TIDMMAC2
RNS Number : 9126N
Marwyn Acquisition Company II Ltd
28 September 2023
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, ANY MEMBER STATE OF
THE EUROPEAN ECONOMIC AREA OR ANY JURISDICTION IN WHICH IT WOULD BE
UNLAWFUL TO DO SO
LEI: 2549008KZ7HM27V4O637
Marwyn Acquisition Company II Limited
(the "Company")
Publication of the 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.marwynac2.com .
Enquiries:
Company Secretary
Antoinette Vanderpuije - 020 7004 2700
FGS Global- PR Adviser
Rollo Head 07768 994 987
Chris Sibbald 07855 955 531
WH Ireland Limited - Corporate Broker - + 44 (0) 207 220
1666
Harry Ansell
Katy Mitchell
MARWYN ACQUISITION COMPANY II LIMITED
Annual Report and Audited Consolidated Financial Statements
For the year ended 30 June 2023
MANAGEMENT REPORT
We present to shareholders the audited consolidated financial
statements of Marwyn Acquisition Company II Limited (the "Company")
for the year ended 30 June 2023 (the "Financial Statements"),
consolidating the results of Marwyn Acquisition Company II Limited
and its subsidiary, MAC II (BVI) Limited (collectively, the "Group"
or "MAC") .
Strategy
The Company is an acquisition vehicle listed on the standard
segment of the London Stock Exchange. The Company's investment
strategy is to seek acquisition opportunities in the financial
services, consumer and technology sectors.
Strategy Execution
The Company intends to execute its strategy through a
combination of selective Merger and Acquisition ("M&A") of
platform and bolt-on businesses, potential strategic partnerships
with established financial services operators as well as ongoing
operational improvements. Target company market segments,
principally expected to be in the UK and US, may include, but are
not limited to:
-- FinTech digital platforms;
-- Digital content platforms;
-- Life and pensions;
-- Life-insurance assets;
-- Lifetime mortgages and equity release;
-- Wealth managers and advisers;
-- Brokerage and associated services;
-- Mortgage advisory;
-- Healthcare related services;
-- Estate planning and associated legal and tax services; and
-- Later life planning and assisted care services.
Activity
Over the last 12 months, the Directors have continued to
progress the development of the Company's strategy, building and
testing the core investment hypothesis. This has been supported by
the additions of both executive and non-executive appointments to
the Board, with a focus on strategic clarity and execution.
During this period the Directors have also identified and
progressed a pipeline of target M&A opportunities, some of
which the Company remains in ongoing discussions with, as well as
potential future commercial partnerships.
On 7 November 2022, the Company announced the appointment of
Cathryn Riley as Non-executive Director. Cathryn is a highly
experienced financial services industry executive and non-executive
director, having worked across both public and private markets. On
7 November 2022, the Company also announced that Mark Brangstrup
Watts had resigned from the Board.
On 27 March 2023, the Company announced that Will Self commenced
his role as Chief Executive Officer - Pensions Division, to lead
the identification, acquisition, and integration of pensions
businesses for the Group, leading the advancement of the Group's
stated investment strategy. Will joined the Group from Curtis Banks
Group PLC (CBP:LON) where he was Chief Executive Officer. Prior to
this, he was Chief Executive Officer of Suffolk Life, a division of
Legal & General. He holds a variety of non-executive roles and
an MBA from Cranfield. On 6 June 2023, the Company announced that
Will had been appointed as CEO, joining the board, to lead the
development and execution of the overall Company strategy.
On 31 March 2022, the Company launched a 12-month placing
programme (the "Placing Programme") pursuant to which the Company
had the ability to issue up to 500 million redeemable C shares ("C
Shares") at an issue price of GBP1 per C share in order to raise up
to an aggregate of GBP500 million. The Placing Programme lapsed on
31 March 2023, at which time GBP723,592 of costs incurred, which
were previously included in current asset deferred costs, were
taken to the profit and loss account and recorded under
non-recurring project, professional and diligence costs. The
Directors believe that allowing the Placing Programme to lapse
saves the significant legal and professional fees and management
time that would be incurred in its renewal whilst the focus remains
firmly on identifying the Company's platform acquisition, but also
does not preclude the Company from issuing a further placing
programme prospectus in the future, at relatively short notice,
should the use of C shares be considered particularly advantageous
at that time for the ongoing strategic direction of the
Company.
Results
The Group's total comprehensive loss for the year to 30 June
2023 was GBP3,527,899 (2022: GBP1,934,518). Of the costs incurred
in the year, GBP2,017,600 (2022: GBP 793,214) relates to
non-recurring project costs. The Group held a cash balance at the
year end of GBP7,783,448 (2022: GBP10,254,198). The Group has not
yet acquired an operating business and as such is currently only
generating interest income on its bank deposits.
Directors
The Directors of the Company who served during the year are:
Mark Hodges (Chairman);
Will Self (Chief Executive Officer) (appointed 5 June 2023);
James Corsellis (Non-Executive Director);
Cathryn Riley (Non-Executive Director) (appointed 6 November
2022); and
Mark Brangstrup Watts (Non-Executive Director) (resigned 6
November 2022).
Directors' Biographies
Biographies of the directors in office at the date of this
report are as follows:
Mark Hodges
Mark Hodges is the Chairman of the Company and has over 30
years' experience across the financial services and consumer
sectors, including extensive FTSE 100 PLC board experience with
Centrica plc and Aviva plc. As former CEO of ReAssure, Mark led the
business through the GBP425m acquisition of Quilter's UK Heritage
business and oversaw the sale of Reassure to Phoenix Group Holdings
in 2020 for GBP3.25bn. At the time of the sale, ReAssure had
approximately GBP80bn of assets under administration, 4 million
customers and approximately 2,500 employees.
Previously, Mark was CEO of Centrica's GBP11bn revenue consumer
division, which included British Gas in the UK, Bord Gais in
Ireland, Direct Energy in the US and Hive globally. Mark was hired
from outside the energy sector as a change agent to simplify and
modernise the business to make it more efficient, more
customer-focused and less product-led. Mark's mandate included the
improvement of digital channels, the growth of new revenue streams,
and to drive cultural change. During his tenure, Mark oversaw a
growth in the Hive customer base from approximately 200,000
customers to more than 1.3 million.
Before this, Mark led Towergate Insurance, a 5,000-employee
business with revenue of more than GBP400m and serving
approximately 2 million customers. Mark was responsible for
formulating the group strategy and oversaw the acquisition of 50
specialist insurance businesses, significantly bolstered the new
executive team and management below executive level, oversaw the
complete rebuild of governance and operational control frameworks
to bring in line with regulatory standards, and carried out a
fundamental operational restructuring, including the establishment
of a market leading 400 person contact centre in Manchester.
Mark previously spent more than 20 years with Aviva across a
variety of senior finance, planning and strategy roles, including
CEO of UK Life and Pensions and latterly as Aviva UK Chief
Executive and board member of Aviva plc. As CEO of Aviva UK, Mark
led a business with annual revenues of GBP15bn, GBP1.4bn in
operating profits, and approximately 20,000 staff. Mark's
highlights at Aviva include the creation of a new strategy for the
UK business and implementation of a new operating model to create
the largest composite insurer in the UK that saw a return to growth
of the General Insurance business, developing a vision for the
integrated UK business that generated significant annual cost
savings and led to sustained outperformance of the UK Life
Business, and leading the turnaround in the UK Life Insurance
business to deliver growth, reduced costs, improved profitability,
improved customer service (NPS), and improved people engagement as
well as overseeing the brand change from Norwich Union to Aviva.
During his tenure with Norwich Union, Mark was involved in the
acquisition of London & Edinburgh in 1996, demutualised and
floated Norwich Union on the London Stock Exchange in 1997 and
merged with CGU in 2000. He subsequently oversaw the acquisition of
RAC PLC in 2005 for GBP1.25bn.
