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Creon Corporation (AMED)

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Tuesday 04 April, 2006

Creon Corporation

Final Results

Creon Corporation PLC
04 April 2006

Creon Corporation plc
4 April 2006

                             Creon Corporation plc

                                 Annual Report

Creon Corporation plc ("the Company" or "Creon") is pleased to announce its
results for the year ended 31 January 2006.

Chairman's Statement

I am delighted to present this first annual report to shareholders since the
Company's incorporation on 27 August 2004.  Pages 16-24 show the financial
performance of the Company from this date to 31 January 2006.  This first
financial period for the company consists of 17 months.

Creon was formed to provide mezzanine finance to residential property developers
in the UK.  Whilst the Company is relatively new its business is based upon the
experience of the Directors in terms of managing a quoted company and the
experience of the partners of Creon Equity LLP in terms of experience in the
property sector generally and the provision of mezzanine finance in particular.

Creon achieved admission of its ordinary shares to trading on AIM on 25 November
2004.  We regard this as an important step in the development of Creon as a
business as it was at this time that the first material funds were invested into
the Company.  The admission to trading on AIM also substantially increased our
profile in the property sector generally which has helped us in the generation
of potential deal flow.


Prior to admission to AIM we undertook two major fundraisings which raised
£85,000 and £399,960 respectively.  Since admission two further material
fundraisings were undertaken, the first of which occurred at the time of our
admission to trading on AIM in November 2004, when £1,000,000 (excluding issue
costs) was raised.  In addition we successfully completed additional
fundraisings of £1,600,000 and £160,000 (excluding issue costs) at 45 pence per
share.  These latter fundraisings were through the exercise by Creon of an
option agreement with Forestdale Trading Limited, the details of which were
announced 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 the
Company's interests to have access to further additional funds in order to
increase the number of financings provided by the Company and so spread the
operational costs of the Company over a larger portfolio of assets.  We have
consequently begun discussions with a number of financial organisations with a
view to generating debt finance for Creon secured against the assets of the
Company.  The Directors have discussed this issue over a number of months with a
variety of advisors and are fully aware of the leverage effect resulting from
the use of debt.  In the event that the directors succeed in raising debt
finance the investment of the resulting funds will be carefully controlled.


The Directors believe that the market for the provision of equity finance for
small and medium-sized residential developers is poorly served by existing
sources which are often expensive or of an informal and uncertain nature.  This
has allowed Creon to develop a business that provides mezzanine level finance to
developers, providing an attractive level of return within an acceptable level
of risk.

Creon's approach is to maximise the return on its funds, at the same time as
minimising its exposure to uncontrollable risks.  The preference, therefore, is
to provide finance on projects that can be completed within 18 months from
acquisition of the site and for the residential development to appeal to a large
pool of potential purchasers.


Creon intends to keep operating costs to a minimum in order to maximise the
funds available for lending.  In addition the Directors wish to ensure that
there is a wide spread of financing opportunities available to the Company which
have been reviewed by an independent and experienced team.  Creon therefore
entered into a consultancy agreement with Creon Equity LLP (the "Manager") which
provides the Directors with specialist advice regarding the provision of finance
to developers.  The details of this management agreement were finalised and
entered into at the time of our admission to AIM.  In summary the Manager is
expected to:

(i)  Identify, evaluate, negotiate and process suitable opportunities for Creon 
     to provide mezzanine finance to small and medium sized residential property 

(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 

(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 recommendations
made by the Manager but there is no obligation upon the Directors to accept a

The partners of Creon Equity LLP are as follows:

Jonathan Samuel Lavy FCA

Jonathan Lavy is a Chartered Accountant with many years experience in
professional practice.  He has subsequently been involved in the property
industry as a principal over the last 22 years and has built up extensive
experience of commercial property investment, debt and equity financing and
residential property development.  He has invested as principal and in
conjunction with partners and been responsible for evaluating investments,
related financial modelling, sensitivity and long term risk analysis together
with project management of refurbishment and renovation projects.  He has also
been a provider of mezzanine finance to residential property developers.

