REG - Trafalgar Prop. Grp - Final Results
30/09/2020 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20200930:nRSd5165Aa
RNS Number : 5165A Trafalgar Property Group PLC 30 September 2020
TRAFALGAR PROPERTY GROUP PLC
("Trafalgar", the "Company" or "Group")
Final Results for the year ended 31 March 2020 and notice of Annual General
Meeting
Trafalgar (AIM: TRAF), the AIM quoted residential property developer operating
in southeast England, announces its final results for the twelve months ended
31 March 2020.
The Company's Annual Report is being posted to shareholders today and contains
notice of the Annual General Meeting of the Company to be held at the
Company's offices at Chequers Barn, Bough Beech, Edenbridge, Kent TN8 7PD at
11.00 a.m. on Tuesday 27th October 2020.
Enquiries:
Trafalgar Property Group Plc +44 (0) 1732 700 000
James Dubois
Spark Advisory Partners Ltd - AIM Nominated Adviser +44 (0) 20 3368 3550
Matt Davis
Peterhouse Capital Limited - Broker
Duncan Vasey/Lucy Williams
Trafalgar Property Group Plc
CHAIRMAN’S STATEMENT
for the year ended 31 March 2020
On behalf of the Board, I present Trafalgar Property Group Plc (the Group),
results for the year ended 31 March 2020 which includes two property sales and
a car park space sale completed in the year. The overall result was
disappointing, as can be seen in the attached Accounts and Strategic Report,
although an improvement on the previous year's loss. We are continuing to
search for profitable sites for planning gains and development possibilities.
Financials
The year under review saw the Group turnover at £1,970,106 (2019:
£2,128,189), with a loss after tax of £1,022,898 (2019: Loss £2,296,422),
after taking into account exceptional items as detailed in note 20 to the
accounts.
Management have performed a review of the assets and liabilities of the
underlying subsidiaries which form the value of the anticipated profits on
ongoing developments. In addition, the value of land options in TR+ have
been re-assessed. At the time of approval of the financial statements there
is no confirmed planning permission on these land options.
Due to the uncertainties and timing of developments it has been agreed by
management not to include any future anticipated profits of developments in
their assessment. Therefore, the net asset value of the underlying investments
and inventory does not support the Group's carrying value of investments in
the subsidiaries.
Management have concluded that an impairment of the investments is prudent and
that these will be written down to zero, resulting in an exceptional charge
of £595,452 (2019: £1,559,319).
The cash on the balance sheet at the end of the year was £27,969 (2019:
£32,800) and the Group continues to have sufficient bank facilities for all
planned activities.
In July 2020 we completed a share issue raising £750,000 of cash, before
expenses, which provides additional cash reserves for our planned activities.
Business Environment and Outlook
Our recent move into the assisted living sector has not proved to be a success
so we are now concentrating on our core activity of property development for
residential homes and apartments.
On 27 May, 2019 Chris Johnson and his son Alex Johnson stepped down from the
Group Board, although they remain involved as Directors of subsidiaries. On
the same day, Paul Treadaway was appointed as the new Group Managing Director
which strengthens the Board with his particular expertise in the sector for
assisted living developments as well as conventional property developments.
This retains a good balance of complementary skills on the Board. We are
currently progressing offers of finance alongside our planning applications so
that we should be well placed to commence our developments as soon as planning
permits.
The effects of the Covid 19 pandemic have affected our business since March as
sales of completed units have been delayed by some months. Fortunately we had
completed the construction phase of these units although there have also been
delays to the obtaining of planning permission for other potential new sites.
Like most businesses, we are aware of our need to conduct ourselves carefully
to preserve the health of our staff and customers.
I would refer you to the Strategic Report that covers our activities in more
detail.
James Dubois
Chairman
29th September 2020
Trafalgar Property Group Plc
STRATEGIC REPORT
for the year ended 31 March 2020
Business review, results and dividends
All trading and property assets of Trafalgar Property Group Plc (Group) are
held in the name of the Group or its subsidiaries as follows:
Trafalgar New Homes Limited (TNH)
Trafalgar Retirement+ Limited (TR+)
Selmat Limited - acquired April 2019 (Selmat)
Combe Bank Homes (Oakhurst) Limited (Oakhurst)
Combe Homes (Borough Green) Limited (Borough
Green)
All bank and mortgage borrowings are the liability of TNH, the wholly owned
subsidiary of the Group, apart from the mortgages on the four properties held
by Selmat. The shares of the Group are quoted on the London Stock Exchange AIM
market.
The principal activity of the Group continues to be that of home building and
property development and the consolidated results of the year's trading, are
shown below. The consolidated loss for the year was £1,022,898 (2019:
Loss £ 2,296,422) after taking into account exceptional items as mentioned in
note 20 to the accounts.
Principal risks & uncertainties
Set out below are certain risk factors which could have an impact on the
Group's long-term performance. The factors discussed below should not be
regarded as a complete and comprehensive statement of all potential risks and
uncertainties facing the Group.
The principal risks and uncertainties facing the Group are:
1. Any possibility that lending criteria from the Group's bankers may
harden with little prior notice.
2. Construction costs may escalate and eat into gross profit
margins.
3. Heavy overheads may be incurred especially when projects have been
completed and before others have been commenced.
4. The Group could pay too much for land acquisitions.
5. The Group's reliance on key members of staff.
6. The market may deteriorate, damaging liquidity of the Group and
future revenues.
The Group considers that it mitigates these risks with the following policies
and actions:
1. The Group affords its bankers and other lenders a strong level of
asset and income cover and maintains good relationships with a range of
funding sources from which it is able to secure finance on favourable terms.
2. Construction costs are outsourced on a fixed price contract basis,
thereby passing on to the contractor all risk of development cost overspend,
including from increased material, labour or other costs.
3. Most other professional services are also outsourced, thus
providing a known fixed cost before any project is taken forward and avoiding
the risk that can arise in employing in-house professionals at a high
unproductive overhead at times when activity is slack.
4. Land buying decisions are taken at board level, after careful
research by the Directors personally, who
have substantial experience of the house building industry, potential
construction issues and the local market.
The Group focuses on a niche market sector of new home developments in the
range of four to twenty units. Within this unit size, competition to
purchase development sites from land buyers is relatively weak, as this size
is unattractive to major national and regional house builders who require a
larger scale to justify their administration and overheads, whilst being too
many units for the smaller independent builder to finance or undertake as a
project. Within this market, there are opportunities to negotiate land
acquisitions on favourable terms. Many competitors who also focus on this
niche have yet to recapitalise and are unable to raise finance.
5. Many of the activities are outsourced and each of the Directors is
fully aware of the activities of all members.
