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Creon Corporation (AMED)

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Friday 29 June, 2007

Creon Corporation

Final Results

Creon Corporation PLC
29 June 2007


Creon Corporation plc
 
Annual Report
 
 
Creon Corporation plc ("the Company" or "Creon") is pleased to announce its 
results for the year ended 31 January 2007.
 

Chairman's Statement


I am delighted to present this annual report to shareholders for the year ended
31 January 2007. Creon Corporation plc ("Creon" or the "Company") was
incorporated on 27 August 2004 to provide mezzanine finance to residential
property developers in the UK. The Company's business is based upon the
experience of the Directors in managing a quoted company and upon the experience
of the members of Creon Equity LLP 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. This was an important step in the development of Creon's business as it
was at this time that the first significant funds were invested in the Company.
The admission helped to increase Creon's profile in the property development
sector which, in turn, has helped in the generation of new business.


I am delighted to be able to report that Creon has reported its first profits
for the year of £265,295 after tax. This equates to a profit per share of 2.64
pence and compares with a loss per share of 0.77 pence last year. The level of
profit achieved for the current year is particularly pleasing as it has 
been generated from a total equity investment of just £3,252,960 (excluding 
issue costs), representing a return of 8.2% on the equity funds invested. I am
confident that, should the Company have access to an increased level of funding
(either through equity, debt or a combination of the two), then significantly
larger profits will be achievable.


Fundraising

No new equity funds have been raised during the current year. The total equity
funds raised by the Company since its incorporation therefore remains at
£3,252,960 (excluding issue costs). During the course of the year ended 31
January 2007 the Company established a revolving debt facility with the Bank of
Scotland for up to £1 million. This facility is for the provision of mezzanine
finance and whilst it remains to be utilised as at 31 January 2007 we expect
that it will be used during the course of 2007 as new financings are made.


The Directors believe that, from an operational point of view, it would be in
the Company's interests to have access to further funds to enable it to
substantially increase its lending capacity and also to spread its operational
costs over a larger portfolio of loans. The Directors have, during the course of
the year, been in discussions with a number of financial organisations with a
view to generating additional funding for Creon. The loan facility with the Bank
of Scotland is a result of some of these discussions and the Directors hope to
achieve further finance during the course of the year ended 31 January 2008.


Strategy

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


Creon aims to maximise the return on its funds, at the same time as minimising
its exposure to uncontrollable external risks such as a general market decline
in property prices. The preference is consequently 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.


Operations

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 are
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 developers;

        (ii)     Provide to Creon's Board sufficient information on suitable
opportunities to enable the Directors to make informed decisions on financing
opportunities;

      (iii)     Provide all necessary documentation to the Board in respect of
each project;

       (iv)     Manage the related transaction and keep under review the
underlying property developments to ensure 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
recommendation.


The partners of Creon Equity LLP are as follows:


Jonathan 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 23 years and has built up extensive
experience of commercial property investment, debt and equity financing and
residential property development. He has invested in property as principal and
in conjunction with partners and been responsible for evaluating opportunities,
related financial modelling, sensitivity and long term risk analysis together
with management of refurbishment and renovation projects. He has also been a
provider of mezzanine finance to residential property developers.


Roger Holbeche FRICS

Roger Holbeche is a Chartered Surveyor and has 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 traded company
which was primarily involved in commercial property development and investment,
construction and house building. Roger had specific responsibility for promoting
and co-ordinating strategy for the Embassy Property Group plc as well as for
managing 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 a 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.



Loans

In December 2006 two loans were redeemed in full producing realised fee income
of £453,750. Of this, £335,777 was recognised as income in the current year and
£117,973 in the prior year. This is in addition to the repayment of the original
loans of £1,090,997.


The loans committed as at 31 January 2007 were for £600,000, £500,000 and
£759,204 for developments of houses and flats in Suffolk, Surrey and the West
Midlands. Two of these developments are expected to be completed and the
respective loans to be repaid during the financial year ending on 31 January
2008, the third is expected to complete in February 2008. The Directors have
recently agreed a further new loan of £300,000 and are considering a range of
other development proposals.


Investments

In our annual report for the period ended 31 January 2006 we stated that the
Directors were planning to broaden Creon's operational base by setting up a
property investment subsidiary to complement its mezzanine finance activities.
We have investigated a number of investment opportunities during the year but
have not found anything so far that can be recommended to the shareholders. The
Directors will continue to explore potential investment opportunities as part of
the Company's overall strategy.


