Wrap Text
Interim report and financial statements
Sacoven Plc
(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Company number 110296)
AIM Share code: SCN
JSE Share code: SCV
ISN: JE00B7YH8W36
(the “Company”)
Interim Report and Financial Statements
The Company announces its interim results for the period 1 April 2014 to 30 September 2014
DIRECTORS’ REPORT FOR THE PERIOD 1 APRIL 2014 TO 30 SEPTEMBER 2014
The board of directors (the “Board” or “Directors”) present their interim report and financial statements for the
period from 1 April 2014 to 30 September 2014. The interim report and financial statements have not been audited.
Incorporation
Sacoven plc (the “Company”) is a public limited company incorporated on 16 March 2012 in Jersey, Channel
Islands. The Company was re-registered as a public company from a private company and adopted new
memorandum and articles of association on 17 May 2012 (the “Articles”). The Company was listed on the AIM
market of the London Stock Exchange on 8 June 2012, and has obtained a secondary listing on the AltX of the
JSE Limited with effect from 12 September 2014.
Principal Activities
The Company is a holding company formed to acquire a company, business or group of businesses or asset(s) in
either the natural resources or the consumer goods sectors where Vasari Global Limited (the “Investment
Adviser”) and the investment team have significant knowledge, expertise and an extensive network of relationships.
The Company raised gross proceeds of £6 million on admission and, as appropriate, will look to raise further funds
from new and existing shareholders once an acquisition target has been identified and the terms of the acquisition
agreed. Any acquisition will be deemed a reverse takeover under the AIM Rules for Companies and will therefore
require shareholder approval in a general meeting prior to completion of the acquisition. In terms of the JSE Listing
Requirements, any acquisition will require approval by a majority of disinterested Directors and the majority of
shareholders in a general meeting.
The Company is advised by the Investment Adviser, utilising the investment team whom the Directors believe
have extensive experience and knowledge of investments in both the natural resources and the consumer goods
sectors. The Board is responsible for the Company’s objectives and business strategy and its overall supervision.
The Company has outsourced most of its operating functions, including the identification and assessment of
acquisition opportunities and the structuring and execution of the acquisition, to the Investment Adviser. The
Investment Adviser may, in turn, delegate some of those outsourced operating functions to various consultants or
third party advisers. The investment team are directors and/or employees of the Investment Adviser through which
they will provide their services.
The Company intends to focus on those opportunities where it believes the investment team has specific insights
and can add long-term value. In addition, the Company believes it will be well placed to compete for any potential
acquisition given the knowledge, experience and reputation of the investment team and its ability to structure deals
innovatively and efficiently for both the Company and the vendors in any transaction. As at the date of this report,
the Investment Adviser has not made a decision to recommend any particular acquisition to the Company.
Going Concern Basis
The Directors have concluded that at the time of approving these financial statements of the Company, there is a
reasonable expectation that the Company has adequate resources to continue in operational existence for the
foreseeable future.
Results
The results for the period are set out in the statement of comprehensive income on page 5.
Dividends
The Directors do not propose any dividends in respect of the reporting period.
Directors
The Directors of the Company who served throughout the period and subsequently were:
Ian Christopher Crosby
Mark Haynes Daniell - Chairman
Samuel Imerman
Hymie Reuvin Levin
Niall Iain McCallum
Secretary
The Secretary of the Company who served throughout the period and subsequently was:
Regal Trustees Limited
Statement of Directors’ Responsibilities
The Companies (Jersey) Law 1991 obliges the Directors to require the Company to prepare the financial statements
in accordance with applicable law and regulations.
The Company is required to prepare financial statements for each financial period. The financial statements have
been prepared in accordance with AIM Rules and JSE Listing Requirements for Companies and in accordance
with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards
Board (“IASB”) and in accordance with the provision of International Account Standard (“IAS”) 34, Interim
Reporting. The financial statements are required to give a true and fair view of the state of affairs of the Company
and of the results of the Company for that period. In relation to these financial statements, the Directors are
required to:
- select suitable accounting policies and then apply them consistently;
- make judgements 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
- require the financial statements to be prepared on the going concern basis, unless it is inappropriate to
presume that the Company will continue in business.