6. The Group has a rigorous corporate governance policy appropriate
for a publicly quoted company with ambitions substantially to raise its
profile within the wider investor community.
Operations review
A summary of the results for the year is as follows:-
2020
2019
£
£
Restated
Revenue for the
year
1,970,106 2,128,189
Gross
profit/(loss)
154,068
(264,171)
Loss after
taxation
(1,022,898) (2,296,422)
Group turnover for the year amounted to £1,970,106 (2019: £2,128,189),
representing the sale of two (2019: five) residential properties plus a car
park space. During the first six months to 30 September, 2019 the Group
reclassified four properties from Trading Stock to Investment Property. These
were assessed to be at fair market value and transferred to a newly acquired
investment company. In the interim accounts this was recorded on the face of
the profit and loss account as turnover and cost of sales at no profit. As
part of the year-end audit process the treatment of this transaction has been
amended and removed from turnover and cost of sales in the Group accounts and
shown instead as an inter-group transfer. This adjustment has had no effect on
profit or cashflow.
After taking into account the overheads of the Group, there was a loss
recorded for the year of £1,022,898 after exceptional items as detailed
in note 20.
There will be no tax charge and the Company now has tax losses being carried
forward of £4,381,991
(2019: losses £3,364,609).
The loss per share during the year was (0.21p), (2019: loss per share
0.54p).
As can be seen from the above , the Group failed to achieve a profit for the
year under review and, as at the year end, all remaining residential units
have been sold being the executive house at Saxons, the sale of an option in
Ewell and the remaining car park space at Borough Green site. Going forward
five of a total of six units at the Sheerness Site are, as at the date of this
report, all under offer with further options opportunities being explored.
Directors' duties under S172
The Directors believe that, individually and together, they have acted in the
way they consider, in good faith, would be most likely to promote the success
of the Group for the benefit of its members as a whole, having regard to the
stakeholders and matters set out in s172(1)(a-f) of the companies Act 2006 in
the decisions taken during the year ended 31 March 2020.
Our Board of Directors remain aware of their responsibilities both within and
outside of the Group. Within the limitations of a Group with so few employees
we endeavour to follow these principles:
· Purpose, vision and strategy: this is set out on pages 3 and 4
of the Strategic Report and we recognise our role in identifying opportunities
to develop homes and apartments to the best quality standards.
· Group policies: these are reviewed annually and staff and
Directors are encouraged to improve their skillset as appropriate.
· Culture and people: we fully support a culture where all
customers, staff and suppliers are treated in an open and honest fashion,
irrespective of race, gender, ethnic, disabilities or other scenarios.
· Board structure: the role of the Board is reviewed annually
with a clear focus on the specific roles assigned to each individual to enable
the Board to properly support each member of staff.
· Freedom within a framework: we are developing a new framework
for communicating this freedom in a straight-forward methodology.
· Risk and internal control framework: risks and controls are
subject to discussion at quarterly Board meetings. Every project undertaken by
the Group is analysed with a view to limiting the risks to the Group and its
Stakeholders before proceeding with implementation.
Key performance indicators (KPIs)
Management are closely involved in the day to day operations of the Group and
are very aware of cashflows and expenditure. However, Management believe
that the key indicators of performance for the Group are the revenue and
profitability achieved during the period. These measures are disclosed above
in the operations review.
Development Pipeline & outlook
The year under review was not without its difficulties. In the residential
division delays occurred on the building programme for the various properties
that were still in the course of construction, or being finished off, with
contractors appointed to complete the works but unable to follow the timetable
laid down for completion of those works.
The delays lead to escalating interest costs on borrowing and therefore
affected the profitability of the completed units that were for sale, on the
disposal of the same.
During the year under review, Selmat was acquired to enable the retention of
selected unsold properties rather than selling them into a declining market.
Four properties were transferred as an intergroup transaction and let out on
Assured Shorthold Tenancy Agreements, the rental income generated being
substantially in excess of the borrowing cost of each property. Currently the
Group holds these four rented properties, valued at £1,975,000 as investment
property.
During the year work has continued on the 6 town house site at Sheerness, Kent
where, again, contractor difficulties were experienced with the appointed
contractor ceasing work on site resulting in the Group having to appoint an
alternative contractor to complete the works. Work on site has been completed
and five of these properties are under offer, under the Government's Help To
Buy Scheme.
Whilst TR+ continue to identify and secure new land opportunities for
extra/care and assisted living, they are equally focused on obtaining a
successful outcome on the sites currently under option and/or in for planning.
Once planning has been achieved then the sites can be built out and placed for
sale on the open market, or in the case of the smaller residential schemes,
sold on with planning, both options being profitable to the business. Options
have been secured for residential development in Ashtead, Epsom, Leatherhead
and Send Surrey. Of these sites, Ashtead and Epsom were sold on once planning
permission had been granted to show a profit in the current year. It is our
intention to develop the Leatherhead and Send sites once planning is granted.
During the year TR+ entered into a guarantee agreement for £240,000 for
funds supplied by Mr C Johnson, being a deposit forfeited by Randell House
Ltd, a subsidiary of TR+. This is related to the acquisition of an assisted
living site in Camberley Surrey, where the acquisition was not completed owing
to a lack of funding. Since then, Randell House Ltd has been dissolved on 22
September, 2020.
Financial Instruments
Information relating to the financial instruments is now included in the
Directors' Report on pages 9-12.
Paul Treadaway
Director
29th September, 2020
Trafalgar Property Group Plc
DIRECTORS’ REPORT
for the year ended 31 March 2020
DIRECTORS' REPORT
The Directors present their Report and Audited Financial Statements for the
year ended 31 March 2020.
Results and dividends
The results for the year are set out on page 17.
The Directors do not recommend the payment of a final dividend for the year
(2019: nil).
Directors
The following Directors have held office since 1 April 2019 and have all
served for the entire accounting year:-
N A C Lott
J Dubois
Appointed in year:
P A Treadaway - appointed 27/5/19
Resignations in the year:
C C Johnson - resigned 27/05/19
A D Johnson - resigned 27/05/19
D C Stocks - resigned 10/12/19
The Company has in place an insurance policy in relation to Directors
indemnity during both years.
Conflicts of interest
Under the articles of association of the company and in accordance with the
provisions of the Companies Act 2006, a Director must avoid a situation where
he has, or can have, a direct or indirect interest that conflicts, or possibly
may conflict with the company's interests. However, the Directors may
authorise conflicts and potential conflicts, as they deem appropriate. As a
safeguard, only Directors who have no interest in the matter being considered
will be able to take the relevant decision, and the Directors will be able to
impose limits or conditions when giving authorisation if they think this is
appropriate. During the financial year ended 31 March 2020, the Directors
have authorised no such conflicts or potential conflicts.
