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Sacoven PLC (SCN)

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Tuesday 24 December, 2013

Sacoven PLC

Interim results for the six months ended 30 09 13

RNS Number : 2411W
Sacoven PLC
24 December 2013
 

24 December 2013

 

Sacoven plc (the "Company")

 

 

Interim results for the six months ended 30 September 2013.

 

The Company announces its interim results for the six months ended 30 September 2013 (the "Period").

 

Company update

 

The Company is a holding company formed to acquire a company, business, group of businesses or asset(s) in either the natural resources or the consumer goods sectors where its investment adviser, Vasari Global Limited, and its investment team have significant knowledge, expertise and an extensive network of relationships.

 

Following the approval of the members of the Company at the annual general meeting held on 15th October 2013, (1) the geographical focus of the investment policy in relation to the consumer goods sector has been widened to include Europe and the emerging markets, removing the exclusion on the Company investing in Africa; (2) the Company's investment policy has been extended for one year; and (3) the directors have been authorized to, and are in the process of, seeking a secondary listing of the shares of the Company. 

 

Following the changes to the investment policy, Vasari Global Limited continues to identify and evaluate investment opportunities on behalf of the Company.  At this time, however, a decision has not been taken to recommend any particular acquisition to the Company.

 

Financial Review

 

During the Period, the Company's only source of revenue was from interest.  This and its cash reserves have been used to cover investment adviser fees, travel costs, professional consultancy fees, initial due diligence and other costs incidental to the identification and development of acquisition opportunities.

 

The loss for the half year was £320,433. Total expenditure during the period was £326,960 which consisted mainly of investment advisory fees of £225,000, with the balance comprising corporate and administration expenses. The expenses were in line with the directors' expectations.

 

 

For further information, please visit the Company's website www.sacoven.com or contact:

 

Sacoven PLC                                                                                                                                                     Niall McCallum

                                                                                                                                                                      +44 (0)1534 823000

 

Liberum Capital Limited

Nominated Adviser, Financial                                                                                                                            Chris Bowman

Adviser and Corporate Broker                                                                                                                    Christopher Britton

                                                                                                                                                                     +44 (0)20 3100 2000

 



 

Statement Of Financial Position

As At 30 September 2013

                                                                                                                                                                                                  

                                                                                                                                   30/09/2013                        31/03/2013

                                                                                                           Notes                         GBP                                   GBP

Assets

 

Current assets

 

Prepayments and other receivables                                                      5                           25,740                                 16,609

Cash and cash equivalents                                                                                            4,178,690                            4,476,754

                                                                                                                         ¾¾¾¾¾¾¾              ¾¾¾¾¾¾¾

Total assets                                                                                                                  4,204,430                            4,493,363

                                                                                                                         ¾¾¾¾¾¾¾              ¾¾¾¾¾¾¾

 

 

Liabilities and equity

 

Current liabilities

 

Other payables and accrued expenses                                                  6                         161,375                               129,875

                                                                                                                         ¾¾¾¾¾¾¾              ¾¾¾¾¾¾¾

Total liabilities                                                                                                                  161,375                               129,875

                                                                                                                         ¾¾¾¾¾¾¾              ¾¾¾¾¾¾¾

Equity & reserves

Share capital                                                                                           7                             6,002                                   6,002

Share premium                                                                                     8                      4,910,690                            4,910,690

Founder option                                                                                    9                             6,000                                   6,000

Retained loss                                                                                                                   (879,637)                            (559,204)

                                                                                                                         ¾¾¾¾¾¾¾              ¾¾¾¾¾¾¾

Total equity                                                                                                                   4,043,055                            4,363,488

                                                                                                                         ¾¾¾¾¾¾¾              ¾¾¾¾¾¾¾

Total liabilities and equity                                                                                       4,204,430                            4,493,363

                                                                                                                         ¾¾¾¾¾¾¾              ¾¾¾¾¾¾¾



 

Statement Of Comprehensive Income

For The Period 1 April 2013 to 30 September 2013

                                                                                       01/04/2013 to             01/04/2012 to                    01/04/2012 to

                                                                                            30/09/2013                 30/09/2012                         31/03/2013

                                                           Notes                                  GBP                            GBP                                     GBP

 

Income                                                                                                -                                    -                                           -

                                                                                          ¾¾¾¾¾                ¾¾¾¾¾                      ¾¾¾¾¾

 

 

Expenses

Investment advisory fees                       10                               225,000                         140,192                               365,192

Directors' fees                                         10                                  37,500                           23,442                                 60,942