Roger Malcolm Holbeche FRICS

Roger Holbeche is a Chartered Surveyor and been involved in residential and
commercial property development since qualifying.  He was co-founder, chairman
and chief executive of The Embassy Property Group plc, an AIM listed company
which was primarily involved in commercial property development and investment,
construction and house building; Roger had specific responsibility to promote
and co-ordinate strategy as well as for the development subsidiary and
commercial development financing.  He has also subsequently been responsible for
investing in and project managing warehouse, office and residential development
schemes in his private capacity where he had responsibility for negotiating the
purchase of sites and subsequent sale of the developments.  He has also been a
provider of mezzanine finance for residential developers.


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 houses
in the Midlands; five houses in Cornwall and seven flats plus a nursery site in
Wimbledon.  These developments are expected to be completed during the current
financial year (which ends on 31 January 2007).  The Directors have recently
agreed a further two new loan proposals totalling £1.1 million and are
considering a range of other proposals for developments of both flats and

The Directors are also planning to broaden Creon's operational base by setting
up a property investment subsidiary to complement its mezzanine finance
activities.  As a consequence the Managers are currently investigating a number
of investment opportunities which reflect the Directors' intention to build a
high quality commercial investment portfolio.

Share Price

We successfully completed a placing and an introduction to trading on AIM, with
trading in the Company's shares commencing on 25 November 2004.  Trading volumes
in the Company's ordinary shares has been very low since admission. The
admission price was 50p per share and there has not been significant movement in
this price in the 18 months since admission. Given the nature of the activities
of the Company which involve the provision of finance for a period of
approximately 12 months there has been little news to date that was likely to
influence the share price materially.  We do expect that as additional
financings are made and as financings are repaid there will be an increase in
the momentum of the company's activities.  We hope that this will be reflected
in our share price.


The Directors believe that Creon has made good progress in the development of a
business in a niche area of property related finance.  We are very aware that we
need to expand and grow the activities of the Company in order to achieve growth
in the value of the Company.  We intend to achieve this by expanding the amount
of finance we have available through leveraging our existing equity finance and
we are also looking at a number of other property related finance opportunities
that are being introduced to us.  We continue to review a wide range of
potential mezzanine finance opportunities and are confident that those
investments we have made will be realised in a profitable and timely manner.  We
therefore remain optimistic about the future.

Jonathan Freeman
4 April 2006

Board of Directors

Jonathan Freeman (aged 40)
Executive Director

Jonathan graduated with a degree in Business Studies from Stirling University in
1988 and gained an MBA from Warwick University in 1993. From 1988 to1993 he was
a contract manager of a property refurbishment company, becoming a director in
1991. He worked within corporate finance and was involved in the creation and
launch of the pan European stock market EASDAQ which was subsequently taken over
by NASDAQ. He is currently a non-executive Director of Cobra Capital Limited,
Equity Pre IPO Investments Limited, both of which are strategic investment
companies quoted on AIM, Futura Medical plc, a healthcare company quoted on AIM
and where he is the senior independent director and Syndicate Asset Management
plc, 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 was
instrumental in setting up and was Managing Director of a new investment banking
division within AON Corporation called Aon Capital Markets Limited. James is
currently Chief Executive of Futura Medical plc, a healthcare company quoted on
AIM. He is also a director of Lorega Claims and Underwriting Ltd, an insurance
claims and loss adjusting service company.

Corporate Governance

Creon Corporation plc was admitted to trading on AIM on 25 November 2004.  As
such it is not governed by the Combined Code on Corporate Governance.  However,
the Board is committed to complying with best practice where appropriate.  This
includes evaluating Directors' performance, the management of the Company, and
ensuring that it maintains full and effective control over appropriate
strategic, financial, operational and compliance issues.

There is no separate Audit Committee as the Board considers, that given its
current size, all members of the Board should participate in those roles and
responsibilities normally reserved for such a committee.  Therefore, the full
Board of Directors will provide a forum for reporting by the Company's external

During the period ended 31 January 2006 the Board discharged these
responsibilities 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
•    Reviewing the performance of the Company's advisers

The Company does not have an independent internal audit function as it is not
deemed appropriate given the size of the Company and the nature of the Company's
business.  However the Board considers annually whether there is a need for such
a function.

Relations with Shareholders

The Directors seek to build a mutual understanding of objectives between the
Company and its shareholders. The Company reports formally to shareholders in
its interim and annual reports setting out details of its activities. In
addition, the Company keeps shareholders informed of events and progress during
the year through the issue of press releases.  The Company is working to create
an investor relations page on its website ( Financial
statements will be published on the Company's website.  The maintenance and
integrity of the Company's website will be the responsibility of the Directors.
The Directors' responsibility also extends to the ongoing integrity of the
financial statements contained therein.

