REG - Caledonian Trust PLC - Final Results <Origin Href="QuoteRef">CNN.L</Origin> - Part 3
23/12/2015 16:11
- Part 3: For the preceding part double click ID:nRSW0916Kb
over a century. The prospects are very good
provided economic and political stability continues, which I expect.
I D Lowe
Chairman
22 December 2015
Consolidated income statementfor the year ended 30 June 2015
2015 2014
Note £000 £000
Revenue
Revenue from development property sales 440 513
Gross rental income 304 332
Service charge income 30 12
Property charges (224) (181)
Net rental and related income 550 676
Cost of development property sales (272) (480)
Administrative expenses (726) (761)
Other income 28 53
Net operating loss before investment property
disposals and valuation movements 5 (420) (512)
Valuation gains on investment properties 1,100 975
Valuation losses on investment properties - (195)
Net valuation gains on investment properties 1,100 780
Operating profit 680 268
Financial income 7 1 1
Financial expenses 7 (116) (105)
Net financing costs (115) (104)
Profit before taxation 565 164
Income tax 8 - -
Profit for the financial period attributable to equity
holders of the company 565 164
Profit per share
Basic and diluted profit per share (pence) 9 4.79p 1.39p
The notes on pages 33 - 51 form part of these financial statements.
Consolidated statement of comprehensive income for the year ended 30 June
2015
2015 2014
£000 £000
Profit for the year attributable to the equity holders of the parent company 565 164
Consolidated balance sheet as at 30 June 2015
2015 2014
Note £000 £000
Non current assets
Investment property 10 10,515 9,415
Property, plant and equipment 11 24 35
Investments 12 1 1
Total non-current assets 10,540 9,451
Current assets
Trading properties 13 11,418 11,498
Trade and other receivables 14 96 67
Cash and cash equivalents 15 131 34
Total current assets 11,645 11,599
Total assets 22,185 21,050
Current liabilities
Trade and other payables 16 (645) (525)
Interest bearing loans and borrowings 17 (3,530) (3,180)
Total current liabilitiesNon current liabilitiesInterest bearing loans and borrowings (4,175) (100) (3,705) -
Total liabilities (4,275) (3,705)
Net assets 17,910 17,345
Equity
Issued share capital 21 2,357 2,357
Capital redemption reserve 22 175 175
Share premium account 22 2,745 2,745
Retained earnings 12,633 12,068
Total equity attributable to equity holders of the parent company 17,910 17,345
NET ASSET VALUE PER SHARE 151.99p
147.19p
The financial statements were approved by the board of directors on 22
December 2015 and signed on its behalf by:
ID Lowe
Director
The notes on pages 33 - 51 form part of these financial statements.
Consolidated statement of changes in equity as at 30 June 2015
Share Capital Share Retained
capital redemption premium earnings Total
reserve account
£000 £000 £000 £000 £000
At 1 July 2014 2,357 175 2,745 12,068 17,345
Profit for the year - - - 565 565
______ ______ ______ ______ ______
At 30 June 2015 2,357 175 2,745 12,633 17,910
====== ====== ====== ====== ======
At 1 July 2013 2,357 175 2,745 11,904 17,181
Profit for the year - - - 164 164
______ ______ ______ ______ ______
At 30 June 2014 2,357 175 2,745 12,068 17,345
====== ====== ====== ====== ======
Consolidated cash flow statement for the year ended 30 June 2015
2015 2014
£000 £000
Cash flows from operating activities
Profit for the year 565 164
Adjustments for :
Gains on fair value adjustment of investment property (1,100) (780)
Depreciation 14 13
Net finance expense 116 104
_______ _______
Operating cash flows before movements
in working capital (405) (499)
Decrease in trading properties 80 273
(Increase)/decrease in trade and other receivables (29) 108
Increase /(decrease) in trade and other payables 3 (10)
_______ _______
Cash absorbed by the operations (351) (128)
Interest received 1 1
_______ _______
Net cash outflow from operating activities (350) (127)
_______ _______
Investing activities
Investment in the year - (1)
Acquisition of property, plant and equipment (3) (24)
_______ _______
Cash flows from investing activities (3) (25)
Financing activities _______ _______
Increase in borrowings 450_______ 180_______
Cash flows from financing activities 450 180
_______ _______
Net increase in cash and cash equivalents 97 28
Cash and cash equivalents at beginning of year 34 6
_______ _______
Cash and cash equivalents at end of year 131 34
Notes to the consolidated financial statements as at 30 June 2015
1 Reporting entity
Caledonian Trust PLC is a company domiciled in the United Kingdom. The
consolidated financial statements of the company for the year ended 30 June
2015 comprise the company and its subsidiaries as listed in note 5 in the
parent company's financial statements (together referred to as "the Group").