Administration fees                               10                                  17,500                           10,965                                 28,865

Insurance                                                                                        8,258                             5,379                                 13,461

Nominated adviser and broker fees                                           26,526                           15,651                                 66,379

Registrar fees                                                                                  3,774                             3,415                                   7,241

Stock exchange fees                                                                        3,801                             1,440                                   3,940

Legal and professional fees                                                                   -                                     -                                 15,150

Audit fees                                                                                       4,000                                     -                                   8,000

GST fees                                                                                                 -                                     -                                      200

Annual return fees                                                                                 -                                     -                                      150

Webhosting                                                                                      240                                240                                      240

Bank charges                                                                                      361                                338                                      842

                                                                                            ¾¾¾¾¾                  ¾¾¾¾¾                     ¾¾¾¾¾

                                                                                                    326,960                         201,062                               570,602

                                                                                            ¾¾¾¾¾                  ¾¾¾¾¾                     ¾¾¾¾¾

 

 

 

Operating loss                                                                          (326,960)                      (201,062)                           (570,602)

 

Other income

Bank interest income                                                                     6,527                             4,462                                 11,398

                                                                                             ¾¾¾¾¾               ¾¾¾¾¾                      ¾¾¾¾¾

Loss before tax                                                                         (320,433)                      (196,600)                           (559,204)

         

Tax on ordinary activities                      3                                              -                                     -                                           -

                                                                                             ¾¾¾¾¾                ¾¾¾¾¾                     ¾¾¾¾¾

Total comprehensive loss for the period / year              (320,433)                      (196,600)                          (559,204)

                                                                                             ¾¾¾¾¾                ¾¾¾¾¾                     ¾¾¾¾¾

 

Loss per share                                                                             (0.053)                          (0.033)                             (0.093)

                                                                                             ¾¾¾¾¾                ¾¾¾¾¾                     ¾¾¾¾¾

                                                                                                                                                                                                  

 

 

 

All the items dealt with in arriving at the comprehensive loss for the period / year relate to continuing operations.

 

 

 

 

 

Statement Of Changes In Equity

For The Period 1 April 2013 to 30 September 2013

                                                                                                                                                                                                  

                                                            Notes            Share                Share          Founder         Retained               Total

                                                                                  capital        premium             option                  loss

                                                                                      GBP                GBP                 GBP                GBP                 GBP

 

As at 1 April 2013                                                       6,002          4,910,690                6,000          (559,204)         4,363,488      

Total comprehensive loss

for the period                                                                      -                        -                        -          (320,433)          (320,433)

                                                                             ¾¾¾¾        ¾¾¾¾       ¾¾¾¾         ¾¾¾¾        ¾¾¾¾

At 30 September 2013                                                6,002         4,910,690                6,000           (879,637)        4,043,055

                                                                             ¾¾¾¾        ¾¾¾¾        ¾¾¾¾        ¾¾¾¾        ¾¾¾¾

 

For The Period 1 April 2012 to 30 September 2012

                                                                                                                                                                                                  

                                                            Notes            Share                Share          Founder         Retained               Total

                                                                                  capital        premium             option                  loss

                                                                                      GBP                GBP                 GBP                GBP                 GBP

 

As at 1 April 2012                                                              2                        -                        -                        -                       2                            

Issue of non-redeemable

ordinary shares                                   7/8                   6,000         5,994,001                        -                        -         6,000,001

 

Deduction of transaction costs           8                             -        (1,083,311)                       -                        -        (1,083,311)

 

Issue of founder option                                                    -                        -                6,000                        -                6,000

 

Total comprehensive loss

for the period                                                                      -                        -                        -           (196,600)          (196,600)                                                                                        ¾¾¾¾       ¾¾¾¾         ¾¾¾¾        ¾¾¾¾        ¾¾¾¾

At 30 September 2012                                                6,002         4,910,690                6,000           (196,600)        4,726,092

                                                                             ¾¾¾¾        ¾¾¾¾        ¾¾¾¾        ¾¾¾¾        ¾¾¾¾

 

For The Year Ended 31 March 2013

 

                                                            Notes            Share                Share          Founder         Retained               Total

                                                                                  capital        premium             option                  loss

                                                                                      GBP                GBP                 GBP                GBP                 GBP

 

As at 1 April 2012                                                              2                        -                        -                        -                       2                            

Issue of non-redeemable

ordinary shares                                   7/8                   6,000         5,994,001                        -                        -         6,000,001

 

