REG - MAC Alpha Limited - Annual Financial Report - 30 June 2024
23/08/2024 07:00
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RNS Number : 4979B MAC Alpha Limited 23 August 2024
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 number: 254900LOBYWJWYSAB947
MAC Alpha Limited
(the "Company")
Publication of Annual Report and Financial Statements for the year ended 30
June 2024
The Company announces the publication of its Annual Report and Financial
Statements for the year ended 30 June 2024.
The Annual Report and Financial Statements are also available on the
'Shareholder Documents' page of the Company's website at www.mac-alpha.com
(http://www.mac-alpha.com) .
Enquiries:
Company Secretary
Antoinette Vanderpuije - +44(0)207 004 2700
MAC ALPHA LIMITED
Annual Report and Audited Consolidated Financial Statements
For the year ended 30 June 2024
MANAGEMENT REPORT
We present to shareholders the audited consolidated financial statements of
MAC Alpha Limited (the "Company") for the year ended 30 June 2024 (the
"Financial Statements"), consolidating the results of MAC Alpha Limited and
its subsidiary, MAC Alpha (BVI) Limited (collectively, the "Group" or "MAC").
Strategy
The Company was incorporated on 11 October 2021 and subsequently listed on the
Main Market of the London Stock Exchange on 24 December 2021. 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's objective is to
generate attractive long term returns for shareholders and to enhance value by
supporting sustainable growth, acquisitions, and performance improvements
within the acquired companies.
While a broad range of sectors will be considered by the Directors, those
which they believe will provide the greatest opportunity and which the Company
will initially focus on include:
• Automotive & Transport;
• Business-to-Business Services;
• Clean Technology;
• Consumer & Luxury Goods;
• Financial Services, Banking & Fin Tech;
• Insurance, Reinsurance & InsurTech, & Other
Vertical Marketplaces;
• Media & Technology; and
• Healthcare & Diagnostics.
The Directors may consider other sectors if they believe such sectors present
a suitable opportunity for the Company.
The Company will seek to identify situations where a combination of management
expertise, improving operating performance, freeing up cashflow for investment
and implementation of a focussed buy and build strategy can unlock growth in
their core markets and often into new territories and adjacent sectors.
Activity
The Directors have identified and met with several potential management teams
over the period and conducted preliminary due diligence on a variety of
opportunities. Although none of these engagements have resulted in appointing
a management partner or completing a platform acquisition, the Directors
continue to progress discussions.
Results
The Group's total comprehensive loss for the year to 30 June 2024 was
£285,528 (2023: £323,463). Of the costs incurred in the year, £Nil (2023:
£15,798) relates to non-recurring project costs. During the year, the Company
raised £Nil (2023: £600,000) through the issue of equity (excluding
expenses), received finance income of £20,607 (2023: £8,422) on uninvested
cash and held a cash balance at 30 June 2024 of £270,534 (2023: £554,446).
The Group has not yet acquired an operating business and as such is not yet
revenue generating.
Directors
The Directors of the Company who served during the year are:
James Corsellis (Chairman);
Tom Basset (Non-Executive Director); and
Antoinette Vanderpuije (Non-Executive Director).
Directors' Biographies
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 Queen Mary University of London.
Tom Basset
Tom has extensive experience working across a range of sectors in the
origination and assessment of new investment opportunities, transaction
execution, coordinating capital market and M&A processes and providing
strategic corporate advice to management teams. Tom joined Marwyn in 2010,
where he now leads the Investment Team and is also a member of the Investment
Committee. Prior to Marwyn, Tom spent six years at Deloitte across the
Assurance & Advisory and Private Equity Transaction Services groups. Tom
is a qualified Chartered Accountant and graduated from Durham University with
a BA (Hons) in Economics.
Antoinette Vanderpuije
Antoinette has been a partner of the Marwyn group for over ten years and leads
the Finance, Markets and Regulation Team. She has extensive M&A and board
experience with a particular focus on corporate governance, regulation and
listing requirements, transaction tax structuring and incentive planning.
Antoinette has supported numerous private and public companies with their
day-to-day finance, company secretarial and operational requirements and
worked on numerous U.K. and cross border M&A transactions in sectors as
varied as online sales, transport, media, chemicals and manufacturing and
distribution.
Antoinette is also a member of Marwyn's Investment Committee and previously
ran Marwyn's award-winning in-house administration business.
Antoinette previously worked in the finance team at Arcadia Group and prior to
that with Bourner Bullock Chartered Accountants. She is a Chartered
Accountant, a Chartered Tax Advisor, and holds a BA from University College
London.
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 share capital of the Company during the period are set out in
Note 12 to the Financial Statements.