The Directors are also responsible for requiring the Company to keep proper accounting records which disclose
with reasonable accuracy at any time the financial position of the Company and enable them to endeavour to
ensure that the financial statements comply with the Companies (Jersey) Law 1991. They are also responsible for
endeavouring to safeguard the assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud, error and non-compliance with law and regulations.
The Directors confirm that they have complied with the above requirements in relation to the preparation of the
financial statements.
Independent Auditors
Grant Thornton Limited have been appointed as auditors.
Niall McCallum Ian Crosby
Director Director
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2014
30/09/2014 31/03/2014
Notes GBP GBP
Assets
Current assets
Prepayments and other receivables 5 26,617 15,014
Cash and cash equivalents 3,496,284 3,732,964
Total assets 3,522,901 3,747,978
Liabilities and equity
Current liabilities
Other payables and accrued expenses 6 145,069 36,125
Total liabilities 145,069 36,125
Equity & reserves
Share capital 7 6,002 6,002
Share premium 8 4,910,690 4,910,690
Founder option 9 6,000 6,000
Retained loss (1,544,860) (1,210,839)
Total equity 3,377,832 3,711,853
Total liabilities and equity 3,522,901 3,474,978
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD 1 APRIL 2014 TO 30 SEPTEMBER 2014
01/04/2014 to 01/04/2013 to 01/04/2013 to
30/09/2014 30/09/2013 31/03/2014
Notes GBP GBP GBP
Income - - -
Expenses
Investment advisory fees 10 225,000 225,000 450,000
Directors’ fees 10 37,500 37,500 75,000
Administration fees 10 17,500 17,500 35,000
Insurance 3,955 8,258 16,926
Insurance adjustment prior year (7,535) - -
Nominated adviser and broker fees 25,000 26,526 51,526
Registrar fees 3,750 3,774 7,500
London stock exchange fees 3,025 3,801 7,345
Legal and professional fees 26,011 - 1,175
Travel expenses - - 10,106
Other expenses 476 - -
Audit fees 4,000 4,000 8,000
GST fees - - 200
Annual return fees - - 150
Webhosting 240 240 240
Bank charges 630 361 945
339,552 326,960 664,113
Operating loss (339,552) (326,960) (664,113)
Other income
Bank interest income 5,531 6,527 12,478
Loss before tax (334,021) (320,433) (651,635)
Tax on ordinary activities 3 - - -
Total comprehensive loss for the period / year (334,021) (320,433) (651,635)
Basic loss per share 17 (0.056) (0.053) (0.108)
All the items dealt with in arriving at the comprehensive loss for the period / year relate to continuing operations.
