Amedeo Resources Regulatory News (AMED)

4 Apr 2006 15:03

Creon Corporation PLC04 April 2006 Creon Corporation plc4 April 2006 Creon Corporation plc Annual Report Creon Corporation plc ("the Company" or "Creon") is pleased to announce itsresults for the year ended 31 January 2006. Chairman's Statement I am delighted to present this first annual report to shareholders since theCompany's incorporation on 27 August 2004. Pages 16-24 show the financialperformance of the Company from this date to 31 January 2006. This firstfinancial period for the company consists of 17 months. Creon was formed to provide mezzanine finance to residential property developersin the UK. Whilst the Company is relatively new its business is based upon theexperience of the Directors in terms of managing a quoted company and theexperience of the partners of Creon Equity LLP in terms of experience in theproperty sector generally and the provision of mezzanine finance in particular. Creon achieved admission of its ordinary shares to trading on AIM on 25 November2004. We regard this as an important step in the development of Creon as abusiness as it was at this time that the first material funds were invested intothe Company. The admission to trading on AIM also substantially increased ourprofile in the property sector generally which has helped us in the generationof potential deal flow. Fundraising Prior to admission to AIM we undertook two major fundraisings which raised£85,000 and £399,960 respectively. Since admission two further materialfundraisings were undertaken, the first of which occurred at the time of ouradmission to trading on AIM in November 2004, when £1,000,000 (excluding issuecosts) was raised. In addition we successfully completed additionalfundraisings of £1,600,000 and £160,000 (excluding issue costs) at 45 pence pershare. These latter fundraisings were through the exercise by Creon of anoption agreement with Forestdale Trading Limited, the details of which wereannounced at the time of our admission to AIM. These fundraisings resulted in a total of £3,252,960 (excluding issue costs)being raised. The Directors believe that, from an operational point of view it would be in theCompany's interests to have access to further additional funds in order toincrease the number of financings provided by the Company and so spread theoperational costs of the Company over a larger portfolio of assets. We haveconsequently begun discussions with a number of financial organisations with aview to generating debt finance for Creon secured against the assets of theCompany. The Directors have discussed this issue over a number of months with avariety of advisors and are fully aware of the leverage effect resulting fromthe use of debt. In the event that the directors succeed in raising debtfinance the investment of the resulting funds will be carefully controlled. Strategy The Directors believe that the market for the provision of equity finance forsmall and medium-sized residential developers is poorly served by existingsources which are often expensive or of an informal and uncertain nature. Thishas allowed Creon to develop a business that provides mezzanine level finance todevelopers, providing an attractive level of return within an acceptable levelof risk. Creon's approach is to maximise the return on its funds, at the same time asminimising its exposure to uncontrollable risks. The preference, therefore, isto provide finance on projects that can be completed within 18 months fromacquisition of the site and for the residential development to appeal to a largepool of potential purchasers. Operations Creon intends to keep operating costs to a minimum in order to maximise thefunds available for lending. In addition the Directors wish to ensure thatthere is a wide spread of financing opportunities available to the Company whichhave been reviewed by an independent and experienced team. Creon thereforeentered into a consultancy agreement with Creon Equity LLP (the "Manager") whichprovides the Directors with specialist advice regarding the provision of financeto developers. The details of this management agreement were finalised andentered into at the time of our admission to AIM. In summary the Manager isexpected to: (i) Identify, evaluate, negotiate and process suitable opportunities for Creon to provide mezzanine finance to small and medium sized residential property developers; (ii) Provide to Creon's Board sufficient information on suitable opportunities in order that the Directors can make an informed decision on whether Creon should proceed with a financing opportunity; (iii)Provide all necessary documentation to the Board in respect of each project; (iv) Manage the related transaction and report on the underlying property development so that Creon is repaid, together with its agreed fee, on time and in full; and (v) Provide to Creon, in a timely manner, appropriate accounting records in respect of each project undertaken. It is expected that