On 24 December 2021 the Company issued 700,000 ordinary shares and matching
warrants for a total price of £700,000. 90% of the ordinary shares and
matching warrants were issued to an entity managed by Marwyn Investment
Management LLP ("MIM LLP") and these are still held by this entity as at the
date of this report. The remaining 10% were issued to third party investors,
including a number of senior executive managers of previous successful
acquisition companies launched by MIM LLP.
On 5 March 2023, pursuant to the forward purchase agreement ("FPA") with
Marwyn Value Investors II LP, the Company raised £600,000 through the issue
of 600,000 A shares ("A Shares") (with Class A Warrants ("A Warrants") being
issued on the basis of one Class A Warrant per A Share) for a total price of
£600,000. The A Shares are ordinary equity shares with the same economic
rights as the Company's ordinary shares but without voting rights. They are
convertible into ordinary shares on a one-for-one basis at the time at which
the Company next publishes a prospectus or equivalent document in relation to
a future listing of shares.
Corporate Governance
During the year, the Company had a Standard Listing and was therefore not
required to comply with the provisions of the UK Corporate Governance Code. On
29 July 2024, the new UK Listing Rules came into force; under the new regime,
the Company has transitioned to the Shell Companies Category and will
therefore continue to not be required to comply with the provisions of the UK
Corporate Governance Code.
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.
Risks
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 24 December
2021 and the Directors have identified a wide range of risks, which are set
out in the Company's prospectus dated 17 December 2021. The risks relevant to
the Company are formally reviewed by the Board on at least an annual basis,
with more frequent updates being made as and when circumstances require. The
Board believe that the risks identified in the prospectus remain appropriate
for the Company at this time. The Company's prospectus is available on the
Company's website: www.mac-alpha.com (http://www.mac-alpha.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 with 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 has a formal
framework in place to manage the review, consideration and formal approval of
the risk register, including the risk assessment.
The Group's only significant asset is cash. As at the balance sheet date the
Group's cash balance was £270,534 (2023: £554,446). 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. 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 (2023: P-1),
as issued by Moody's. 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 requires further funding to pursue its stated investment strategy. The Company does not currently have sufficient cash to pursue its stated
investment strategy. On 16 December 2021, the Company entered into a FPA with
Marwyn Value Investors II LP and Marwyn General Partner II Limited, under
which the Company has the ability to drawdown up to £20 million, which may be
drawn down for working capital purposes and to fund due diligence on potential
acquisition targets, through the issue of unlisted A shares. Any drawdown
under the FPA is subject to the prior approval of Marwyn Value Investor II LP
(the manager of the Marwyn Fund) and the satisfaction of conditions precedent.
On 5 March 2023, pursuant to the FPA the Company drew down £600,000.
The Company could incur costs for transactions that may ultimately be There is a risk that the Company may incur substantial legal, financial and
unsuccessful. advisory expenses arising from unsuccessful transactions which may include
public offer and transaction documentation, legal, accounting and other due
diligence which could have a material adverse effect on the business,
financial condition, results of operations and prospects of the Company.
The Company may not be able to complete an acquisition and may face The Company's future success is dependent upon its ability to not only
significant competition for acquisition opportunities. identify opportunities but also to execute a successful acquisition. There can
be no assurance that the Company will be able to conclude agreements with an
industry leading management team and/or any target business and its
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.
There may also be significant competition for some, or all, of the acquisition
opportunities that the Company may explore. Such competition may for example
come from strategic buyers, sovereign wealth funds, special purpose
acquisition companies and public and private investment funds, many of which
are well established and have extensive experience in identifying and
completing acquisitions. A number of these competitors may possess greater
technical, financial, human and other resources than the Company. 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.
The success of the Company's investment objective is not guaranteed. The Company's return will be reliant upon the performance of the assets
acquired and the Company's investment objective from time to time. The success
of the investment objective depends on the Directors' ability to identify
investments in accordance with the Company's strategy and to interpret market
data and predict market trends correctly. No assurance can be given that the
strategy to be used will be successful under all or any market conditions or
that the Company will be able to generate positive returns for shareholders.
If the investment objective is not successfully implemented, this could
adversely impact the business, development, financial condition, results of
operations and prospects of the Company.
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 15 to the Financial Statements. James Corsellis is the
managing partner of Marwyn Investment Management LLP ("MIM LLP"), and
Antoinette Vanderpuije and Tom Basset are partners in MIM LLP which manages
90% per cent. of the ordinary share capital and matching warrants and 100% of
the A share capital and matching A warrants and the 1 sponsor share in issue.