Directors' interests in shares
Directors' interests in the shares of the Company, including family interests,
at 31 March 2020 were as follows:-
31.03.2020 31.03.2019
Ordinary shares - 0.1p each Ordinary shares - 0.1p each
C C Johnson 186,815,803 186,815,803
A Johnson 1,868 1,868
J Dubois 4,000,000 1,500,000
N Lott 500,000 500,000
D C Stocks 80,330,532 80,330,532
P Treadaway 106,484,658 106,484,658
On 31 May 2019 62,500,000 additional shares were issued being ordinary 0.01p
shares and 0.03p premium shares.
P Treadaway was a shareholder as at 31 March, 2019 but not a Group Director at
that time.
C C Johnson, A D Johnson and D C Stocks were Directors and shareholders as at
31 March, 2019 but only shareholders at 31 March, 2020.
Other substantial shareholdings
As at 16 September, 2020, being the latest practicable date before the issue
of these financial statements, the company had been notified of the following
shareholdings which constitute 3% or more of the total issued shares of the
company at that date.
Ordinary shares Shareholding
No.
%
C.C. Johnson 186,815,803 13.11
C Akers 145,190,380 10.17
P Treadaway 187,734,658 13.17
Statement of directors' responsibilities
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the
consolidated financial statements in accordance with EU adopted IFRS and the
Company financial statements in accordance with FRS 102 and applicable law.
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and of the profit or loss of the Group for that year.
In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements 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;
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and enable
them to ensure that the financial statements comply with the Companies Act
2006. 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.
They are further responsible for ensuring that the Strategic Report and the
Report of the Directors and other information included in the Annual Report
and Financial Statements is prepared in accordance with applicable law in the
United Kingdom.
The maintenance and integrity of the Group website is the responsibility of
the Directors; the work carried out by the auditors does not involve the
consideration of these matters and, accordingly, the auditors accept no
responsibility or any changes that may have occurred in the accounts since
they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination
of the accounts and the other information included in annual reports may
differ from legislation in other jurisdictions.
Corporate Governance Statement
The Board of the Group recognise the value of good corporate governance and
has through the year ended 31 March 2020 implemented corporate governance
procedures appropriate for the present size of the entity having given due
regard to the Corporate Governance Code for Small and Mid-Size Quoted
Companies issued by the Quoted Companies Alliance ("QCA"). In accordance
with AIM Rule 26 as amended, the Company has decided to apply the QCA
Corporate Governance Code ("QCA Code") issued by the QCA in May 2018 and has
published on its website details of the QCA Code, how the Company has complied
with the QCA Code and, where it departs from the QCA Code, an explanation of
the reasons for doing so.
Board Structure
The Board consists of three Directors of which one is executive and two
non-executive, all of whom hold shares in the Group.
The Board meets as and when required and is satisfied that it is provided with
information in an appropriate form and quality to enable it to discharge its
duties. All Directors are required to retire by rotation with one third of
the board seeking re-election each year.
Due to the current size of the Group, the duties that would normally be
attributed to The Nomination Committee, have been undertaken by the board as a
whole.
The board has undertaken a formal assessment of the auditor's independence and
will continue to do so at least annually. This assessment includes:
· a review of non-audit services provided to the company and the
related fees;
· a review of the auditor's own procedures for ensuring the
independence of the audit firm and parties
and staff involved in the audit, including regular rotation of the audit
partner; and
· obtaining confirmation from the auditor that, in their
professional judgement, they are independent.
Internal Controls
The Board is responsible for the Group's system of internal controls and for
reviewing their effectiveness. The internal controls are designed to ensure
the reliability of financial information for both internal and external
purposes. The Directors are satisfied that the current controls are
effective with regard to the size of the Group. Any internal control system
can only provide reasonable, but not absolute assurance against material
mis-statement or loss. Given the size of the Group, the Board has assessed
that there is currently no need for an internal audit function.
Financial Instruments
The Group's principal financial instruments comprise cash at bank, bank loans,
other loans and various items within current assets and current liabilities
that arise directly from its operations. The Directors consider that the key
financial risk is liquidity. This risk is explained in the section headed
'Principal risks and uncertainties' in the Annual Report and Accounts on
page 5.
Information relating to the financial instruments is now included in the
Strategic Report on pages 5-8.
Future Developments
Information relating to future developments is included in the Strategic
Report on pages 5-8.
Provision of information to auditor
Each of the persons who are Directors at the time when this Directors' Report
is approved has confirmed that:
· so far as that Director is aware, there is no relevant audit
information of which the Group's auditor is unaware; and
· that Director has taken all the steps that ought to have been
taken as a Director in order to be aware of any information need by the
Group's auditor in connection with preparing their report and to establish
that the Group's auditor is aware of the information.
Auditor
The auditor, MHA MacIntyre Hudson, will be proposed for re-appointment in
accordance with Section 489 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Paul Treadaway Director
29th September 2020
Independent auditor's report to the members of Trafalgar Property Group plc
1. Our Opinion
We have audited the financial statements of Trafalgar Property Group plc (the
parent) and its subsidiaries (the group) for the year ended 31 March 2020.
The financial statements that we have audited comprise:
· Consolidated statement of comprehensive income
· Group and company statement of financial position
· Group statement of changes in equity
· Statement of changes in equity
· Group and company statement of cashflows
· Notes of the financial statements, including the accounting
policies.
The financial reporting framework of the group that has been applied in their
preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union. The financial reporting framework
that has been applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 The Financial Reporting Standard
applicable in the UK and Republic of Ireland (United Kingdom Generally
Accepted Accounting Practice).
In our opinion:
· the financial statements give a true and fair view of the state
of the Group's and of the parent company's affairs as at 31 March 2020 and the
Group's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with International Financial Reporting Standards (IFRS) as adopted
by the European Union;
· the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006; as regards the group financial
statements, Article 4 of the IAS Regulation.
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of
the group and the parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities, and we
have fulfilled our ethical responsibilities in accordance with those
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
3. Material uncertainty regarding going concern
We draw your attention to note 3 in the financial statements which states that
the group incurred substantial losses during the year and the continued
requirements for successful future equity or debt fund raising. The impact of
this together with other matters set out in the note, indicate that a material
uncertainty exists that may cast significant doubt on the group's ability to
continue as a going concern. Our opinion is not modified in respect of this
matter.
Overview
Materiality
Group £68K 2% of gross assets
Company £7K 2% of gross assets
Key audit matters
Group · Valuation of inventory
· Undisclosed Related Party transactions
4. Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters
included those matters which had the greatest effect on: the overall audit
strategy, the allocation of resources in the audit; and directing the efforts
of the engagement team and, as required for listed entities, our results from
those procedures. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Valuation of inventory
The Risk Our response
There is a risk that inventory in the financial statements might not be valued We reviewed the accounting policy to be adopted by management and assessed its
correctly either at initial recognition or when assessing the recoverability consistency with the requirements of IAS 2 on inventories.
at the year end.
