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1 December 2009

Palmaris Capital Plc 

("Palmaris" or the "Company")

Audited Results for Year Ended 30 June 2009 

and Notice of AGM

The Board of Palmaris, the investment company with interests in coal mining, is pleased to present its audited results for the year ended 30 June 2009.

Key points include:

• Increase in valuation of Palmaris's holding in Scottish Resources Group by 10% to £14.17m

• Net assets increase 8.6% to 9.3p per share

For further information contact:
Palmaris Capital plc Greg Melgaard (Managing Director)	07799 657 553
Noble & Company Limited John Llewellyn-Lloyd	020 7763 2200
Harry Stockdale

Chairman's Statement

Results

The net cost of operating the company for the year resulted in a loss of £136,000, as compared with £123,000 the previous year. The difference was due to a reduction in interest receivable.

Our remaining investment is in Scottish Resources Group Ltd. ("SRG"), the main Scottish opencast coal operator with significant development land potential. Based on the information available to them of the position of SRG, the Directors have increased their valuation of the SRG shares from £2 to £2.20 per share. 

The effect of this increase is to increase the valuation of the investment from £12.88M to £14.17M. This increases our net assets to £14.5M or 9.3p per ordinary share.  

Scottish Resources Group

As reported in our Interim Results to 31 December 2008, the SRG audited accounts for 

the year ended March 2008 were published in January 2009, reporting a profit after tax of £2.34M compared with a restated profit after tax in the previous year of £1.86M.

In the accounts to March 2008, SRG stated that new sales contracts had been negotiated 

at improved prices and the first effects of these increased prices would be felt in the year ended March 2010. It is expected that the results for the year to March 2009 will show a loss but increased sales prices, combined with the intended increase in sales tonnages, should produce a very substantial profit in the current year. Management accounts for the current year confirm this trend.

At present the spot prices for coal are lower than the contracted prices which are being reflected in SRG's results for the current year. This creates a probability that the prices which are likely to be achieved for sales in the year to March 2011 will be lower than the current year.

In addition to the coal production side of the business, the SRG Estates division has contributed in the past to the profitability of the group through various land disposals. Although 2009 has been a difficult year for the world economy, and commercial property in particular, it is expected that the sites capable of being developed by SRG will be progressed as the economy improves.

Even in this difficult financial climate, SRG has been able to put appropriate facilities in place relating to its overdraft and long term banking loan. The profitability in the current 

year is allowing debt to be reduced.

In the summer of 2008, SRG appointed a new chief executive and estates director, with the experience required to take the business forward. Their input has already had a beneficial effect.

Conclusion

As the economic situation improves further, SRG will be well placed to consolidate its position in the coal market and maximise its property assets. The increased profitability should ensure an increase in the value of SRG and its future marketability.  

Timothy Noble

Chairman

30 November 2009

 

PROFIT AND LOSS ACCOUNT

for the year ended 30 June 2009

			2009	2008
		NOTES	£	£
Turnover			-	-
Cost of Sales			-	-
Gross Profit			-	-
Administrative expenses			(165,332)	(169,724)
Operating loss		4	(165,332)	(169,724)
Investment and other income		3	29,169	46,403
(Loss) on ordinary activities before interest payable			(136,163)	(123,321)
Interest payable			-	-
(Loss) on ordinary activities before taxation		2	(136,163)	(123,321)
Taxation on (loss) on ordinary activities		6	-	-
(Loss) on ordinary activities after taxation			(136,163)	(123,321)
(Loss) for the financial year		12	(136,163)	(123,321)

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	7	(0.09)p	(0.08)p
Net assets per share
Net assets per ordinary share		9.3p	8.56p

BALANCE SHEET

As at 30 June 2009

		2009	2008
	NOTES	£	£
Fixed assets
Investments	8	14,168,000	12,880,000
		14,168,000	12,880,000
Current assets
Debtors	9	16,284	17,276
Cash		339,551	472,609
		355,835	489,885
Creditors
Amounts falling due within one year
Other	10	(23,610)	(21,497)
		(23,610)	(21,497)
Net current assets		332,225	468,388
Net Assets		14,500,225	13,348,388
Capital and reserves
Called up equity share capital	11	7,796,665	7,796,665
Unrealised appreciation reserve	12	7,728,000	6,440,000
Capital reserve	12	(1,217,356)	(1,217,356)
Share Premium	12	351,500	351,500
Profit and loss account	12	(158,584)	(22,421)
Shareholders' funds	13	14,500,225	13,348,388

The Notes form part of the financial statements.