James Corsellis
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 the managing partner of Marwyn Capital LLP and Marwyn
Investment Management LLP, an executive director of Silvercloud
Holdings Limited, the chairman of Marwyn Acquisition Company III
Limited and MAC Alpha Limited, and a director of 450 Plc and Palmer
Street Limited.
Cathryn Riley
Cathryn is a highly experienced financial services industry
executive and non-executive director, having worked across both
public and private markets.
Cathryn has had a wide-ranging career covering insurance,
customer services, IT, operations and human resources. She was
previously Group Chief Operations Director at Aviva plc, where she
worked for 17 years, in roles including Group CIO, UK Commercial
Director, CIO/COO Europe and COO. Prior to Aviva, Cathryn was
general manager of transformation at BUPA, as well as a consultant
in the financial services division of Coopers & Lybrand.
Cathryn is currently a non-executive director at The Financial
Services Compensation Scheme and Liberty Managing Agency Limited.
She has previously held non-executive positions at ReAssure, AA
Insurance Services Limited, International Personal Finance,
Equitable Life and Chubb.
Will Self
Will Self is the Chief Executive Officer of the Company and has
extensive experience across pension and retirement services
sectors. Previously Will was Chief Executive Officer of Curtis
Banks Group PLC and prior to this he was Chief Executive Officer of
Suffolk Life and Chief Commercial Officer of Cofunds, both
divisions of Legal & General. As Chief Executive Officer he
will lead the development and execution of the overall company
strategy.
Will also serves as Deputy Chair to the FCA Small Business
Practitioner Panel. Will holds an MBA from Cranfield School of
Management.
Dividend Policy
The Company has not yet acquired a trading business 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 an acquisition and, in any
event, will only commence the payment of dividends when it becomes
commercially prudent to do so.
Key Performance Indicators
The Company has not yet acquired a trading business and
therefore no key performance indicators have been set as it is
inappropriate to do so.
Stated Capital
Details of the stated capital of the Company during the year is
set out in Note 15 to the Financial Statements.
On 4 December 2020 the Company issued 700,000 ordinary shares
and matching warrants for a total price of GBP700,000. 75% of the
ordinary shares and matching warrants were issued to an entity
managed by Marwyn Investment Management LLP ("MIM LLP"), the
remaining 25% were issued to senior executive managers of previous
successful acquisition companies launched by Marwyn.
On 20 April 2021, the Company issued 12 million A shares to an
entity managed by MIM LLP (with class A warrants being issued on
the basis of one class A warrant per A share), for a total price of
GBP12,000,000 .
Corporate Governance
As a company with a Standard Listing, the Company is not
required to comply with the provisions of the UK Corporate
Governance Code and given the size and nature of the Group the
Directors have decided not to adopt the UK Corporate Governance
Code. Nevertheless, the Board is committed to maintaining high
standards of corporate governance and will consider whether to
voluntarily adopt and comply with the UK Corporate Governance Code
as part of any acquisition, taking into account the Company's size
and status at that time.
The Company currently complies with the following principles of
the UK Corporate Governance Code:
-- The Company is led by an effective and entrepreneurial board
of directors ("Board"), whose role is to promote the long term
sustainable success of the Company, generating value for
shareholders and contributing to wider society;
-- The Board ensures that it has the policies, processes,
information, time and resources it needs in order to function
effectively and efficiently; and
-- The Board ensures that the necessary resources are in place
for the company to meet its objectives and measure performance
against them.
Given the size and nature of the Company, the Board has not
established any committees and intends to make decisions as a
whole. If the need should arise in the future, for example
following any acquisition, the Board may set up committees and may
decide to comply with the UK Corporate Governance Code.
Risk management and internal control systems
A robust risk assessment was carried out by the Directors of the
Company, along with its advisers, in preparation for the Company's
IPO on 4 December 2020 and the Directors have identified a wide
range of risks, which are set out in the Company's prospectus dated
4 December 2020. As part of the launch of the Placing Programme an
updated robust risk assessment was carried out by the Directors of
the Company, along with its advisers and the wide range of risks
identified are set out in the Company's prospectus dated 31 March
2022.
The Company's prospectuses are available on the Company's
website: www.marwynac2.com .
The Company's risk management framework incorporates a risk
assessment that identifies and assesses the strategic, operational
and financial risks facing the business and mitigating controls.
The risk assessment is documented through a risk register which
categorises the key risks faced by the business into:
-- Business risks;
-- Shareholder risks;
-- Financial and procedural risks; and
-- Risks associated with the acquisition process.
The risk assessment identifies the potential impact and
likelihood of each of the risks detailed on the risk register and
mitigating factors/actions have also been identified.
The Company's risk management process includes both formal and
informal elements. The size of the Board and the frequency in which
they interact ensures that risks, or changes to the nature of the
Company's existing risks, are identified, discussed and analysed
quickly. The Company's governance framework, including formal
periodic board meetings with standing agendas, ensures that the
Company has a formal framework in place to manage the review,
consideration and formal approval of the risk register, including
risk assessment.
The Group's only significant asset is cash. As at the statement
of financial position date the Group's cash balance was
GBP7,783,448 (2022: GBP10,254,198). Price, credit, liquidity and
cashflow risk are not considered to be significant due to the
simple nature of the Company's assets and liabilities and the
current activities undertaken by the Group. The Directors have set
out below the principal risks faced by the business. These are the
risks the Directors consider to be most relevant to the Company
based on its current status. The risks referred to below do not
purport to be exhaustive and are not set out in any particular
order of priority.
Key risk Explanation
The Company There is a risk that the Company may incur substantial
could incur legal, financial and advisory expenses arising
costs for from unsuccessful transactions which may include
transactions public offer and transaction documentation, legal,
that may ultimately accounting and other due diligence which could
be unsuccessful. have a material adverse effect on the business,
financial condition, results of operations and
prospects of the Company.
------------------------------------------------------------------------
The Company The Company's future success is dependent upon
may not be its ability to not only identify opportunities
able to complete but also to execute a successful acquisition.
an acquisition. There can be no assurance that the Company will
be able to conclude agreements with any target
business and/or shareholders in the future and
failure to do so could result in the loss of an
investor's investment. In addition, the Company
may not be able to raise the additional funds
required to acquire any target business, fund
future operating expenses after the initial twelve
months, or incur the expense of due diligence
for the pursuit of acquisition opportunities in
accordance with its investment objective.
------------------------------------------------------------------------
The Company There may be significant competition for some
may face significant or all of the acquisition opportunities that the
competition Company may explore. Such competition may for
for acquisition example come from strategic buyers, sovereign
opportunities. 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. Therefore, the Company may identify
an investment opportunity in respect of which
it incurs costs, for example through due diligence
and/or financing, but the Company cannot assure
Investors that it will be successful against such
competition. Such competition may cause the Company
to incur significant costs but 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.
------------------------------------------------------------------------
Even if the The success of any of the Group's acquisitions
Group completes may depend in part on the Group's ability to implement
an acquisition, the necessary technological, strategic, operational
any technological, and financial change programmes in order to transform
strategic, the acquired business and improve its financial
operating performance. Implementing change programmes within
and financial an acquired business may require significant modifications,
improvements including changes to hardware and other business
proposed and assets, operating and financial processes and
implemented technology, software, business systems, management
may not be techniques and personnel, including senior management.
successful.
There is no certainty that the Group will be able
to successfully implement such change programmes
within a reasonable timescale and cost, and any
inability to do so could have a material adverse
impact on the Company's performance and prospects.
Specifically, in the context of operational improvements
and financial performance, the Company may not
be able to propose and implement effective operational
improvements for the target business with which
the Group completes an acquisition. Such target
businesses may not be able to generate the expected
margins or cash flows. Although the Group assesses
each target business, these assessments are subject
to a number of assumptions and estimates concerning
markets, profitability, growth, interest rates
and company and asset valuations. The Group's
assessments of, and assumptions regarding, target
businesses may prove to be incorrect and actual
developments may differ significantly from the
Group's expectations. In addition, even if the
Group completes an acquisition, general economic
and market conditions or other factors outside
the Company's control make the Company's operating
strategies difficult or impossible to implement.
