Final Results
15/05/2023 07:00
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RNS Number : 3416Z Macaulay Capital PLC 15 May 2023
Macaulay Capital PLC
15 May 2023
Macaulay Capital PLC
("Macaulay Capital" or the "Company")
Final Results
Macaulay Capital PLC (AQSE:MCAP), which was formed to originate and manage
corporate transactions, raise funds from third parties, invest its own funds
alongside those of external investors and to manage its investment portfolio
with the aim of maximising its value, announces its final results for the
period ended 31 December 2022.
Copies of the annual report will be sent today to shareholders along with the
Notice of the Company's Annual General Meeting which will take place on
Tuesday 6 June 2023 at noon at 11 Laura Place, Bath, BA2 4BL
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.
ENDS
Enquiries:
Macaulay Capital PLC
Clive Milner +44 (0)12 2554 1904
Cairn Financial Advisers LLP (AQSE Corporate Adviser)
James Caithie +44 (0)20 7213 0880
Louise O'Driscoll
Emily Staples
Oberon Capital (Broker)
Chris Crawford +44 (0)20 3179 5304
For more information please visit: www.macaulaycapital.com
(http://www.macaulaycapital.com/)
Chairman's Statement
For the period ended 31 December 2022
I am delighted to be writing this inaugural Chairman's statement for Macaulay
Capital Plc ("Macaulay") and to welcome all Shareholders to the Group
following the flotation of the Company on 29 July 2022.
These accounts are for the period from Macaulay's incorporation on 13 May 2022
to our year end of 31 December 2022.
Background
When we embarked on the fundraise and admission to trading on the Aquis Stock
Exchange Growth Market we had hoped for admission to have been achieved by the
end of April 2022. In the event, whilst the fundraising was complete, for
reasons wholly unrelated to the Group, a whole host of clearing banks turned
down the opportunity to provide the simple banking services we required.
Fortunately, the historical, enlightened, and pragmatic Hoare and Co stepped
forward and we were able to complete the IPO.
Our share capital comprises 10,000,000 shares which were issued at 20p per
share, raising a gross total of £2 million, made up of £100,000 raised prior
to admission and an additional £1.9 million raised on flotation.
The Horner Family is collectively the largest shareholder block with a total
of 2.1 million shares (21.0%) today, which we expect to increase by a further
6 million shares over the next 15 months to 8.1 million shares (50.3%),
through the exercise of warrants priced at 25p per share.
Much work has been done to position the Group well for the future, including
establishing the compliance and regulatory framework, building the website,
setting up the processes for onboarding potential investors in the Macaulay
transactions and building our pipeline of potential opportunities, which is of
course changing the whole time.
In early 2022 we considered embarking on the process of FCA authorisation as
an independent company but felt that this might lead to further delays in
establishing Macaulay. We therefore opted to be an Appointed Representative
of The Fund Incubator Limited. Whilst this is a satisfactory solution for
the time being, we wish to be completely independent in the future and will,
when time permits, commence the lengthy and expensive process of seeking FCA
authorisation.
Trading Activities
In May 2022 we completed the first Macaulay transaction, assisting Devonvale
Limited's ("Devonvale") management team to buy out the company's founders.
Devonvale was established in Honiton in 2002 and is a manufacturer of
flapjacks, cakes and cereal bars. We established Vale Foods (Holdings)
Limited to effect the buyout in conjunction with Martin Loader (Managing
Director) and an incoming Executive Chairman, Tony Revill-Johnson, and
invested £1 million, subscribing for 40% of the equity for £86,000 and for
£914,000 of loan stock with a coupon of 8%.
As this transaction was ready to complete prior to the Company's fundraise and
admission to AQSE and we did not want to delay or fail to achieve its
completion, the Horner Family provided the interim funding required for the
investment. Accordingly, Macaulay invested £200,000 and £800,000 was
invested by the Horner Family. By the end of 2022, the Horner Family had
successfully sold down all of the £800,000 portion at cost to third party
investors introduced by Macaulay.
We are pleased to say that some six months from the purchase, Devonvale is
performing in line with expectations.