Deduction of transaction costs           8                             -        (1,083,311)                       -                        -        (1,083,311)

 

Issue of founder option                                                    -                        -                6,000                        -                6,000

 

Total comprehensive loss

for the year                                                                           -                        -                        -           (559,204)          (559,204)                                                                                        ¾¾¾¾        ¾¾¾¾        ¾¾¾¾        ¾¾¾¾        ¾¾¾¾

At 31 March 2013                                                        6,002         4,910,690                6,000           (559,204)        4,363,488

                                                                             ¾¾¾¾        ¾¾¾¾        ¾¾¾¾        ¾¾¾¾        ¾¾¾¾

Statement Of Cash flows

For The Period 1 April 2013 to 30 September 2013

                                                                                             01/04/2013 to                 01/04/2012 to                 01/04/2012 to

                                                                                                  30/09/2013                     30/09/2012                     31/03/2013

                                                                         Notes                          GBP                                GBP                                 GBP

Cash flows from operating activities

 

Operating loss                                                                               (326,960)                          (201,062)                         (570,602)

Adjustments for changes in:

Receivables                                                                                         (9,131)                            (32,351)                           (16,607)

Other payables and accrued expenses                                              31,500                            138,335                            129,875

                                                                                                 ¾¾¾¾¾                    ¾¾¾¾¾                   ¾¾¾¾¾

Net cash outflow from operating activities                                  (304,591)                           (95,078)                         (457,334)

                                                                                                 ¾¾¾¾¾                    ¾¾¾¾¾                   ¾¾¾¾¾

Cash flows from investing activities

 

Bank interest received                                                                          6,527                                4,462                              11,398

                                                                                                 ¾¾¾¾¾                    ¾¾¾¾¾                   ¾¾¾¾¾

 

Net cash received from investing activities                                        6,527                                 4,462                              11,398

                                                                                                 ¾¾¾¾¾                     ¾¾¾¾¾                  ¾¾¾¾¾

Cash flows from financing activities

 

Proceeds from the issue of shares                    7/8                                 -                            6,000,001                         6,000,001

Transaction fees paid                                           8                                   -                           (1,083,311)                      (1,083,311)

Proceeds from issue of founder option             9                                   -                                   6,000                                6,000

                                                                                                 ¾¾¾¾¾                     ¾¾¾¾¾                   ¾¾¾¾¾

Net cash generated from financing activities                                           -                             4,922,690                        4,922,690 

                                                                                                 ¾¾¾¾¾                     ¾¾¾¾¾                   ¾¾¾¾¾

 

 

Net change in cash and cash equivalents                                      (298,064)                          4,832,074                        4,476,754

Opening cash and cash equivalent                                              4,476,754                                          -                                      -

                                                                                                  ¾¾¾¾¾                    ¾¾¾¾¾                  ¾¾¾¾¾

Cash and cash equivalents at the end

of the period / year                                                                    4,178,690                           4,832,074                        4,476,754

                                                                                                  ¾¾¾¾¾                    ¾¾¾¾¾                  ¾¾¾¾¾

 

 

Notes To The Financial Statements

For The Period 1 April 2013 to 30 September 2013

 

1.       General Information

Sacoven plc (the "Company") is a public limited company incorporated on 16 March 2012 in Jersey, Channel Islands. The Company was re-registered as a public company from a private company and adopted new memorandum and articles of association on 17 May 2012. The Company was listed on the AIM market of the London Stock Exchange on 8 June 2012.

 

The interim financial statements have not been audited.

                                                           

2.      Principal accounting policies

      

2.1     Basis of preparation

         The financial statements of the Company have been prepared in accordance with the AIM Rules for Companies and in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee. The financial statements have been prepared in accordance with International Accounting Standard 34, Interim Reporting and consistent standards in the annual financial statements on a historical cost basis.

        

2.2    Summary of significant accounting policies

         The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Directors believe that the estimates utilised in preparing the financial statements are reasonable and prudent, and that such estimates and assumptions are immaterial in nature and have no significant impact on the results reported in the financial statements. The financial statements have been prepared on the going concern basis.

 

         Standards, interpretations and amendments to published standards effective in 2012

         In 2013, the Company adopted new standards, amendments and interpretations to existing standards that are mandatory for the Company's accounting period beginning on 1 April 2013.

 

(i)  Financial instruments

Classification

The Company classifies its financial assets and financial liabilities in accordance with IAS 39, Financial Instruments: Recognition and Measurement.

 

Receivables

Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. 