all investment decisions will be based upon recommendationsmade by the Manager but there is no obligation upon the Directors to accept arecommendation. The partners of Creon Equity LLP are as follows: Jonathan Samuel Lavy FCA Jonathan Lavy is a Chartered Accountant with many years experience inprofessional practice. He has subsequently been involved in the propertyindustry as a principal over the last 22 years and has built up extensiveexperience of commercial property investment, debt and equity financing andresidential property development. He has invested as principal and inconjunction with partners and been responsible for evaluating investments,related financial modelling, sensitivity and long term risk analysis togetherwith project management of refurbishment and renovation projects. He has alsobeen a provider of mezzanine finance to residential property developers. Roger Malcolm Holbeche FRICS Roger Holbeche is a Chartered Surveyor and been involved in residential andcommercial property development since qualifying. He was co-founder, chairmanand chief executive of The Embassy Property Group plc, an AIM listed companywhich was primarily involved in commercial property development and investment,construction and house building; Roger had specific responsibility to promoteand co-ordinate strategy as well as for the development subsidiary andcommercial development financing. He has also subsequently been responsible forinvesting in and project managing warehouse, office and residential developmentschemes in his private capacity where he had responsibility for negotiating thepurchase of sites and subsequent sale of the developments. He has also been aprovider of mezzanine finance for residential developers. Loans The loans committed as at 31 January 2006 were for £400,000, £390,000 and£700,000. These had been drawn down as at 31 January 2006 to the extent of£400,000, £367,490 and £191,000 respectively for a development of: eight housesin the Midlands; five houses in Cornwall and seven flats plus a nursery site inWimbledon. These developments are expected to be completed during the currentfinancial year (which ends on 31 January 2007). The Directors have recentlyagreed a further two new loan proposals totalling £1.1 million and areconsidering a range of other proposals for developments of both flats andhouses. The Directors are also planning to broaden Creon's operational base by settingup a property investment subsidiary to complement its mezzanine financeactivities. As a consequence the Managers are currently investigating a numberof investment opportunities which reflect the Directors' intention to build ahigh quality commercial investment portfolio. Share Price We successfully completed a placing and an introduction to trading on AIM, withtrading in the Company's shares commencing on 25 November 2004. Trading volumesin the Company's ordinary shares has been very low since admission. Theadmission price was 50p per share and there has not been significant movement inthis price in the 18 months since admission. Given the nature of the activitiesof the Company which involve the provision of finance for a period ofapproximately 12 months there has been little news to date that was likely toinfluence the share price materially. We do expect that as additionalfinancings are made and as financings are repaid there will be an increase inthe momentum of the company's activities. We hope that this will be reflectedin our share price. Outlook The Directors believe that Creon has made good progress in the development of abusiness in a niche area of property related finance. We are very aware that weneed to expand and grow the activities of the Company in order to achieve growthin the value of the Company. We intend to achieve this by expanding the amountof finance we have available through leveraging our existing equity finance andwe are also looking at a number of other property related finance opportunitiesthat are being introduced to us. We continue to review a wide range ofpotential mezzanine finance opportunities and are confident that thoseinvestments we have made will be realised in a profitable and timely manner. Wetherefore remain optimistic about the future. Jonathan Freeman4 April 2006 Board of Directors Jonathan Freeman (aged 40)Executive Director Jonathan graduated with a degree in Business Studies from Stirling University in1988 and gained an MBA from Warwick University in 1993. From 1988 to1993 he wasa contract manager of a property refurbishment company, becoming a director in1991. He worked within corporate finance and was involved in the creation andlaunch of the pan European stock market EASDAQ which was subsequently taken overby NASDAQ. He is currently a non-executive Director of Cobra Capital Limited,Equity Pre IPO Investments Limited, both of which are strategic investmentcompanies quoted on AIM, Futura Medical plc, a healthcare company quoted on AIMand where he is the senior independent director and