Share Price

Creon's share price and market liquidity has been disappointing during the
financial year ended 31 January 2007. This is especially so when one considers
the fall from 50.5 pence per share (mid-market price) on 1 February 2006 to 42
pence per share as at 31 January 2007 in the context of the substantial progress
that Creon has made and can be seen by the first profits for the year of
£265,295 after tax. The Board's objective remains to grow the size and 
profitability of the Company, and to promote the Company to potential investors,
with the hope that the share price will improve as the Company becomes more 
widely known.


Outlook

The Directors believe that Creon has made good progress in the development of
its business in a niche area of property finance. We have moved the Company from
a post tax loss of £55,715 for the period to 31 January 2006 to a post tax
profit of £265,295 for the year to 31 January 2007. We are very aware that we
need to expand and further the activities of the Company in order to achieve the
planned growth. We intend to achieve this by increasing the amount of finance we
have available to lend and by sourcing more property development opportunities.
We continue to review a wide range of potential mezzanine finance opportunities
and are confident that those investments we have made to date will be realised
in a profitable and timely manner. We therefore remain optimistic about the
future of the Company.





Jonathan Freeman

28 June 2007





Board of Directors


Jonathan Freeman (aged 42)

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 to 1993 he was
a contract manager of a property refurbishment company, becoming a director in
1991. Since 1993 he has worked within corporate finance being involved in the
creation and launch of the pan European stock market EASDAQ, which was
subsequently taken over by NASDAQ. In 1997 he joined the investment bank Beeson
Gregory, becoming a director in 1998. He joined Gambit Corporate Finance in 2002
and left in 2003. He is currently a non-executive Director of Cobra Capital
Limited and Equity Pre IPO Investments Limited, both of which are strategic
investment companies traded 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 traded on AIM.


James Barder (aged 47)

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 traded 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
auditors.


During the year ended 31 January 2007 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
    auditor's detailed reports when applicable
   •Reviewing the appropriateness of the Company's accounting policies
   •Reviewing the audit fee
   •Reviewing the terms of engagement for the audit
   •Reviewing the internal controls operated in relation to the Company's
    business
   •Reviewing the performance of the Company's advisers


The Company does not have an independent internal audit function as it is 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 has created an
investor relations page on its website (www.creoncorporation.com).


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.


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 financial
statements is set out on page 12 and a statement by the Auditors about their
reporting responsibilities is set out in the Auditors' Report on page 13.


Directors' Report


The Directors have pleasure in presenting their report together with the
financial statements for the year ended 31 January 2007.


Activities

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 year to 31 January 2007 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 year. Further details are included in the Chairman's
statement on pages 3 to 5.


Issue of shares

No shares were issued during the year to 31 January 2007.


Directors

The Directors of the Company during the year were:

Jonathan Freeman

James Barder


None of the Directors who held office at the end of the financial year 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
follows:


          (i)     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 £26,508 per annum. The agreement is terminable by 3 months' notice on either
side; and

        (ii)     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 £26,508 per annum. The
agreement is terminable by 3 months' notice on either side.


Jonathan Freeman owns 50% and is a director of CMS.


Management

Creon Equity LLP is appointed as a manager to identify, evaluate, and 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 on each individual loan made by the company.


Creon Equity LLP is not a related party.


Financial instruments

The nature and extent to which financial instruments have an effect on the
Company are disclosed in note 12 to the financial statements.



Substantial Shareholdings

Shareholders on the Shareholder Register with a 3% or more interest in the
Company's share capital at 31 January 2007 are detailed below:

                                              Number of            Percentage of
                                                                 issued ordinary
                                                                   share capital
                                        ordinary shares
HSBC Custody Nominee
Limited                                     5,047,510                    50.29%
E*Trade Securities
Limited                                     1,925,000                    19.18%
ROY Nominees Limited                          637,500                     6.35%
Chase Nominees
Limited                                       620,000                     6.18%
Pinnacle Limited                              612,500                     6.10%
Alderwood Management
Limited                                       500,000                     4.98%


We have also conducted a limited investigation into the underlying holders of 3%
or more of our share capital.  As far as we are aware, as of 31 January
2007, the following shareholders held 3% or more of our share capital:

                                              Number of            Percentage of
                                                                 issued ordinary
                                                                   share capital
                                        ordinary shares
Newton Nominees                             2,371,110                    23.63%
Equity Special
Situations Limited                          1,910,000                    19.03%
Cobra Capital
Limited                                     1,000,000                     9.96%
RBC Trustees
(Guernsey) Limited                            637,500                     6.35%
Pinnacle Limited                              612,500                     6.10%
J. Olafsson                                   600,000                     5.98%
Alderwood Management
Limited                                       500,000                     4.98%


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. At the
year end trade creditors had been outstanding for 9 days.


Auditors

A resolution to reappoint BDO Stoy Hayward LLP as auditors will be proposed at
the Annual General Meeting to be held on XX June 2007.


All of the current Directors have taken all the steps that they ought to have
taken to make themselves aware of any information needed by the Company's
auditors for the purposes of their audit and to establish that the auditors are
aware of that information. The Directors are not aware of any relevant audit
information of which the auditors are unaware.


By order of the Board





Louise Lawrie
For and on behalf of Noble Corporate Management Limited
Company Secretary
London
28 June 2007


Directors' Remuneration Report


Whilst the Board has prepared this report it is not intended to be 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 properly oversee 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 2008 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
benefits.


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
period.


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


Directors' emoluments for the year (audited)

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


Fees or emoluments:

Jonathan Freeman* £53,016 (2006 - £54,520)

James Barder £12,000 (2006 - £14,000)


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


Emoluments are stated net of employer's national insurance contributions where
appropriate.

No pension scheme contributions or other retirement benefit contributions were
paid.

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

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 page 11 was approved by the Board of
Directors on 28 June 2007 and signed on its behalf by Jonathan Freeman.






On behalf of the Board,

Jonathan Freeman

Director

28 June 2007


Statement of Directors' Responsibilities

The directors are responsible for preparing the annual report and the financial
statements in accordance with applicable law and United Kingdom Generally
Accepted Accounting Practice.


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.


Financial statements are published on the Company's website in accordance with
legislation in the United Kingdom governing the preparation and dissemination of
financial statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company's website is the responsibility of
the Directors. The Directors' responsibility also extends to the ongoing
integrity of the financial statements contained therein.



Independent Auditor's Report To The Shareholders Of Creon Corporation plc


We have audited the financial statements of Creon Corporation plc for the year
ended 31 January 2007 which comprise the Profit and Loss Account, the Balance
Sheet, the Cash Flow Statement and the related notes. These financial statements
have been prepared under the accounting policies set out therein.


Respective responsibilities of directors and auditors

The Directors' responsibilities for preparing the financial statements in
accordance with applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice) are set out in the Statement of
Directors' Responsibilities.

Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true
and fair view and have been properly prepared in accordance with the Companies
Act 1985 and whether the information given in the Directors' Report is
consistent with those financial statements. We also report to you if, in our
opinion, 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 other
transactions is not disclosed.


We read other information contained in the Annual Report and consider whether it
is consistent with the audited financial statements. The other information
comprises only the Chairman's Statement, the Directors' Report, the Directors'
Remuneration Report and the Corporate Governance Statement. We consider the
implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the financial statements. Our responsibilities do
not extend to any further information.


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 International Standards on Auditing
(UK and Ireland) 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 judgments 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.


Opinion

In our opinion:

   • the financial statements give a true and fair view, in accordance with
     United Kingdom Generally Accepted Accounting Practice, of the state of the
     Company's affairs as at 31 January 2007 and of its profit for the year then
     ended;
   • the financial statements have been properly prepared in accordance with
     the Companies Act 1985; and
   • the information given in the Directors' Report is consistent with the
     financial statements.