On 23 March 2023 we announced the completion of another transaction, being the
secondary management buy-out of Camloc Motion Control Limited, an established
Midlands based precision engineering business which manufactures compression
struts and dampers. This was bought from a private equity fund managed by
Foresight plc and again we partnered with the incumbent management team. In
this case Macaulay has taken on some £700,000 of the total fundraise of
approximately £1.55 million and intends to sell down £500,000 of its
investment in due course. Given the total funding was made up of £52,666
for approximately 52.7% of the equity and £1,498,359 in 8% loan stock,
Macaulay will be earning a significantly enhanced coupon on its investment
over the "usual" £200,000.
We have found that as we meet and explain Macaulay's operations to potential
future investors, they ask what we have available for them to invest in. So,
going forward we might well have a "stock" of investments which are earning a
good running yield for Macaulay, thus enabling us to present potential
investors with an immediate range of opportunities.
The Legacy Portfolio
In addition to Devonvale, Macaulay manages the investment portfolio
transferred from Chelverton Asset Management Limited, (the "Legacy Portfolio"
and "CAM" respectively). The Legacy Portfolio consists of five investments
previously carried out by the "Macaulay Team" as part of CAM and financed by
the group of investors coming under the Chelverton Investor Club banner. All
of the agreements between CAM and the Legacy Portfolio companies have been
novated to Macaulay giving it direct responsibility for on-going monitoring
activities and entitling it to management fees, together with the potential
for additional performance fees on exit.
Investors
Having a pool of potential investors for the underlying opportunities that
Macaulay creates is a business imperative. However, there is a "Catch 22" -
which is that when we have investment opportunities for people we attract
their interest - but unless we have a critical mass of investors to fund any
given transaction it can be difficult to attract investment opportunities.
Our marketing efforts are aimed at trying to find people like us, who consider
the area of the market in which we operate to be underserved. We aim to create
shareholder value through the identification of opportunities to invest in
established companies which, if they were ten times larger, would attract much
greater interest and would therefore command a much higher rating.
We have also been trying to impress on potential investors the importance of
investing across a range of our opportunities and building a portfolio by
investing in transactions created by Macaulay over several years and thus
reducing their investment risk.
Outlook
As we expected we are finding no shortage of investment opportunities to
consider. As we are highly selective, we reject the majority of these, taking
on only a handful to offer stage and then finally presenting an even smaller
number, say 3 - 5 a year, to potential investors.
The process is time-consuming and often unrewarding but necessary to achieve
good outcomes for us and our fellow investors. We will continue marketing
and introducing "the Macaulay Approach" to
High-Net-Worth individuals and Family Offices for whom what we do,
particularly in a time of rising Inheritance Tax Assessments, should be of
great interest.
We are pleased with the progress that has been made to date and fully expect
to make greater steps forward in the current year.
Finally, and on behalf of the Board, I would like to thank our Shareholders,
employees and advisers for their support.
Lindsay Mair
Chairman
12 May 2023
Consolidated Statement of Comprehensive Income
for the period ended 31 December 2022
Period to
31 December 2022
Notes £
Income 4 118,737
Other expenses 5/6 (502,827)
Loss on ordinary activities before interest and taxation (384,090)
Loan interest 7 (904)
Loss on ordinary activities before taxation (384,994)
Taxation 8 -
(384,994)
Loss on ordinary activities after taxation
Loss per Ordinary share in pence 10 (3.85)
The notes below form part of these financial statements
Consolidated Balance Sheet
For the period ended 31 December 2022
2022
Notes £
Fixed assets
Tangible assets 11 4,219
Investments at fair value through profit or loss 12 200,000
204,219
Current assets
Debtors: amounts falling due within one year 14 104,962
Cash at bank and in hand 1,189,219
1,294,181
Creditors: amounts falling due within one year
15 (60,394)
Other creditors and accruals
1,233,787
Net current assets
1,438,006
Net assets
Capital and reserves
Called up share capital 16 1,000,000
Share premium account 2.17 823,000
Profit and loss account (384,994)
Shareholders' funds 1,438,006
The financial statements were approved and authorised for issue by the Board
and were signed on its behalf on 12 May 2023.