------------------------------------------------------------------------
Directors interests
The Directors have no direct interests in the ordinary shares of
the Company. The Directors have interests in the Company's long
term incentive plan, as detailed in Note 18 to the Financial
Statements. James Corsellis is the managing partner of MIM LLP
which manages 75% per cent of the ordinary shares and matching
warrants, and 100% of the A shares and matching A warrants issued
by the Company. James Corsellis is also the managing partner of
Marwyn Capital LLP, a firm which provides corporate finance advice,
company secretarial services and ad-hoc managed services support to
the Company.
Details of the related party transactions which occurred during
the year are disclosed in Note 19 to the Financial Statements, save
for the participation in the Company's long term incentive plan as
disclosed in Note 18 to the Financial Statements.
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.
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 Directors have considered the financial position of the Group
and have reviewed forecasts and budgets for a period of at least 12
months following the approval of the Financial Statements.
At 30 June 2022, the Group has net assets of GBP4,749,829 (2022:
GBP8,247,216), net assets excluding warrant liabilities of
GBP7,416,829 (2022: GBP10,660,216) and a cash balance of
GBP7,783,448 (2022: GBP10,254,198). The Company has sufficient
resources to continue to pursue its investment strategy which may
include effecting a merger, share exchange, asset acquisition,
share or debt purchase, reorganisation or similar business
combination with one or more businesses.
Subject to the structure of any acquisition, the Company may
need to raise additional funds to finance the acquisition in the
form of equity and/or debt. The capital structure of the Company
enables it to issue different types of shares in order to raise
equity to fund an acquisition. The ability of the Company to raise
additional funds in relation to an acquisition may affect its
ability to complete that acquisition. Other factors outside of the
Company's control may also impact on the Company's ability to
complete that acquisition. The key risks relating to the Company's
ability to execute its stated strategy are set out on pages 7 to
8.
The Company entered into a forward purchase agreement ("FPA") on
27 November 2020 with Marwyn Value Investors II LP ("MVI II LP") of
up to GBP20 million, which may be drawn for general working capital
purposes and to fund due diligence costs. Any drawdown is subject
to the prior approval of MVI II LP and the satisfaction of
conditions precedent. At 30 June 2023 GBP12 million had been drawn
down under the FPA. Whilst the FPA provides a mechanism for the
Company to raise additional funds, as any drawdown is not under the
exclusive control on the Company, all cashflow and working capital
forecasts have been prepared without any further draw down on the
FPA being assumed.
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 have also considered the ongoing operating costs
expected to be incurred by the business over at least the next 12
months. Based on their review the Directors have concluded that
there are no material uncertainties relating to going concern of
the Group and as such 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 within
the next 12 months from the date of approval of the Financial
Statements.
Outlook
The Directors remain excited about the scale of the opportunity
and unmet need in the customer, product and addressable markets
identified. The Directors continued to believe that the successful
execution of the strategy, including platform and follow-on
M&A, performance improvements and sustainable growth, has the
potential to generate significant long term returns for
shareholders.
RESPONSIBILTY STATEMENT
The Directors are responsible for preparing the consolidated
financial statements in accordance with applicable laws and
regulations, including the BVI Business Companies Act, 2004. The
Directors have prepared the financial statements for the year to 30
June 2023, which present fairly the state of affairs of the Group
and the profit or loss of the Group for that year.
The Directors have acted honestly and in good faith and in what
the Directors believes to be in the best interests of the
Company.
The Directors have chosen to use International Financial
Reporting Standards as adopted by the European Union ("EU adopted
IFRS" or "IFRS") in preparing the Group's financial statements.
International Accounting Standard 1 requires that financial
statements present fairly for each financial year the group's
financial position, financial performance and cash flows. This
requires the faithful presentation of the effects of transactions,
other events and conditions in accordance with the definitions and
recognition criteria for assets, liabilities, income and expenses
set out in the International Accounting Standards Board's
"Framework for the preparation and presentation of financial
statements". In virtually all circumstances, a fair presentation
will be achieved by compliance with all applicable EU adopted
IFRS.
A fair presentation also requires the Directors to:
-- select consistently and apply appropriate accounting
policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- make judgements and accounting estimates that are reasonable
and prudent;
-- provide additional disclosures when compliance with the
specific requirements in EU adopted IFRS is insufficient to enable
users to understand the impact of particular transactions, other
events and conditions on the entity's financial position and
financial performance;
-- state that the Group has complied with EU adopted IFRS,
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 are also required to prepare financial statements
in accordance with the rules of the London Stock Exchange for
companies trading securities on the Stock Exchange.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Group, for safeguarding the assets, for
taking reasonable steps for the prevention and detection of fraud
and other irregularities and for the preparation of financial
statements.
Financial information is published on the Group's website. The
maintenance and integrity of this website is the responsibility of
the Directors; the work carried out by the auditor does not involve
consideration of these matters and, accordingly, the auditor's
accept no responsibility for any changes that may occur to the
financial statements after they are presented initially on the
website. Legislation in the British Virgin Islands governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Directors' Responsibilities Pursuant to DTR4
In compliance with the Listing Rules of the London Stock
Exchange, the Directors confirm to the best of their knowledge:
-- The Financial Statements have been prepared in accordance
with EU adopted IFRS, and give a true and fair view of the assets,
liabilities, financial position and profit and loss of the Group;
and
-- The management report includes a fair review of the
development and performance of the business and the financial
position of the group, together with a description of the principal
risks and uncertainties that they face.
Independent Auditor
Baker Tilly Channel Islands Limited ("BTCI") remains the
Company's independent auditor for the year ended 30 June 2023 and
has expressed its willingness to continue to act as auditor to the
Group.
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 Financial Statements, which have been prepared in
accordance with EU adopted IFRS, present fairly 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.
This Directors' Report was approved by the Board of Directors on
27 September 2023 and is signed on its behalf.
By Order of the Board
Mark Hodges
Chairman
27 September 202 3
INDEPENT AUDITOR'S REPORT
Independent auditor's report to the members of Marwyn
Acquisition Company II Limited
Opinion
We have audited the consolidated financial statements of Marwyn
Acquisition Company II Limited (the "Company" and, together with
its subsidiary, MAC II (BVI) 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 (IFRSs); and
-- have been prepared in accordance with the requirements of the
BVI Business Company Act 2004, 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, were of most significance in our audit of the
consolidated financial statements of the current period and include
the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of
the engagement team. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and
in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Key audit matter How our audit addressed Key observations
the matter communicated to those
charged with governance
Equity and Warrants Classification Based on the procedures
Issuance We obtained an understanding performed, we are
The warrants issued of management's assessment satisfied that management's
to investors are subject for the classification judgements and estimates
to judgement in both of these instruments in respect of the
classification and and the rationale valuation and classification
valuation. for their classification. of warrants for the
The classification We reviewed, in conjunction year ended 30 June
of the warrants is with our Technical 2023, along with the
complex and must consider Director the classification related disclosures
the nature and details of these instruments in the consolidation
of the instrument and management's assessment financial statements,
contracts to determine in accordance with are appropriate.
the correct classification IAS 32 and IFRS 9 We have nothing to
between equity and and we challenged report to those charged
liabilities. management on their with governance from
Further the fair value assessment. our testing.
of these warrants Valuation
was determined using We obtained the valuation
the Black Scholes report prepared by
option pricing methodology management's expert
which considered the and reviewed the credentials
exercise price, expected and inputs used.
volatility, risk free We performed the review
rate, expected dividends of and validation
and expected term of the valuation assumptions,
of the warrants which methodology and calculations
is complex and involves in respect of the
estimates and judgements. valuation of the instruments
Financial statement and determined whether
impact: GBP2,667,000 it was in accordance
(PY: 2,413,000). with the requirements
The accounting policies of IFRS 9 and IFRS
on pages 21, 22 and 13.