Shareholders have the opportunity to meet the Board at the AGM.  The Board is
also happy to respond to any written queries made by shareholders during the
course 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, the
Board and representatives of the management team are available to answer any
questions shareholders may have.

The Registrars collate proxy votes and the results (together with the proxy
forms) are forwarded to the Company Secretary immediately prior to the AGM.  In
order to comply with the revised Combined Code, proxy votes are announced at the
AGM, following each vote on a show of hands, except in the event of a poll being
called.  The notice of the next adjourned AGM and proxy form can be found at the
end of these financial statements.

Where possible the Annual Report is sent to shareholders at least 20 working
days before the Annual General Meeting. Directors are required to attend Annual
General Meetings of the Company unless unable to do so for personal reasons or
due to pressing commercial commitments. Shareholders are given the opportunity
to vote on each separate issue.  The Company counts all proxy votes and will
indicate the level of proxies lodged on each resolution, after it has been dealt
with by a show of hands.

Internal Control

The Directors of the company have overall responsibility for the Company's
system of internal control. Internal control systems are designed to meet the
particular needs of the Company and the risks to which it is exposed.  By their
nature these controls can provide reasonable but not absolute assurance against
material misstatement or loss.

The Board's appointment of Noble Corporate Management Limited as Company
Secretary has delegated much of the administration of the Company to Noble
Corporate Management Limited which has an established system of control,
including internal financial controls, to enable it to ensure that proper
accounting records are maintained and that the financial information for use
within the business and for reporting to shareholders is accurate and reliable
and that the Company's assets are safeguarded.  This delegation of
administration by the Board, and the use of Noble Corporate Management Limited,
is monitored by the Board with regards to its appropriateness and with regard to
the performance of Noble Corporate Management Limited in carrying out its work
on behalf of Creon.

Going Concern

After due consideration, the Directors believe that the Company has adequate
resources for a period of at least 12 months from the date of approval of the
financial statements, and consequently that it is appropriate to apply the going
concern principle in preparing the financial statements.

Financial Reporting

The Directors' statement of responsibilities for preparing the accounts is set
out on page 13 and a statement by the Auditors about their reporting
responsibilities is set out in the Auditors' Report on page 14.

Directors' Report

The Directors have pleasure in presenting their first report together with the
financial statements for the period ended 31 January 2006.


The Company was incorporated on 27 August 2004 and was admitted to trading on
AIM on 25 November 2004.

The principal activity of the Company is the provision of mezzanine finance to
small 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 accompanying
financial statements and attached notes.  The Directors consider that the
Company's performance was satisfactory.  The Directors propose that no dividend
be paid in respect of the period.

Issue of shares

During the period to 31 January 2006, the Company issued 10,036,110 Ordinary
shares of 1p each, raising gross funds totalling £3,252,960.


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 any
interest in the share capital, loan capital or share options of the Company, nor
does any person connected with the Directors have any such interests, whether
beneficial or non-beneficial.

Directors' Service Agreements and Letters of Appointment

On 22 October 2004, Combined Management Services Limited ("CMS") entered into
two separate consultancy agreements with the Company, the terms of which are as
(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.


Creon Equity LLP is appointed as a manager to identify, evaluate, and process
suitable opportunities for the Company to provide mezzanine finance to
residential property developers. Creon Equity LLP receive 3% per annum of  the
value of funds already invested and funds still available for investment plus
15% 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 the
Company'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 of
suppliers' invoices in accordance with the stated terms of the invoices.


A resolution to reappoint BDO Stoy Hayward LLP as auditors was proposed and
passed at the Annual General Meeting held on 24 February 2006.

By order of the board

Stephen Churchill
For and on behalf of Noble Corporate Management Limited
Company Secretary

4 April 2006

Directors' Remuneration Report

The Board has prepared this report in accordance with the requirements of
Schedule 7A to the Companies Act 1985.

Directors' Fees

The Board considers at least annually the level of the Directors' fees, in
accordance with the Combined Code on Corporate Governance. The Company Secretary
provides information on comparative levels of Directors' fees to the Board in
advance of each review.

The Board concluded following the review of the level of Directors' fees for the
forthcoming 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 to
attract and retain the Directors needed to oversee properly the Company and to
reflect the specific circumstances of the Company, the duties and
responsibilities of the Directors and the value and amount of time committed to
the Company's affairs. It is intended that this policy will continue for the
year ending 31 January 2007 and subsequent years.