James Corsellis is also the managing partner of Marwyn Capital LLP ("MC LLP"),
and Antoinette Vanderpuije and Tom Basset are partners in MC LLP, a firm which
provides corporate finance, company secretarial and ad-hoc managed services
support to the Company.
Details of the related party transactions which occurred during the year are
disclosed in Note 16 to the Financial Statements, save for the participation
in the Company's long term incentive plan as disclosed in Note 15 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 are prepared on a going concern basis, which assumes
the Group will continue to be able to meet its liabilities as they fall due
for the foreseeable future. The Group had cash resources of £270,534 (2023:
£554,446) at 30 June 2024 and net assets of £216,483 (2023: £502,011). The
Directors have considered the financial position of the Group and reviewed
forecasts and budgets for a period of at least 12 months following the
approval of the Financial Statements.
On 16 December 2021, the Company entered into a forward purchase agreement
("FPA") with Marwyn Value Investors II LP (''MVI II LP'') of up to £20
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, who has assigned discretionary authority for portfolio and risk management
to MIM LLP under the terms of a management agreement, and the satisfaction of
conditions precedent. On 5 March 2023, the Company drew down £600,000 under
the FPA and accordingly issued 600,000 A shares and 600,000 matching A
warrants as set out in the FPA. As at the date of these accounts, MIM LLP as
manager of the Marwyn Funds has provided a letter of support ("Letter of
Support") which states that its current intention is to provide the financial
resources needed to support the Group in continuing to pursue its stated
strategy. It is expected that any necessary financing will be provided via the
FPA.
The Directors have reviewed the working capital model for the Group in detail
and considered the Letter of Support and are therefore satisfied that the
Company will have sufficient cash to meet its ongoing operating costs.
Based on this review the Directors are satisfied that at the date of approval
of the Financial Statements, the Company and the Group have sufficient
resources to continue to pursue its stated strategy.
Outlook
The Directors remain highly confident that the listed status and flexible
structure of the Company will provide an attractive platform from which to
execute a buy-and-build growth strategy alongside a management partner.
RESPONSIBILTY STATEMENT
The Directors are responsible for preparing the 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 2024, which give a true and fair view of 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
believe 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 Financial Statements. International Accounting Standard 1 requires that
financial statements present fairly for each financial period 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 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 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 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 accepts 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 IFRS
and give a true and fair view of the assets, liabilities, financial position
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 it faces.
Independent Auditor
Baker Tilly Channel Islands Limited ("BTCI") remains the Company's independent
auditor for the year ended 30 June 2024 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 22 August
2024 and is signed on its behalf.
By Order of the Board
James Corsellis
Chairman
22 August 2024
INDEPENDENT AUDITOR'S REPORT
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MAC ALPHA LIMITED
Opinion
We have audited the consolidated financial statements of MAC Alpha Limited
(the "Company" and, together with its subsidiary, MAC Alpha (BVI) Limited, the
"Group"), which comprise the consolidated statement of financial position as
at 30 June 2024, 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 2024, 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.
We have determined that there are no key audit matters to be communicated in
our report.
Our Application of Materiality
Materiality for the consolidated financial statements as a whole was set at
£9,700 (PY: £20,000), determined with reference to a benchmark of net
assets, of which it represents 4.5% (PY: 4%).
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 £6,700 (PY:
£14,000). 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 £485 (PY: £1,000), 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 8 and 9, the Directors are responsible for the preparation of
consolidated financial statements that give a true and fair view in accordance
with IFRSs, and for such internal control as the Directors determine is
necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are
responsible for assessing the Group and Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends
to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Directors are responsible for overseeing the Group's financial reporting
process.
Auditor's Responsibilities for the Audit of the Consolidated Financial
Statements
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
consolidated financial statements.
The extent to which our procedures are capable of detecting irregularities,
including fraud, is detailed below:
· Enquiry of management to identify any instances of non-compliance
with laws and regulations, including actual, suspected or alleged fraud;
· Reading minutes of meetings of the Board of Directors;
· Review of legal invoices;
· Review of management's significant estimates and judgements for
evidence of bias;
· Review for undisclosed related party transactions;
· 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 MAC Alpha Limited to audit the consolidated financial
statements. Our total uninterrupted period of engagement is 3 years.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the Group and we remain independent of the Group in conducting our
audit. Our audit opinion is consistent with the additional report to the audit
committee in accordance with ISAs.
Use of this Report
This report is made solely to the Members of the Company, as a body, in
accordance with our letter of engagement dated 7 June 2024. 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: 22 August 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
30 June 30 June
2024 2023
Note £'s £'s
Administrative expenses 6 (306,135) (331,885)
Total operating loss (306,135) (331,885)
Finance income 20,607 8,422
Loss before income taxes (285,528) (323,463)
Income tax - -
Loss for the year (285,528) (323,463)
Total other comprehensive income - -
Total comprehensive loss for the year (285,528) (323,463)
Loss per ordinary share £'s £'s
Basic and diluted 7 (0.2196) (0.3625)
The Group's activities derive from continuing operations.