BDO Stoy Hayward LLP

Chartered Accountants and Registered Auditors

London

28 June 2007


Profit and Loss Account

for the year ended 31 January 2007



                                                     Year ended     Period ended
                                                31 January 2007  31 January 2006
                                                                      (restated)
                                         Note               £                £

Turnover                                   2          806,882          219,233


Cost of sales                                        (264,728)         (67,385)
                                                      ________         ________

Gross profit                                          542,154          151,848

Administrative expenses                              (206,521)        (253,388)
                                                      ________         ________

Operating profit/(loss)                    3          335,633         (101,540)

Interest receivable and similar income                 23,381           45,825
                                                      --------         --------
Interest payable and similar charges       7          (44,837)               -
                                                      --------         --------

Profit/(loss) on ordinary activities
before taxation                                       314,177          (55,715)

Taxation                                   8          (48,882)               -
                                                      ________         ________

Retained profit/(loss) for the year       15          265,295          (55,715)

                                                      ========         ========

Basic and diluted earnings per share       4             2.64p           (0.77)p
                                                      --------         --------
                                                                             



All recognised gains and losses in the current year and prior period are
included in the profit and loss account.


All amounts relate to continuing activities.

Balance Sheet

as at 31 January 2007



                                                             2007         2006
                                                 Note           £            £

Fixed assets
Investments                                        9            8            -

Current assets

Debtors                                           10    2,355,573    1,128,542
Cash at bank                                              942,234    1,754,359
                                                        ---------    ---------

                                                        3,297,807    2,882,901
                                                        ---------    ---------
Creditors: amounts falling due within one year    11     (212,925)     (63,306)
                                                         ________     ________

Net current assets                                      3,084,882    2,819,595
                                                         ________     ________

Total assets less current liabilities                   3,084,890    2,819,595
                                                       ===========  ===========

Capital and reserves

Called up share capital                           13      100,361      100,361
Share premium account                             14    2,774,949    2,774,949
Profit and loss account                           15      209,580      (55,715)
                                                         ________     ________

Shareholders' funds                               16    3,084,890    2,819,595
                                                      ===========  ===========



The financial statements were approved by the board of Directors and authorised
for issue on 28 June 2007.






Jonathan Freeman

Director


Cash Flow Statement

For the year ended 31 January 2007


                                                    Note      2007        2006
                                                                 £           £

Net cash inflow/(outflow) from operating activities 17     110,044    (208,286)

Net cash (outflow)/inflow from returns on
investments and servicing of finance

Interest received                                           23,381      45,825

Interest paid                                              (44,837)          -
                                                           --------     -------

                                                           (21,456)     45,825

Net cash (outflow) from capital expenditure and
financial investments

Mezzanine finance loans advanced                         (1,991,710)  (958,490)

Mezzanine finance loans repaid                           1,090,997           -

                                                           --------     -------

                                                          (900,713)   (958,490)


Net cash inflow from financing

New loans                                                  377,000           -

Repayment of loans                                        (377,000)          -

Issue of ordinary share capital                                  -   3,252,960

Share issue costs                                                -    (377,650)
                                                           --------  ---------


                                                                 -   2,875,310
                                                         _________   _________


(Decrease)/increase in cash                               (812,125)  1,754,359
                                                       ===========   ==========


Reconciliation of net cash flow to movement in net funds


(Decrease)/increase in cash in the year             18    (812,125)  1,754,359
                                                         _________   _________


Change in net funds resulting from cash flows       18    (812,125)  1,754,359
                                                        ===========  =========

                                                                 

Net funds at the start of the year                       1,754,359           -
                                                        ===========  =========
                                                          _________  _________


Net funds at the end of the year                           942,234   1,754,359



Notes (forming part of the financial statements)


1 Accounting policies


Basis of accounting


The financial statements have been prepared under the historical cost convention
and in accordance with applicable accounting standards and the Companies Act
1985 and cover the year ended 31 January 2007. Comparative figures cover the
period from 27 August 2004, being the date of incorporation, to 31 January 2006.


In accordance with section 229 (2) of the Companies Act 1985 the Company has not
prepared consolidated financial statements on the basis that the inclusion of 
those subsidiary undertakings, which have not traded since incorporation, would 
not be material for the purpose of giving a true and fair view.


Turnover


Turnover represents the arrangement fees due in respect of mezzanine finance
advances and additional fees arising from the extension of loans beyond the
original repayment date. 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.


Deferred tax balances are not discounted.


Financial Instruments


Financial instruments are recognised initially and subsequently at cost.


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.


For the purpose of the information in note 12 in the financial statements
short-term debtors and creditors have been excluded from that information.


Share Based Payments

The Company has adopted FRS20 in the current year and this has not had a material
effect on the financial statements.


