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24 November 2008

Palmaris Capital Plc ('Palmaris' or the 'Company')

Results for the 12 months to 30 June 2008

The Board of Palmaris, the investment company with interests in coal mining, is pleased to present its audited results for the 
12 month period ended 30 June 2008.

Key points include:

• Palmaris' assets now focussed wholly on Scottish Resources Group Limited ('SRG');

• The outlook for SRG remains reasonably optimistic and demand for its coal has remained strong. 

For further information contact:
Greg Melgaard, Managing Director	07799 657 553
John Llewellyn-Lloyd, Noble & Company Limited	020 7763 2200
Sunil Sanikop, Noble & Company Limited	020 7763 2200

CHAIRMAN'S STATEMENT

Results

Our sole remaining substantial asset is our shareholding in SRG, previously called Mining Scotland. We have kept the value of this shareholding at the same level as at the previous year end and our results therefore merely reflect the net costs of running the company for the year. These were £123,000, which reflects our tight control of overheads and is a very low figure for a public company. Our net assets in the balance sheet fell by only £118,000 to 8.56p per share (2007: 8.64p).

Scottish Resources Group

SRG's final audited results for the year to end March 2008 have not yet been published. After a return to profitability the previous year, it is likely that these results will show an increased profit, helped by the sale of property assets and of the biomass fuel subsidiary during the year.

It is too early to be able to determine the trading of SRG in the current year, but several circumstances have impaired performance. These have included delays in bringing some new sites into operation, much higher fuel costs, wetter than normal weather conditions during the summer and autumn and geological problems 

at two sites. However, there has been a marked improvement in international coal prices which has provided some modest improvement to the average selling price achieved during the year.  

Looking to the future, SRG is likely to benefit to an increasing extent from improved coal prices, as older legacy contracts are fulfilled. The outlook for coal prices remains reasonably optimistic and demand for the company's coal has remained strong. The Group is planning to increase production in 2009 and has implemented a substantial capital investment programme. The impact of the international credit crisis on SRG's future sales contracts and on its banking relationships is uncertain but the whole of the UK economy faces the same difficulties.

SRG's extensive property interests were also actively managed during the year. The Group has a large land ownership across Scotland and is working to develop a significant number of projects. Whilst the property market has suffered in the current downturn, SRG Estates continues to invest to move projects forward through the planning processes in order to be in a position to benefit when there is an improvement in the market. The Group's flagship development is a large scale new township development at Blindwells in the East of Scotland. Detailed planning permission for this is being sought, and it is thought likely that this will be granted in due course.

 

Conclusion

Our assets are entirely focused on SRG. We remain optimistic about the potential for realising this investment in the future at a favourable price when normal market conditions return.

Timothy Noble

Chairman

21 November 2008

  

PROFIT AND LOSS ACCOUNT

for the year ended 30 June 2008

			2008	2007
		NOTES	£	£
Turnover			-	-
Cost of Sales			-	-
Gross Profit			-	-
Administrative expenses			(169,724)	(177,003)
Exceptional Item		4	-	(133,171)
Operating loss		5	(169,724)	(310,174)
Investment and other income		3	46,403	81,790
(Loss) on ordinary activities
before interest payable			(123,321)	(228,384)
Interest payable			-	-
(Loss) on ordinary activities
before taxation		2	(123,321)	(228,384)
Taxation on (loss) on ordinary activities		7	-	-
(Loss) on ordinary activities after taxation			(123,321)	(228,384)
(Loss) for the financial year		13	(123,321)	(228,384)

The reported (loss) on ordinary activities before taxation equates to the historical cost (loss) on ordinary activities before taxation.

                

None of the company's activities were acquired or discontinued during the above two financial years.           
     

Earnings per ordinary share
(Loss) per ordinary share			(0.08)p	(0.16)p
Net assets per share
Net assets per ordinary share			8.56p	8.64p

  BALANCE SHEET

As at 30 June 2008

			2008	2007
		NOTES	£	£
Fixed assets
Investments		9	12,880,000	12,880,000
			12,880,000	12,880,000
Current assets
Debtors		10	17,276	22,415
Cash			472,609	599,506
			489,885	621,921
Creditors
Amounts falling due within one year
Other		11	(21,497)	(35,093)
			(21,497)	(35,093)
Net current assets			468,388	586,828
Net Assets			13,348,388	13,466,828
Capital and reserves
Called up equity share capital		12	7,796,665	7,796,665
Unrealised appreciation reserve		13	6,440,000	5,217,763
Capital reserve		13	(1,217,356)	-
Share Premium		13	351,500	351,500
Profit and loss account		13	(22,421)	100,900
Shareholders' funds		14	13,348,388	13,466,828

The notes to the accounts form part of these financial statements.                