Lindsay
Mair
Director
The notes below form part of these financial statements
Company Balance Sheet
for the period ended 31 December 2022
2022
Notes £
Fixed assets
Investments in subsidiary 13 1,000,000
1,000,000
Current assets
Debtors: amounts falling due within one year 14 28,517
Cash at bank and in hand 1,082,652
1,111,169
Creditors: amounts falling due within one year
15 (390,814)
Other creditors and accruals
720,355
Net current assets
1,720,355
Net assets
Capital and reserves
Called up share capital 16 1,000,000
Share premium account 823,000
Profit and loss account (102,645)
Equity Shareholders' funds 1,720,355
The financial statements were approved and authorised for issue by the Board
on 12 May 2023 and were signed on its behalf by
Lindsay Mair Director
The notes below form part of these financial statements.
Consolidated Statement of Changes in Equity
for the period ended 31 December 2022
Called up Share premium Profit and loss account Total
share capital account equity
£ £ £ £
At 13 May 2022 - - - -
Total comprehensive income for the period:
Loss for the period - - (384,994) (384,994)
Transactions with Shareholders
recorded directly to equity:
Issue of Ordinary shares 1,000,000 1,000,000 - 2,000,000
Expenses of share issue - (175,000) - (175,000)
Irrecoverable VAT on share issue expenses - (2,000) - (2,000)
At 31 December 2022 1,000,000 823,000 (384,994) 1,438,006
The notes below form part of these financial statements.
Company Statement of Changes in Equity
for the period ended 31 December 2022
Called up Share premium Profit and loss account
share capital account Total equity
£ £ £ £
At 13 May 2022 - - - -
Total comprehensive income for
the period:
Loss for the period - - (102,645) (102,645)
Transactions with Shareholders
recorded directly to equity:
Issue of Ordinary shares 1,000,000 1,000,000 - 2,000,000
Expenses of share issue - (175,000) - (175,000)
Irrecoverable VAT on share issue expenses - (2,000) - (2,000)
At 31 December 2022 1,000,000 823,000 (102,645) 1,720,355
The notes below form part of these financial statements.
.
Consolidated Cash Flow
for the period ended 31 December 2022
2022
£
Cash flows used in operating activities:
Loss for the year (384,994)
Adjusted for:
Depreciation of assets 1,407
Interest paid 904
Increase in debtors (104,962)
Increase in creditors 60,394
Net cash used in operating activities (427,251)
Cash used in investing activities:
Purchase of investments (200,000)
Purchase of fixed assets (5,626)
Net cash used in investing activities (205,626)
Cash flows generated from financing activities:
Issue of Ordinary shares 2,000,000
Share issue expenses (including irrecoverable VAT) (177,000)
Interest paid (904)
Net cash generated from financing activities 1,822,096
Net increase in cash and cash equivalents 1,189,219
Reconciliation of net cash flow to movement in net cash:
Increase in cash 1,189,219
Net cash at start of period -
Net cash at end of period 1,189,219
The notes below form part of these financial statements.
Notes to the Financial Statements
for the period ended 31 December 2022
1 General information
Macaulay Capital Plc was incorporated on 13 May 2022 for
the purpose of acquiring Macaulay Management Limited ("MML"). MML was
incorporated on 14 October 2021 and was formed to originate and manage
corporate transactions, raise funds from third parties, invest the Group's own
funds alongside those of external investors and to manage the Group's
investment portfolio with the aim of maximising its value. Macaulay Capital
Plc acquired the entire issued share capital of MML on 14 June 2022.
The Company is a public limited company, which is
incorporated and registered in England and Wales (Registered number:
14105915).
The registered office address is Suite 8, Bridge House,
Courtenay Street, Newton Abbot, TQ12 2QS.
2 Accounting policies
2.1 Basis of preparation of financial statements
The financial statements have been prepared under the
historical cost convention unless otherwise specified within these accounting
policies and in accordance with Financial Reporting Standard 102, the
Financial Reporting Standard applicable in the UK and the Republic of Ireland
and the Companies Act 2006.
The Company has taken advantage of the exemption allowed
under section 408 of the Companies Act 2006 and has not presented its own
Statement of comprehensive income in these financial statements.
The preparation of financial statements in compliance with
FRS 102 requires the use of certain critical accounting estimates. It also
requires management to exercise judgement in applying the Company's accounting
policies (see note 3).