The fees for the non-executive Directors are determined in accordance with the
Company's Articles of Association. Non-executive Directors are not eligible for
bonuses, pension benefits, share options, long-term incentive schemes or other

Directors' service contracts

Jonathan Freeman's services as Director are provided through an open ended
agreement with Combined Management Services Limited, with a 3 month notice

A service agreement exists between the Company and James Barder with a 3 month
notice period.

Directors' emoluments for the period (audited)

The Directors who served during the period received remuneration either in the
form of fees or emoluments:

                                                            Fees or emoluments


Jonathan Freeman*                                                  55
James Barder                                                       14

*fees paid to a third party in respect of Directors' services

Emoluments are stated net of Employer's national insurance contributions where

No pension scheme contributions or other retirement benefit contributions were

There are no share option contracts held by the Directors or long term incentive

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 Board
of Directors on 4 April 2006 and signed on its behalf by Jonathan Freeman.

On behalf of the Board,

Jonathan Freeman
4 April 2006

Statement of Directors' Responsibilities

Company law requires the directors to prepare financial statements for each
financial period, which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period.  In preparing
those 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 which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985.  They are also responsible for safeguarding the assets
of the company and hence for taking reasonable steps for the prevention and
detection 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 period
ended 31 January 2006 on pages 16 to 24 which have been prepared under the
accounting policies set out on page 19.

Respective responsibilities of directors and auditors

The directors' responsibilities for preparing the annual report and the
financial statements in accordance with applicable law and United Kingdom
Accounting Standards are set out in the Statement of Directors'

Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and United Kingdom Auditing

We report to you our opinion as to whether the financial statements give a true
and fair view and are properly prepared in accordance with the Companies Act
1985.  We also report to you if, in our opinion, the Directors' Report is not
consistent with the financial statements, if the company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding
directors' remuneration and transactions with the company is not disclosed.

We read the Chairman's Statement, the Corporate Governance Report, the
Directors' Report and the Directors' Remuneration Report and consider the
implications for our report if we become aware of any apparent misstatements
within them.

Our report has been prepared pursuant to the requirements of the Companies Act
1985 and for no other purpose.  No person is entitled to rely on this report
unless such a person is a person entitled to rely upon this report by virtue of
and for the purpose of the Companies Act 1985 or has been expressly authorised
to do so by our prior written consent.  Save as above, we do not accept
responsibility for this report to any other person or for any other purpose and
we hereby expressly disclaim any and all such liability.

Basis of audit opinion

We conducted our audit in accordance with United Kingdom Auditing Standards
issued by the Auditing Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and
judgements made by the directors in the preparation of the financial statements,
and of whether the accounting policies are appropriate to the company's
circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.


In our opinion the financial statements give a true and fair view of the state
of the company's affairs as at 31 January 2006 and of its loss for the period
then ended and have been properly prepared in accordance with the Companies Act

Chartered Accountants
and Registered Auditors
Date: 4 April 2006

Profit and Loss Account
for the period ended 31 January 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 financial

All amounts relate to continuing activities.

Balance Sheet
as at 31 January 2006
                                                         Note                          £

Current assets
Debtors                                                   7                            1,128,542
Cash at bank                                                                           1,754,359


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 reserves
Called up share capital                                   9                            100,361
Share premium account                                     10                           2,774,949
Profit 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 Statement
For 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)


   Issue of ordinary share capital                                              3,252,960
   Share issue costs                                                            (377,650)


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

(forming part of the financial statements)

1    Accounting policies

Basis of accounting

The financial statements have been prepared under the historical cost convention
and in accordance with applicable accounting standards and the Companies Act


Turnover represents the arrangement fees due in respect of mezzanine finance
advances 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 that
have originated but not reversed by the balance sheet date, except that:
•    The recognition of deferred tax assets is limited to the extent that 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 is
included in debtors and is stated at the amount of the funds advanced net of any
provision for potentially irrecoverable amounts.
2    Turnover

Turnover is wholly attributable to the principal activity of the company and
arises solely within the United Kingdom.

3    Operating loss
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 which
have been debited to the share premium account.