                

                

T. P. Noble (Director)                

Authorised for issue by the board on 21 November 2008                

  STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

for the year ended 30 June 2008

			2008	2007
			£	£
(Loss) for the financial year			(123,321)	(228,384)
Realised (losses)/gains on investments			(1,217,356)	6,456,502
Total recognised (losses)/gains for the year			(1,340,677)	6,228,118

  CASH FLOW STATEMENT

for the year ended 30 June 2008

			2008	2007
		NOTES	£	£
Net cash (outflow) from operating activities		A	(178,181)	(313,274)
Returns on investments and servicing of finance		B	46,403	81,790
Cash (outflow) before financing			(131,778)	(231,484)
Capital expenditure and financial investment		B	4,881	-
(Decrease) in cash in the year			(126,897)	(231,484)

  NOTES TO THE CASH FLOW STATEMENT

for the year ended 30 June 2008

A.	Reconciliation of operating loss to operating cash flows
			2008	2007
			£	£
	Operating loss		(169,724)	(310,174)
	Decrease in debtors		5,139	3,635
	(Decrease) in creditors		(13,596)	(6,735)
	Net cash (outflow) from operating activities		(178,181)	(313,274)

                

                

B.	Analysis of cash flows
			2008	2007
			£	£
	Returns on investments and servicing of finance
	Interest received		31,250	37,931
	Fees and commissions received		15,153	43,859
	Net cash inflow		46,403	81,790
	Capital Expenditure and Financial Investment
	Proceeds of sale of equity holdings		4,881	-

                

                

C.	Analysis and reconciliation of net funds
		1 July		30 June
		2007	Cash flow	2008
		£	£	£
	Cash	599,506	(126,897)	472,609
	Net Funds	599,506	(126,897)	472,609

                

                

			2008	2007
			£	£
	(Decrease) in cash in the year		(126,897)	(231,484)
	Net funds at beginning of year		599,506	830,990
	Net funds at end of year		472,609	599,506

  NOTES TO THE ACCOUNTS

1.    Accounting policies

A summary of the principal accounting policies, all of which have been applied consistently throughout the year and the preceding year, are as follows:

Basis of accounting:

The accounts have been prepared in accordance with applicable accounting standards. At 30 June, 2008, the company had no subsidiaries and therefore its results are not consolidated. In accordance with Rule 19 of the AIM rules the company's accounts are prepared under UK GAAP rather than IFRS.

Turnover:

Turnover represented amounts receivable for goods and services provided in the normal course of business, net of trade discounts and VAT.

Income and expenses from investments:

Income from securities is credited to the profit and loss account when the securities are listed ex-dividend. Interest receivable, interest payable and other expenses of management are dealt with on an accruals basis. 

Foreign currency transactions:

Overseas income is converted to sterling at the rates of exchange ruling on the date of the transaction.

Assets and liabilities denominated in foreign currencies are translated to sterling at the rates of exchange ruling at the balance sheet date.

Investments:

Fixed Assets: Listed investments are stated at values based on market prices at the balance sheet date. Unlisted investments are valued by the directors at cost less amounts written-off or on an earnings multiple basis. Provisions are made for permanent diminutions in value.

Unrealised appreciation reserve:

The unrealised appreciation reserve represents the difference between the book cost and the market value of fixed asset investments, held at the balance sheet date. This reserve is non-distributable.

Realised gains and losses on investment transactions:

Gains and losses on realisation of fixed asset investments and realised exchange differences thereon are transferred from the unrealised appreciation reserve to the capital reserve at the time of the realisation of the investment. The capital reserve is a distributable reserve.

Taxation:

The charge for taxation is based on the profit or loss for the year and takes into account deferred taxation arising on short term timing differences between the treatment of certain income for taxation and accounting purposes. Deferred taxation is provided for at anticipated tax rates on differences arising from the inclusion of items of income and expenditure in taxation computations in periods that differ from those in which they are included in the financial statements. Deferred tax assets and liabilities are recorded only where it is expected that an asset or liability will crystallise in the foreseeable future.

2.     Segmental analysis

			2008	2007
			£	£
(Loss) on ordinary activities before taxation
United Kingdom			(123,321)	(228,384)
Investments
United Kingdom			12,880,000	12,880,000
Net current assets			468,388	586,828
Net assets			13,348,388	13,466,828

3.    Investment and other income

			2008	2007
			£	£
Fees and commission receivable			15,153	43,859
Interest receivable			31,250	37,931
			46,403	81,790

4.     Exceptional item

Legal and professional costs incurred in distributing the dividend in specie to shareholders in February 2007.