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD 1 APRIL 2014 TO 30 SEPTEMBER 2014
Notes Share Share Founder Retained Total
capital premium option loss
GBP GBP GBP GBP GBP
As at 1 April 2014 6,002 4,910,690 6,000 (1,210,839) 3,711,853
Total comprehensive loss
for the period - - - (334,021) (334,021)
At 30 September 2014 6,002 4,910,690 6,000 (1,544,860) 3,377,832
FOR THE PERIOD 1 APRIL 2013 TO 30 SEPTEMBER 2013
Notes Share Share Founder Retained Total
capital premium option loss
GBP GBP GBP GBP GBP
As at 1 April 2013 6,002 4,910,690 6,000 (559,204) 4,363,488
Total comprehensive loss
for the period - - - (320,433) (320,433)
At 30 September 2013 6,002 4,910,690 6,000 (879,637) 4,043,055
FOR THE YEAR ENDED 31 MARCH 2014
Notes Share Share Founder Retained Total
capital premium option loss
GBP GBP GBP GBP GBP
As at 1 April 2013 6,002 4,910,690 6,000 (559,204) 4,363,488
Total comprehensive loss
for the year - - - (651,635) (651,635)
At 31 March 2014 6,002 4,910,690 6,000 (1,210,839) 3,711,853
STATEMENT OF CASH FLOWS
FOR THE PERIOD 1 APRIL 2014 TO 30 SEPTEMBER 2014
01/04/2014 to 01/04/2013 to 01/04/2013 to
30/09/2014 30/09/2013 31/03/2014
Notes GBP GBP GBP
Cash flows from operating activities
Operating loss (339,552) (326,960) (664,113)
Adjustments for changes in:
Receivables (11,603) (9,131) 1,595
Other payables and accrued expenses 108,944 31,500 (93,750)
Net cash outflow from operating activities (242,211) (304,591) (756,268)
Cash flows from investing activities
Bank interest received 5,531 6,527 12,478
Net cash received from investing activities 5,531 6,527 12,478
Net change in cash and cash equivalents (236,680) (298,064) (743,790)
Opening cash and cash equivalent 3,732,964 4,476,754 4,476,754
Cash and cash equivalents at the end
of the period / year 3,496,284 4,178,690 3,732,964
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 APRIL 2014 TO 30 SEPTEMBER 2014
1. General Information
The Company is a public limited company incorporated on 16 March 2012 in Jersey, Channel Islands. The
Company was re-registered as a public company from a private company and adopted new memorandum
and articles of association on 17 May 2012. The Company was listed on the AIM market of the London Stock
Exchange on 8 June 2012, and has obtained a secondary listing on the AltX of the JSE on 12 September
2014.
The interim financial statements have not been audited.
2. Principal accounting policies
2.1 Basis of preparation
The financial statements of the Company have been prepared in accordance with the AIM Rules and JSE
Listing Requirements and in accordance with IFRS as issued by the IASB and interpretations issued by the
International Financial Reporting Interpretations Committee. The financial statements have been prepared
in accordance with IAS 34, Interim Reporting and consistent standards in the annual financial statements on
a historical cost basis.
2.2 Summary of significant accounting policies
The preparation of financial statements in conformity with IFRS requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and accompanying notes. The
Directors believe that the estimates utilised in preparing the financial statements are reasonable and prudent,
and that such estimates and assumptions are immaterial in nature and have no significant impact on the
results reported in the financial statements. The financial statements have been prepared on the going concern
basis.
Standards, interpretations and amendments to published standards effective in 2014 / 2015
In 2014, the Company adopted new standards, amendments and interpretations to existing standards that are
mandatory for the Company's accounting period beginning on 1 April 2014.
Investment Entities – Amendments to IFRS 10, IFRS 12 and IAS 27
The amendments define the term “investment entity”, providing supporting guidance and require investment
entities to measure investments in the form of controlling interests in another entity at fair value through
profit or loss.
It is management’s opinion that this will not impact the financial statements of the Company.
(i) Financial instruments
Classification
The Company classifies its financial assets and financial liabilities in accordance with IAS 39, Financial
Instruments: Recognition and Measurement.
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market.
Other financial liabilities
Financial liabilities that are not at fair value through profit or loss include other short term operating expenses
payable. In the opinion of the Directors, the carrying amounts of other financial liabilities not measured at
fair value through profit or loss are approximate to their fair value.
Recognition
The Company recognises a financial asset or financial liability when, and only when, it becomes a party to a
contractual agreement.
Initial and subsequent measurement
Receivables and other financial liabilities are initially recognised at fair value and subsequently at amortised
cost using the effective interest rate method.
De-recognition
A financial asset or part of a financial asset is de-recognised where:
- The rights to receive cash flows from the asset have expired;
- Substantially all risks and rewards of the asset have been transferred.
The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled
or expired.
(ii) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short term highly liquid
investments that are readily convertible to a known amount of cash and are subject to insignificant risk of
changes in value.