The Group's principal activities are the holding of property for both
investment and development purposes.
2 Statement of Compliance
The group financial statements have been prepared and approved by the
directors in accordance with International Financial Reporting Standards and
its interpretation as adopted by the EU ("Adopted IFRSs"). The Company has
elected to prepare its parent company financial statements in accordance with
UK GAAP; these are presented on pages 52 to 59.
3 Basis of preparation
The financial statements are prepared on the historical cost basis except for
available for sale financial assets and investment properties which are
measured at their fair value.
The preparation of the financial statements in conformity with Adopted IFRSs
requires the directors to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions
are based on historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form the basis
of making the judgements about carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from
these estimates.
These financial statements have been presented in pounds sterling which is the
functional currency of all companies within the Group. All financial
information has been rounded to the nearest pounds thousand.
Going concern
The group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chairman's
Statement on pages 2 to 21. The financial position of the group, its cash
flows, liquidity position and borrowing facilities are described in Note 18.
In addition, note 18 to the financial statements includes the group's
objectives, policies and processes for managing its capital; its financial
risk management objectives; details of its financial instruments and hedging
activities; and its exposures to credit risk and liquidity risk.
The group and company finance their day to day working capital requirements
through related party loans (see note 17).
The Directors have prepared projected cash flow information for the period
ending twelve months from the date of their approval of these financial
statements. These forecasts assume the group will make property sales in the
normal course of business to provide sufficient cash inflows to allow the
group to continue to trade.
Should these sales not complete as planned, the directors are confident that
they would be able to sell sufficient other properties within a short
timescale to generate the income necessary to meet the group's liabilities as
they fall due.
For these reasons they continue to adopt the going concern basis in preparing
the financial statements.
Areas of estimation uncertainty and critical judgements
Information about significant areas of estimation uncertainty and critical
judgements in applying accounting policies that have the most significant
effect on the amount recognised in the financial statements is contained in
the following notes:
· Valuation of investment properties (note 10)
The valuation of properties is subjective and based on similar transactions in
the market, rental yields and development potential. The company's directors
are experienced in dealing with such properties. Director's valuations at the
balance sheet date are based on independent external valuations as at 30 June
2013. The Executive Directors have respectively over 40 years and 30 years of
experience in commercial property. RJ Pearson is a Fellow of the Royal
Institution of Chartered Surveyors and has practised as a surveyor in Scotland
for 37 years during which time he has specialised in commercial property.
· Valuation of trading properties (note 13)
Trading properties are carried at the lower of cost and net realisable value.
The net realisable value of such properties is based on the amount the company
is likely to achieve in a sale to a third party. This is then dependent on
availability of planning consent and demand for sites which is influenced by
the housing and property markets.
4 Accounting policies
The accounting policies below have been applied consistently to all periods
presented in these consolidated financial statements.
Basis of consolidation
The financial statements incorporate the financial statements of the company
and all its subsidiaries. Subsidiaries are entities controlled by the group.
Control exists when the group has the power to determine the financial and
operating policies of an entity so as to obtain benefits from its activities.
The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date it
ceases.