The following principal accounting policies have been
applied:
2.2 Basis of consolidation
The consolidated financial statements incorporate the
results of the Company and its subsidiary MML, (the Group), as if they form a
single entity using merger accounting. On the establishment of the Company as
the ultimate parent of the Group, no change in ownership occurred and the
entity was established for the purpose of acquiring MML. Therefore, the
requirements of purchase method accounting did not apply.
The financial statements of the subsidiary are prepared for
the period 14 October 2021 to 31 December 2022 using consistent accounting
policies. All inter-company balances and transactions, including unrealised
profits arising from them are eliminated on consolidation.
2.3 Going concern
Company law requires the Directors to consider the appropriateness of the
going concern basis when preparing the financial statements. Having reviewed
cash flow forecasts for the period to December 2024, the Directors confirm
that they consider that the going concern basis is appropriate. This review
included consideration of the Group's financial position in respect of its
cash flows and investment commitments (of which there are none of
significance), the working arrangements of key service providers, the impact
of the conflict in
Ukraine and the current economic environment. In addition, the Directors are
not aware of any material uncertainties that may cast significant doubt upon
the Group's ability to continue as a going concern.
The Directors believe that the Group has sufficient resources
to continue in operational existence for the foreseeable future. Thus, they
have adopted the going concern basis of accounting in preparing the annual
financial statements.
2.4 Income
Income is attributable to the principal activities of the
Group which are to manage corporate transactions, raise funds from third
parties, invest the Group's own funds alongside those of external investors
and to manage the Group's investment portfolio.
All of the reported revenue and operational results for the
period derive from the Group's external investments and its investments and
are recognised on an accruals basis. The Group is not reliant on any one
customer.
2.5 Tangible fixed assets
Tangible fixed assets are stated at historical cost less accumulated
depreciation and any accumulated impairment losses. Historical cost includes
expenditure that is directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the
manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their
residual value over their estimated useful lives, using the methods below:
Computer equipment - 4 years straight line.
2.6 Investment in subsidiaries
Investments in subsidiaries are measured at cost less any accumulated
impairment in value.
2.7 Investments
Investments are measured initially at cost and at subsequent reporting dates
at fair value and derecognised at the trade date.
2.8 Debtors
Short-term debtors are measured at transaction price, less any impairment.
2.9 Cash and cash equivalents
Cash comprises cash at bank and demand deposits. Cash equivalents are
short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to insignificant risk of changes in
value.
For the purpose of the Cash Flow Statement, cash and cash equivalents consist
of cash and cash equivalents as defined above.
2.10 Financial instruments
The Group only enters into basic financial instruments transactions that
result in the recognition of financial assets and liabilities like trade and
other debtors and creditors.
Financial assets that are measured at cost and amortised cost are assessed at
the end of each reporting period for objective evidence of impairment. If
objective evidence of impairment is found, an impairment loss is recognised in
the income statement.
2.11 Creditors
Short-term creditors are measured at the transaction price. Other financial
liabilities, should they arise, will be measured initially at fair value net
of transaction costs, and will be measured subsequently at amortised cost
using the effective interest method.
2.12 Pensions - contributory pension plan
The Group operates a contributory plan for its employees. Once the
contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the Profit and Loss account
when they fall due. Amounts not paid are shown in accruals as a liability in
the Balance Sheet. The current employees have opted out of the Scheme and
hence there will be no charge in the Profit and Loss account going forward.
2.13 Interest income
Interest income is recognised in the consolidated profit or loss using the
effective interest method.
2.14 Earnings per share
Basic earnings per share is calculated by dividing the profit or loss
attributable to ordinary equity holders of the Company by the weighted average
number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated by adjusting the earnings and number
of shares for the effects of dilutive options and other dilutive potential
ordinary shares.
2.15 Dividend policy
The Company expects returns to Shareholders will be delivered
primarily through an appreciation in the price of the Ordinary Shares rather
than capital distribution through regular dividends.