The notes on pages 17 to 29 form an integral part of these Financial
Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at
30 June 2024 30 June 2023
Note £'s £'s
Assets
Current assets
Other receivables 9 5,325 6,621
Cash and cash equivalents 10 270,534 554,446
Total current assets 275,859 561,067
Total assets 275,859 561,067
Equity and liabilities
Equity
Ordinary shares 12 319,000 319,000
A shares 12 498,000 498,000
Sponsor share 12 1 1
Warrant reserve 12, 13 105,000 105,000
Warrant reserve A shares 12, 13 102,000 102,000
Share-based payment reserve 13, 15 67,516 67,516
Accumulated losses 13 (875,034) (589,506)
Total equity 216,483 502,011
Current liabilities
Trade and other payables 11 59,376 59,056
Total liabilities 59,376 59,056
Total equity and liabilities 275,859 561,067
The notes on pages 17 to 29 form an integral part of these Financial
Statements.
The Financial Statements were issued and approved by the Board of Directors on
22 August 2024 and were signed on its behalf by:
James Corsellis Antoinette Vanderpuije
Chairman Non-Executive Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary shares A shares Sponsor share Warrant reserve Warrant reserve A shares Share-based payment reserve Accumulated losses Total equity
£'s £'s £'s £'s £'s £'s £'s £'s
Balance at 1 July 2022 319,000 - 1 105,000 - 67,516 (266,043) 225,474
Issuance of 600,000 A shares and matching warrants - 498,000 - - 102,000 - - 600,000
Total comprehensive loss for the year - - - - - - (323,463) (323,463)
Balance at 30 June 2023 319,000 498,000 1 105,000 102,000 67,516 (589,506) 502,011
Ordinary shares A shares Sponsor share Warrant reserve Warrant reserve A shares Share-based payment reserve Accumulated losses Total equity
£'s £'s £'s £'s £'s £'s £'s £'s
Balance at 1 July 2023 319,000 498,000 1 105,000 102,000 67,516 (589,506) 502,011
Total comprehensive loss for the year - - - - - - (285,528) (285,528)
Balance at 30 June 2024 319,000 498,000 1 105,000 102,000 67,516 (875,034) 216,483
The notes on pages 17 to 29 form an integral part of these Financial
Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended Year ended
30 June 30 June
2024 2023
Note £'s £'s
Operating activities
Loss for the year (285,528) (323,463)
Adjustments to reconcile total operating loss to net cash flows:
Finance income (20,607) (8,422)
Working capital adjustments:
Decrease in other receivables 1,296 2,981
Increase/ (decrease) in trade and other payables 320 (7,316)
Net cash flows used in operating activities (304,519) (336,220)
Investing activities
Interest received 20,607 8,422
Net cash flows received from investing activities 20,607 8,422
Financing activities
Proceeds from issue of A shares and matching A warrants 12 - 600,000
Net cash flows received from financing activities - 600,000
Net (decrease) / increase in cash and cash equivalents (283,912) 272,202
Cash and cash equivalents at the beginning of the year 554,446 282,244
Cash and cash equivalents at the end of the year 10 270,534 554,446
The notes on pages 17 to 29 form an integral part of these Financial
Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
MAC Alpha Limited was incorporated on 11 October 2021 in the British Virgin
Islands ("BVI") as a BVI business company (registered number 2078235) under
the BVI Business Company Act, 2004. The Company was listed on the Main Market
of the London Stock Exchange on 24 December 2021 and has its registered
address at Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola,
VG1110, British Virgin Islands.
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 Alpha (BVI) Limited (together with the Company the "Group").
2. MATERIAL ACCOUNTING POLICIES
(a) Basis of preparation
The Financial Statements for the year ended 30 June 2024 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 and the
functional currency and presentational currency of the Company. The
Financial Statements have been prepared under the historical cost basis.
The principal accounting policies adopted in the preparation of the Financial
Statements are set out below. The policies have been consistently applied
throughout the year presented.
(b) Going concern
The Financial Statements are prepared on a going concern basis, which assumes
the Group will continue to be able to meet its liabilities as they fall due
for the foreseeable future. The Group had cash resources of £270,534 (2023:
£554,446) at 30 June 2024 and net assets of £216,483 (2023: £502,011). The
Directors have considered the financial position of the Group and reviewed
forecasts and budgets for a period of at least 12 months following the
approval of the Financial Statements.