(forming part of the financial statements)
4    Earnings per share

The earnings per share for the period was (0.77)p. The calculation of earnings
per share is based on the loss of £55,715 for the period from 27 August 2004 to
31 January 2006 and the weighted number of shares in issue (7,212,616) from the
date 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 period
including  Directors was two.

The aggregate remuneration and associated costs of the Company's employees were:

Wages and salaries                                                               14,000
Social security costs                                                            653
Pension costs                                                                    -

Directors' emoluments

Amounts paid to third parties in respect of Directors' services                  54,520
Emoluments                                                                       14,000

(forming part of the financial statements)
6    Taxation
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 carry
forward to set off against future profits.
7    Debtors

Prepayments and accrued income                                                    170,052
Mezzanine finance advances                                                        958,490

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 months
and are for the purpose of property development. The finance is secured against
the properties being developed.

The Company's financial instruments consist of cash and mezzanine finance. The
risks associated with these are interest rate risk and the potential
non-recoverability of the loans. Interest rate risk is monitored through cash
flow management and the placing of cash on interest bearing deposit accounts.
The risk of potential non-recoverability of the loans is reduced by closely
considering each loan applicant before agreeing to the loan facility and by
securing the loans against property.

(forming part of the financial statements)
8    Creditors:  amounts falling due within one year

Accruals                                                                          62,778
Other taxation and social security                                                528

9    Share capital
50,000,000 Ordinary shares of 1p each                                             500,000

Allotted, called up and fully paid
10,036,110 Ordinary shares of 1p each                                             100,361

During the period the company issued 10,036,110 Ordinary Shares of 1p each as
detailed below:

                                                   Price per share        Total Gross Issue
                                                                 £                        £
Date                No of shares allotted
27/08/04                                       200            0.01                        2
25/10/04                                   799,800            0.01                    7,998
03/11/04                                 2,125,000            0.04                   85,000
10/11/04                                 1,200,000            0.33                  399,960
25/11/04                                 2,000,000            0.50                1,000,000
04/11/05                                 3,555,555            0.45                1,600,000
04/11/05                                   355,555            0.45                  160,000

Total                                   10,036,110                                3,252,960

The company was incorporated with authorised share capital of £50,000 divided
into 50,000 ordinary shares of £1 each of which two ordinary shares of £1 each
were issued.  On 22 October 2004, each issued and un-issued ordinary share of £1
was sub-divided into 100 ordinary shares of 1p each and the authorised share
capital of the company was increased from £50,000 to £500,000 by the creation of
45 million ordinary shares of 1p each.

On 25 October 2004, the Company issued and allotted 300,000 warrants to each of
Roger Holbeche and Jonathan Lavy. In relation to each holding, 100,000 warrants
were exercisable from 25 November 2005 at a price of 60p per share, 100,000 are
exercisable on 25 November 2006 at a price of 70p per share and 100,000 are
exercisable on 25 November 2007 at a price of 80p per share. Each warrant
entitles the holder to subscribe for one new Ordinary share. The final exercise
date for all warrants is 25 November 2008. The warrants have been issued for no
consideration and to date no warrants have been exercised.

(forming part of the financial statements)
10   Share premium account

Shares issued                                                                     3,152,599
Share issue expenses                                                              (377,650)
11   Reconciliation of movements in shareholders' funds

Opening shareholders' funds                                                       -
Issue of shares - share capital                                                   100,361
Issue of shares - share premium                                                   2,774,949
Loss 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 the
Net Assets as at 31 January 2006 of £2,819,595 and on 10,036,110 shares, being
the number of shares in issue at that date.
13   Cash flow from operating activities
Operating loss                                                                   (101,540)
Increase in debtors                                                              (170,052)
Increase in creditors                                                            63,306
14   Analysis of net funds

                                                               Cash flow         As at 31 January
                                                               £                 £

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

(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 to
developers. These loans total £1.1 million and both loans are repayable within
12 months and are secured against property.
17   Related Party Transactions

The following information is provided in accordance with Financial Reporting
Standard 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            Nil
Services Limited      Director of Creon is a 50%
                      shareholder in Combined
                      Management Services Limited

Combined Management   Jonathan Freeman,           Admin & support                 27,260            Nil
Services 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 date
of incorporation, to 31 January 2006.

Copies of the Annual Report for the year ended 31 January 2006 are being sent to
shareholders. Further copies will be available from the Company Secretary's
office: Noble Corporate Management Limited, 120 Old Broad Street, London, EC2N

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

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