We reviewed and discussed each material inventory item, as these relate to
This balance is required to be measured at the lower of cost and net specific sites being developed, with the Directors.
realisable value.
We tested additions to inventory in the year and corroborated to supporting
This requires significant judgement from management. These factors increase evidence.
the risk of a material misstatement.
A material element of these balances was capitalised borrowing costs and we
considered this against the requirements of IAS 32 and confirmed that the
requirements were appropriately applied.
We reviewed the Directors assessment of the recoverability of each inventory
item and confirmed these to post year end sales were possible.
Result of our procedures
We concluded that inventory was appropriately valued and presented within the
financial statements.
Undisclosed Related Party transactions
The Risk Our response
The Group enters into a significant number of transactions with related Our procedures included an assessment of the presentation of related party
parties, both intra-group transactions and with individuals related to the transactions in the financial statements. This focussed primarily on the
Group. There is a risk that transactions (particularly any transactions which Directors' loan accounts.
are not at arm's length) and balances with related parties are undisclosed.
We reviewed movements on these balances in the year and vouched items to
supporting evidence.
We discussed with management the nature and purpose of these items and
considered whether disclosure sufficiently addressed these matters.
In addition we obtained written confirmations of the balances from all
disclosed parties and confirmed key terms to agreements.
Result of our procedures
We concluded that the classification and disclosure of related party
transactions is complete and appropriate.
5. Our application of materiality
Our definition of materiality considers the value of error or omission in the
financial statements that would change or influence the economic decision of a
reasonably knowledgeable person. Materiality is used in planning the scope
of our work, executing that work and evaluating the results.
Materiality in respect of the group was set at £68K and for the parent
company was £7K which was determined based on 2% of gross assets.
6. An overview of the scope of our audit
The group consists of 6 reporting components all of which were considered to
be significant components of the group, Trafalgar Property Group Plc,
Trafalgar New Homes Limited, Trafalgar Retirement + Limited, Combe Bank Homes
(Oakhurst) Limited, Combe Homes (Borough Green) Ltd and Selma Limited. The
significant components were subjected to full scope audits for the purposes of
our audit report on the group financial statements.
7. We have nothing to report on the other information in the Annual
Report
The directors are responsible for the other information. The other information
comprises the information included in the Annual Report, other than the
financial statements and our auditor's report thereon. Our opinion of the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
8. Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires is to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
9. Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the company or
to cease operations, or have no realistic alternative but to do so.
10. Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
[website link]. This description forms part of our auditor's report.
11. Use of our report
This report is made solely to the Company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Andrew Moyser FCA FCCA
Senior Statutory Auditor
for and on behalf of MHA MacIntyre Hudson
Chartered Accountants and Statutory Auditor
London
29 September 2020
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2020
Year Year
ended ended
31 March 31 March
Note 2020 2019
Restated
£ £
Revenue 1 1,970,106 2,128,189
Cost of sales (1,816,038) (2,392,360)
Gross profit/(loss) 154,068 (264,171)
Administrative expenses (541,397) (472,932)
3 (387,329) (737,103)
Operating (loss)
(Loss) before interest (387,329) (737,103)
Other income 2 - -
Exceptional items 20 (595,452) (1,559,319)
5 (40,117) -
Interest payable and similar charges
(Loss) before taxation (1,022,898) (2,296,422)
Tax payable on (loss) on ordinary activities 6 - -
(Loss) after taxation for the year attributable to equity (1,022,898) (2,296,422)
holders of the parent
Other comprehensive income attributable to equity - -
holders of the parent
(1,022,898) (2,296,422)
Total comprehensive (loss) for the year
(Loss) attributable to:
Equity holders of the Parent (1,022,898) (2,296,422)
Total comprehensive (loss) for the year attributable to:
Equity holders of the Parent (1,022,898) (2,296,422)
(LOSS) PER ORDINARY SHARE: 7 (0.21)p (0.54)p
Basic/diluted
All results in the current and preceding financial year derive from continuing
operations.
The notes on pages 21 to 37 are an integral part of these consolidated
financial statements.
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 March 2020
31 March 31 March
Note 2020 2019
TOTAL ASSETS £ £
Non-current assets
Plant and equipment 8 1,423 1,339
Investment property 9 1,975,000 -
1,976,423 1,339
Current assets
Inventory 12 1,212,692 4,481,230
Trade and other receivables 10 42,299 92,092
Cash and cash equivalents 11 27,969 32,800
1,282,960 4,606,122
Total assets 3,259,383 4,607,461
EQUITIES & LIABILITIES
Current liabilities
Trade and other payables 13 548,804 442,203
Borrowings 14 555,000 2,502,462
1,103,804 2,944,665
Non-current liabilities
Deferred tax 6 - -
Borrowings 14 5,575,884 4,273,103
Total liabilities 6,679,688 7,217,768
Equity attributable to equity holders of the Company
Called up share capital 15 2,633,067 2,570,567
Share premium account 16 2,660,862 2,510,462
Reverse acquisition reserve (2,817,633) (2,817,633)
Profit & loss account (5,896,601) (4,873,703)
Total Equity (3,420,305) (2,610,307)
Total Equity & Liabilities 3,259,383 4,607,461
These financial statements were approved by the Board of Directors and
authorised for issue on 29 September, 2020 and are signed on its behalf by:
P Treadaway: ………………………………………. J
Dubois: ……………………………………………
The notes on pages 21 to 37 are an integral part of these consolidated
financial statements.
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 March 2020
Re
Share capital Share premium Reverse Retained Total equity
acquisition profits
reserve /(losses)
£ £ £ £ £
At 1 April 2018 2,570,567 2,510,462 (2,817,633) (2,577,281) (313,885)
Loss for the year - - - (2,296,422) (2,296,422)
Total comprehensive income for the year - - - (2,296,422) (2,296,422)
Issue of shares - - - - -
Share issue costs - - - - -
At 31 March 2019 2,570,567 2,510,462 (2,817,633) (4,873,703) (2,610,307)
At 1 April 2019 2,570,567 2,510,462 (2,817,633) (4,873,703) (2,610,307)
(Loss) for year - - - (1,022,898) (1,022,898)
Total comprehensive - - - (1,022,898) (1,022,898)
(loss) for the year
Issue of shares 62,500 187,500 - - 250,000
Share issue costs - (37,100) - - (37,100)
2,633,067 2,660,862 (2,817,633) (5,896,601) (3,420,305)
At 31 March 2020
The reverse acquisition reserve was created in accordance with IFRS3 'Business
Combinations'. The reserve arises due to the elimination of the Company's
investment in TNH (formerly Combe Bank Homes Limited). Since the shareholders
of TNH became the majority shareholders of the enlarged group, the acquisition
is accounted for as though there is a continuation of the legal subsidiary's
financial statements. In reverse acquisition accounting, the business
combination's costs are deemed to have been incurred by the legal subsidiary.