(iii) Going concern basis
The Directors have concluded that at the time of approving the financial statements of the Company there
is a reasonable expectation that the Company has adequate resources to continue in operational existence for
the foreseeable future.
(iv) Income
Income consists of bank interest income accounted for on an accruals basis.
(v) Expenses
Expenses are accounted for on an accruals basis.
(vi) Foreign currencies
Functional and presentation currency
The functional currency of the Company is pounds sterling and this is also the presentational currency of the
Company.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the date of the transactions or an average rate as an approximation. Foreign currency monetary assets and
liabilities are translated into the functional currency at the closing exchange rate at the end of the reporting
period.
Gains and losses
Any foreign exchange gains and losses on financial assets and financial liabilities are included in the Statement
of Comprehensive Income in the period in which they arise.
(vii) Related parties
Related parties are entities which have the ability, directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial and operating decisions. The related parties of
the Company are disclosed in note 10.
3. Taxation
The Company is classified under Article 123C of the Income Tax (Jersey) Law 1961, as amended, as a Jersey
resident company which is neither a ‘utility company’ nor a ‘financial services company’ and as such is charged
Jersey income tax at the rate of 0%.
A Jersey goods and services tax (“GST”) applies at a standard rate of 5% on the majority of goods and
services supplied in Jersey for local use or benefit. The Company has obtained International Services Entity
status under the Goods and Services Tax (Jersey) Law 2007. In connection with its International Services
Entity status the Company pays an annual fee to the Comptroller of Income Tax in Jersey, which is currently
fixed at £200. As an International Services Entity the Company is not required to charge GST and in most
situations will not be subject to a GST charge on goods and services provided to it.
4. Segmental reporting
The Directors are of the opinion that the Company is engaged in a single segment of business, as such no
segmental reporting information has been presented.
5. Prepayment and other receivables
30/09/2014 31/03/2014
GBP GBP
Prepayments 26,617 15,012
Other debtors - 2
26,617 15,014
6. Other payables and accrued expenses
30/09/2014 31/03/2014
GBP GBP
Investment advisory fees 112,500 -
Administration fees 8,750 8,750
Directors’ fees 18,750 18,750
Audit fees 4,000 8,000
Registrar fees 625 625
Other payables 444 -
145,069 36,125
7. Share capital
30/09/2014 31/03/2014
Units Units
Authorised share capital
Non-redeemable ordinary shares of £1 each 2 2
Unclassified shares of £0.001 each 59,999,998 59,999,998
30/09/2014 31/03/2014
GBP GBP
Issued and fully paid up share capital
2 non-redeemable ordinary shares of £1 each 2 2
6,000,001 unclassified shares of £0.001 each 6,000 6,000
6,002 6,002
On 15 May 2012 the 2 ordinary shares of £1 each in the issued share capital of the Company were redesignated
as non-redeemable ordinary shares of £1 each having the rights and being subject to the restrictions set out
in the Articles adopted by the Company on 17 May 2012.
Each of the 998 ordinary shares of £1 each in the unissued (but authorised) share capital of the Company
was subdivided into 1,000 ordinary shares of £0.001 each and then all such ordinary shares of £0.001 each
were redesignated as unclassified shares of £0.001 each that may from time to time (and in accordance with
the Articles) be issued as, or redesignated or converted into, shares (whether or not redeemable from time to
time) and, in each case having the rights and being subject to the restrictions specified in the Articles adopted
by the Company on 17 May 2012.
The authorised share capital of the Company was increased from £1,000 divided into 2 non-redeemable
ordinary shares of £1 each and 998,000 unclassified shares of £0.001 each to £60,000,000 divided into 2 non-
redeemable ordinary shares of £1 each and 59,999,998,000 unclassified shares of £0.001 each by the creation
of an additional 59,999,000,000 unclassified shares of £0.001 each that may from time to time (and in
accordance with the Articles) be issued as, or redesignated or converted into, shares (whether or not
redeemable from time to time) and, in each case having the rights and being subject to the restrictions
specified in the Articles.