2 Turnover


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


3 Operating profit/(loss)
                                                            2007          2006
                                                               £             £
This is arrived at after charging:
Auditor's remuneration - for audit work                   17,625        11,200
                                                          ========      ========


The auditors received non-audit remuneration fees of £nil (2006 - £11,820, in
respect of Corporate Finance work which were debited to the share premium
account).


4 Earnings per share


The earnings per share for the year ended 31 January 2007 was 2.64p. The
calculation of earnings per share is based on the profit of £265,295 for the
year ended 31 January 2007, and the number of shares in issue (10,036,110).


The earnings per share for the period to 31 January 2006 was (0.77)p. The
calculation of earnings per share for that period was 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.


All of the share warrants have been excluded from the earnings per share
calculation as they are anti-dilutive as at 31 January 2007. These warrants
could be dilutive in future periods.


5 Asset Value per share


The net asset value per share at 31 January 2007 was £0.31 (as at 31 January
2006; £0.28). Net asset value is based on the net assets as at 31 January 2007
of £3,084,890 (as at 31 January 2006; £2,819,595) and on the number of shares in
issue at 31 January 2007 being 10,036,110 shares (as at 31 January 2006 -
10,036,110 shares).


6 Staff numbers and costs


The average monthly number of employees of the Company, including Directors,
during the year, was 2 (2006: 2).


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

                                                   2007                   2006
                                                      £                      £

Wages and salaries                               12,000                 14,000
Social security costs                               892                    653
Pension costs                                         -                      -
                                             ------------           ------------
                                                                      
                                                 12,892                 14,653
                                                 ========               ========



Directors' emoluments
                                                              2007        2006
                                                                 £           £

Amounts paid to third parties in respect of Directors'
services                                                    53,016      54,520
Emoluments                                                  12,000      14,000
                                                            --------    --------
                                                                      
                                                            65,016      68,520
                                                            ========    ========


7 Interest payable and similar charges
                                        2007                    2006
                                           £                       £
On other loans                        44,837                       -
                                      ========               ========
                                                                


8 Taxation
                                                       2007               2006
                                                          £                  £
UK Corporation Tax

Current tax on profit/(loss) for the year            48,882                  -
                                               ==============    ===============

The tax assessed for the year is lower (2006 - higher) than the effective rate
of corporation tax in the UK applied to the profit/(loss) before tax.

Factors affecting tax charge in the year

Profit/(loss) on ordinary activities before tax            314,177     (55,715)
                                                           =========  ==========
Profit/(loss) on ordinary activities at the effective
rate                                                        59,693     (16,714)
of corporation tax in the UK of 19% (2006 - 30%)

Effect of:
Utilisation of tax losses                                  (10,811)          -
Losses carried forward                                           -      16,714
                                                            -------     --------
                                                                        
Tax charge for the year                                     48,882           -
                                                            ========    ========

As at 31 January 2007 the Company had trade losses of £nil (2006 - £55,715)
available to carry forward to set off against future profits.



9 Fixed asset investments

                                                                 Shares in group
                                                                    undertakings

At 1 February 2006                                                           -
Additions                                                                    8
                                                                ----------------

At 31 January 2007                                                           8
                                                                ================


The Company holds investments in the following subsidiary undertakings:

Company                             Percentage of        Capital &        Profit
                                      shares held         reserves

Creon Properties
Limited                                     100%               2             -
                                           ======              ===           ===
Creon Investments
Limited                                     100%               2             -
Creon Estates
Limited                                     100%               2             -
Creon Property
Investments Limited                         100%               2             -


All subsidiary undertakings are dormant.


10 Debtors
                                                     2007                2006
                                                        £                   £

Prepayments and accrued income                    496,370             170,052
Mezzanine finance advances                      1,859,203             958,490
                                              -------------       -------------
                                                                   
                                                2,355,573           1,128,542
                                               ============        ============
                                                               

All amounts fall due for payment within one year.


11 Creditors: amounts falling due within one year
                                                      2007                2006
                                                         £                   £

Trade creditors                                      4,600                   -
Accruals and deferred income                       159,113              62,778
Corporation tax                                     48,882                   -
Other taxation and social security                     322                 528
Amounts due to group undertakings                        8                   -
                                                  ----------           ---------
                                                                      
                                                   212,925              63,306
                                                  ==========           =========




12 Financial instruments
                                                     2007                2006
                                                        £                   £

Cash at bank                                      942,234           1,754,359
Mezzanine finance advances                      1,859,203             958,490


There is no difference between the book values and fair values of the Company's
financial instruments.