On 16 December 2021, the Company entered into a forward purchase agreement
("FPA") with Marwyn Value Investors II LP (''MVI II LP'') of up to £20
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, who has assigned discretionary authority for portfolio and risk management
to MIM LLP under the terms of a management agreement, and the satisfaction of
conditions precedent. On 5 March 2023, the Company drew down £600,000 under
the FPA and accordingly issued 600,000 A shares and 600,000 matching A
warrants as set out in the FPA. As at the date of these accounts, MIM LLP as
manager of the Marwyn Funds has provided a letter of support ("Letter of
Support") which states that its current intention is to provide the financial
resources needed to support the Group in continuing to pursue its stated
strategy. It is expected that any necessary financing will be provided via the
FPA.
The Directors have reviewed the working capital model for the Group in detail
and considered the Letter of Support and are therefore satisfied that the
Company will have sufficient cash to meet its ongoing operating costs.
(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
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7*); 1 January 2024
Non-current Liabilities with Covenants (Amendments to IAS 1); 1 January 2024
Amendments to IFSR 16 - Lease liability in sale and leaseback; 1 January 2024
Amendments to IAS 1 Presentation of Financial Statements: Classification of 1 January 2024
Liabilities as Current or Non-current*;
Amendments to IAS 21 Lack of exchangeability*; and 1 January 2025
Amendments IFRS 9 and IFRS 7 regarding the classification and measurement of 1 January 2026
financial instruments. *
IFRS 18 - Presentation and Disclosure of financial Statements*; 1 January 2027
* 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 in these Financial Statements 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 these Financial
Statements.
(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 and are subsequently remeasured at amortised cost using the
effective interest rate.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and demand deposits at banks.
All deposits are readily convertible to known amounts of cash and which are
subject to an insignificant risk of change with a short maturity of less than
2 months.
(g) Stated capital
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
There is no corporate, income or other tax of the BVI imposed by withholding
or otherwise on BVI companies. The Company will therefore not have any tax
liabilities or deferred tax in the BVI. The Company is exempt from all
provisions of the Income Tax Act of the British Virgin Islands.
(i) Loss per ordinary share
The Group presents basic earnings per ordinary share ("EPS") data for its
ordinary shares. Basic EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period. Diluted EPS is
calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all potential dilutive ordinary shares.
(j) Share-based payments
The A ordinary shares in MAC Alpha (BVI) Limited (the "Incentive Shares"),
represent equity-settled share-based payment arrangements under which the
Company receives services as a consideration for the additional rights
attached to these equity shares, over and above their nominal price.
Equity-settled share-based payments to 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 15. The fair value is expensed,
with a corresponding increase in equity, on a straight-line basis from the
grant date to the expected exercise date. Where the equity instruments granted
are considered to vest immediately, the services are deemed to have been
received in full, with a corresponding expense and increase in equity
recognised at grant date.
(k) Warrants
The Company has issued Ordinary shares with matching warrants and A shares
with matching A warrants. Under the terms of the warrant instruments, warrant
holders are able to acquire one corresponding share per warrant at a price of
£1 per share. Warrants are accounted for as equity instruments under IAS 32
and are measured at fair value at grant date. Fair value of the warrants has
been calculated using a Black Scholes option pricing methodology and details
of these estimates and judgements used in determining 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.
There were no critical accounting estimates or judgements in the year, those
listed below related to prior periods.
Critical accounting judgements
Classification of warrants
On 24 December 2021, the Company issued 700,000 ordinary shares and matching
warrants ("Warrants"). Under the terms of the warrant instrument, warrant
holders are able to acquire one ordinary share per warrant at a price of £1
per ordinary share. The Warrants are exercisable at any time until five years
after the IPO date, being 24 December 2021. Further on 5 March 2023, the
Company issued 600,000 A shares and matching Class A Warrants ("A Warrants")
being issued on the basis of one Class A Warrant per A Share at a price of £1
per share. The Warrants are exercisable at any time until five years after the
IPO date being 24 December 2021.
The Warrants and A Warrants can only be classified as equity if they will be
settled only by the issuer exchanging a fixed amount of cash or another
financial asset for a fixed number of its own equity instruments. The warrant
instruments contain an exercise price adjustment ("Exercise Price
Adjustment"), whereby if the corresponding shares are issued at less than £1
before or as part of an acquisition then the exercise price equals the
discounted issue price, as a result the fixed-for-fixed requirement is
breached. However, it is the opinion of the Directors that whilst the Exercise
Price Adjustment exists, the likelihood of this being used is remote, and
therefore it is most appropriate for the warrants and A Warrants to be
classified as equity.