23 set out the treatment Disclosure
applied by management, We reviewed the relevant
and related disclosures disclosures in the
are presented in note consolidated financial
14. statements in accordance
with the requirements
of the IFRS as adopted
by the European Union
and performed a financial
statement disclosure
checklist utilising
specialist software.
=============================== ==============================
Our Application of Materiality
Materiality for the consolidated financial statements as a whole
was set at GBP189,000 (PY: GBP211,000), 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 GBP132,000 (PY: GBP147,700). We applied this percentage in our
determination of performance materiality because we did not
identify any factors indicating an elevated level of risk.
We reported to the Board of Directors any uncorrected omissions
or misstatements exceeding GBP9,400 (PY: GBP10,550), in addition to
those that warranted reporting on qualitative grounds.
The work on all the components was performed by the Group audit
team.
Conclusions relating to Going Concern
In auditing the consolidated financial statements, we have
concluded that the Directors' use of the going concern basis of
accounting in the preparation of the consolidated financial
statements is appropriate.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and Company's ability to continue as a going concern for a
period of at least twelve months from when the consolidated
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Other Information
The other information comprises the information included in the
annual report other than the consolidated financial statements and
our auditor's report thereon. The Directors are responsible for the
other information contained within the annual report. Our opinion
on the consolidated financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our
knowledge obtained in the course of the audit, or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in
the consolidated financial statements themselves. If, based on the
work performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the Directors
As explained more fully in the Directors' responsibilities
statement set out on page 10 and 11, the Directors are responsible
for the preparation of consolidated financial statements that give
a true and fair view in accordance with IFRSs, and for such
internal control as the Directors determine is necessary to enable
the preparation of consolidated financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the
Directors are responsible for assessing the Group'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;
-- Obtained and reviewed bank statements as well as reviewed
ledgers and minutes to ensure finance income is complete and as per
our expectations;
-- 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.
The Company is required to include these financial statements in
an annual financial report prepared using the single electronic
reporting format specified in the TD ESEF Regulation. The auditor's
report provides no assurance over whether the annual financial
report has been prepared in accordance with that format.
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 Marwyn Acquisition Company II Limited to
audit the consolidated financial statements. Our total
uninterrupted period of engagement is 2 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
Date: 27 September 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
30 June 30 June
2023 2022
Note GBP's GBP's
Administrative expenses 6 (3,526,278) (1,314,001)
Total Operating loss (3,526,278) (1,314,001)
Finance income 7 252,379 14,483
Movement in fair value of warrants 14 (254,000) (635,000)
Loss for the year before tax (3,527,899) (1,934,518)
Income tax 8 - -
============ ============
Loss for the year (3,527,899) (1,934,518)
Total other comprehensive income - -
============ ============
Total comprehensive loss for the year (3,527,899) (1,934,518)
============ ============
Loss per ordinary share GBP's GBP's
Basic and diluted 9 (0.2778) (0.1523)
The Group's activities derive from continuing operations.
The notes on pages 20 to 35 form an integral part of these
Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at
30 June 30 June
2023 2022
Assets Note GBP 's GBP's
Current assets
Other receivables 11 235,620 805,360
Cash and cash equivalents 12 7,783,448 10,254,198
----------- -----------
Total current assets 8,019,068 11,059,558
Total assets 8,019,068 11,059,558
=========== ===========
Equity and liabilities
Equity
Ordinary Shares 15 326,700 326,700
A Shares 15 10,320,000 10,320,000
Sponsor share 15 1 1
Share-based payment reserve 16,18 201,641 171,129
Accumulated losses 16 (6,098,513) (2,570,614)
----------- -----------
Total equity 4,749,829 8,247,216
Current liabilities
Trade and other payables 13 602,239 399,342
Warrants 14 2,667,000 2,413,000
----------- -----------
Total liabilities 3,269,239 2,812,342
----------- -----------
Total equity and liabilities 8,019,068 11,059,558
=========== ===========
The notes on pages 20 to 35 form an integral part of these
Financial Statements.
The Financial Statements were issued and approved by the Board
of Directors on 27 September 2023 and were signed on its behalf
by:
Mark Hodges James Corsellis
Chairman Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
based
Ordinary Sponsor payment Accumulated Total
Note Shares A Shares Share reserve losses equity
--------- ----------- -------- --------- ------------ ------------
GBP's GBP's GBP's GBP's GBP's GBP's
Balance
at 1 July
2021 326,700 10,320,000 1 169,960 (636,096) 10,180,565
Total comprehensive
loss for
the year - - - - (1,934,518) (1,934,518)
Share-based
payment
charge 18 - - - 1,169 - 1,169
Balance
at 30
June 2022 326,700 10,320,000 1 171,129 (2,570,614) 8,247,216
========= =========== ======== ========= ============ ============
Share
based
Ordinary Sponsor payment Accumulated Total
Note Shares A Shares Share reserve losses equity
--------- ----------- -------- --------- ------------ ------------
GBP's GBP's GBP's GBP's GBP's GBP's
Balance
at 1 July
2022 326,700 10,320,000 1 171,129 (2,570,614) 8,247,216
Total comprehensive
loss for
the year - - - - (3,527,899) (3,527,899)
Share-based
payment
charge 18 - - - 30,512 - 30,512
Balance
at 30 June
2023 326,700 10,320,000 1 201,641 (6,098,513) 4,749,829
========= =========== ======== ========= ============ ============
The notes on pages 20 to 35 form an integral part of these
Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the For the
year ended year ended
30 June 30 June
2023 2022
Note GBP's GBP's
Operating activities
Loss for the year (3,527,899) (1,934,518)
Adjustments to reconcile total operating
loss to net cash flows:
Finance income 7 (252,379) (14,483)
Fair Value loss on warrant provision 14 254,000 635,000
Share-based payment expense 18 30,512 1,169
Working capital adjustments:
Decrease / (Increase) in other receivables 11 569,740 (153,652)
Increase / (Decrease) in trade and other
payables 13 184,497 (596,188)
Net cash flows used in operating activities (2,741,529) (2,062,672)
------------------ -----------
Investing activities
Interest received 7 252,379 14,483
-----------
Net cash flows received from investing
activities 252,379 14,483
------------------ -----------
Financing activities
Proceeds from issue of ordinary A share
capital in MAC II (BVI) limited 18 18,400 47,000
Net cash flows received from financing
activities 18,400 47,000
------------------ -----------
Net decrease in cash and cash equivalents (2,470,750) (2,001,189)
Cash and cash equivalents at the beginning
of the year 10,254,198 12,255,387
------------------ -----------
Cash and cash equivalents at the end
of the year 12 7,783,448 10,254,198
================== ===========
The notes on pages 20 to 35 form an integral part of these
Financial Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Marwyn Acquisition Company II Limited was incorporated on 31
July 2020 in the British Virgin Islands ("BVI") as a BVI business
company (registered number 2040956) under the BVI Business Company
Act, 2004. The Company was listed on the Main Market of the London
Stock Exchange on 4 December 2020 and has its registered address at
Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola,
VG1110, British Virgin Islands and UK establishment (BR022831) at
11 Buckingham Street, London WC2N 6DF.
The Company has been formed for the purpose of effecting a
merger, share exchange, asset acquisition, share or debt purchase,
reorganisation or similar business combination with one or more
businesses. The Company has one subsidiary, MAC II (BVI) Limited
(together with the Company, the "Group").
2. ACCOUNTING POLICIES
(a) Basis of preparation
The Financial Statements for the year ended 30 June 2023 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
presentational currency of the Group. The Financial Statements have
been prepared under the historical cost basis, except for the
revaluation of certain financial instruments that will be measured
at fair value at the end of each reporting year, as explained in
the accounting policies below.