Revenue
Rental income from properties leased out under operating leases is recognised
in the income statement on a straight line basis over the term of the lease.
Costs of obtaining a lease and lease incentives granted are recognised as an
integral part of total rental income and spread over the period from
commencement of the lease to the earliest termination date on a straight line
basis.
Revenue from the sale of trading properties is recognised in the income
statement on the date at which the significant risks and rewards of ownership
are transferred to the buyer with proceeds and costs shown on a gross basis.
Other income
Other income comprises income from agricultural land and other miscellaneous
income.
Finance income and expenses
Finance income and expenses comprise interest payable on bank loans and other
borrowings. All borrowing costs are recognised in the income statement using
the effective interest rate method. Interest income represents income on bank
deposits using the effective interest rate method.
Taxation
Income tax on the profit or loss for the year comprises current and deferred
tax. Income tax is recognised in the income statement except to the extent
that it relates to items recognised directly in equity, in which case the
charge / credit is recognised in equity. Current tax is the expected tax
payable on taxable income for the current year, using tax rates enacted or
substantively enacted at the reporting date, adjusted for prior years under
and over provisions.
Deferred tax is provided using the balance sheet liability method in respect
of all temporary differences between the values at which assets and
liabilities are recorded in the financial statements and their cost base for
taxation purposes. Deferred tax includes current tax losses which can be
offset against future capital gains. As the carrying value of the group's
investment properties is expected to be recovered through eventual sale rather
than rentals, the tax base is calculated as the cost of the asset plus
indexation. Indexation is taken into account to reduce any liability but does
not create a deferred tax asset. A deferred tax asset is recognised only to
the extent that it is probable that future taxable profits will be available
against which the asset can be utilised.
Investment properties
Investment properties are properties owned by the group which are held either
for long term rental growth or for capital appreciation or both. Properties
transferred from trading properties to investment properties are revalued to
fair value at the date on which the properties are transferred. When the Group
begins to redevelop an existing investment property for continued future use
as investment property, the property remains an investment property, which is
measured based on the fair value model, and is not reclassified as property,
plant and equipment during the redevelopment.
The cost of investment property includes the initial purchase price plus
associated professional fees. Borrowing costs directly attributable to the
acquisition or construction of qualifying assets are capitalised during the
period of construction. Subsequent expenditure on investment properties is
only capitalised to the extent that future economic benefits will be
realised.
Investment property is measured at fair value at each balance sheet date.
External independent professional valuations are prepared at least once every
three years. The fair values are based on market values, being the estimated
amount for which a property could be exchanged on the date of valuation
between a willing buyer and a willing seller in an arms-length transaction
after proper marketing wherein the parties had each acted knowledgeably,
prudently and without compulsion.
Any gain or loss arising from a change in fair value is recognised in the
income statement.
Purchases and sales of investment properties
Purchases and sales of investment properties are recognised in the financial
statements at completion which is the date at which the significant risks and
rewards of ownership are transferred to the buyer.
Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated
depreciation and any provision for impairment. Depreciation is provided on
all property, plant and equipment at varying rates calculated to write off
cost to the expected current residual value by equal annual instalments over
their estimated useful economic lives. The principal rates employed are:
Plant and equipment - 20.0 per cent
Fixtures and fittings - 33.3 per cent
Motor vehicles - 33.3 per cent
Trading properties
Trading properties held for short term sale or with a view to subsequent
disposal in the near future are stated at the lower of cost or net realisable
value. Cost is calculated by reference to invoice price plus directly
attributable professional fees. Net realisable value is based on estimated
selling price less estimated cost of disposal.
Financial assets
Trade and other receivables
Trade and other receivables are initially recognised at fair value and then
stated at amortised cost.
Financial instruments
Available for sale financial assets
The group's investments in equity securities are classified as available for
sale financial assets. They are initially recognised at fair value plus any
directly attributable transaction costs. Subsequent to initial recognition
they are measured at fair value and changes therein, other than Impairment
losses, are recognised directly in equity. The fair value of available for
sale investments is their quoted bid price at the balance sheet date. When an
investment is disposed of, the cumulative gain or loss in equity is recognised
in profit or loss. Dividend income is recognised when the company has the
right to receive dividends either when the share becomes ex dividend or the
dividend has received shareholder approval.