Retained profit/(losses) relate to the profits/ losses earned by the business
that have not been distributed and have built up over the years of trading.
For the purpose of preparing the consolidated financial statement of the
Group, share capital represents the nominal value of the issued share capital
of 0.1p per share (2018: 0.1p per share). Share premium represents the excess
over nominal value of the fair value consideration received for equity shares
net of expenses plus deferred shares of 0.9p after issued share capital of 1p.
On 31 May 2019 62,500,000 additional shares were issued being ordinary 0.01p
shares and 0.03p premium shares. The notes on pages 21 to 37 are an integral
part of these consolidated financial statements.
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2020
2020 2019
£ £
Cash flow from operating activities
(Loss) after taxation (1.022,898) (2,296,422)
Depreciation 902 740
Decrease in inventory 1,303,640 3,494,598
Decrease in receivables 49,783 2,752
Increase in payables 106,601 47,948
Interest payable and similar charges 118,177 145,434
Net cash outflow from operating activities 556,215 1,395,050
Investing activities
Purchase of tangible fixed assets (986) -
(986) -
Taxation - (291,045)
Financing activities
Issue of shares 212,900 -
New loan borrowings 1,479,373 -
Repaid loan borrowings (2,502,462) (606,048)
Related party new loan borrowing 778,408 320,000
Related party loan repayment - (794,715)
Repayment of other borrowings (400,000) (120,000)
Interest paid (128,279) (328,651)
Net cash (outflow) from financing (560,060) (1,529,414)
(Decrease) in cash and cash equivalents in the year (4,831) (425,409)
Cash and cash equivalents at the beginning of the year 32,800 458,209
Cash and cash equivalents at the end of the year 27,969 32,800
The notes on pages 21 to 37 are an integral part of these consolidated
financial statements.
Trafalgar Property Group Plc
GROUP ACCOUNTING POLICIES
For the year ended 31 March 2020
BASIS OF ACCOUNTING
These financial statements are for Trafalgar Property Group Plc ("the
Company") and its subsidiary undertakings ('the Group'). The Company is a
public company, limited by shares and incorporated in England and Wales.
(company number is 04340125). The Company's registered office is Chequers
Barn, Bough Beech, Edenbridge, Kent, TN8 7PD.
The nature of the Group's operations and its principal activities are set out
in the Strategic Report on page 5.
BASIS OF PREPARATION
The Group financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and interpretations adopted
by the European Union ("EU") and as applied in accordance with the provisions
of the Companies Act 2006. These financial statements are for the year ended
31 March 2020 and are presented in pounds sterling ("GBP"). The comparative
year is for the year to 31 March 2019.
The financial statements have been prepared under the historical cost
convention in accordance with applicable United Kingdom law. The principal
accounting policies adopted are set out below.
GOING CONCERN
The Directors have reviewed forecasts and budgets for the coming year, which
have been drawn up with appropriate regard for the current economic
environment and the particular circumstances in which the Group operates.
These were prepared with reference to historical and current industry
knowledge, taking into account future strategy of the Group.
The Group continues to utilise banking sources for the financing of its
developments, together with loans from third party investors, to ensure that
there is sufficient money available for the Group to undertake and complete
its various developments.
The Group do not operate an overdraft facility but borrow on a site specific
basis from various bankers, with a mix of loans from outside investors geared
to some of the development properties and otherwise loaned on a general basis
to the Group.
The Board is comfortable with the structure of its bank finance, which usually
involves the bank lending a modest sum towards the land purchase for the
modest sized residential development schemes, with the Group putting up the
rest of the funds required to acquire the site and the costs associated with
the acquisition and then for the bank to provide 100% of the build
finance. However, difficulties have been experienced in the raising of
finance for the substantial larger extra care/assisted living schemes which
the Group wishes to undertake and the Group is accordingly actively seeking
the finance for such developments at the present time.
Investor loans that are not related to specific sites are long term loans with
repayment dates extending beyond the year end and have, in the past, been
renewed when they come up for repayment.
The existing operations have been generating funds to meet short-term
operating cash requirements and management are confident that the expected
sales will allow the Group to meet loan repayments due within the next twelve
months or that the loans will be refinanced.
As a result of these considerations, at the time of approving the financial
statements, the Directors consider that the Company and the Group have
sufficient resources to continue in operational existence for the foreseeable
future.
However given that a degree of uncertainty exists in the timing of future
sales, and management's ability to refinance all loans due in the next twelve
months, there exists a material uncertainty in relation to the going concern
basis adopted in the preparation of the financial statements.
REVENUE RECOGNITION
Revenue represents the amounts receivable from the sale of properties during
the year and other income directly associated with property development.
Revenue from the sale of properties is recognised when the amounts of revenue
and cost can be measured reliably, the significant risks and rewards of
ownership have been transferred to the buyer, neither continuing managerial
involvement nor effective control of the property is retained and it is
probable that the economic benefits associated with the sale will flow to the
Group/company. In the majority of cases properties are treated as sold and
profits are recognised at the point of legal completion.
The Directors are of the opinion that this accounting policy accurately
reflects commercial reality and the recording of revenue for the Group.
STANDARDS ISSUED BUT NOT YET EFFECTIVE
The financial statements comply with IFRS as adopted by the European Union. A
number of new and revised Standards and Interpretations have been adopted in
the current period by the Group for the first time and do not have a material
impact on the Group.
In the current year, the Group has applied a number of amendments to IFRS
Standards and Interpretations issued by the IASB that are effective for
an annual period that begins on or after 1 January 2019. Their adoption has
not had any material impact on the disclosures or on the amounts reported in
these financial statements.
IFRIC 23 Uncertainty over Income Tax Treatments
The Group has adopted IFRIC 23 for the first time in the current year. IFRIC
23 sets out how to determine the accounting tax position when there is
uncertainty over income tax treatments. The Interpretation requires the Group
to: • determine whether uncertain tax positions are assessed separately or
as a group; and • assess whether it is probable that a tax authority will
accept an uncertain tax treatment used, or proposed to be used, by an entity
in its income tax filings: - If yes, the Group should determine its accounting
tax position consistently with the tax treatment used or planned to be used in
its income tax filings. - If no, the Group should reflect the effect of
uncertainty in determining its accounting tax position using either the most
likely amount or the expected value method.