5.     Operating loss

			2008	2007
			£	£
Operating loss is stated after charging (crediting):
Auditors' remuneration:
Audit of these financial statements			6,500	7,000
Consultation and taxation services			8,920	14,630

6.    Staff costs

			2008	2007
			£	£
Wages and salaries			88,000	88,000
Social security costs			1,846	4,842
			89,846	92,842

                

			2008	2007
			Number	Number
The average monthly number of employees
(including executive directors) was:
Administration staff			2	2

                

Directors' remuneration
			2008	2007
			£	£
Directors' emoluments
Name of director
Executive
R. G. Melgaard			36,000	36,000
J. Richardson			12,000	12,000
Non-executive
T. P. Noble			16,000	16,000
P. M. B. Bucher			12,000	12,000
W. Paterson			12,000	12,000
Aggregate emoluments			88,000	88,000

The fees due to T. P. Noble were paid to Noble House and the fees due to W. Paterson and J. Richardson were paid to Patersons Quarries Ltd under arrangements in which the services of these directors were provided by the businesses concerned.

From 1 October 2007 the fees and remuneration due to R.G. Melgaard were paid to Semper Holdings Ltd. on the same basis.

No directors had accrued entitlements under defined benefit schemes.

Directors' share options

No director holds options to acquire shares in the company.

7.     Taxation on (loss) on ordinary activities

No taxation charge arises as a result of the tax losses incurred and brought forward (2007 - nil). 

The difference between this nil charge and that which would arise from applying the relevant standard rate of tax to the loss on ordinary activities before tax is as follows:

			2008	2007
			£	£
(Loss) on ordinary activities before tax			(123,321)	(228,384)
Standard rate of corporate tax at 30% (2007 - 30%)			36,996	68,515
Adjustments - (losses) for which no relief currently available			(36,996)	(68,515)
Tax charge for the year			-	-

8.     (Loss) per ordinary share

			2008	2007
			£	£
(Loss) attributable to ordinary shareholders			(123,321)	(228,384)
(Loss) per ordinary 5p share based on the weighted
average number of shares in issue in the year to 30 June 2008
which totalled 155,933,304 (2007 - 139,528,430)			(0.08)p	(0.16)p

9.     Fixed asset investments

            

			2008	2007
			£	£
Equity Holdings
Unlisted at directors' valuation			12,880,000	12,880,000
The unlisted shares were valued at the year end by the directors.
			2008	2007
			£	£
Market value of investments
held at beginning of year			12,880,000	21,390,081
Unrealised appreciation
at beginning of year			5,217,763	11,674,266
Cost of investments held at
beginning of year			7,662,237	9,715,815
Disposals at cost			(1,222,237)	(2,053,578)
Cost of investments held
at end of year			6,440,000	7,662,237
Unrealised appreciation
at end of year			6,440,000	5,217,763
Market value of investments
held at end of year			12,880,000	12,880,000

Listed investments

The company held no listed investments at 30 June 2008.

Dormant subsidiaries removed from Register of Companies

During the year the two dormant subsidiaries of Palmaris Capital plc, Waverley Asset Management Ltd and Waverley Investment Management Ltd ,were removed from the Register of Companies.

At 30 June, 2008 the company had no subsidiaries and therefore its results are not consolidated.

 

Investments

Details of the significant investments of the Company at 30 June, 2008 are as follows:

		Class
		of shares	Year	Principal
		held	end	activities
Operating mainly in the UK - unlisted
Scottish Resources Group Limited
(formerly Mining (Scotland) Ltd)	16.1%	Ordinary	24 March	Coal mining

Information on significant investments

				Scottish
				Resources
				Group Limited
				24 March 2007
				Year end
				£000
Turnover				110,762
Profit before tax				3,085
Taxation charge				(1,225)
Profit after tax				1,860
Fixed assets				51,692
Current assets				95,906
Liabilities due within one year				(51,066)
Liabilities due after one year				(86,883)
Net assets				9,649

Audited accounts of Scottish Resources Group Limited to 29 March, 2008 are not yet available. In these circumstances the information from the Accounts to 24 March, 2007 has been shown.