Key sources of estimation uncertainty
Valuation of incentive 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 Group and the potential range of
value for the Incentive Shares, based on the circumstances on the grant date.
The fair value of the Incentive Shares and related share-based payment expense
was calculated using a Monte Carlo valuation model. A summary of the terms is
set out in note 15.
Valuation of warrants
The Warrants and A Warrants were valued using the Black Scholes option pricing
methodology which considered the exercise price, expected volatility, risk
free rate, expected dividends and expected term of the Warrants and A
Warrants.
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
The Group does not have any employees. During the year ended 30 June 2024, the
Company had three serving directors as detailed on page 3, no director
received remuneration under the terms of their director service agreements
(2023: 4 directors and £Nil). The Company's subsidiary has issued Incentive
Shares as more fully disclosed in Note 15 in which the Directors are
indirectly beneficially interested.
6. ADMINISTRATIVE EXPENSES
Year ended Year ended
30 June 30 June
2024 2023
£'s £'s
Group expenses by nature
Professional support 285,334 296,726
Non-recurring project, professional and due diligence costs - 15,798
Audit fees payable in respect of the audit of the Group (Note 18) 19,122 18,094
Other expenses 1,679 1,267
306,135 331,885
7. 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 in issue during
the period. Diluted EPS is calculated by adjusting the weighted average number
of ordinary shares outstanding to assume conversion of all dilutive potential
ordinary shares. The weighted average number of shares has not been adjusted
in calculating diluted EPS as there are no instruments which have a current
dilutive effect.
The Company maintains different share classes, of which ordinary shares, A
shares and sponsor shares were in issue in the current and prior year. The key
difference between ordinary shares and A shares is that the ordinary shares
are traded with voting rights attached and the A shares are not listed and do
not carry voting rights. 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 distribution rights so has been ignored for the
purposes of IAS 33.
Refer to Note 15 (share-based payments) for instruments that could potentially
dilute basic EPS in the future.
Year ended Year ended
30 June 30 June
2024 2023
Loss attributable to owners of the parent (£'s) (285,528) (323,463)
Weighted average in issue 1,300,000 892,329
Basic and diluted loss per ordinary share (£'s) (0.2196) (0.3625)
8. INVESTMENTS
Principal subsidiary undertakings of the Group
The Company owns directly the whole of the issued ordinary share capital of
its subsidiary undertaking. Details of the Company's subsidiary are presented
below:
Nature of business Country of incorporation Proportion of ordinary shares held by parent Proportion of ordinary shares
held by the Group
Subsidiary
MAC Alpha (BVI) Limited Incentive vehicle BVI 100% 100%
The share capital of MAC Alpha (BVI) Limited consists of both ordinary shares
and A ordinary shares (the "Incentive Shares"). The Incentive shares are held
by Marwyn Long Term Incentive LP (''MLTI'') and are non-voting. Further detail
on the Incentive Shares is given in Note 15.
The registered office of MAC Alpha (BVI) Limited is Commerce House, Wickhams
Cay 1, P.O. Box 3140, Road Town, Tortola, VG1110, British Virgin Islands.
9. OTHER RECEIVABLES
As at As at
30 June
30 June
2024
2023
£'s £'s
Amounts receivable within one year:
Prepayments 5,325 6,621
5,325 6,621
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.
10. CASH AND CASH EQUIVALENTS
As at As at
30 June
30 June
2024
2023
£'s £'s
Cash and cash equivalents
Cash at bank 270,534 554,446
270,534 554,446
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 (2023:P-1), as issued by Moody's, are
accepted.
11. TRADE AND OTHER PAYABLES
As at As at
30 June
30 June
2024
2023
£'s £'s
Amounts falling due within one year:
Trade payables 3,647 5,430
Accruals 38,743 42,116
Due to a related party (Note 16) 16,986 11,510
59,376 59,056
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.
12. STATED CAPITAL
Authorised
Unlimited ordinary shares of no par value
Unlimited A shares of no par value
Unlimited B shares of no par value
100 sponsor shares of no par value
As at As at
30 June 30 June
2024 2023
£'s £'s
Issued and fully paid
700,000 ordinary shares of no par value 319,000 319,000
600,000 A shares of no par value 498,000 498,000
1 sponsor share of no par value 1 1
On incorporation, the Company issued one ordinary share of no par value to MVI
II Holdings I LP. On 28 October 2021, it was resolved that updated memorandum
and articles ("Updated M&A") be adopted by the Company and with effect
from the time the Updated M&A be registered with the Registrar of
Corporate Affairs in the British Virgin Islands, the 1 ordinary share which
was in issue by the Company be redesignated as 1 sponsor share of no par value
(the "Sponsor Share").