Cash and cash equivalents
Cash includes cash in hand, deposits held at call (or with a maturity of less
than 3 months) with banks, and bank overdrafts. Bank overdrafts that are
repayable on demand and which form an integral part of the Group's cash
management are shown within current liabilities on the balance sheet and
included with cash and cash equivalents for the purpose of the statement of
cash flows.
Financial liabilities
Trade payables
Trade payables are non-interest-bearing and are initially measured at fair
value and thereafter at amortised cost.
Interest bearing loans and borrowings
Interest-bearing loans and bank overdrafts are initially carried at fair value
less allowable transactions costs and then at amortised cost.
New Standards and interpretations not yet adopted
The International Accounting Standards Board (IASB) and International
Financial Reporting Interpretations Committee has recently issued the
following new standards and amendments which are effective for annual periods
beginning on or after 1 January 2015, unless stated otherwise, and have not
been applied in preparing these consolidated financial statements.
- IFRS 9 Financial Instruments: Classification and Measurement which is
the first phase of a wider project to replace IAS 39.
Financial Instruments: Recognition and Measurement, replaces the current
models for classification measurement of financial instruments. Financial
assets are to be classified into two measurement categories: fair value and
amortised cost. Classification will depend on an entity's business model and
the characteristics of contractual cash flow of the financial instrument. The
standard is effective for annual periods beginning on or after 1 January
2018.
As at the time of publication of these financial statements, the IASB is
re-deliberating the requirements for classification and measurement in IFRS 9
while the requirements of latter phases of IFRS 9 are in development and
therefore remain uncertain.
Operating segments
The Group determines and presents operating segments based on the information
that is internally provided to the Board of Directors ("The Board"), which is
the Group's chief operating decision maker. The directors review information
in relation to the Group's entire property portfolio, regardless of its type
or location, and as such are of the opinion that there is only one reportable
segment which is represented by the consolidated position presented in the
primary statements.
5 Operating profit 2015 2014
£000 £000
The operating profit is stated after charging :
Depreciation 14 13
Amounts received by auditors and their associates in respect of:
- Audit of these financial statements (Group and Company) 7 9
- Audit of financial statements of subsidiaries pursuant to 6 6
legislation
====== ======
6 Employees and employee benefits 2015 2014
£000 £000
Employee remuneration
Wages and salaries 412 371
Social security costs 43 41
Other pension costs 31 32
_______ _______
486 444
====== =======
Other pension costs represent contributions to defined contribution plans.
The average number of employees during the year was as follows:
No. No.
Management 2 2
Administration 3 2
Other 4 2
_______ _______
9 6
====== =======
2015 2014
Remuneration of directors £000 £000
Directors' emoluments 251 250
Company contributions to money purchase pension schemes 26 25
====== ======
Director Salary andFees Benefits PensionContributions 2015Total 2014Total
£000 £000 £000 £000 £000
ID Lowe 110 5 - 115 115
MJ Baynham 125 2 26 153 152
RJ Pearson 9 - - 9 8
______ ______ ______ ______ ______
244 7 26 277 275
7 Finance income and finance expenses
2015 2014
£000 £000
Finance income
Interest receivable:
- on bank balances 1 1
=== ===
Finance expenses
Interest payable:
- Other loan interest 21 10
- Loan stock repayable within five years 95 95
____ ____
116 105
==== ====
8 Income tax
There was no tax charge/(credit) in the current or preceding year.