8. Share premium
30/09/2014 31/03/2014
GBP GBP
6,000,001 unclassified shares issued at a premium of £0.999 5,994,001 5,944,001
Less: transaction costs (1,083,311) (1,083,311)
4,910,690 4,910,690
9. Founder option
30/09/2014 31/03/2014
GBP GBP
Founder option 6,000 6,000
Brunswood International Holdings Limited (the “Founder”) has purchased an option for £6,000 (the
“Founder Option”). The Founder Option gives the founder the right, from admission up to completion of
any acquisition, to subscribe for a further 6,000,000 shares for £0.999 per share.
10. Related party disclosures
The Company has a number of related parties, the transactions with the related parties are detailed below:
Administration fees
Fees are payable to Regal Trustees Limited for administration services, Ian Crosby and Niall McCallum are
directors of Regal Trustees Limited and of the Company. The amount payable by the Company for the period
was £17,500 (six months ended 30/09/2013: £17,500; 2014: £35,000) for administration and £12,500 (six
months ended 30/09/2013: £12,500; 2014: £25,000) for directors’ fees, of this £15,000 (2014: £15,000)
remained unpaid at the period end.
Directors
In addition to the amounts payable to Regal Trustees Limited, Samuel Imerman and Hymie Levin were paid
directors fees of £6,250 each (six months ending 30/09/2013: £6,250; 2014: £12,500) and Mark Daniell was
paid directors fees of £12,500 (six months ending 30/09/2013: £12,500; 2014: £25,000). At the period end
£12,500 (2014: £12,500) remained unpaid.
Shareholdings
The Founder and the Investment Adviser are beneficially owned and are under the common control of the
trustees of trusts established for the benefit of certain members of the Imerman family (the “Family Trusts”).
Samuel Imerman is the settlor and a protector of the Family Trusts and Hymie Levin is a protector of the
Family Trusts.
Separately, Ian Crosby and Niall McCallum are employees of Stonehage Group Services (Jersey) Limited
(“Stonehage”), a member of the Stonehage group of companies who act as trustees of the Family Trusts. Ian
Crosby and Niall McCallum do not, however, have any connection with the role that Stonehage carry out as
trustees of the Family Trusts and, as such, the other directors of the Company are satisfied that they are
“independent” directors of the Company.
In accordance with the investment advisory agreement, the Investment Adviser is entitled to receive fees of
£450,000 per annum payable quarterly in arrears. During the period, the amount payable to the Investment
Adviser was £225,000 (six months ended 30/09/2013: £225,000; 2014: £450,000) in respect of the quarterly
retainer fee, at the period end £112,500 (2014: £nil) remained outstanding.
11. Commitments and contingencies
The Company has issued 100 warrants to the Founder (the “Founder Warrants”). The Founder Warrants
entitle the Founder in respect of every one warrant held to subscribe for such number of shares as shall equal
0.1 per cent of the share capital of the Company on a fully diluted basis following completion of an acquisition
until the last business day of the month following the month in which an acquisition was completed for an
amount equal to the par value of those shares issued.
The Company has issued an option to the Founder as disclosed in note 9.
12. Ultimate controlling party
No single party is considered to be the ultimate controlling party.
13. Financial risk management
Overview
The Company has exposure to a number of business risks. The Board has overall responsibility for the
Company’s risk management arrangements. The Company may be exposed to market risk, credit risk and
liquidity risk.
This note presents information on the Company’s exposure to each of the above risks, the Company's
objectives, policies and processes for measuring and managing risk and the management of the Company’s
capital.
a) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market risk comprises three types of risk: price risk, interest rate risk and currency
risk.
(i) Price risk
Price risk is the risk that the market prices move unfavourably and that the fair value of future cash flows that
are based on the market will fluctuate due to changes in the market prices. The Company is not currently
exposed to price risk.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
Cash flow interest rate risk arises on cash balances held. The Directors have determined that a fluctuation in
interest rate of 50 basis points is reasonably possible. An increase in 50 basis points in interest rates as at the
reporting date would have increased the profit for the period by £17,481 (2014: £18,665), a decrease of 50
basis points would have an equal but opposite effect. The analysis assumes that all other variables remain
constant.
