. Any future
management partners or senior executive management team members
receiving Incentive Shares will be dilutive to the interests of
existing holders of Incentive Shares, however the share of the
Growth of the Incentive Shares in aggregate will not increase.
The following shares were issued on 6 November 2022:
Issue price Number of Unrestricted IFRS 2
per A share A ordinary market value Fair value
Nominal GBP's shares at grant date GBP's
Holder Price GBP's
Waheed Alli GBP0.01 10.50 2,000 21,000 72,000
--------- ------------- ------------ --------------- ------------
Marwyn Long
Term Incentive
LP GBP0.01 10.50 2,000 21,000 72,000
--------- ------------- ------------ --------------- ------------
A valuation of the incentive shares has been prepared by
Deloitte LLP dated 4 November 2022 to determine the fair value of
the Incentive Shares in accordance with IFRS 2 at grant date.
There are significant estimates and assumptions used in the
valuation of the Incentive Shares. Management has considered at the
grant date, the probability of a successful first acquisition by
the Company and the potential range of value for the Incentive
Shares, based on the circumstances on the grant date.
The fair value of the Incentive Shares granted under the scheme
was calculated using a Monte Carlo model. The fair value uses an
ungeared volatility of 25 per cent, and an expected term of seven
years. The Incentive Shares are subject to the Preferred Return
being achieved, which is a market performance condition, and as
such has been taken into consideration in determining their fair
value. A risk-free rate of 4.1 per cent. has been applied. The
model incorporates a range of probabilities for the likelihood of
an acquisition being made of a given size.
Expense related to Incentive Shares
An expense of GBP59,283 (2022: GBPNil) has been recognised in
the Statement of Comprehensive Income in respect of the Incentive
Shares issued during the year.
There is a service condition associated with the shares issued
to Waheed Alli, which requires the fair value charge associated
with his shares to be allocated over the minimum vesting period.
This vesting period is estimated to be 4 years from the date of
grant. Accordingly, for the year ended 30 June 2023, an amount of
GBP8,283 (2022: GBPNil) was expensed to the profit and loss
account.
There are no service conditions attached to the MLTI shares and
as result the fair value at grant date net of the amount paid by
MLTI for the unrestricted market value which totals GBP51,000 was
expensed to the profit and loss account on issue.
The share based payment reserve includes the IFRS2 fair value of
the Incentive Shares issued to MLTI of GBP72,000 plus the cost of
GBP8,283 (2022: Nil) expensed to the profit and loss account for
the year to 30 June 2023 relating to the Incentive Shares issued to
Waheed Alli.
Reclassification of Marwyn performance shares expense
MLTI held 100% of the A2 Shares in WHJ Limited at the date of
dissolution of WHJ Limited. These shares were forfeited as part of
the dissolution and as a result the cumulative charge held in the
share-based payment reserve of GBP205,465 has been transferred to
accumulated losses.
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 Tom Basset have served as directors of the
Company during the year . James Corsellis is the managing partner
of Marwyn Investment Management Limited ("MIM LLP") and Tom Basset
is a partner of MIM LLP, MIM LLP is the manager of the Marwyn Fund,
the Marwyn Fund holds 95.36% of the Company's issued ordinary
shares. Mark Brangstrup Watts was a director of the Company until 6
November 2022, up until this date Mark Brangstrup Watts was also a
managing partner of MIM LLP.
James Corsellis and Tom Basset have an indirect beneficial
interest in the A ordinary shares issued by MAC (BVI) Limited which
were issued during the year to Marwyn Long Term Incentive LP and
are disclosed in note 17 of these Financial Statements. Waheed Alli
has a direct interest in the A ordinary shares issued by MAC (BVI)
Limited, also as disclosed in note 17.
James Corsellis is also the managing partner of MC LLP and Tom
Basset is a partner in MC LLP, which provides corporate finance and
managed services support to the Group. During the year, Marwyn
Capital LLP charged GBP335,485 (2022: GBP149,357) in respect of
managed services and corporate finance costs, GBP53,968 for
recharged expenses (2022: Nil), and GBP11,913 (excluding VAT)
(2022: GBP16,547) for James Corsellis' and Mark Brangstrup Watts'
directors' fees. Marwyn Capital LLP was owed an amount of GBP34,405
the balance sheet date (2022: GBP24,470). Mark Brangstrup Watts was
a managing partner of MC LLP up until 6 November 2022.
Compensation of key management personnel of the Group is
included in the Nomination and Remuneration Report. Interests in
the LTIP are detailed in Note 17.
19. COMMITMENTS AND CONTINGENT LIABILITIES
On 6 November 2022, Waheed Alli was appointed as Chair of the
Company, as part of Waheed's appointment the Company entered into a
service agreement under which Waheed does not receive a director
fee for his role as Chair, however, if a platform acquisition is
completed during his appointment, Waheed Alli is entitled to the
payment of a one-off transaction fee of an amount equal to
GBP25,000 for each calendar month elapsed between the date of his
appointment and a platform acquisition being completed (a
"Transaction Fee"). If no platform acquisition is completed during
Waheed Alli's term of appointment, then no Transaction Fee will be
payable. The Transaction Fee is calculated by taking GBP25,000
multiplied by the number of whole calendar months which have
elapsed since 6 November 2022.
20. INDEPENT AUDITORS' REMUNERATION
Baker Tilly Channel Islands Limited ("BCTI") was reappointed as
auditor at the AGM on 5 December 2022. BTCI is expected to incur
audit fees for the year ended 30 June 2023 of GBP19,740 (2022:
GBP16,775). BTCI has charged GBPNil in 2023 for non-audit services
to the Group (2022: 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 if
required to acquire a target business and fund its working capital
requirements in accordance with its Investing Policy.
Pursuant to the AIM Rules for Companies, as the Company has not
yet substantially implemented its Investing Policy, its Investing
Policy is now subject to shareholder approval at each AGM.
Should shareholders reject the Investing 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 may have insufficient funds to fund in full suitable
acquisitions and/or investments identified by the Board.
Accordingly, the Company expects 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 Investing Policy not guaranteed
The Company's level of profit will be reliant upon the
performance of the assets acquired and the Investing Policy. The
success of the Investing 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 Investing Policy
is not successfully implemented, this could adversely impact the
business, development, financial condition, results of operations
and prospects of the Company.
--Changes in Investing Policy may occur
The Company's Investing 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.
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. Details on the LTIP are disclosed in note 17 to these
Financial Statements.
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
the traditional and digital creative industries encompassing the
content media and technology sector 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 high inflation may result in
greater demand in certain sectors, and fewer opportunities in
others.
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 Shareholder. Such Shareholder is 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 Shareholder may conflict with
those of other holders of Ordinary Shares.
--Dilution of Shareholders' interest as a result of additional
equity fundraising
The Company expects 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 Investing 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.
ADVISERS
Nominated Adviser and Broker
Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square
London, EC4M 7LT
Corporate Services
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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