 

Other financial liabilities

Financial liabilities that are not at fair value through profit or loss include other short term operating expenses payable. In the opinion of the Directors, the carrying amounts of other financial liabilities not measured at fair value through profit or loss are approximate to their fair value.

 

Recognition

The Company recognises a financial asset or financial liability when, and only when, it becomes a party to a contractual agreement.

 

Initial and subsequent measurement

         Receivables and other financial liabilities are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method.

 

De-recognition

A financial asset or part of a financial asset is de-recognised where:                                                                                  

-   The rights to receive cash flows from the asset have expired;

-   Substantially all risks and rewards of the asset have been transferred.

 

The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expired.

 

(ii)    Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.

 

(iii)  Going concern basis

The Directors have concluded that at the time of approving the financial statements of the Company there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.

 

(iv)   Income

Income consists of bank interest income accounted for on an accruals basis.  

 

(v)    Expenses

Expenses are accounted for on an accruals basis.

(vi)   Foreign currencies

Functional and presentation currency

The functional currency of the Company is pounds sterling and this is also the presentational currency of the Company.

 

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions or an average rate as an approximation. Foreign currency monetary assets and liabilities are translated into the functional currency at the closing exchange rate at the end of the reporting period.

 

Gains and losses

Any foreign exchange gains and losses on financial assets and financial liabilities are included in the Statement of Comprehensive Income in the period in which they arise.

 

(vii)  Related parties

Related parties are entities which have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. The related parties of the Company are disclosed in note 10.

 

3.      Taxation

The Company is classified under Article 123C of the Income Tax (Jersey) Law 1961, as amended, as a Jersey resident company which is neither a 'utility company' nor a 'financial services company' and as such is charged Jersey income tax at the rate of 0%.

 

A Jersey goods and services tax ("GST") applies at a standard rate of 5% on the majority of goods and services supplied in Jersey for local use or benefit. The Company has obtained International Services Entity status under the Goods and Services Tax (Jersey) Law 2007. In connection with its International Services Entity status the Company pays an annual fee to the Comptroller of Income Tax in Jersey, which is currently fixed at £200. As an International Services Entity the Company is not required to charge GST and in most situations will not be subject to a GST charge on goods and services provided to it.

 

4.      Segmental reporting

The Directors are of the opinion that the Company is engaged in a single segment of business, as such no segmental reporting information has been presented.

 

5.      Prepayment and other receivables                                                                                                                           

                                                                                                                   30/09/2013                        31/03/2013            

                                                                                                                                               GBP                                   GBP

        

         Prepayments                                                                                                             25,738                                 16,607

         Other debtors                                                                                                                    2                                          2

                                                                                                                            ¾¾¾¾¾¾              ¾¾¾¾¾¾¾

                                                                                                                                            25,740                                 16,609

                                                                                                                            ¾¾¾¾¾¾              ¾¾¾¾¾¾¾

 

6.      Other payables and accrued expenses                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                          30/09/2013                        31/03/2013            

                                                                                                                                               GBP                                   GBP

 

         Investment advisory fees                                                                                       112,500                               112,500

         Administration fees                                                                                                 17,500                                   8,750

         Directors' fees                                                                                                           18,750                                           -

         Audit fees                                                                                                                  12,000                                   8,000

         Registrar fees                                                                                                                  625                                      625

                                                                                                                           ¾¾¾¾¾¾              ¾¾¾¾¾¾¾

                                                                                                                                          161,375                               129,875

                                                                                                                             ¾¾¾¾¾¾              ¾¾¾¾¾¾¾

 

 

 

7.      Share capital                                                                                                                                                                 

                                                                                                                                   30/09/2013                        31/03/2013

                                                                                                                                             Units                                  Units

         Authorised share capital                                                                                                                                                                                              -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

         Non-redeemable ordinary shares of £1 each                                                                   2                                          2

         Unclassified shares of £0.001 each                                                                    59,999,998                          59,999,998

                                                                                                                             ¾¾¾¾¾¾              ¾¾¾¾¾¾¾

                                                                                                                                               GBP                                   GBP                            

         Issued and fully paid up share capital                                                                                                                                                        

         2 non-redeemable ordinary shares of £1 each                                                                 2                                          2

         6,000,001 unclassified shares of £0.001 each                                                            6,000                                   6,000

                                                                                                                             ¾¾¾¾¾¾              ¾¾¾¾¾¾¾

                                                                                                                                              6,002                                   6,002

                                                                                                                             ¾¾¾¾¾¾              ¾¾¾¾¾¾¾

 

On 15 May 2012 the 2 ordinary shares of £1 each in the issued share capital of the Company were redesignated as non-redeemable ordinary shares of £1 each having the rights and being subject to the restrictions set out in the articles of association (the "Articles") adopted by the Company on 17 May 2012.