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.


No interest is receivable in respect of the mezzanine finance advances.
Arrangement fees are charged and these are included within turnover. Mezzanine
finances are advanced by the Company for a maximum period of 18 months and are
for the purpose of property development. The finance is secured against the
properties being developed.


The Company earns interest at 5.4% on its cash at bank balances.


The Company has an undrawn revolving credit facility of £1million;


13 Share capital
                                                        2007              2006
                                                           £                 £
Authorised

50,000,000 Ordinary shares of 1p each                500,000           500,000
                                                  ============      ============

Allotted, called up and fully paid

10,036,110 Ordinary shares of 1p each                100,361           100,361
                                                  ============      ============


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 were
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.

The charge in respect of the warrants as required by FRS20: Share Based Payment 
is not significant and has therefore not been booked.


14 Share premium account

                                                                             £
At 1 February 2006                                                   2,774,949
Shares issued                                                                -
Share issue expenses                                                         -
                                                                    ------------
                                                                           
At 31 January 2007                                                   2,774,949
                                                                    ============


15 Profit and loss account
                                                                             £

At 1 February 2006                                                     (55,715)
Profit for year                                                        265,295
                                                                     -----------
                                                                             
At 31 January 2007                                                     209,580
                                                                      ==========


16 Reconciliation of movements in shareholders' funds
                                                      2007                2006
                                                         £                   £

Opening shareholders' funds                      2,819,595                   -
Issue of shares - share capital                          -             100,361
Issue of shares - share premium                          -           2,774,949
Profit/(loss) for the financial period             265,295             (55,715)
                                                ------------        ------------

Shareholders' funds at 31 January 2007           3,084,890           2,819,595
                                                ============        ============



17 Net cash inflow/(outflow) from operating activities


                                                            2007          2006
                                                               £             £
Operating profit/(loss)                                  335,633      (101,540)
Increase in debtors                                     (326,318)     (170,052)
Increase in creditors                                    100,729        63,306
                                                         ________      ________

Net cash inflow/(outflow) from operating activities      110,044      (208,286)
                                                       ===========   ===========


18 Analysis of net funds

                                    As at 1 Cash flow     As at 31 January 2007
                              February 2006
                                        £             £                      £

Cash in hand and at bank        1,754,359      (812,125)               942,234

Debt payable within 1 year              -             -                      -
Debt payable after 1 year               -             -                      -
                                 ________       ________      

Net debt                        1,754,359      (812,125)               942,234
                               ==========       ========               =======


19 Capital commitments


There were no capital commitments at the year end (2006 - £nil).



20 Post balance sheet events


Since 31 January 2007, the Directors have agreed one further loan to a
developer. The loan is for £300,000, repayable within 12 months and is secured
against property.


21 Related Party Transactions


The following information is provided in accordance with Financial Reporting
Standard 8 as being transactions with related parties for the year:

                                                   Amount            Balance
Name of related party and
nature of relation         Transaction type     2007      2006    2007    2006
                                                   £         £       £       £
Jonathan Freeman, Director
of Creon is a 50% 
shareholder in             Directors fees    26,508    27,260       Nil     Nil
Combined Management
Services
Limited


Jonathan Freeman, Director
of Creon is a 50% 
shareholder in             Admin & support   26,508    27,260       Nil     Nil
Combined Management
Services
Limited
                               


22 Restatement of prior year comparatives


Prior year management and performance fees of £67,385 paid to Creon Equity LLP 
have been reclassified from administrative fees to cost of sales. The Directors' 
believe this provides a fairer representation of the results.


Copies of the Annual Report for the year ended 31 January 2007 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 1AR.

For further information, please contact:

Jonathan Freeman, Director     Tel - +44 (0) 1600 750 432

John Riddell, Director of Noble & Company Limited  Tel - +44 (0) 020 763 2200




Notice of the Annual General Meeting

Notice is hereby given that the annual general meeting of the Creon Corporation 
Plc will be held at 3.00pm on 24th July 2007, at the offices of Noble Group, 
120 Old Broad Street, London, EC2N 1AR.





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