Syndicate Asset Managementplc, a fund management company quoted on AIM. James Barder (aged 46)Non- Executive Director James previously worked in the field of insurance and finance. In 1995 he wasinstrumental in setting up and was Managing Director of a new investment bankingdivision within AON Corporation called Aon Capital Markets Limited. James iscurrently Chief Executive of Futura Medical plc, a healthcare company quoted onAIM. He is also a director of Lorega Claims and Underwriting Ltd, an insuranceclaims and loss adjusting service company. Corporate Governance Creon Corporation plc was admitted to trading on AIM on 25 November 2004. Assuch it is not governed by the Combined Code on Corporate Governance. However,the Board is committed to complying with best practice where appropriate. Thisincludes evaluating Directors' performance, the management of the Company, andensuring that it maintains full and effective control over appropriatestrategic, financial, operational and compliance issues. There is no separate Audit Committee as the Board considers, that given itscurrent size, all members of the Board should participate in those roles andresponsibilities normally reserved for such a committee. Therefore, the fullBoard of Directors will provide a forum for reporting by the Company's externalauditors. During the period ended 31 January 2006 the Board discharged theseresponsibilities by: • Reviewing the Company's draft annual financial statements and interim results statement prior to Board approval and reviewing the external auditors' detailed report when applicable• Reviewing the appropriateness of the Company's accounting policies• Reviewing and proposing to the Board the audit fee• Reviewing the terms of engagement for the audit• Reviewing the internal controls operated in relation to the Company's business• Reviewing the performance of the Company's advisers The Company does not have an independent internal audit function as it is notdeemed appropriate given the size of the Company and the nature of the Company'sbusiness. However the Board considers annually whether there is a need for sucha function. Relations with Shareholders The Directors seek to build a mutual understanding of objectives between theCompany and its shareholders. The Company reports formally to shareholders inits interim and annual reports setting out details of its activities. Inaddition, the Company keeps shareholders informed of events and progress duringthe year through the issue of press releases. The Company is working to createan investor relations page on its website (www.creoncorporation.com). Financialstatements will be published on the Company's website. The maintenance andintegrity of the Company's website will be the responsibility of the Directors.The Directors' responsibility also extends to the ongoing integrity of thefinancial statements contained therein. Shareholders have the opportunity to meet the Board at the AGM. The Board isalso happy to respond to any written queries made by shareholders during thecourse of the year, or to meet with major shareholders if so requested. At the AGM, in addition to undertaking the formal business of the meeting, theBoard and representatives of the management team are available to answer anyquestions shareholders may have. The Registrars collate proxy votes and the results (together with the proxyforms) are forwarded to the Company Secretary immediately prior to the AGM. Inorder to comply with the revised Combined Code, proxy votes are announced at theAGM, following each vote on a show of hands, except in the event of a poll beingcalled. The notice of the next adjourned AGM and proxy form can be found at theend of these financial statements. Where possible the Annual Report is sent to shareholders at least 20 workingdays before the Annual General Meeting. Directors are required to attend AnnualGeneral Meetings of the Company unless unable to do so for personal reasons ordue to pressing commercial commitments. Shareholders are given the opportunityto vote on each separate issue. The Company counts all proxy votes and willindicate the level of proxies lodged on each resolution, after it has been dealtwith by a show of hands. Internal Control The Directors of the company have overall responsibility for the Company'ssystem of internal control. Internal control systems are designed to meet theparticular needs of the Company and the risks to which it is exposed. By theirnature these controls can provide reasonable but not absolute assurance againstmaterial misstatement or loss. The Board's appointment of Noble Corporate Management Limited as CompanySecretary has delegated much of the administration of the Company to NobleCorporate Management Limited which has an established system of control,including internal financial controls, to enable it to ensure that properaccounting records are maintained and that the financial information for usewithin the business and for reporting to shareholders is