 

Each of the 998 ordinary shares of £1 each in the unissued (but authorised) share capital of the Company was subdivided into 1,000 ordinary shares of £0.001 each and then all such ordinary shares of £0.001 each were redesignated as unclassified shares of £0.001 each that may from time to time (and in accordance with the Articles) be issued as, or redesignated or converted into, shares (whether or not redeemable from time to time) and, in each case having the rights and being subject to the restrictions specified in the Articles adopted by the Company on 17 May 2012.

 

The authorised share capital of the Company was increased from £1,000 divided into 2 non-redeemable ordinary shares of £1 each and 998,000 unclassified shares of £0.001 each to £60,000,000 divided into 2 non-redeemable ordinary shares of £1 each and 59,999,998,000 unclassified shares of £0.001 each by the creation of an additional 59,999,000,000 unclassified shares of £0.001 each that may from time to time (and in accordance with the Articles) be issued as, or redesignated or converted into, shares (whether or not redeemable from time to time) and, in each case having the rights and being subject to the restrictions specified in the Articles.

 

8.      Share premium                                                                                                                                                                         

                                                                                                                                   30/09/2013                        31/03/2013

                                                                                                                                               GBP                                   GBP

        

         6,000,001 unclassified shares issued at a premium of £0.999                          5,994,001                            5,944,001

         Less: transaction costs                                                                                        (1,083,311)                         (1,083,311)

                                                                                                                              ¾¾¾¾¾¾              ¾¾¾¾¾¾¾  

                                                                                                                                       4,910,690                            4,910,690

                                                                                                                             ¾¾¾¾¾¾               ¾¾¾¾¾¾¾

 

9.      Founder option                                                                                                                                                            

                                                                                                                                   30/09/2013                        31/03/2013  

                                                                                                                                               GBP                                   GBP

 

         Founder option                                                                                                          6,000                                   6,000

                                                                                                                           ¾¾¾¾¾¾              ¾¾¾¾¾¾¾

 

The founder has purchased an option for £6,000 (the "Founder Option"). The Founder Option gives the founder the right, from admission up to completion of any acquisition, to subscribe for a further 6,000,000 shares for £0.999 per share.

 

10.     Related party disclosures

The Company has a number of related parties, the transactions with the related parties are detailed below:

 

Administration fees

Fees are payable to Regal Trustees Limited for administration services, Ian Crosby and Niall McCallum are directors of Regal Trustees Limited and of the Company. The amount payable by the Company for the period was £17,500 (six months ended 30/09/2012: £10,965; 2013: £28,865) for administration and £12,500 (six months ended 30/09/2012: £7,825; 2013: £20,325) for directors' fees, of this £23,750 (2013: £8,750) remained unpaid at the period end.

 

Shareholdings

The founder and the Investment Adviser are beneficially owned and are under the common control of the trustees of trusts established for the benefit of certain members of the Imerman family (the "Family Trusts").

 

Samuel Imerman is the settlor and a protector of the Family Trusts and Hymie Levin is a protector of the Family Trusts.

 

Separately, Ian Crosby and Niall McCallum are employees of Stonehage Trust Holdings (Jersey) Limited, a member of the Stonehage group of companies who act as trustees of the Family Trusts. Ian Crosby and Niall McCallum do not, however, have any connection with the role that Stonehage carry out as trustees of the Family Trusts and, as such, the other directors of the Company are satisfied that they are "independent" directors of the Company. 

 

In accordance with the investment advisory agreement, the Investment Adviser is entitled to receive fees of £450,000 per annum payable quarterly in arrears. During the period, the amount payable to the Investment Adviser was £225,000 (six months ended 30/09/2012: £140,192; 2013: £365,192) in respect of the quarterly retainer fee, at the period end £112,500 (2013: £112,500) remained outstanding.

 

11.     Commitments and contingencies

The Company has issued 100 warrants to the founder (the "Founder Warrants"). The Founder Warrants entitle the founder in respect of every one warrant held to subscribe for such number of shares as shall equal 0.1 per cent of the share capital of the Company on a fully diluted basis following completion of an acquisition until the last business day of the month following the month in which an acquisition was completed for an amount equal to the par value of those shares issued.

 

The Company has issued an option to the Founder as disclosed in note 9.