(iii) Currency risk
Currency risk is the risk that currency exchange rates move unfavourably and the assets that the Company
owns in currencies other than its functional currency decrease in value due to exchange rate movements.
The Company’s functional and presentational currency is pounds sterling, the Company currently has no
assets and no liabilities in currencies other than pounds sterling and is therefore not exposed to currency risk.
b) Credit Risk
Credit risk is the risk that a counterparty of a financial instrument will fail to discharge an obligation or
commitment that it has entered into with the Company.
Credit risk arises mainly from cash deposits, cash equivalents and accrued income. The Company only
deposits cash with major banks with high quality credit standing, this ensured through monitoring credit
worthiness of the bank using data available from Standard and Poor’s. The Company reviews its cash
positions and ensures it limits exposure to any one counterparty.
All banks, custodians and brokers with which the Company will be doing business, may encounter financial
difficulties that impair the operational capabilities or capital position of the Company.
The carrying amount of financial assets represents the Company’s maximum exposure to credit risk. The
maximum exposure of each class of financial asset are as follows:
30/09/2014 31/03/2014
GBP GBP
Other receivables - 2
Cash and cash equivalents 3,496,284 3,732,964
3,496,284 3,732,966
c) Liquidity risk
Liquidity risk is the risk that the Company fails to maintain adequate levels of financial resources to enable it
to meet its financial obligations as they fall due. Liquidity risk arises because of the possibility that the
Company could be required to pay its liabilities earlier than expected or because of any inability to realise
assets in order to meet obligations as they fall due or is only able to realise assets by suffering financial loss.
The Company’s liquidity risk derives from the need to have sufficient funds available to cover future
commitments. The Company manages liquidity risk through an ongoing review of future cash requirements.
Cash flow forecasts are compared to cash available.
The carrying amount of financial liabilities represents the Company’s maximum exposure to liquidity risk.
The maximum exposure of each class of financial liability are as follows:
30/09/2014 31/03/2014
GBP GBP
Other payables and accrued expenses 145,069 36,125
(all due within one year)
145,069 36,125
14. Capital risk management
The share capital and share premium is considered to be the capital of the Company. The Company must
maintain sufficient financial resources, in the opinion of the Directors to meet its commitments. The
Directors monitor the capital of the Company to ensure that the Company continues as a going concern
whilst ensuring optimal return for the shareholders.
15. Employees
The Company had no employees during the period other than the Directors.
16. Events after the reporting period
At the Annual General Meeting (“AGM”) of the Company on 29 October 2014 the Directors approved the
extension of the Company’s investment period for an additional year, until the 2015 AGM.
17. Basic / headline earnings / (loss) per share
Basic / headline earnings / (loss) per share is calculated by dividing the net profit attributable to shareholders
by the weighted average number of ordinary shares outstanding during the year.
30/09/2014 31/03/2014
GBP GBP
Net loss attributable to shareholders (334,021) (651,635)
Weighted average number of shares in issue 6,000,002 6,000,002
Basic / headline loss per share (0.056) (0.108)
Should the Founder Option have exercised a further 6,000,000 shares would be in issue diluting the loss
and headline loss per shares, the basic / headline loss per share would have been GBP (0.0278) (2014: GBP
(0.0543)).
Sacoven Plc has a primary listing on the Alternative Investment Market of the London Stock Exchange
and a secondary listing on the AltX of the Johannesburg Stock Exchange.
17 December 2014
JSE Sponsor
KPMG Services Proprietary Limited
AIM Nomad and Broker
Liberum Capital Limited
Chris Bowman & Christopher Britton
Tel: +44 (0) 20 3100 2000
For further information please visit the Company’s website www.sacoven.com
Niall McCallum +44 (0) 1534 823000
Date: 17/12/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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