IFRS 16 Leases
IFRS 16 introduces new or amended requirements with respect to lease
accounting. It introduces significant changes to lessee accounting by removing
the distinction between operating and finance lease and requiring the
recognition of a right-of-use asset and a lease liability at commencement for
all leases, except for short-term leases and leases of low value assets. In
contrast to lessee accounting, the requirements for lessor accounting have
remained largely unchanged. The impact of the adoption of IFRS 16 on the
Group's consolidated financial statements is described below.
The date of initial application of IFRS 16 for the Group is 1 April 2019.
The Group only have short-term leases and leases of low value assets.
Therefore there has been no impact on the Group financial statements as a
result of IFRS 16.
New and revised IFRS Standards in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not
applied the following new and revised IFRS Standards that have been issued but
are not yet effective and [in some cases] had not yet been adopted by the EU:
IFRS 10 and IAS 28 (amendments) Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
Amendments to IFRS 3 Definition of a business
Amendments to IAS 1 and IAS 8 Definition of material
Conceptual Framework Amendments to References to the Conceptual Framework in
IFRS Standards
The directors do not expect that the adoption of the Standards listed above
will have a material impact on the financial statements of the Group in future
periods.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of
the Group and its subsidiaries.
The results of subsidiaries acquired during the year are included from the
date of acquisition, being the date on which the Group obtains control. They
are deconsolidated on the date that control ceases.
The consideration transferred for the acquisition of a subsidiary is the fair
value of the assets transferred, the liabilities incurred and the equity
interests issued by the Group. This fair value includes any contingent
consideration. Acquisition-related costs are expensed as incurred.
When the Group ceases to have control or significant influence, any retained
interest in the entity is remeasured to its fair value, with the change in
carrying amount recognised in profit or loss. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in respect of that
entity are accounted for as if the Group had directly disposed of the related
assets or liabilities. This may mean the amounts previously recognised in
other comprehensive income are reclassified to profit or loss.
Control is achieved when the Group:
- has the power over the investee;
- is exposed or his rights, to variable returns from its
involvement with the investee; and
- has the ability to use its power to affect its returns.
FUNCTIONAL CURRENCY
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The consolidated financial
statements are presented in Pounds Sterling (£), which is the Company's
functional and the Group's presentation currency.
DEFINED CONTRIBUTION PENSION PLAN
The Group operates a defined contribution plan for its employees. A defined
contribution plan is a pension plan under which the Group pays fixed
contributions into a separate entity. Once the contributions have been paid
the Group has no further payments obligations.
The contributions are recognised as an expense in the Statement of
Comprehensive Income when they fall due. Amounts not paid are shown in
accruals as a liability in the Statement of Financial Position. The assets of
the plan are held separately from the Group in independently administered
funds
FINANCIAL INSTRUMENTS
The Company recognises financial instruments when it becomes a party to the
contractual arrangements of the instrument. Financial instruments are
de-recognised when they are discharged or when the contractual term expire.
The Company's accounting policies in respect of financial instruments
transactions are explained below:
Financial assets and financial liabilities are initially measured at fair
value.
Financial assets:
All recognised financial assets are subsequently measured in their entirety at
either fair value or amortised cost, depending on the classification of the
financial assets.
Fair value through profit or loss
All of the Company's financial assets other than those which meet the criteria
to be measured at amortised cost are subsequently measured at fair value at
the end of each reporting period, with any fair value gains or losses being
recognised in profit or loss to the extent they are not part of a designated
hedging relationship. The net gain or loss recognised in profit or loss
includes any dividend or interest earned on the financial asset.
Debt instruments at amortised cost
Debt instruments are subsequently measured at amortised cost where they are
financial assets held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows and selling the
financial assets, and the contractual terms of the financial asset give rise
on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. Amortised cost is calculated
using the effective interest method and represents the amount measured at
initial recognition less repayments of principal plus the cumulative
amortisation using the effective interest method of any difference between the
initial amount and the maturity amount, adjusted for any loss allowance.
Trade payables
Trade payables are initially measured at fair value and are subsequently
measured at amortised cost, using the effective interest rate method.
Equity instruments
Equity instruments issued by the company are recorded at the proceeds
received, net of direct issue costs. Shares issued are held at their fair
value.
Share capital
Ordinary share capital is classified as equity. Interim ordinary dividends are
recognised when paid and final ordinary dividends are recognised as a
liability in the year in which they are approved.
Impairment of financial assets
The Company recognises a loss allowance for expected credit losses (ECL) on
investments in debt instruments that are measured at amortised cost or FVTOCI,
lease receivables, amounts due from customers under construction contracts, as
well as on loan commitments and financial guarantee contracts. No impairment
loss is recognised for investments in equity instruments. The amount of
expected credit losses is updated at each reporting date to reflect changes in
credit risk since initial recognition of the respective financial instrument.
The Company recognises lifetime ECL on all financial instruments where there
has been a significant increase in credit risk since initial recognition. The
assessment of whether lifetime ECL should be recognised is based on
significant increase in the likelihood or risk of a default occurring since
initial recognition instead of on evidence of a financial asset being
credit-impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the expected credit losses that will result from all
possible default events over the expected life of a financial instrument. In
contract, 12 month ECL represents the portion of lifetime ECL that is expected
to result from default events on a financial instrument that are possible
within 12 months after the reporting date.
In assessing whether the credit risk on a financial instrument has increased,
the following shall be taken into account:
- Actual or expected significant deterioration in the financial instrument's
external or internal credit rating; or
- Significant deterioration in external market conditions; or
- Existing or forecast adverse changes in business, financial or economic
conditions that will impact the debtor's ability to meet debt
obligations; or
- Actual or expected deterioration in the operating results of the debtor; or
- Actual or expected significant adverse changes in the regulatory or
technological environment of the debtor that will impact the debtor's ability
to meet debt obligations.
For certain categories of financial asset, such as trade receivables, assets
that are assessed not to be impaired individually are subsequently assessed
for impairment on a collective basis. Objective evidence of impairment for a
portfolio of receivables could include the Company's past experience of
collecting payments, an increase in the number of delayed payments in the
portfolio past the average credit period of 30 days, as well as observable
changes in the national or local economic conditions that correlate with
default on receivables.
Financial liabilities:
Fair value through profit or loss
Financial liabilities are classified as at fair value through profit or loss,
when the financial liability is held for trading, or is designated as at fair
value through profit or loss. This designation may be made if such designation
estimates or significantly reduces a measurement or recognition inconsistency
that would otherwise arise, or the financial liability forms part of a group
of financial instruments which is managed and its performance is evaluated on
a fair value basis, or the financial liability forms part of a contract
containing one or more embedded derivatives, and IFRS 9 permits the entire
combined contract to be designated as at fair value through profit or loss.