                                                                                                                                                         

12.     Ultimate controlling party

The ultimate controlling party is deemed to be Brunswood International Holdings Limited (the "Founder"). The Founder owns greater than 50% of the unclassified shares holding a total of 3,000,001 unclassified shares in the Company.  The Founder is also the holder of the Founder Option as disclosed in note 9 and the Founder Warrants in note 11.  It should be noted that this was incorrectly disclosed in the previous financial statements that have been issued.

 

13.     Financial risk management

Overview

The Company has exposure to a number of business risks. The Board of Directors has overall responsibility for the Company's risk management arrangements. The Company may be exposed to market risk, credit risk and liquidity risk.

 

This note presents information on the Company's exposure to each of the above risks, the Company's objectives, policies and processes for measuring and managing risk and the management of the Company's capital.

 

a)   Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: price risk, interest rate risk and currency risk.    

 

(i) Price risk

Price risk is the risk that the market prices move unfavourably and that the fair value of future cash flows that are based on the market will fluctuate due to changes in the market prices. The Company is not currently exposed to price risk.

 

(ii) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Cash flow interest rate risk arises on cash balances held. The Directors have determined that a fluctuation in interest rate of 50 basis points is reasonably possible. An increase in 50 basis points in interest rates as at the reporting date would have increased the profit for the period by £20,893 (2013: £22,384), a decrease of 50 basis points would have an equal but opposite effect. The analysis assumes that all other variables remain constant.

 

(iii) Currency risk

Currency risk is the risk that currency exchange rates move unfavourably and the assets that the Company owns in currencies other than its functional currency decrease in value due to exchange rate movements.

 

The Company's functional and presentational currency is pounds sterling, the Company currently has no assets and no liabilities in currencies other than pounds sterling and is therefore not exposed to currency risk.

 

b)  Credit Risk

Credit risk is the risk that a counterparty of a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company.

 

Credit risk arises mainly from cash deposits, cash equivalents and accrued income. The Company only deposits cash with major banks with high quality credit standing, this ensured through monitoring credit worthiness of the bank using data available from Standard and Poor's. The Company reviews its cash positions and ensures it limits exposure to any one counterparty.

 

c)   Credit Risk (continued)

All banks, custodians and brokers with which the Company will be doing business, may encounter financial difficulties that impair the operational capabilities or capital position of the Company.

 

The carrying amount of financial assets represents the Company's maximum exposure to credit risk. The maximum exposure of each class of financial asset are as follows:                  

                                                                                                                      30/09/2013 31/03/2013

                                                                                                                                               GBP                                   GBP            

          Other receivables                                                                                                               2                                          2

          Cash and cash equivalents                                                                                   4,178,690                            4,476,754

                                                                                                                              ¾¾¾¾¾¾                  ¾¾¾¾¾¾

                                                                                                                                       4,178,692                            4,476,756

                                                                                                                              ¾¾¾¾¾¾                  ¾¾¾¾¾¾

d)    Liquidity risk

Liquidity risk is the risk that the Company fails to maintain adequate levels of financial resources to enable it to meet its financial obligations as they fall due. Liquidity risk arises because of the possibility that the Company could be required to pay its liabilities earlier than expected or because of any inability to realise assets in order to meet obligations as they fall due or is only able to realise assets by suffering financial loss.

 

The Company's liquidity risk derives from the need to have sufficient funds available to cover future commitments. The Company manages liquidity risk through an ongoing review of future cash requirements. Cash flow forecasts are compared to cash available.

 

The carrying amount of financial liabilities represents the Company's maximum exposure to liquidity risk. The maximum exposure of each class of financial liability are as follows:                     

                                                                                                                                                                                         

                                                                                                                          30/09/2013                        31/03/2013

                                                                                                                                              GBP                                   GBP

 

          Other payables and accrued expenses                                                                   161,375                               129,875

                                                                                                                             ¾¾¾¾¾¾                  ¾¾¾¾¾¾

                                                                                                                                          161,375                               129,875

                                                                                                                             ¾¾¾¾¾¾                  ¾¾¾¾¾¾

 

14.     Capital risk management

The share capital and share premium is considered to be the capital of the Company. The Company must maintain sufficient financial resources, in the opinion of the Directors to meet its commitments. The Directors monitor the capital of the Company to ensure that the Company continues as a going concern whilst ensuring optimal return for the shareholders.

15.     Employees

         The Company had no employees during the period other than the Directors.

 

16.     Events after the reporting period

         There were no significant events to report since the balance sheet date.

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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