accurate and reliableand that the Company's assets are safeguarded. This delegation ofadministration by the Board, and the use of Noble Corporate Management Limited,is monitored by the Board with regards to its appropriateness and with regard tothe performance of Noble Corporate Management Limited in carrying out its workon behalf of Creon. Going Concern After due consideration, the Directors believe that the Company has adequateresources for a period of at least 12 months from the date of approval of thefinancial statements, and consequently that it is appropriate to apply the goingconcern principle in preparing the financial statements. Financial Reporting The Directors' statement of responsibilities for preparing the accounts is setout on page 13 and a statement by the Auditors about their reportingresponsibilities is set out in the Auditors' Report on page 14. Directors' Report The Directors have pleasure in presenting their first report together with thefinancial statements for the period ended 31 January 2006. Activities The Company was incorporated on 27 August 2004 and was admitted to trading onAIM on 25 November 2004. The principal activity of the Company is the provision of mezzanine finance tosmall and medium sized UK residential property developers. Results and review of business The results for the period to 31 January 2006 are set out in the accompanyingfinancial statements and attached notes. The Directors consider that theCompany's performance was satisfactory. The Directors propose that no dividendbe paid in respect of the period. Issue of shares During the period to 31 January 2006, the Company issued 10,036,110 Ordinaryshares of 1p each, raising gross funds totalling £3,252,960. Directors The Directors of the Company during the period were: AC1 Directors Limited (appointed 27/08/2004, resigned 27/08/2004)Jonathan Freeman (appointed 27/08/2004)James Barder (appointed 24/09/2004) None of the Directors who held office at the end of the financial period had anyinterest in the share capital, loan capital or share options of the Company, nordoes any person connected with the Directors have any such interests, whetherbeneficial or non-beneficial. Directors' Service Agreements and Letters of Appointment On 22 October 2004, Combined Management Services Limited ("CMS") entered intotwo separate consultancy agreements with the Company, the terms of which are asfollows: (a) pursuant to the first agreement, CMS has agreed to provide the Company with the services of Jonathan Freeman as an executive director for a fee of £20,000 per annum. The agreement is terminable by 3 months' notice on either side; and (b) pursuant to the second agreement, CMS has agreed to provide the Company with the services of Jonathan Freeman to perform various administrative and support services to the Company for a fee of £20,000 per annum. The agreement is terminable by 3 months' notice on either side. Jonathan Freeman owns 50% and is a director of CMS. Management Creon Equity LLP is appointed as a manager to identify, evaluate, and processsuitable opportunities for the Company to provide mezzanine finance toresidential property developers. Creon Equity LLP receive 3% per annum of thevalue of funds already invested and funds still available for investment plus15% of the gross profits. Creon Equity LLP is not a related party. Substantial Shareholdings Shareholders on the Shareholder Register with more than a 3% interest in theCompany's share capital at 31 January 2006 are detailed below: Shareholder % of share holding Alderwood Management Limited 5%E\* Trade Securities Limited 34%HSBC Custody Nominee Limited 36%Pinnacle Limited 6%ROY Nominees Limited 6%Vidacos Nominees Limited 6% Creditors Payment Policy and Practice It is the company's payment policy and actual practice to ensure settlement ofsuppliers' invoices in accordance with the stated terms of the invoices. Auditors A resolution to reappoint BDO Stoy Hayward LLP as auditors was proposed andpassed at the Annual General Meeting held on 24 February 2006. By order of the board Stephen ChurchillFor and on behalf of Noble Corporate Management LimitedCompany SecretaryEdinburgh 4 April 2006 Directors' Remuneration Report The Board has prepared this report in accordance with the requirements ofSchedule 7A to the Companies Act 1985. Directors' Fees The Board considers at least annually the level of the Directors' fees, inaccordance with the Combined Code on Corporate Governance. The Company Secretaryprovides information on comparative levels of Directors' fees to the Board inadvance of each review. The Board concluded following the review of the level of Directors' fees for theforthcoming year that the amounts should remain unchanged at present. Policy on Directors' Fees The Board's policy is that the level of remuneration should be sufficient toattract and retain the Directors needed to oversee properly the Company and toreflect the specific circumstances of the Company, the duties