The principal accounting policies adopted in the preparation of
the Financial Statements are set out below. The policies have been
consistently applied throughout the current and prior year
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 Directors have considered the financial position of the Group
and have reviewed forecasts and budgets for a period of at least 12
months following the approval of the Financial Statements.
At 30 June 2022, the Group has net assets of GBP4,749,829 (2022:
GBP8,247,216), net assets excluding warrant liabilities of
GBP7,416,829 (GBP2022: GBP10,660,216) and a cash balance of
GBP7,783,448 (2022: GBP10,254,198). The Company has sufficient
resources to continue to pursue its investment strategy which may
include effecting a merger, share exchange, asset acquisition,
share or debt purchase, reorganisation or similar business
combination with one or more businesses.
Subject to the structure of any acquisition, the Company may
need to raise additional funds to finance the acquisition in the
form of equity and/or debt. The capital structure of the Company
enables it to issue different types of shares in order to raise
equity to fund an acquisition. The ability of the Company to raise
additional funds in relation to an acquisition may affect its
ability to complete that acquisition. Other factors outside of the
Company's control may also impact on the Company's ability to
complete that acquisition. The key risks relating to the Company's
ability to execute its stated strategy are set out on pages 7 to
8.
The Company entered into a forward purchase agreement ("FPA") on
27 November 2020 with Marwyn Value Investors II LP ("MVI II LP") of
up to GBP20 million, which may be drawn for general working capital
purposes and to fund due diligence costs. Any drawdown is subject
to the prior approval of MVI II LP and the satisfaction of
conditions precedent. At 30 June 2023 GBP12 million had been drawn
down under the FPA. Whilst the FPA provides a mechanism for the
Company to raise additional funds, as any drawdown is not under the
exclusive control on the Company, all cashflow and working capital
forecasts have been prepared without any further draw down on the
FPA being assumed.
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 have also considered the ongoing operating costs
expected to be incurred by the business over at least the next 12
months. Based on their review the Directors have concluded that
there are no material uncertainties relating to going concern of
the Group and as such 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 within
the next 12 months from the date of approval of the Financial
Statements.
(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 IAS21 Lack of exchangeability. 1 January
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
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
The Group initially recognises financial assets and financial
liabilities at fair value. With the exception of warrants,
financial assets and liabilities are subsequently remeasured at
amortised cost using the effective interest rate.
Warrants
Warrants are accounted for as derivative liability instruments
under IAS 32 and are measured at fair value at the date of issue
and remeasured at each subsequent reporting date with changes in
fair value being recognised in the Statement of Comprehensive
Income. Fair value of the warrants has been calculated using a
Black-Scholes option pricing methodology and details of the
estimates and judgements used in determining the fair value of the
warrants are set out in Note 3. The warrant liability will be
derecognised when the liability is extinguished either through
exercise or expiry.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash balances at banks.
(g) Equity
Ordinary shares, A shares and sponsor shares are classified as
equity . Incremental costs directly attributable to the issue of
new shares are recognised in equity as a deduction from the
proceeds.
(h) 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 year, using tax rates enacted or substantially enacted at
the balance sheet date. Deferred tax is provided using the balance
sheet liability method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. 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.
(i) Loss per ordinary share
The Group presents basic earnings per ordinary share ("EPS")
data for its ordinary shares and A shares as disclosed in more
detail in Note 9. 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
potential dilutive ordinary shares.
(j) Share based payments
The A1 ordinary shares and A2 ordinary shares in MAC II (BVI)
Limited (the "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.
Equity-settled share-based payments to Directors and others
providing similar services are measured at the fair value of the
equity instruments at the grant date. Fair value is determined
using an appropriate valuation technique, further details of which
are given in Note 18. 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 as the
services are deemed to have been received in full, the fair value
is recognised as an expense with a corresponding increase in equity
recognised at grant date.
(k) Warrants
On 4 December 2020, the Company issued 700,000 ordinary shares
and matching warrants at a price of GBP1 for one ordinary share and
matching warrant . Under the terms of the warrant instrument,
warrant holders are able to acquire one ordinary share per warrant
at a price of GBP1 per ordinary share, subject to a downward price
adjustment depending on future share issues.
On 20 April 2021, the Company issued 12,000,000 A shares and
matching A warrants at a price of GBP1 for one ordinary A share and
matching A warrant. Under the terms of the warrant instrument,
warrant holders are able to acquire one ordinary share per warrant
at a price of GBP1 per ordinary share, subject to a downward price
adjustment depending on future share issues.
Warrants are accounted for as derivative liability instruments
under IAS 32 and are measured at fair value at the date of issue
and each subsequent balance sheet date. Fair value of the warrants
has been calculated using a Black-Scholes option pricing
methodology and details of the estimates and judgements used in
determining the fair value of the warrants are set out in Note
3.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
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.
Key sources of estimation uncertainty
Valuation of warrants
The Company has issued matching warrants for both its issues of
ordinary shares and A shares. For every share subscribed for, each
investor was also granted a warrant ("Warrant") to acquire a
further share at an exercise price of GBP1.00 per share (subject to
a downward adjustment under certain conditions). In the prior
period, the Warrants were exercisable at any time until five years
after the issue date; effective 31 March 2022 the exercise date for
the Warrants was extended to the 5(th) anniversary of a business
acquisition, as detailed in Note 14. The Warrants are valued using
the Black-Scholes option pricing methodology which considers the
exercise price, expected volatility, risk free rate, expected
dividends, and expected term of the Warrants.
Valuation of Incentive Scheme
The Company has issued Incentive Shares as part of the creation
of a long-term incentive scheme which is valued using a Monte Carlo
model. This model requires estimation and judgement surrounding the
inputs of exercise price, expected volatility, risk free rate,
expected dividends, and expected term of the Incentive Shares. The
Ordinary A share liability held represents at the subscription
price as there is an option to redeem the shares for cash in the
instance of a bad leaver, at the lower of market value and the
subscription price, which the Directors estimate to be materially
equivalent to their underlying market value.
Other disclosures relating to the Group's exposure to risk and
uncertainties in relation to financial instruments are included in
Note 17.
Critical accounting judgements
Classification of warrants
The Directors consider the warrants to represent a derivative
liability due to the potential modification of the exercise price
under certain conditions that the Directors believe are possible to
occur. This modification results in the warrants failing the 'fixed
for fixed' test, as outlined in IAS 32 para 16, required to
recognise the warrants as equity instruments, that requires the
Company to provide a fixed number of shares for a fixed amount of
cash on exercise of the warrants. Accordingly, the warrants are
recognised as derivative liabilities, to be assessed at each
balance sheet date with a review of the underlying inputs
undertaken.
The initial fair value recognised for the warrants affects the
corresponding entry in equity recognised for the issue of shares as
the proceeds are required to be allocated between equity and
liability. This is due to the proceeds received from the issue of
equity deemed to have been received for both the issue of the
shares and the warrants attached.
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. EMPLOYEES AND DIRECTORS
During the year ended 30 June 2023, the Company had five serving
Directors: James Corsellis, Mark Hodges, Cathryn Riley (appointed 6
November 2022), Will Self (appointed 5 June 2023) and Mark
Brangstrup Watts (resigned 6 November 2022). The Company had one
employee at the year end who was not a director during the year
(2022: None).
Mark Hodges, Cathryn Riley and Will Self were the only Directors
to receive remuneration under the terms of their director service
agreements.
The Company's subsidiary has issued Incentive Shares directly to
Will Self and Mark Hodges, with James Corsellis indirectly
beneficially interested in the Incentive Shares through his
interest in MLTI, further detail is disclosed in Note 18.