On 24 December 2021, the Company issued 700,000 ordinary shares and matching
warrants at a price of £1 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 £1 per ordinary share. Warrants are
accounted for as equity instruments under IAS 32 and are measured at fair
value at grant date, the combined market value of one ordinary share and one
warrant was considered to be £1, in line with the market price paid by third
party investors. A Black Scholes option pricing methodology was used to
determine the fair value of the Warrants, which considered the exercise price,
expected volatility, risk free rate, expected dividends and expected term.
Warrants have been assigned a fair value of 15p per Warrant and each ordinary
share has been valued at 85p per share, therefore, on issuance of the Warrants
£105,000 was recorded in the warrant reserve. Costs of £276,000 directly
attributable to the equity raise were taken against stated capital at the
issuance date.
On 5 March 2023, the Company issued 600,000 A shares and matching A Warrants
at a price of £1 for one A share and matching A Warrant. Under the terms of
the warrant instrument, warrant holders are able to acquire one A share per
warrant at a price of £1 per A share. A Warrants are accounted for as equity
instruments under IAS 32 and are measured at fair value at grant date, the
combined market value of one A share and one A Warrant was considered to be
£1, in line with the market price paid by third party investors. A Black
Scholes option pricing methodology was used to determine the fair value of the
A Warrants, which considered the exercise price, expected volatility, risk
free rate, expected dividends and expected term. A Warrants have been assigned
a fair value of 17p per A Warrant and each A share has been valued at 83p per
share, therefore, on issuance of the Warrants £102,000 was recorded in the
warrant reserve. There were no costs directly attributable to the issue of
shares.
Holders of ordinary shares are entitled to receive notice and attend and vote
at any meeting of members and have the right to 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. The A Shares are ordinary equity shares
with the same economic rights as the Company's ordinary shares but without
voting rights.
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 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.
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) or is a holder of incentive shares the
Company must receive the prior consent of the holder of the Sponsor Share in
order to:
i. issue any further Sponsor Shares;
ii. 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;
iii. amend, alter, or repeal any existing, or introduce any new
share-based compensation or incentive scheme in respect of the Group; or
iv. 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 holder of the Sponsor Share has the right to require that: (i) any
purchase or redemption by the Company of its 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.
13. 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 15.
Warrant reserve
The warrant reserve is the cumulative fair value attributed to warrants issued
attached to ordinary shares.
Warrant reserve A shares
The warrant reserve is the cumulative fair value attributed to warrants issued
attached to A shares.
14. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
The Group has the following categories of financial instruments:
As at As at
30 June
30 June
2024
2023
£'s £'s
Financial assets measured at amortised cost
Cash and cash equivalents (Note 10) 270,534 554,446
270,534 554,446
Financial liabilities measured at amortised cost
Trade and other payables (Note 11) 42,390 47,546
Due to a related party (Note 16) 16,986 11,510
59,376 59,056
The fair value and book value of the financial assets and liabilities are
materially equivalent.
The Group's risk management policies are established to identify and analyse
the risks faced by the Group, to set appropriate risk limits and controls, and
to monitor risks and adherence limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the Group's
activities.
Treasury activities are managed on a Group basis under policies and procedures
approved and monitored by the Board. These are focussed on maximising the
interest earned by the Group on its cash deposits (refer note 10) through
effective management of the amount available to be placed on deposit being
cognisant of the ongoing working capital requirements of the Company. Any
movement in interest rates will not have a significant effect on the Company
or its ability to continue to pursue its stated strategy and such movements
are therefore not considered to be a material risk to the Company.
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.
15. 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. As at the balance sheet date, an executive management team is
not yet in place and as such MLTI is the only participant in the LTIP. Any
future issuances of Incentive Shares to management will be dilutive to MLTI.
Under the LTIP, Incentive Shares are issued by MAC Alpha (BVI) Limited (the
"Subsidiary").
As at the statement of financial position date, MLTI had subscribed for
redeemable A ordinary shares of £0.01 each in the Subsidiary entitling it to
100 per cent. of the incentive value.
Preferred Return
The incentive arrangements are subject to the Company's shareholders achieving
a preferred return of at least 7.5 per cent. per annum on a compounded basis
on the capital they have invested 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 is the date that such shares are
issued.
Redemption / Exercise
Unless otherwise determined and subject to the redemption conditions having
been met, the Company and the holders of the Incentive Shares have the right
to exchange each Incentive Share for Ordinary Shares in the Company, 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 of business, the 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. whereby 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 A
Shares will be treated as having vested in full.
Holding of Incentive Shares
MLTI holds Incentive Shares entitling it 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 issued on 25 November 2021.