andresponsibilities of the Directors and the value and amount of time committed tothe Company's affairs. It is intended that this policy will continue for theyear ending 31 January 2007 and subsequent years. The fees for the non-executive Directors are determined in accordance with theCompany's Articles of Association. Non-executive Directors are not eligible forbonuses, pension benefits, share options, long-term incentive schemes or otherbenefits. Directors' service contracts Jonathan Freeman's services as Director are provided through an open endedagreement with Combined Management Services Limited, with a 3 month noticeperiod. A service agreement exists between the Company and James Barder with a 3 monthnotice period. Directors' emoluments for the period (audited) The Directors who served during the period received remuneration either in theform of fees or emoluments: Fees or emoluments £000s Jonathan Freeman* 55James Barder 14 *fees paid to a third party in respect of Directors' services Emoluments are stated net of Employer's national insurance contributions whereappropriate. No pension scheme contributions or other retirement benefit contributions werepaid. There are no share option contracts held by the Directors or long term incentiveschemes. No Directors' contract has a notice period in excess of one year. No Director had any interest in any contract to which the Company is a party. The Directors' Remuneration Report on pages 11 and 12 was approved by the Boardof Directors on 4 April 2006 and signed on its behalf by Jonathan Freeman. On behalf of the Board, Jonathan FreemanDirector4 April 2006 Statement of Directors' Responsibilities Company law requires the directors to prepare financial statements for eachfinancial period, which give a true and fair view of the state of affairs of thecompany and of the profit or loss of the company for that period. In preparingthose financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make adjustments and estimates that are reasonable and prudent; • state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping proper accounting records whichdisclose with reasonable accuracy at any time the financial position of thecompany and to enable them to ensure that the financial statements comply withthe Companies Act 1985. They are also responsible for safeguarding the assetsof the company and hence for taking reasonable steps for the prevention anddetection of fraud and other irregularities. Report of the independent auditors to the shareholders of Creon Corporation plc We have audited the financial statements of Creon Corporation plc for the periodended 31 January 2006 on pages 16 to 24 which have been prepared under theaccounting policies set out on page 19. Respective responsibilities of directors and auditors The directors' responsibilities for preparing the annual report and thefinancial statements in accordance with applicable law and United KingdomAccounting Standards are set out in the Statement of Directors'Responsibilities. Our responsibility is to audit the financial statements in accordance withrelevant legal and regulatory requirements and United Kingdom AuditingStandards. We report to you our opinion as to whether the financial statements give a trueand fair view and are properly prepared in accordance with the Companies Act1985. We also report to you if, in our opinion, the Directors' Report is notconsistent with the financial statements, if the company has not kept properaccounting records, if we have not received all the information and explanationswe require for our audit, or if information specified by law regardingdirectors' remuneration and transactions with the company is not disclosed. We read the Chairman's Statement, the Corporate Governance Report, theDirectors' Report and the Directors' Remuneration Report and consider theimplications for our report if we become aware of any apparent misstatementswithin them. Our report has been prepared pursuant to the requirements of the Companies Act1985 and for no other purpose. No person is entitled to rely on this reportunless such a person is a person entitled to rely upon this report by virtue ofand for the purpose of the Companies Act 1985 or has been expressly authorisedto do so by our prior written consent. Save as above, we do not acceptresponsibility for this report to any other person or for any other purpose andwe hereby expressly disclaim any and all such liability. Basis of audit opinion We conducted our audit in accordance with United Kingdom Auditing Standardsissued by the Auditing Practices Board. An audit includes examination, on a testbasis, of evidence relevant to the amounts and disclosures in the financialstatements. It also includes an assessment of the significant estimates andjudgements made by the directors in the preparation of the financial statements,and of whether the accounting policies are appropriate to the company'scircumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the