Any gains or losses arising on changes in fair value are recognised in profit
or loss to the extent that they are not part of a designated hedging
relationship.
At amortised cost
Financial liabilities which are neither contingent consideration of an
acquirer in a business combination, held for trading, nor designated as at
fair value through profit or loss are subsequently measured at amortised cost
using the effective interest method. This is a method of calculating the
amortised cost of a financial liability and of allocating interest expense
over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments through the expected life of the
financial liability, or where appropriate a shorter period, to the amortised
cost of a financial liability.
Derecognition of financial liabilities
The company derecognises financial liabilities when, and only when, the
company's obligations are discharged, cancelled or they expire.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and deposits held at call
with banks with maturities of three months or less from inception.
INVENTORIES
Inventories consist of properties under construction and are stated at the
lower of cost and net realisable value. Cost comprises direct materials and,
where applicable, direct labour costs and those overheads that have been
incurred in bringing the inventories to their present location and
condition. Interest on sums borrowed that finance specific projects is added
to cost. Net realisable value represents the estimated selling price less all
estimated costs of completion and costs to be incurred in marketing, selling
and distribution.
PROPERTY PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost, net of depreciation and any
provision for impairment. Depreciation is calculated to write down the cost
less estimated residual value of all tangible fixed assets using the reducing
balance method over their expected useful economic lives. The rates
generally applicable are:
Fixtures, fittings and equipment - 25% on reducing balance
INVESTMENT PROPERTY
Investment property, which is property held to earn rentals and/or for capital
appreciation (including property under construction for such purposes), is
measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment property is measured at fair value. Gains or losses
arising from changes in the fair value of investment property are included in
profit or loss in the period in which they arise."
FINANCIAL LIABILITIES AND EQUITY
Financial liabilities and equity instruments issued by the Group are
classified according to the substance of the contractual arrangements entered
into and the definitions of a financial liability and an equity instrument. An
equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. The accounting
policies adopted for specific financial liabilities and equity instruments are
set out below.
BORROWING COSTS
Borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that take a substantial
period of time to be completed for sale, are added to the cost of property
held as stock at the year end. All other borrowing costs are recognised in
the statement of comprehensive income in the year in which they relate.
CURRENT AND DEFERRED TAXATION
Current tax assets and liabilities for the current and prior years are
measured at the amount expected to be recovered from or paid to the tax
authorities. The tax rates and the tax laws used to compute the amount are
those that are enacted or substantively enacted, by the reporting date.
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from goodwill or from
the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the tax profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
year when the liability is settled or the asset is realised. Deferred tax is
charged or credited in profit or loss, except when it relates to items charged
or credited directly to other comprehensive income, in which case the deferred
tax is also dealt with in other comprehensive income.
PROVISIONS
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event and it is probable that an outflow
of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. Where the Group expects some or all of a provision to be
reimbursed, the reimbursement is recognised as a separate asset but only when
the reimbursement is virtually certain. The expense relating to any provision
is presented in the income statement net of any reimbursement. If the effect
of the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects, where appropriate, the risks specific to
the liability. Where discounting is used, the increase in the provision due to
the passage of time is recognised as a borrowing cost.
COMMITMENTS AND CONTINGENCIES
Commitments and contingent liabilities are disclosed in the financial
statements. They are disclosed unless the possibility of an outflow of
resources embodying economic benefits is remote. A contingent asset is not
recognised in the financial statements but disclosed when an inflow of
economic benefits is virtually certain.
CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY
The preparation of financial statements in conformity with IFRS as adopted by
the EU requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of applying the
Group's accounting policies. The areas involving a higher degree of judgment
or complexity, or areas where assumptions and estimates are significant to the
Group financial statements are disclosed below.
Estimates and judgments are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the present circumstances.
Valuation of Inventory
The Group assesses the net realisable value of inventories under development
and completed properties held for sale according to their recoverable amounts
based on the realisability of these properties, taking into account estimated
costs to completion based on past experience and committed contracts and
estimated net sales based on prevailing market conditions. Provision is made
when events or changes in circumstances indicate that the carrying amounts may
not be realised. The carrying value is reduced by its selling price less costs
to complete and sell. This impairment loss is recognised immediately in the
Statement of Comprehensive Income. The assessment requires the use of
judgment and estimates. The carrying amount of inventory is disclosed in
note 12 to the financial statements.
Recognition of deferred tax assets
The recognition of deferred tax assets is based upon whether it is more likely
than not that sufficient and suitable taxable profits will be available in the
future against which the reversal of temporary differences can be deducted.
To determine the future taxable profits, reference is made to the latest
available profit forecasts. Where the temporary differences are related to
losses, relevant tax law is considered to determine the availability of the
losses to offset against the future taxable profits.
Impairment of non financial assets
At each statement of financial position date the company reviews the carrying
amounts of its tangible and intangible assets with finite lives to determine
whether there is an indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss (if any).
If the recoverable amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is reduced to its
recoverable amount. Impairment losses are recognised as an expense
immediately, unless the relevant asset is land or buildings at a revalued
amount, in which case the impairment loss is treated as a revaluation
decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset is increased to the revised estimate of its recoverable amount, but so
that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the
asset in prior years. A reversal of an impairment loss is recognised as income
immediately, unless the relevant asset is carried at a revalued amount, in
which case the reversal of the impairment loss is treated as a revaluation
increase.
Trafalgar Property Group Plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2020
1 SEGMENTAL REPORTING
For the purpose of IFRS 8, the chief operating decision maker ("CODM") takes
the form of the Board of Directors. The Directors' opinion of the business
of the Group is as follows.
The principal activity of the Group was property development. All the
Group's non-current assets are located in the UK.
Based on the above considerations, there is considered to be one reportable
segment. The internal and external reporting is on a consolidated basis with
transactions between Group companies eliminated on consolidation. Therefore
the financial information of the single segment is the same as that set out in
the consolidated statement of comprehensive income, the consolidated statement
of changes in equity, the consolidated statement of financial position and
cashflows.
Revenue
An analysis of revenue is as follows:
The Group's revenue, which is all attributable to their principal activity,
can be split as follows:
2020 2019
£ £
Restated
Development
sales
1,891,000 2,123,500
Rental
income
79,106 4,689
1,970,106 2,128,189
Timing of revenues are as follows:
2020 2019
£ £
Goods transferred at a point in
time
1,891,000 2,123,500
Services transferred over time
79,106
4,689
1,970,106 2,128,189
Revenues analysed by geographic location are as follows:
2020 2019
£ £
United Kingdom
1,970,106
2, 128,189
2 OTHER INTEREST RECEIVABLE AND SIMILAR INCOME
Rental income has now become part of the principal activity of the Group, and
is therefore shown in revenue
with a subsequent restatement of the prior year.