2.16 Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is
recognised in profit or loss except that a charge attributable to an item of
income and expense recognised as other comprehensive income or to an item
recognised directly in equity is also recognised in other comprehensive income
or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws
that have been enacted or substantively enacted by the balance sheet date in
the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that
have originated but not reversed by the balance sheet date, except that:
• The recognition of deferred tax assets is limited to the extent that
it is probable that they will be recovered against the reversal of deferred
tax liabilities or other future taxable profits;
• Where they relate to timing differences in respect of interests in
subsidiaries and the Group can control the reversal of the timing differences
and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of
permanent differences except in respect of business combinations, when
deferred tax is recognised on the differences between the fair values of
assets acquired and the future tax deductions available for them and the
differences between the fair values of liabilities acquired and the amount
that will be assessed for tax. Deferred tax is determined using tax rates and
laws that have been enacted or substantively enacted by the balance sheet
date.
2.17 Reserves
Share premium account
The share premium account represents the accumulated premium
paid for shares issued in previous periods above their nominal value less
issue expenses. This is a reserve forming part of non-distributable reserves.
The following items are taken to this reserve:
• costs associated with the issue of equity; and
• premium on the issue of shares.
Profit and loss account
This reserve holds the accumulation of profits and losses reduced by any
dividends paid to Shareholders.
3 Judgements in applying accounting policies and key sources of
estimation uncertainty
The Group makes judgements, estimates and assumptions that
affect the application of policies and the carrying values of assets and
liabilities, income and expenses. The resulting accounting estimates
calculated using these judgements will, by definition, seldom equal the
related actual results but are based on the experience of the Directors and
the expectation of future events. The estimates are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised.
The principal areas where judgement is exercised are as follows:
Investments - all investments are held at fair value through profit or loss
and the Directors assess the carrying value of investments as appropriate to
assess whether an impairment is required.
4 Income
Period to
31 December 2022
£
Arrangement fees 35,000
Monitoring fees 74,722
Loan stock interest 9,015
118,737
5 Other expenses
Period to
31 December 2022
£
Administration and secretarial services 10,417
Auditor's remuneration for:
- Audit services 15,000
- Non-audit services 6,319
Legal & professional fees 53,547
Irrecoverable VAT 15,897
Other expenses 113,781
214,961
The Audit fee paid by the Company was £9,500.
6 Directors' remuneration and employee costs
Period to
31 December 2022
£
Directors' fees 88,449
Director's healthcare 459
Staff salaries 172,975
Pension contributions 2,345
Employer's national insurance 23,638
287,866
The average number of employees for the Group was 4.
7 Loan and loan interest
On 18 May 2022 Macaulay Management Limited entered into a £200,000 loan
agreement with Chelverton Asset Management Limited ("CAM"), a Company of which
David Horner is a Director, at an annual interest rate of 4%.
An amount of £70,000 was repaid on 26 August 2022, a further £90,000 was
repaid on 31 August 2022 and the outstanding balance of £40,000 was repaid on
1 September 2022.
Total interest payable during the period amounted to £904. At 31 December
2022 the balance outstanding was £nil.
8 Taxation
Period to
31 December 2022
£
Analysis of charge in period
Current tax -
-
Factors affecting current tax charge for the year
The tax assessed for the year is lower than the standard rate of corporation
tax in the UK of 19%. The differences are explained below:
Period to
31 December 2022
£
Loss on ordinary activities (384,994)
Theoretical tax at UK corporation tax rate of 19%
Corporation tax (73,149)
Ineligible depreciation 267
Expenses not deductible for tax purposes -
Excess expenses for the year 72,882
Current tax charge for the year -
Factors that may affect future tax charges
At 31 December 2022 the Company had surplus management expenses of £383,587.
The UK government has announced that with effect from 1 April 2023 the
Corporation Tax rate will be increased to 25% for companies with profits over
£250,000, with a small profits rate of 19% applying to companies with profits
of not more than £50,000, with marginal relief available for profits up to
£250,000.
9 Parent company loss for the year
The Company has taken advantage of the exemption allowed under section 408 of
the Companies Act 2006 and has not presented its own profit and loss account
in these financial statements. The loss after tax of the parent company for
the year was £102,645.
10 Loss per share
The calculation of basic return per share is based on the return after tax and
on a weighted average number of ordinary shares in issue in the period. Normal
and diluted returns per share are the same as there are no dilutive elements
on share capital.