2015 2014
£000 £000
Profit before tax 565 164
===== =====
Current tax at 20.75 % (2014 : 22.5%) 117 37
Effects of:
Expenses not deductible for tax purposes 20 8
Losses carried forward 91 131
Revaluation of property not taxable (228) (176)
______ ______
Total tax charge - -
===== =====
In the case of deferred tax in relation to investment property revaluation surpluses, the base cost used is historical book cost and includes allowances or deductions which may be available to reduce the actual tax liability which would crystallise in the
event of a disposal of the asset.Reductions in the UK corporation tax rate from 23% to 21% (effective from 1 April 2014) and 20% (effective from 1 April 2015) were substantively enacted on 2 July 2013. Further reductions to 19% (effective from 1 April
2017) and to 18% (effective 1 April 2020) were substantively enacted on 26 October 2015. This will reduce the company's future current tax charge accordingly.
9 Profit per share
Basic profit per share is calculated by dividing the profit attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period as follows:
2015 2014
£000 £000
Profit for financial period 565 164
====== ======
No. No.
Weighted average no. of shares:
for basic earnings per share and for diluted
earnings per share 11,783,577 11,783,577
======== ========
Basic profit per share 4.79p 1.39 p
Diluted profit per share 4.79p 1.39p
The diluted figure per share is the same as the basic figure per share as there are no dilutive shares.
10 Investment properties
2015 2014
£000 £000
Valuation
At 30 June 2014 9,415 8,635
Revaluation in year 1,100 780
________ ________
Valuation at 30 June 2015 10,515 9,415
======== ========
The carrying amount of investment property is the fair value at the balance sheet date as calculated by the directors, based on
external independent valuations at open market value made by Montagu Evans and Rettie & Co, independent property consultants, at
30 June 2013. The properties have been valued individually in accordance with the definition of market value and good practice
guidelines set out in the 6th Edition of the Royal Institution of Chartered Surveyors valuation and appraisal manual. In this
regard, market value is defined as "the estimated amount for which a property should exchange between a willing buyer and
willing seller in an arm's length transaction after proper marketing wherein the parties had acted knowledgeably, prudently and
without compulsion". The significant investment properties have development potential and the valuation of such properties is
inherently subjective. However the company's directors are experienced in dealing with such properties. The Executive Directors
have respectively over 40 years and 30 years of experience in commercial property. Additionally RJ Pearson is a Fellow of the
Royal Institution of Chartered Surveyors and has practised as a surveyor in Scotland for 37 years during which time he has
specialised in commercial property. The 'review of activities' within the Chairman's statement provides the current status of
each property together with an analysis of the 'property prospects' for 2016 and beyond.The cumulative amount of interest
capitalised in respect of the group's investment properties is £476,000 (2014: £476,000).
11 Property, plant and equipment
MotorVehicles Fixtures and fittings Otherequipment Total
£000 £000 £000 £000
Cost
At 30 June 2014 18 14 62 94
Additions in year - - 3 3
At 30 June 2015 18 14 65 97
Depreciation
At 30 June 2014 11 9 39 59
Charge for year 2 4 8 14
At 30 June 2015 13 13 47 73
Net book value
At 30 June 2015 5 1 18 24
At 30 June 2014 7 5 23 35
23
35
12 Investments
2015 2014
£000 £000
Available for sale investments
At the start of the yearPurchased in year 1- -1
_______ _______
Available for sale financial assets 1 1
====== ======
13 Trading properties
2015 2014
£000 £000
At start of year 11,498 11,771
AdditionsSold in year 190(270) 207(480)
_________ _________
At end of year 11,418 11,498
======== ========
14 Trade and other receivables 2015 2014
£000 £000
Amounts falling due within one year
Other debtors 68 25
Prepayments and accrued income 28 42
_______ _______
96 67
====== ======
The company's exposure to credit risks and impairment losses relating to trade receivables is given in note 18.
15 Cash and cash equivalents 2015 2014
£000 £000
Cash 131 34
====== ======
Cash and cash equivalents comprise cash at bank and in hand. Cash deposits are held with UK banks. The carrying amount of cash equivalents approximates to their fair values. The company's exposure to credit risk on cash and cash equivalents is regularly monitored (note 18).