(a) Employment costs for the Group during the year:
For the For the
year year
ended 30 ended 30
June June
2023 2022
GBP's GBP's
Wages and salaries 388,519 8,333
Social security costs 57,335 10,356
Signing on fee 34,717 61,238
Pension contributions 5,967 -
Short term employee benefits 3,604 -
--------- ---------
Total employment costs expense 490,142 79,927
========= =========
On the 19 June 2022, Mark Hodges was appointed as a
Non-Executive Director and Chairman. Under the terms of his
appointment letter, he is entitled to an annual fee of GBP250,000
and received a signing on fee of GBP61,238 of which GBP47,000 was
used to pay the subscription for his Incentive Shares as further
detailed in Note 18.
On 6 November 2022, Cathryn Riley was appointed as a
Non-Executive Director and under the terms of her appointment
letter, she is entitled to an annual fee of GBP70,000.
On the 5 June 2023, Will Self was appointed as Chief-Executive
Officer. Under the terms of his appointment letter, he is entitled
to an annual gross salary of GBP320,000, employer pension
contribution of 8% of Gross salary, annual travel allowance of up
to GBP10,000 and received a signing on fee of GBP34,717 of which
GBP18,400 was used to pay the subscription for his Incentive Shares
as further detailed in Note 18. There are provisions for
discretionary annual bonuses to be paid up to the maximum value of
75% of salary provided performance targets are met.
(b) Key management compensation
The Board considers the Directors of the Company to be the key
management personnel of the Group.
(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
Directors 3 2
--------- ---------
3 2
========= =========
6. ADMINISTRATIVE EXPENSES
For the
For the year
year ended ended 30
30 June June
2023 2022
GBP's GBP's
Group expenses by nature
Personnel costs 490,142 79,927
Non-recurring project, professional and
diligence costs 2,017,600 793,214
Professional support 955,813 410,298
Audit fees payable (Note 21) 23,000 20,000
Share-based payment expenses (Note 18) 30,512 1,169
Sundry expenses 9,211 9,393
----------
3,526,278 1,314,001
================ ==========
Included within non-recurring project, professional and
diligence costs is GBP723,592 that had been included in the balance
sheet as current asset deferred costs in the year ended 30 June
2022, as these costs were directly attributable to a future
issuance of shares under the Placing Programme and therefore
expected to be capitalised to equity. As detailed in the Management
Report, effective 31 March 2023, the Directors have approved the
termination of the Placing Programme and as such effective this
date, the GBP723,592 of costs were taken to the profit and loss
account.
7. FINANCE INCOME
For the For the
year ended year ended
30 June 30 June
2023 2022
GBP's GBP's
Interest on bank deposits 252,379 14,483
----------------
252,379 14,483
================ ================
8. INCOME TAX
For the For the
year ended year
30 June ended 30
2023 June
2022
GBP's GBP's
Analysis of tax in year
Current tax on loss for the year - -
Total current tax - -
=========== ==========
Reconciliation of effective rate and For the For the
tax charge year ended year ended
30 June 30 June 2022
2023
GBP's GBP's
Loss on ordinary activities before tax (3,527,899) (1,934,518)
----------- --------------
Loss multiplied by the rate of corporation
tax in the UK of 25% (2022: 19%) (881,975) (367,558)
Effects of:
Disallowable expenditure 73,508 131,780
Tax losses not utilised 808,467 235,778
----------- --------------
Total taxation charge - -
=========== ==============
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 GBP 4,953,146 , (2022: GBP1,719,280 ) subject
to agreement with HM Revenue & Customs. There is currently no
certainty as to future profits and no deferred tax asset is
recognised in relation to these carried forward losses. Under UK
Law, there is no expiry for the use of tax losses.
9. LOSS PER ORDINARY SHARE
Basic EPS is calculated by dividing the loss attributable to
equity holders of the company by the weighted average number of
ordinary shares and A shares in issue during the year. Diluted EPS
is calculated by adjusting the weighted average number of ordinary
shares and A shares outstanding to assume conversion of all
dilutive potential ordinary shares and A shares. The Company being
loss making in both this year and comparative year would mean that
any exercise would be anti-dilutive.
The Company maintains different share classes, of which ordinary
shares, A shares and sponsor shares were in issue in the current
year and prior period. The key difference between ordinary shares
and A shares is that the ordinary shares are traded with voting
rights attached. The ordinary share and A share classes both have
equal rights to the residual net assets of the Company, which
enables them to be considered collectively as one class per the
provisions of IAS 33. The sponsor share has no rights to
distribution rights so has been ignored for the purposes of IAS
33.
Refer to Note 14 (warrant liability) and Note 18 (share based
payments) for instruments that could potentially dilute basic EPS
in the future.
For the For the
year year
ended 30 ended 30
June June
2023 2022
Loss attributable to owners of the parent
(GBP's) (3,527,899) (1,934,518)
Weighted average in issue 12,700,000 12,700,000
Basic and diluted loss per ordinary share
(GBP's) (0.2778) (0.1523)
10. SUBSIDIARY
Marwyn Acquisition Company II Limited is the parent company of
the Group, the Group comprises of Marwyn Acquisition Company II
Limited and the following subsidiary as at 30 June 2023:
Company name Nature of business Country of incorporation Proportion of
ordinary shares
held directly
by parent
-------------- -------------------- -------------------------- ------------------
MAC II (BVI) British Virgin
Limited Incentive vehicle Islands 100%
The share capital of MAC II (BVI) Limited consists of both
ordinary shares and Incentive Shares. The Incentive Shares are
non-voting and disclosed in more detail in Note 18.
There are no restrictions on the parent company's ability to
access or use the assets and settle the liabilities of the parent
company's subsidiary. The registered office of MAC II (BVI) Limited
is Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town,
Tortola, VG1110, British Virgin Islands and has a UK Establishment
address at 11 Buckingham Street, London, WC2N 6DF.
11. OTHER RECEIVABLES
As at As at
30 June 30 June
2023 2022
GBP's GBP's
Amounts receivable within one year:
Prepayments 20,689 17,634
Deferred costs - 723,592
Due from related party (Note 19) 1 42,001
VAT receivable 214,930 22,133
-------- --------
235,620 805,360
======== ========
There is no material difference between the book value and the
fair value of the receivables. Receivables are considered to be
past due once they have passed their contracted due date. Other
receivables are all current.
12. CASH AND CASH EQUIVALENTS
As at As at
30 June 30 June
2023 2022
GBP's GBP's
Cash and cash equivalents
Cash at bank 7,783,448 10,254,198
--------- ----------
7,783,448 10,254,198
========= ==========
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's GBP's
Amounts falling due within one year:
Trade payables 165,661 74,740
Due to a related party (Note 19) 179,192 109,735
Accruals 158,602 141,026
Other tax liabilities 30,345 26,841
Other creditors 3,039 -
A1 ordinary share liability (Note 18) 65,400 47,000
602,239 399,342
======== ========
There is no material difference between the book value and the
fair value of the trade and other payables.
All trade payables are non-interest bearing and are usually paid
within 30 days.
14. WARRANT LIABILITY
GBP's
Fair value of warrants at 1 July 2021 1,778,000
Fair value movement of warrants :
Warrant liability - ordinary warrants 35,000
Warrant liability - A warrants 600,000
---------
Total fair value movement 635,000
---------
Fair value of warrants at 30 June 2022 2,413,000
=========
Fair value movement of warrants:
Warrant liability - ordinary warrants
Warrant liability - ordinary warrants 14,000
Warrant liability - A warrants 240,000
---------
Total fair value movement 254,000
---------
Fair value of warrants at 30 June 2023 2,667,000
=========
On 4 December 2020, the Company issued 700,000 ordinary shares
and matching warrants at a price of GBP1 for one ordinary share and
matching warrant. Under the terms of the warrant instrument,
warrant holders are able to acquire one ordinary share per warrant
at a price of GBP1 per ordinary share, subject to a downward price
adjustment depending on future share issues. Warrants are fully
vested at the year end and are exercisable for 5 years from the
date of the initial acquisition.