T. P. Noble (Director)

Authorised for issue by the board on 30 November 2009

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

for the year ended 30 June 2009

		2009	2008
		£	£
(Loss) for the financial year		(136,163)	(123,321)
Unrealised gains on investments		1,288,000	-
Realised (losses) on investments		-	(1,217,356)
Total recognised gains (losses) for the year		1,151,837	(1,340,677)

NOTE OF HISTORICAL COST PROFITS AND LOSSES

	2009	2008
	£	£
Reported (loss) on ordinary activities before taxation	(136,163)	(123,321)
Historical cost (loss) on ordinary activities before taxation	(136,163)	(123,321)
Historical cost (loss) for the year after taxation	(136,163)	(123,321)

CASH FLOW STATEMENT

for the year ended 30 June 2009

		2009	2008
	NOTES	£	£
Net cash (outflow) from operating activities	A	(162,227)	(178,181)
Returns on investments and servicing of finance	B	29,169	46,403
Cash (outflow) before financing		(133,058)	(131,778)
Capital expenditure and financial investment	B	-	4,881
(Decrease) in cash in the year		(133,058)	(126,897)

NOTES TO THE CASH FLOW STATEMENT

for the year ended 30 June 2009

A.    Reconciliation of operating loss to operating cash flows

	2009	2008
	£	£
Operating loss	(165,332)	(169,724)
Decrease in debtors	992	5,139
Increase/(Decrease) in creditors	2,113	(13,596)
Net cash (outflow) from operating activities	(162,227)	(178,181)

B.    Analysis of cash flows

	2009	2008
	£	£
Returns on investments and servicing of finance
Interest received	14,118	31,250
Fees and commissions received	15,051	15,153
Net cash inflow	29,169	46,403
Capital Expenditure and Financial Investment
Proceeds of sale of equity holdings	-	4,881

C.    Analysis and reconciliation of net funds

		1 JULY 2008	CASH FLOW	30 JUNE 2009
		£	£	£
Cash		472,609	(133,058)	339,551
Net Funds		472,609	(133,058)	339,951

                    

	2009	2008
	£	£
(Decrease) in cash in the year	(133,058)	(126,897)
Net funds at beginning of year	472,609	599,506
Net funds at end of year	339,551	472,609

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, 2009 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

	2009	2008
	£	£
(Loss) on ordinary activities before taxation
United Kingdom	(136,163)	(123,321)
Investments
United Kingdom	14,168,000	12,880,000
Net current assets	332,225	468,388
Net assets	14,500,225	13,348,388

3.    Investment and other income

	2009	2008
	£	£
Fees and commission receivable	15,051	15,153
Interest receivable	14,118	31,250
	29,169	46,403

4.     Operating loss

		2009	2008
Operating loss is stated after charging (crediting):
Auditors' remuneration:
Audit of these financial statements		5,635	6,750
Consultation and taxation services		5,722	8,920

5.    Staff costs

	2009	2008
	£	£
Wages and salaries	88,000	88,000
Social security costs	3,757	1,846
	91,757	89,846
	2009	2008
	Number	Number
The average monthly number of employees
(including executive directors) was:
Administration staff	2	2

Directors' remuneration            

	2009	2008
	£	£
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 July 2008 to 30 September 2008 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.

6.     Taxation on (loss) on ordinary activities

No taxation charge arises as a result of the tax losses incurred and brought forward (2008 - 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:

		2009	2008
		£	£
(Loss) on ordinary activities before tax		(136,163)	(123,321)
Standard rate of corporate tax at 28% (2008 - 30%)		38,126	36,996
Adjustments - (losses) for which no relief currently available		(38,126)	(36,996)
Tax charge for the year		-	-

7.     (Loss) per ordinary share

	2009	2008
	£	£
(Loss) attributable to ordinary shareholders	(136,163)	(123,321)
(Loss) per ordinary 5p share based on the weighted average number of shares in issue in the year to 30 June 2009which totalled 155,933,304 (2008 - 155,933,304)	(0.09)p	(0.08)p

8.     Fixed asset investments

            

	2009	2008
	£	£
Equity Holdings
Unlisted at directors' valuation	14,168,000	12,880,000
The unlisted shares were valued at the year end by the directors.
	2009	2008
	£	£
Market value of investments held at beginning of year	12,880,000	12,880,000
Unrealised appreciation at beginning of year	6,440,000	5,217,763
Cost of investments held at beginning of year	6,440,000	7,662,237
Disposals at cost	-	(1,222,237)
Cost of investments held at end of year	6,440,000	6,440,000
Unrealised appreciation at end of year	7,728,000	6,440,000
Market value of investments held at end of year	14,168,000	12,880,000

Listed investments

The company held no listed investments at 30 June 2009.