Period to
31 December 2022
Loss after taxation attributable to Ordinary shareholders (£) (384,994)
Weighted average Ordinary shares in issue 10,000,000
Loss per Ordinary share - basic and diluted (pence) (3.85)
11 Tangible fixed assets
31 December 2022
Group
Computer equipment
Cost or valuation £
At 13 May 2022 -
Additions 5,626
Disposals -
At 31 December 2022 5,626
Depreciation
At 13 May 2022 -
Charge for the period 1,407
At 31 December 2022 1,407
Net book value at 31 December 2022 4,219
12. Investments
31 December 2022
Group
£
Investments held at fair value through profit or loss
Opening book cost -
Opening net investment holding gains -
Opening valuation -
Movements in the year:
Purchases at cost 200,000
Movement in investment holding gains -
Closing valuation 200,000
Closing book cost 200,000
Closing investment holding gains -
Closing valuation 200,000
13. Investment in subsidiary undertaking
31 December 2022
Company
£
At 13 May 2022 -
Additions 1,000,000
Net value at 31 December 2022 1,000,000
At 31 December 2022 the Company held interests in the following subsidiary
company
Country of incorporation % of capital held % share of voting rights Nature of business
Macaulay Management Limited England 100% 100% Investment company
The registered
address of the subsidiary is the same as the Company.
14. Debtors
Group Company
31 December 2022 31 December 2022
£ £
Due within one year:
Trade debtors 58,781 -
Other debtors 31,920 23,949
Prepayments and accrued income 14,261 4,568
104,962 28,517
15. Creditors amounts falling due within one year
Group Company
31 December 2022 31 December 2022
£ £
Amounts due to subsidiary - 350,908
Trade creditors 4,173 963
Other taxation and social security 12,155 7,391
Accruals and other creditors 44,066 31,552
60,394 390,814
16. Called up share capital
Group and Company
31 December 2022 31 December 2022
Issued, allotted and fully paid: Number £
Ordinary shares of 10p each 10,000,000 1,000,000
Ordinary shares have full voting rights with 1 vote per share, they are
entitled to dividends when proposed and are due a capital distribution on a
company exit event.
Share options
The Company may adopt a formal incentive plan under which it contemplates
awarding Share Options to Directors, employees and consultants pursuant to
share option and incentive schemes approved by the Board. It is intended that
any individual awards under any such scheme will be subject to vesting and/or
performance conditions. The proportion of Ordinary Shares which will be made
the subject of Share Options will not exceed 20 per cent. of the Company's
issued Ordinary Share capital from time to time without the prior approval of
the Shareholders and no Share Options are intended to be granted to David
Horner.
Founder Warrants
Unconditional Founder Warrants have been issued to subscribe for 6,000,000
Ordinary Shares exercisable at £0.25 per share and which the Founder Warrant
Holders have irrevocably undertaken to exercise in full within two years of
admission; and
Conditional Founder Warrants have been issued to subscribe for a further
5,000,000 Ordinary Shares, exercisable at the higher of £0.25 per share or
the mid- market price of an Ordinary Share at the time of exercise,
conditional on the exercise of Share Options and in numbers of up to a maximum
of (but not exceeding) the numbers of Ordinary Shares issued following the
exercise of such Share Options.
17. Pension commitments
The Group operates a contributory pension scheme. The pension cost charge
represents contributions payable by the Group to the fund and amounted to
£2,345. All of the employees as at the year end have opted out of the scheme
and there were no contributions payable to the fund at the balance sheet date.
18. Capital commitments
At 31 December 2022, there were no capital commitments outstanding and no
contingent liabilities.
19. Related party transactions (Group and Company)
The Company has taken advantage of the exemption in section 33 of FRS 102 from
the requirement to disclose transactions with its wholly owned subsidiary on
the grounds that consolidated financial statements are prepared by the Parent
Company.
The Directors are considered to be the key management of the business. Their
remuneration for the year is disclosed in note 6 of these financial
statements.
The Directors and connected persons held the following interests in the voting
shares of the Company at 31 December 2022.
Number of shares % of total voting
rights
David
Horner
50,000
0.5%
Mary
Horner
50,000
0.5%
Lindsay
Mair
125,000
1.25%
For the purposes of the AQSE Growth Market Access Rulebook the parties
referred to below are related parties of the Company for the reasons set out
in those paragraphs.