On 20 April 2021, the Company issued 12,000,000 A shares and
matching warrants at a price of GBP1 for one A share and matching A
warrant. Under the terms of the warrant instrument, warrant holders
are able to acquire one ordinary share per warrant at a price of
GBP1 per ordinary share, subject to a downward price adjustment
depending on future share issues. Warrants are fully vested at the
period end and are exercisable for 5 years from the date of the
initial acquisition.
Warrants are accounted for as a level 3 derivative liability
instruments and are measured at fair value at grant date and each
subsequent balance sheet date. The warrants and A warrants were
separately valued at the date of grant. For both the warrants and A
warrants, the combined market value of one share and one Warrant
was considered to be GBP1, in line with the market price paid by
third party investors. A Black-Scholes option pricing methodology
was used to determine the fair value, which considered the exercise
prices, expected volatility, risk free rate, expected dividends and
expected term. At 30 June 2023, the fair value was assessed as 21p
per warrant, the result of which is a fair value loss of GBP254,000
(2022: loss GBP635,000). The Directors are responsible for
determining the fair value of the warrants at each reporting date,
the underlying calculations are prepared by Deloitte LLP.
Effective 31 March 2022, both the Warrant Instrument and A
Warrant Instrument were amended such that the long stop date was
extended to the fifth anniversary of an initial acquisition by a
member of the Group (which may be in the form of a merger, share
exchange, asset acquisition, share or debt purchase, reorganisation
or similar transaction) of a business ("Business Acquisition").
Previously the warrants were exercisable for 5 years from the date
of issue.
The key assumptions used in determining the fair value of the
Warrants are as follows:
As at As at
30 June 30 June
2023 2022
Combined price of a share and warrant GBP1 GBP1
Exercise price GBP1 GBP1
Expected volatility 30.0% 30.0%
Risk free rate 4.70% 2.17%
Expected dividends 0.0% 0.0%
Expected term 5(th) anniversary 5(th) anniversary
of the completion of the completion
of a Business of a Business
Acquisition Acquisition
15. STATED CAPITAL
As at As at
30 June 30 June
2023 2022
Issued and fully paid GBP's GBP's
700,000 ordinary shares of no par value 326,700 326,700
12,000,000 A shares of no par value 10,320,000 10,320,000
1 sponsor share of no par value 1 1
---------- ----------
Total 10,646,701 10,646,701
========== ==========
There has been no issue of any share capital in the year ended
30 June 2023.
The ordinary shares and A shares are entitled to receive a share
in any distribution paid by the Company and a right to a share in
the distribution of the surplus assets of the Company on a
winding-up. Only ordinary shares have voting rights attached. The
Sponsor Share confers upon the holder no right to receive notice
and attend and vote at any meeting of members, no right to any
distribution paid by the Company and no right to a share in the
distribution of the surplus assets of the Company on a summary
winding-up. Provided the holder of the Sponsor Share holds directly
or indirectly 5 per cent. or more of the issued and outstanding
shares of the Company (of whatever class other than any Sponsor
Shares), they have the right to appoint one director to the
Board.
The Company must receive the prior consent of the holder of the
Sponsor Share, where the holder of the Sponsor Share holds directly
or indirectly 5 per cent. or more of the issued and outstanding
shares of the Company, in order to:
-- Issue any further Sponsor Shares;
-- issue any class of shares on a non pre-emptive basis where
the Company would be required to issue such share pre-emptively if
it were incorporated under the UK Companies Act 2006 and acting in
accordance with the Pre-Emption Group's Statement of Principles;
or
-- amend, alter or repeal any existing, or introduce any new
share-based compensation or incentive scheme in respect of the
Group; and
-- take any action that would not be permitted (or would only be
permitted after an affirmative shareholder vote) if the Company
were admitted to the Premium Segment of the Official List.
The Sponsor Share also confers upon the holder the right to
require that: (i) any purchase of ordinary shares; or (ii) the
Company's ability to amend the Memorandum and Articles, be subject
to a special resolution of members whilst the Sponsor (or an
individual holder of a Sponsor Share) holds directly or indirectly
5 per cent. or more of the issued and outstanding shares of the
Company (of whatever class other than any Sponsor Shares) or are a
holder of incentive shares.
16. 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 18.
17. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The fair value measurement of the Group's financial and
non-financial assets and liabilities utilities market observable
inputs and data as far as possible. Inputs used in determining fair
value measurements are categorised into different levels based on
how observable the inputs used in the valuation technique utilised
are (the "fair value hierarchy"):
Level 1: Quoted prices in active markets for identical
items;
Level 2: Observable direct or indirect inputs other than Level 1
inputs; and
Level 3: Unobservable inputs, thus not derived from market
data.
The classification of an item into the above levels is based on
the lowest level of the inputs used that has a significant effect
on the fair value measurement of the item. Transfers of items
between levels are recognised in the year they occur.
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's GBP's
Financial assets measured at amortised
cost
Cash and cash equivalents (Note 12) 7,783,448 10,254,198
Due from related party (Note 19) 1 42,001
7,783,449 10,296,199
========== ==========
Financial liabilities measured at amortised
cost
Trade payables (Note 13) 165,661 74,740
Due to related party (Note 19) 179,192 109,735
Accruals 158,602 141,026
A1 ordinary share liability (Note 18) 65,400 47,000
---------- ----------
568,855 372,501
========== ==========
Financial liabilities measured at measure
at fair value to profit and loss
Warrant Liability (Note 14) 2,667,000 2,413,000
---------- ----------
2,667,000 2,413,000
========== ==========
All financial instruments are classified as current assets and
current liabilities. There are no non-current financial instruments
as at 30 June 2023.
For details of the fair value hierarchy, valuation techniques,
and significant unobservable inputs related to determining the fair
value of the warrant liability, which is classified in level 3 of
the fair value hierarchy, refer to Note 14.
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.
As the Group's assets are predominantly cash and cash
equivalents, market risk, and liquidity risk are not currently
considered to be material risks to the Group. The Directors have
reviewed the risk of holding a singular concentration of assets as
predominantly all credit assets held are cash and cash equivalents,
however, do not deem this a material risk. The risk is mitigated by
all cash and cash equivalents being held with Barclays Bank plc,
which holds a short-term credit rating of P-1, as issued by
Moody's.
18. SHARE-BASED PAYMENTS
Management Long Term Incentive Arrangements
The Group has put in place a Long-Term Incentive Plan (" 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.
On inception of the LTIP, Incentive Shares were issued by the
Company's subsidiary to Marwyn Long Term Incentive LP (" MLTI ").
On 17 June 2022, the Incentive Shares in the Company's subsidiary
were redesignated into A1 ordinary shares (" A1 Shares ") and A2
ordinary shares (" A2 Shares ") and the Incentive shares issued to
MLTI were redesignated as A2 Shares.
Preferred Return
The incentive arrangements are subject to the Company's
shareholders achieving a preferred return of at least 7.5 percent
per annum on a compounded basis on the capital they have invested
from time to time (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 can give notice to
redeem their Incentive Shares for ordinary shares in the Company ("
Ordinary Shares ") for an aggregate value equivalent to 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 its aggregate paid up share capital (20 per cent. of the
Growth being the " Incentive Value ").
Grant date
The grant date of the Incentive Shares will be the date that
such shares are issued.
Service Conditions and Leaver Provisions
There are leaver provisions in relation to the A1 Shares which
are set out in the subscription agreements entered into between the
holders of the A1 Shares and MAC II (BVI) Limited.
If the holder leaves in circumstances in which he or she is
deemed to be a "Good Leaver" (being any reason other than a bad
leaver circumstance), then the holder of the A1 Shares will be
entitled to the vested portion of the A1 Shares and in respect of
the remainder of the A1 Shares the holder will be required to enter
into documentation under which, at the election of the Company or
MAC II (BVI) Limited the remainder of the A1 Shares will be
compulsorily redeemed or acquired at the lower of the (i) the
subscription price or (ii) the market value for such A1 Shares or
the A1 Shares may be converted into ordinary shares in the Company.