10.     Debtors

Amounts falling due within one year
			2008	2007
			£	£
Trade debtors			2,937	7,344
Prepayments and accrued income			9,660	10,290
VAT			4,679	4,781
			17,276	22,415

11.    Creditors

Amounts falling due within one year
			2008	2007
			£	£
VAT, payroll taxes and social security			990	4,251
Accruals and deferred income			16,000	17,500
Trade and sundry creditors			4,507	13,342
			21,497	35,093

12.    Called up equity share capital 

			2008	2007
			£	£
Authorised
190,000,000 (2007 - 190,000,000)
Ordinary shares of 5p each			9,500,000	9,500,000
Issued and fully paid
155,933,304 (2007 - 155,933,304)
Ordinary shares of 5p each			7,796,665	7,796,665

The Directors have the power to allot up to a further 16,500,000 Ordinary Shares on a non pre-emptive basis without reverting to shareholders.

13.    Reserves

The movements on reserves are as follows:  

	Unrealised			Profit and
	appreciation	Capital	Share	loss
	reserve	reserve	premium	account
	£	£	£	£
Beginning of year	5,217,763	-	351,500	100,900
Realised losses on investments	1,222,237	-	-	-
Loss on investments	-	(1,217,356)	-	-
Loss for the financial year	-	-	-	(123,321)
End of year	6,440,000	(1,217,356)	351,500	(22,421)

            

			2008	2007
			£	£
Total distributable reserves are as follows:
Profit and loss account
(Deficit)/surplus			(22,421)	100,900
Capital reserve			(1,217,356)	-
			(1,239,777)	100,900
Total non distributable reserves are as follows:
Unrealised appreciation reserve			6,440,000	5,217,764
Share premium			351,500	351,500
			6,791,500	5,569,264

14. Reconciliation of movements in shareholders' funds

	2008	2007
	£	£
(Loss) for the financial year	(123,321)	(228,384)
Unrealised (losses) on investments	-	(8,510,081)
Movement in unrealised appreciation reserve	1,222,237	-
Movement in capital reserve	(1,217,356)	-
Net reduction to shareholders' funds	(118,440)	(8,738,465)
Opening shareholders' funds	13,466,828	22,205,293
Closing shareholders' funds	13,348,388	13,466,828

15. Related party transactions

During the year there were a number of transactions with related parties, all of which arose in the normal course of business. These transactions and the related balances outstanding as at 30 June are summarised below:

	Value of transactions in the year		Outstanding balance As at 30 June
	2008	2007	2008	2007
	£	£	£	£
Services rendered:
Scottish Resources Group Ltd	15,000	15,000	2,937	7,344
Purchase of goods and services:
Patersons Quarries Ltd	24,000	24,000	-	-
Noble & Company Ltd	20,711	102,963	-	-
Noble House	16,000	16,000	-	-
Semper Holdings Ltd.	27,000	-	-	-

Scottish Resources Group Ltd is an associated company. Patersons Quarries Ltd hold 33.90% of the share capital of Palmaris Capital Plc and T.P Noble, chairman of Palmaris Capital plc, was a director of Noble Group Ltd, the parent company of Noble & Company Ltd, and is a partner in Noble House. R.G. Melgaard is a director of Semper Holdings Ltd.

16. The above results have been extracted from the audited accounts of Palmaris Capital Plc for the year ended 30 June 2008 which received an unqualified auditor's report and will be filed with the Registrars of Companies. The above extract does not represent statutory accounts as defined by section 240 of the Companies Act. The statutory accounts were adopted by the Board of Directors on 21 November 2008.

17. A copy of the audited Report and Accounts will be sent to the Shareholders on or about 25 November 2008 and additional copies will be available free of charge for a period of one month from the offices of the Company's nominated adviser, Noble & Company Limited, 120 Old Broad Street, London, EC2N 1AR.

CORPORATE DIRECTORY

Directors:

T. P. Noble (Chairman)

R. G. Melgaard (Managing Director)

J. Richardson (Finance Director)

P. M. B. Bucher

W. Paterson

Secretary:

J. Richardson

Paterson Building

Gartsherrie Road

Coatbridge ML5 2EU

Registered Office:

Paterson Building

Gartsherrie Road

Coatbridge ML5 2EU

Company number: SC108429

Registered in Scotland

Bankers:

The Royal Bank of Scotland plc

62 Hamilton Road

Motherwell

ML1 3DA

Financial Advisers:

Noble & Company Ltd

76 George Street

Edinburgh

EH2 3BU

Auditors:

Scott-Moncrieff

17 Melville Street

Edinburgh EH3 7PH

Legal Advisers:

Shepherd & Wedderburn WS

Saltire Court

20 Castle Terrace

Edinburgh EH1 2ET

Registrars:

Capita IRG plc

Bourne House

Beckenham Road

Beckenham

Kent BR3 

ENDFR EAXFFADNPFFE