16 Trade and other payables
2015 2014
£000 £000
Accruals and other creditors 645 525
====== ======
The Group's exposure to currency and liquidity risk relating to trade payables is disclosed in note 18.
17 Other interest bearing loans and borrowings
The Group's interest bearing loans and borrowings are measured at amortised cost. More information about the Group's exposure to interest rate risk and liquidity risk is given in note 18.
Current liabilities
2015 2014
£000 £000
Floating rate unsecured Loan Notes 2,725 2,725
Unsecured loan 805 455
________ _________
3,530 3,180
======= ========
Non current liabilitiesUnsecured loan 100 -
======= =======
Terms and debt repayment schedule
Terms and conditions of outstanding loans and loan stock were as follows:
2015 2014
Currency Nominal interest rate Fair value Carrying amount Fair value Carrying amount
£000 £000 £000 £000
Unsecured loan GBP Base +3% 805 805 455 455
Floating rate unsecured loan stock Unsecured loan GBP GBP Base + 3% Base + 3% 2,725 100 2,725 100 2,725 - 2,725 -
3,630 3,630 3,180 3,180
18 Financial instruments
Fair valuesFair values versus carrying amountsThe fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet, are as follows:
2015 2014
Fair value Carrying Fair value Carrying
amount amount
£000 £000 £000 £000
Trade and other receivables 96 96 67 67
Cash and cash equivalents 131 131 34 34
227 227 101 101
Loans from related parties 3,630 3,630 3,180 3,180
Trade and other payables 645 645 525 525
4,275 4,275 3,705 3,705
Estimation of fair valuesThe following methods and assumptions were used to estimate the fair values shown above:Available for sale financial assets - as such assets are listed, the fair value is determined at the market price.Trade and other
receivables/payables - the fair value of receivables and payables with a remaining life of less than one year is deemed to be the same as the book value.Cash and cash equivalents - the fair value is deemed to be the same as the carrying amount due to the
short maturity of these instruments.Other loans - the fair value is calculated by discounting the expected future cashflows at prevailing interest rates.
Overview of risks from its use of financial instrumentsThe Group has exposure to the following risks from its use of financial instruments:· credit risk· liquidity risk· market riskThe Board of Directors has overall responsibility for the
establishment and oversight of the company's risk management framework and oversees compliance with the Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
The Board's policy is to maintain a strong capital base so as to cover all liabilities and to maintain the business and to sustain its development.The Board of Directors also monitors the level of dividends to ordinary shareholders.There were no changes in
the Group's approach to capital management during the year. Neither the company nor any of its subsidiaries are subject to externally imposed capital requirements.The group's principal financial instruments comprise cash and short term deposits. The main
purpose of these financial instruments is to finance the group's operations. As the group operates wholly within the United Kingdom, there is currently no exposure to currency risk.The main risks arising from the group's financial instruments are interest
rate risks and liquidity risks. The board reviews and agrees policies for managing each of these risks, which are summarised below
Credit riskCredit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group's receivables from customers, cash held at banks and
its available for sale financial assets.Trade receivablesThe Group's exposure to credit risk is influenced mainly by the individual characteristics of each tenant. The majority of rental payments are received quarterly in advance which reduces the group's
exposure to credit risk on trade receivables.Other receivablesOther receivables consist of amounts due from a company in which the group holds a minority investment.
Available for sale financial assetsThe Group does not actively trade in available for sale financial assets. Bank facilitiesAt the year end the company had no loan facilities available (2014: Nil).Exposure to credit riskThe carrying amount of financial
assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
Carrying value 2015 2014 £000 £000 Available for sale investments 1 1 Other receivables 68 25 Cash and cash equivalents 131 34 ________ ________ 200 60 ======= =======
The company does not have an allowance for impairment on trade receivables as, based on historical experience, management does not consider that such an impairment is required.Credit risk for trade receivables at the reporting date was all in relation to property tenants in United Kingdom.The company's exposure is spread across a number of customers.
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