financial statementsare free from material misstatement, whether caused by fraud or otherirregularity or error. In forming our opinion we also evaluated the overalladequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements give a true and fair view of the stateof the company's affairs as at 31 January 2006 and of its loss for the periodthen ended and have been properly prepared in accordance with the Companies Act1985. BDO STOY HAYWARD LLPChartered Accountantsand Registered AuditorsLondonDate: 4 April 2006 Profit and Loss Accountfor the period ended 31 January 2006 2006 Note £ Turnover 2 219,233 Administrative expenses (320,773) ________ Operating loss 3 (101,540) Interest receivable 45,825 Loss on ordinary activities before taxation (55,715) Taxation 6 - ________ Retained loss for the financial period 11 (55,715) Basic and diluted earnings per share (0.77)p There were no recognised gains or losses other than the loss for the financialperiod. All amounts relate to continuing activities. Balance Sheetas at 31 January 2006 2006 Note £ Current assetsDebtors 7 1,128,542Cash at bank 1,754,359 2,882,901 Creditors: amounts falling due within one year 8 (63,306) ________ Net current assets 2,819,595 ________ Total assets less current liabilities 2,819,595 Capital and reservesCalled up share capital 9 100,361Share premium account 10 2,774,949Profit and loss account (55,715) ________ Equity shareholders' funds 11 2,819,595 The accounts were approved by the board of Directors on 4 April 2006. Jonathan Freeman Cash Flow StatementFor the period ended 31 January 2006 Note 2006 2006 £ £ Net cash flow from operating activities 13 (208,286) Returns on investment and servicing of finance Interest received 45,825 Capital expenditure and financial investments Mezzanine finance loans advanced (958,490) Financing Issue of ordinary share capital 3,252,960 Share issue costs (377,650) 2,875,310 _________ Increase in cash 1,754,359 Reconciliation of net cash flow to movement in net funds Increase in cash in the period 14 1,754,359 _________ Change in net funds resulting from cash flows 14 1,754,359 Notes(forming part of the financial statements) 1 Accounting policies Basis of accounting The financial statements have been prepared under the historical cost conventionand in accordance with applicable accounting standards and the Companies Act1985. Turnover Turnover represents the arrangement fees due in respect of mezzanine financeadvances and these are spread on a straight-line basis over the loan terms. Deferred taxation Deferred tax balances are recognised in respect of all timing differences thathave originated but not reversed by the balance sheet date, except that: • The recognition of deferred tax assets is limited to the extent that the company anticipates making sufficient taxable profits in the future to absorb the reversal of the underlying timing differences. Financial Instruments Finance provided by the Company is in the form of mezzanine finance which isincluded in debtors and is stated at the amount of the funds advanced net of anyprovision for potentially irrecoverable amounts. 2 Turnover Turnover is wholly attributable to the principal activity of the company andarises solely within the United Kingdom. 3 Operating loss 2006 £Loss on ordinary activities before taxation is stated after charging:Auditor's remuneration - for audit work 11,200 In addition to the above, the auditors received non-audit fees of £11,820 whichhave been debited to the share premium account. Notes(forming part of the financial statements) 4 Earnings per share The earnings per share for the period was (0.77)p. The calculation of earningsper share is based on the loss of £55,715 for the period from 27 August 2004 to31 January 2006 and the weighted number of shares in issue (7,212,616) from thedate of admission to trading on AIM until 31 January 2006. Prior to admission,the Company had not started trading. 5 Staff numbers and costs The average monthly number of employees of the Company during the periodincluding Directors was two. The aggregate remuneration and associated costs of the Company's employees were: 2006 £ Wages and salaries 14,000Social security costs 653Pension costs - 14,653 Directors' emoluments 2006 £ Amounts paid to third parties in respect of Directors' services 54,520Emoluments 14,000 68,520 Notes(forming part of the financial statements) 6 Taxation 2006 £Analysis of charge in the period Corporation tax on loss for the period - Factors affecting tax charge in the period Loss on ordinary activities before tax (55,715) UK Corporation Tax at the standard rate of tax of 30% (16,714)Losses carried forward 16,714 - As at 31 January 2006 the Company had trade losses of £55,715 available to carryforward to set off against future profits. 