Nominal Price Issue price per A ordinary share Number of A ordinary shares Unrestricted market value at grant date IFRS 2 Fair value
£'s £'s £'s
Marwyn Long Term Incentive LP £0.01 7.50 2,000 15,000 67,516
Valuation of Incentive Shares
A valuation of the Incentive Shares was prepared by Deloitte LLP dated 3
February 2022 to determine the fair value of the Incentive Shares in
accordance with IFRS 2 at grant date.
There were significant estimates and assumptions used in the valuation of the
Incentive Shares. Management considered at the grant date, the probability of
a successful first acquisition by the Company and the potential range of value
for the Incentive Shares, based on the circumstances on the grant date.
The fair value of the Incentive Shares granted under the scheme was calculated
using a Monte Carlo model. The fair value used an ungeared volatility of 25
per cent, and an expected term of seven years. The Incentive Shares are
subject to the Preferred Return being achieved, which is a market performance
condition, and as such has been taken into consideration in determining their
fair value. A risk-free rate of 0.7 per cent. was applied. The model
incorporated a range of probabilities for the likelihood of an acquisition
being made of a given size.
As the shares issued to MLTI were deemed to vest on issue, the full expense of
£52,516 relating to the issue was recognised in the Statement of
Comprehensive Income for the period ended 30 June 2022.
16. RELATED PARTY TRANSACTION
James Corsellis, Antoinette Vanderpuije and Tom Basset have served as
directors of the company during the year. James Corsellis is the managing
partner of MIM LLP, and Antoinette Vanderpuije and Tom Basset are partners of
MIM LLP, MIM LLP is the manager of the Marwyn Fund, the Marwyn Fund holds 90%
of the Company's issued ordinary share capital, 100 % of the A shares and 1
Sponsor Share. 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.
Marwyn Value Investors II LP is an entity within the Marwyn Fund, the Company
has entered into an FPA with Marwyn Value Investors II LP under which the
Company drew down £Nil in the year ended 30 June 2024 (2023: £600,000).
James Corsellis is the managing partner of Marwyn Capital LLP ("MCLLP"), and
Antoinette Vanderpuije and Tom Basset are also partners. Mark Brangstrup Watts
was a managing partner of MC LLP until 6 November 2022. MC LLP provides
corporate finance and managed services support including named company
secretary, to the Company. On an ongoing basis a monthly fee of £10,470 per
calendar month (£10,000 up to December 2023) is charged for the provision of
the corporate finance services, and managed services support is charged by MC
LLP on a time spent basis. The total amount charged in the year ended 30 June
2024 by MC LLP was £163,991 (2023: £179,612) and they had incurred expenses
on behalf of the Group, which were subsequently recharged, of £12,683 (2023:
£24,109). An amount payable to MC LLP of £16,986 (2023: £11,510) was
outstanding as at the balance sheet date.
17. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding at 30 June
2024 (2023: £Nil) which would require disclosure or adjustment in these
Financial Statements.
18. INDEPENDENT AUDITOR'S REMUNERATION
BTCI acts as the Group's independent auditor. Audit fees payable to BTCI for
the year ended 30 June 2024 are £19,122 (2023: £18,094) (refer Note 6).
19. POST BALANCE SHEET EVENTS
There have been no material post balance sheet events that would require
disclosure or adjustment to these Financial Statements.
ADVISERS
Company Secretary BVI legal advisers to the Company
Antoinette Vanderpuije Conyers Dill & Pearman
11 Buckingham Street Commerce House
London Wickhams Cay 1
WC2N 6DF Road Town
Email: MACAlpha@marwyn.com VG1110
Tortola
British Virgin Islands
Registered Agent Depository
Conyers Trust Company (BVI) Limited Link Market Services Trustees Limited
Commerce House The Registry
Wickhams Cay 1 34 Beckenham Road
Road Town Beckenham
VG1110 Kent
Tortola BR3 4TU
British Virgin Islands
English legal advisers to the Company Registrar
Travers Smith LLP Link Market Services (Guernsey) Limited
10 Snow Hill Mont Crevelt House
London Bulwer Avenue
EC1A 2AL St Sampson
Guernsey
GY2 4LH
Registered office Independent auditor
Commerce House Baker Tilly Channel Islands Limited
Wickhams Cay 2(nd) Floor Lime Grove House
1 Road Town Green Street
VG1110 St Helier
Tortola Jersey
British Virgin Islands JE2 4UB
Assistant Company Secretary
Conyers Corporate Services (BVI) Limited
Commerce House
Wickhams Cay 1
Road Town
VG1110
Tortola
British Virgin Islands
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