David Horner is a related party of the Company because he is a Director of the
Company; and Mary Horner, who is David Horner's wife, is for that reason an
associate of David Horner and thereby a related party to the Company.
CAM, a company of which David Horner is a director and significant
shareholder, is a related party of the Company because CAM is an associate of
David Horner.
Each of Harry and Tom Horner is a related party of the Company for the
following two reasons:
each of them will be entitled to exercise, or to control the exercise of, 10
per cent or more of the votes able to be cast on all or substantially all
matters at general meetings of the Company; and
each of them is a son of David Horner and, as a result, an associate of his
and therefore is a related party.
The loan transactions described below to which the Company is a party, each of
which was formalised on the terms of loan agreements with the Company on 25
July 2022, are related party transactions, for the purposes of the AQSE Growth
Market Access Rulebook, because the lender in each case was either David
Horner or CAM.
A loan from CAM to MML in the principal amount of £200,000 was made to the
Company on 18 May 2022 in order to enable the Group to make an investment The
benefit to the Company of receipt of the loan was to enable it to fund the
investment, which it would not have been able to do if the loan had not been
made available.
The loan was repayable to CAM by the Company no later than the fifth business
day following admission and its terms include a guarantee from David Horner in
respect of MML's liabilities to CAM in respect of the loan. The loan bore
interest at the rate of 4% per annum from the date of drawdown to the date of
repayment. As stated in note 7 the loan has been fully repaid.
A loan facility from David Horner to MML in the aggregate principal amount of
£100,000, for the amount of sums paid by him on behalf of MML during the
period from 1 November 2022 to 20 July 2022 in respect of payroll expenses
incurred by MML. This was of benefit to the Company because MML did not have
available funds to meet these liabilities itself. The loan has now been repaid
to David Horner by the Company and did not bear interest.
A loan facility from CAM to MML in the aggregate principal amount of
£150,000, which has now been repaid, representing the aggregate amount of
sums paid by CAM on behalf of the Company or MML during the period from 14
October 2021, the date of incorporation of MML, to 20 July 2022 in respect of
various invoiced liabilities of the Company or of MML. This was of benefit to
the Company because the Company and MML did not have available funds to meet
these liabilities themselves. The loan did not bear interest.
A capital contribution of £9,475 made by David Horner in respect of costs and
expenses payable by the Company in relation to admission so as to limit such
costs and expenses to the amount of £175,000 net of VAT. This contribution
was set against the balance of the £100,000 loan described above and paid by
MML to the Company in accordance with a letter of direction from David Horner
to MML to that effect, reducing the amount owed to David Horner by the
Company.
Others
MML has agreed to take over the investment management of the unquoted
investment portfolio of CAM, which David Horner, a director of the Company,
founded and of which he is managing director. In line with its strategy, CAM's
current and future focus is on quoted companies, rather than unquoted
businesses, and therefore the unquoted portfolio is now insignificant,
relative to CAM's quoted company portfolio.
In the period the Company's operations manager has spent a proportion of his
time working with a private business owned by David Horner and his wife.
Under this agreement, the private business paid the Group £7,500, equivalent
to the pro-rata cost of the operations manager's employment to the Group.
20. Financial instruments
The Group's financial instruments comprise securities and other investments,
cash balances and debtors and creditors that arise from its operations, for
example, in respect of sales and purchases awaiting settlement and debtors for
accrued income.
The financial instruments of the Group fall into the following categories:
Group Assets at fair value through profit or loss Total
At amortised
cost
31 December 2022 £ £ £
Assets as per the Balance Sheet
Investments - 200,000 200,000
Debtors 58,781 - 58,781
Cash and cash equivalents 1,189,219 - 1,189,219
Total 1,248,000 200,000 1,448,000
Liabilities as per the Balance Sheet
Creditors 48,239 - 48,239
Total 48,239 - 48,239
Company At amortised Assets at fair value through profit or loss Total
cost
31 December 2022 £ £ £
Assets as per the balance sheet
Cash and cash equivalents 1,082,652 - 1,082,652
Total 1,082,652 - 1,082,652
Liabilities as per the balance sheet
Creditors 383,423 - 383,423
Total 383,423 - 383,423
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