7 Debtors 2006 £ Prepayments and accrued income 170,052Mezzanine finance advances 958,490 1,128,542 All amounts fall due for payment within one year. No interest is receivable in respect of the mezzanine finance advances.Mezzanine finances are advanced by the Company for a maximum period of 12 monthsand are for the purpose of property development. The finance is secured againstthe properties being developed. The Company's financial instruments consist of cash and mezzanine finance. Therisks associated with these are interest rate risk and the potentialnon-recoverability of the loans. Interest rate risk is monitored through cashflow management and the placing of cash on interest bearing deposit accounts.The risk of potential non-recoverability of the loans is reduced by closelyconsidering each loan applicant before agreeing to the loan facility and bysecuring the loans against property. Notes(forming part of the financial statements) 8 Creditors: amounts falling due within one year 2006 £ Accruals 62,778Other taxation and social security 528 63,306 9 Share capital 2006 £Authorised50,000,000 Ordinary shares of 1p each 500,000 Allotted, called up and fully paid10,036,110 Ordinary shares of 1p each 100,361 During the period the company issued 10,036,110 Ordinary Shares of 1p each asdetailed below: Price per share Total Gross Issue Proceeds £ £Date No of shares allotted27/08/04 200 0.01 225/10/04 799,800 0.01 7,99803/11/04 2,125,000 0.04 85,00010/11/04 1,200,000 0.33 399,96025/11/04 2,000,000 0.50 1,000,00004/11/05 3,555,555 0.45 1,600,00004/11/05 355,555 0.45 160,000 Total 10,036,110 3,252,960 The company was incorporated with authorised share capital of £50,000 dividedinto 50,000 ordinary shares of £1 each of which two ordinary shares of £1 eachwere issued. On 22 October 2004, each issued and un-issued ordinary share of £1was sub-divided into 100 ordinary shares of 1p each and the authorised sharecapital of the company was increased from £50,000 to £500,000 by the creation of45 million ordinary shares of 1p each. On 25 October 2004, the Company issued and allotted 300,000 warrants to each ofRoger Holbeche and Jonathan Lavy. In relation to each holding, 100,000 warrantswere exercisable from 25 November 2005 at a price of 60p per share, 100,000 areexercisable on 25 November 2006 at a price of 70p per share and 100,000 areexercisable on 25 November 2007 at a price of 80p per share. Each warrantentitles the holder to subscribe for one new Ordinary share. The final exercisedate for all warrants is 25 November 2008. The warrants have been issued for noconsideration and to date no warrants have been exercised. Notes(forming part of the financial statements) 10 Share premium account 2006 £ Shares issued 3,152,599Share issue expenses (377,650) 2,774,949 11 Reconciliation of movements in shareholders' funds 2006 £ Opening shareholders' funds -Issue of shares - share capital 100,361Issue of shares - share premium 2,774,949Loss for the financial period (55,715) Shareholders' funds at 31 January 2006 2,819,595 12 Asset Value per share The net asset value per share at 31 January 2006 was £0.28. It is based on theNet Assets as at 31 January 2006 of £2,819,595 and on 10,036,110 shares, beingthe number of shares in issue at that date. 13 Cash flow from operating activities 2006 £Operating loss (101,540)Increase in debtors (170,052)Increase in creditors 63,306 ________ (208,286) 14 Analysis of net funds Cash flow As at 31 January 2006 £ £ Cash in hand and at bank 1,754,359 1,754,359 Debt payable within 1 year - -Debt payable after 1 year - - ________ ________Total 1,754,359 1,754,359 Notes(forming part of the financial statements) 15 Capital commitments There were no capital commitments at the period end. 16 Post balance sheet events Since 31 January 2006, the Directors have agreed two further loans todevelopers. These loans total £1.1 million and both loans are repayable within12 months and are secured against property. 17 Related Party Transactions The following information is provided in accordance with Financial ReportingStandard 8 as being transactions with related parties for the period: Name of related party Nature of relation Transaction type Amount Balance £ £ Combined Management Jonathan Freeman, Directors fees 27,260 NilServices Limited Director of Creon is a 50% shareholder in Combined Management Services Limited Combined Management Jonathan Freeman, Admin & support 27,260 NilServices Limited Director of Creon is a 50% services shareholder in Combined Management Services Limited Jonathan Freeman Director Fee for creation of 50,000 Nil the Company and the strategy 18 Period of the financial statements These financial statements cover the period from 27 August 2004, being the dateof incorporation, to 31 January 2006. Copies of the Annual Report for the year ended 31 January 2006 are being sent toshareholders. Further copies will be available from the Company Secretary'soffice: Noble Corporate Management Limited, 120 Old Broad Street, London, EC2N1AR For further information, please contact: Jonathan Freeman, Director Tel: +44 (0) 1600 750 432 This information is provided by RNS The company news service from the London Stock Exchange