Any holder deemed to be a "Bad Leaver" (such as termination of
employment for gross misconduct, fraud or criminal acts) will be
required to sell his A1 Shares back to MAC II (BVI) Limited for a
total consideration of GBP0.01. As there are conditions whereby the
unvested portion of the A1 Shares can be redeemed or acquired at
the lower of the (i) the subscription price or (ii) the market
value for such A1 Shares, the amounts received from on the issue of
A1 Shares is recognised as a liability in the Financial
Statements.
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 but not the
obligation 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 and earlier than the seventh anniversary of the
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.
Holding of Incentive Shares
MLTI, Mark Hodges and Will Self hold Incentive Shares entitling
them in 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 in issue at 30 June 2023:
Issue
Share price Unrestricted
designation per Number market IFRS
at balance A ordinary of A value 2 Fair
sheet Nominal share ordinary at grant value
Issue date Name date Price GBP's shares date GBP's GBP's
25 November 2020 MLTI A2 GBP0.01 7.50 2,000 15,000 169,960
--------- -------------- --------- ------------ ---------- ------------- --------
Mark
19 June 2022 Hodges A1 GBP0.01 23.50 2,000 47,000 166,275
--------- -------------- --------- ------------ ---------- ------------- --------
Will
5 June 2023 Self A1 GBP0.01 23.00 800 18,400 60,000
--------- -------------- --------- ------------ ---------- ------------- --------
Valuation of Incentive Shares
Valuations were performed by Deloitte LLP using a Monte Carlo
model and ascertaining a fair value at each date. Details of the
valuation methodology and estimates and judgements used in
determining the fair value are noted herewith and were in
accordance with IFRS 2 at grant date.
The cumulative unrestricted market value at grant date of
GBP65,400 represents the A share liability due to Mark Hodges and
Will Self (2022: GBP47,000), being the tax paid value of the
shares.
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 with the following
inputs:
Share designation
at balance Risk-free Expected
Issue date Name sheet date Volatility rate term* (years)
25 November
2020 MLTI A2 25% 0.0% 7.0
------------- ------------------- ----------- ---------- ---------------
19 June 2022 Mark Hodges A1 30% 2.2% 7.1
------------- ------------------- ----------- ---------- ---------------
5 June 2023 Will Self A1 30% 4.4% 7.2
------------- ------------------- ----------- ---------- ---------------
*The expected term assumes that the Incentive Shares are
exercised 7 years post acquisition.
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. 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 GBP 30,512 (2022: GBP1,169) has been recognised in
the Statement of Comprehensive Income in respect of the Incentive
Shares in issue during the year. There is a service condition
associated with the shares issued to both Mark Hodges and Will Self
which requires the fair value charge associated with these shares
to be allocated over the minimum vesting period. These vesting
periods are estimated to be 4.0 years and 3.04 years respectively
from the date of grant.
There are no service conditions attached to the MLTI shares and
as result the fair value at grant date was expensed to the profit
and loss account on issue.
19. RELATED PARTY TRANSACTIONS
James Corsellis has served as a director of the Company during
the year and Antoinette Vanderpuije is the Company Secretary of the
Company. Funds managed by Marwyn Investment Management LLP ("MIM
LLP"), of which James Corsellis is the managing partner, and
Antoinette Vanderpuije is a partner, hold 75 per cent. of the
Company's issued ordinary shares and warrants and 100% of the A
shares and A warrants at the year end date as well as the Sponsor
Share. The GBP1 due for the Sponsor Share remains unpaid at the
year end (2022: unpaid). During the year MIM LLP recharged expenses
of GBPNil (2022: GBP46,583), of which GBPNil (2022: GBPNil) was
outstanding at the year end. 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 Antoinette Vanderpuije have an indirect
beneficial interest in the A2 ordinary shares issued by MAC II
(BVI) Limited to Marwyn Long Term Incentive LP which is disclosed
in Note 18. Mark Brangstrup Watts also had an indirect beneficial
interest in the A2 ordinary shares until he stepped down as
director on 6 November 2022.
Mark Hodges and Will Self have a direct interest in the A1
ordinary shares issued by MAC II (BVI) Limited, as disclosed in
Note 18.
James Corsellis is also the managing partner of Marwyn Capital
LLP, and Antoinette Vanderpuije is a partner, which provides
corporate finance support, company secretarial, administration and
accounting services to the Company. On an ongoing basis a monthly
fee of GBP50,000 per calendar month charged for the provision of
the corporate finance services and managed services support is
charged on a time spent basis. The total amount charged in the year
ended 30 June 2023 by Marwyn Capital LLP for services was
GBP818,067 (2022: GBP553,641) and they had incurred expenses on
behalf of the Company of GBP82,405 (2022: GBP299,434) and the
aggregate amount due to Marwyn Capital LLP at year end was
GBP179,192 (2022: GBP97,575).
The Company has been recharged costs associated with provision
of project services of GBP 10,750 (2022: GBP16,039 due to Company)
inclusive of VAT from Marwyn Acquisition Company III Limited ("MAC
III"), of which GBP Nil (2022: GBPNil) was due to the Company at
year end. MAC III is related to the Group through James Corsellis
being the chairman of MAC III during the year, and Mark Brangstrup
Watts being a director until 6(th) November 2022.
The Company has not recharged costs associated with provision of
project services in the current year to MAC III (BVI) Limited ("MAC
III (BVI)") (2022: GBP42,000) and therefore no balance was
outstanding at year end (2022: GBP42,000) was due to the Company at
year end. MAC III (BVI) is related to the Group through James
Corsellis being a director of MAC III (BVI) during the year, and
Mark Brangstrup Watts being a director until 6(th) November
2022.
Directors' emoluments, in relation to Mark Hodges, Will Self and
Cathryn Riley, are disclosed in Note 5 with details of incentive
shares issued are outlined in Note 18.
20. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding
at 30 June 2023 which would require disclosure or adjustment in
these Financial Statements (2022: GBPNil).
21. INDEPENDENT AUDITOR'S REMUNERATION
On 24 August 2022, the Group appointed Baker Tilly Channel
Islands Limited as the Group's independent auditor, replacing
Mazars LLP. Audit fees payable for the year ended 30 June 2023 are
GBP 23,000 (2022: GBP20,000). Fees payable for the year ended 30
June 2023 in respect of any non-audit related procedures are GBP
Nil (2022: GBPNil).
22. POST BALANCE SHEET EVENTS
There have been no material post balance sheet events that would
require disclosure or adjustment in these Financial Statements
(2022: None).
ADVISERS
Company Broker BVI legal advisers to the Company
WH Ireland Limited Conyers Dill & Pearman
24 Martin Lane Commerce House
London Wickhams Cay 1
EC4R 0DR Road Town
+44 (0)20 7220 1666 VG1110
Company Broker Tortola
British Virgin Islands
Company Secretary Depository
Antoinette Vanderpuije Link Market Services Trustees
Limited
11 Buckingham Street The Registry
London 34 Beckenham Road
WC2N 6DF Beckenham
Email: MAC2@marwyn.com Kent
BR3 4TU
Registered Agent and Assistant Registrar
Company Secretary
Conyers Corporate Services (BVI) Link Market Services (Guernsey)
Limited Limited
Commerce House Mont Crevelt House
Wickhams Cay 1 Bulwer Avenue
Road Town St Sampson
VG1110 Guernsey
Tortola GY2 4LH
British Virgin Islands
English legal advisers to the Independent auditor
Company
Travers Smith LLP Baker Tilly Channel Islands
Limited
10 Snow Hill First Floor, Kensington Chambers
London 46-50 Kensington Place
EC1A 2AL St Helier
Jersey, JE4 0ZE
PR Advisor Registered office
FGS Global Commerce House
1-11 John Adam Street Wickhams Cay 1
London Road Town
WC2N 6HT VG1110
Tortola
British Virgin Islands
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September 28, 2023 02:00 ET (06:00 GMT)
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