 

Investments

Details of the significant investments of the Company at 30 June, 2009 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	29 March	Coal mining

Information on significant investments

		SCOTTISH
		RESOURCES
		GROUP LIMITED
		29 MARCH 2008
		YEAR END
		£000
Turnover		111,774
Profit before tax		2,915
Taxation charge		(574)
Profit after tax		2,341
Fixed assets		55,186
Current assets		96,621
Liabilities due within one year		(46,146)
Liabilities due after one year		(75,641)
Net assets		30,020

*    Audited accounts of Scottish Resources Group Limited to 28 March, 2009 are not yet available. In these circumstances the information from the Accounts to 29 March, 2008 has been shown.

9.    Debtors

    Amounts falling due within one year                    

	2009	2008
	£	£
Trade debtors	2,875	2,937
Prepayments and accrued income	10,639	9,660
VAT	2,770	4,679
	16,284	17,276

10.    Creditors

Amounts falling due within one year

	2009	2008
	£	£
Other
VAT, payroll taxes and social security	4,252	990
Accruals and deferred income	16,500	16,000
Trade and sundry creditors	2,858	4,507
	23,610	21,497

11.    Called up equity share capital 

			2009		2008
				£	£
Authorised
190,000,000 (2008 - 190,000,000)
Ordinary shares of 5p each				9,500,000	9,500,000
Issued and fully paid
155,933,304 (2008 - 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.

12.    Reserves

The movements on reserves are as follows:  

	UNREALISED			PROFIT AND
	APPRECIATION	CAPITAL	SHARE	LOSS
	RESERVE	RESERVE	PREMIUM	ACCOUNT
	£	£	£	£
Beginning of year	6,440,000	(1,217,356)	351,500	(22,421)
Unrealised gains on investments	1,288,000	-	-	-
Loss for the financial year	-	-	-	(136,163)
End of year	7,728,000	(1,217,356)	351,500	(158,584)
			2009	2008
			£	£
Total distributable reserves are as follows:
Profit and loss account
(Deficit)			(158,584)	(22,421)
Capital reserve			(1,217,356)	(1,217,356)
			(1,375,940)	(1,239,777)
Total non distributable reserves are as follows:
Unrealised appreciation reserve			7,728,000	6,440,000
Share premium			351,500	351,500
			8,079,500	6,791,500

13. Reconciliation of movements in shareholders' funds

	2009	2008
	£	£
(Loss) for the financial year	(136,163)	(123,321)
Movement in unrealised appreciation reserve	1,288,000	1,222,237
Movement in capital reserve	-	(1,217,356)
Net addition (reduction) to shareholders' funds	1,151,837	(118,440)
Opening shareholders' funds	13,348,388	13,466,828
Closing shareholders' funds	14,500,225	13,348,388

14.    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
	2009	2008	2009	2008
	£	£	£	£
Services rendered:
Scottish Resources Group Ltd	15,000	15,000	2,875	2,937
Purchase of goods and services:
Patersons Quarries Ltd	24,000	24,000	-	-
Noble & Company Ltd	20,400	20,711	-	-
Noble House	16,000	16,000	-	-
Semper Holdings Ltd.	9,000	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, is a shareholder 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.

Statutory Accounts

The above results have been extracted from the audited accounts of Palmaris Capital Plc for the year ended 30 June 2009 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.

Annual Report 

A copy of the audited Report and Accounts will be sent to the Shareholders and posted on the Company's website www.palmariscapital.com on or about 2 December 2009 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.

 AGM

The Annual General Meeting of Palmaris Capital plc is to be held at 76 George Street, Edinburgh, EH2 3BU on Friday 18 December 2009 at 11:00am.  A notice convening this meeting will be sent to shareholders on or about 2 December 2009.

Ends

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