3 LOSS FOR THE YEAR
Operating loss is stated after charging / (crediting) the following:
2020 2019
£ £
Subcontractor costs and cost of inventories recognised as an expense
1,687,759
2,063,709
Interest
charges
128,279 328,651
1,816,038 2,392,360
Depreciation of property, plant and equipment
902 740
Auditor's remuneration - audit services -
Group
10,000 10,000
Auditor's remuneration - audit services - Group
entities
7,000 6,000
17,000 16,000
Operating expenses by nature:
Subcontractors costs, interest and consumables 1,816,038 2,392,360
Employee expenses 141,552 169,054
Depreciation 902 740
Other expenses 994,395 1,862,457
Consultancy Services - P Treadaway 70,108 -
Debt forgiveness (70,108) -
2,952,887 4,424,611
4 EMPLOYEES AND DIRECTORS' REMUNERATION
Staff costs during the year were as follows:
2020 2019
£ £
Wages and salaries 113,000 138,000
Social security costs 8,512 11,394
Other pension costs 20,040 19,660
141,552 169,054
The average number of employees of the Group during the year was:
2020 2019
Number Number
Directors 3 4
Management 2 2
Key management are the Group's Directors. Remuneration in respect of key
management was as follows:
2020 2019
£ £
Short-term employee benefits:
- Emoluments for qualifying services C C Johnson - -
- Emoluments for qualifying services A Johnson 48,550 65,617
- Emoluments for qualifying services J Dubois 15,879 15,907
64,429 81,524
There are retirement benefits accruing to Mr C C Johnson for whom a company
contribution was paid during the year of £18,000 (2019: £18,000) and Mr A
Johnson £ 1,350 (2019: £1,200).
Consultancy fees of £ 4,994 (2019: £4,994) were paid to Mr N Lott during the
year.
5 INTEREST PAYABLE AND SIMILAR CHARGES
During the year the mortgage interest paid on borrowings relating to ongoing
developments was capitalised as part of inventory £ 10,102 (2019: £ 183,217)
with the interest on properties sold in the year forming part of cost of sales
and transferred to profit & loss accordingly.
For sites where the construction had been completed, the mortgage interest
paid of £ 118,177 (2019: £145,434) has been accounted for in the profit
& loss within cost of sales together with an impairment provision of £
nil (2019: £126,661) on account of the reduction of likely selling prices
being achieved since the year end.
6 TAXATION
2020 2019
£ £
Current tax - -
Tax charge - -
2020 2019
£ £
(Loss)/profit on ordinary activities before tax (1,022,898) (2,296,422)
Based on (loss) for the year:
Tax at 19% (2018: 19%) (194,350) (436,320)
Unrelieved tax losses 76,411 138,799
Impairment 116,968 296,271
Disallowable expenses 971 1,250
Tax charge for the year - -
Deferred tax
No deferred tax asset has been recognised in respect of historical losses due
to the uncertainty in future profits against which to offset these losses. As
at the 31 March 2020, the Group had cumulative tax losses of
£4,381,991 (2019: £3,364,609) that are available to offset against
future taxable profits.
7 (LOSS) PER ORDINARY SHARE
The calculation of (loss)/profit per ordinary share is based on the following
profits/(losses) and number of shares:
2020 2019
£ £
(Loss) for the year (1,022,898) (2,296,422)
Weighted average number of shares for basic (loss) per share 487,690,380 425,190,380
Weighted average number of shares for diluted (loss) per share 487,690,380 425,190,380
(0.21)p (0.54)p
(LOSS) PER ORDINARY SHARE:
Basic
Diluted (0.21)p (0.54)p
8 PROPERTY, PLANT AND EQUIPMENT
Plant and equipment 2020 2019
£ £
Cost
At 1 April 6,205 6,205
Additions 986 -
At 31 March 7,191 6,205
Depreciation
At 1 April 4,866 4,126
Charge for the year 902 740
At 31 March 5,768 4,866
1,423 1,339
Net book value at 31 March
2020 2019
£ £
9 INVESTMENT PROPERTY - -
1,975,000 1,975,000 -
FAIR VALUE -
1 April 2019
Additions 1,975,000
31 March 2020 -
-
NET BOOK VALUE -
At 31 March 2020
1,975,000
At 31 March 2019 -
Fair Value at 31 March 2020 is represented by:
Valuation in 2020
The Directors consider there has been no change in the valuation since
purchase of the properties in August 2019 and therefore the property remains
in the accounts as at 31 March 2020 at £1,975,000.00.
10 TRADE AND OTHER RECEIVABLES
2020 2019
£ £
Other receivables 24,000 75,389
Other taxes 16,480 14,629
Prepayments 1,819 2,074
42,299 92,092
There are no receivables that are past due but not impaired at the year-end.
There are no provisions for irrecoverable debt included in the balances above.
11 CASH AND CASH EQUIVALENTS
All of the Group's cash and cash equivalents at 31 March 2020 are in sterling
and held at floating interest rates.
2020 2019
£ £
Cash and cash equivalents 27,969 32,800
The Directors consider that the carrying amount of cash and cash equivalents
approximates to their fair value.
12 INVENTORY
2020 2019
£ £
Work in progress 1,212,692 4,481,230
See note 5 for details of interest capitalised as part of the value of
inventory.
13 TRADE AND OTHER PAYABLES
2020 2019
£ £
Trade payables 85,950 21,602
Other payables 28,130 2,462
Taxation & social security 3,422 6,149
Accruals 431,302 411,990
548,804 442,203
14 BORROWINGS
2020 2019
£ £
Directors' loans 3,471,511 2,693,103
Other loans 1,180,000 1,580,000
Bank loans - see under 1,479,373 2,502,462
6,130,884 6,775,565
Included in Directors' loans is the sum of £ 300,000 (2019: £300,000)
advanced by the DFM Pension Scheme of which Mr J Dubois is the principal
beneficiary. This loan bears interest at 12% per annum (2019: 12% per annum).
Within Directors' loans is the sum of £ 240,000 provided by Mr C C Johnson
for a deposit on an option which was not taken up.
The remaining balance is disclosed in note 17.
Included in other loans is £ 650,000 (2019: £980,000) advanced by Mr. G
Howard (son-in-law of Mr. C C Johnson) to the company at a rate of 10% per
annum (2019: 10% pa). £ 530,000 (£2019: £600,000) has been advanced by C
Rowe, an employee of the Group, at a rate of 10% per annum.
Lloyds Bank hold a legal charge over land at Wellesley Road, Sheerness, Kent,
together with charges over two term life policies on two of the Directors.
Mrs S Johnson, wife of Mr C C Johnson has a legal charge relating to her loan
of £ 380,000 to Selmat.
Selmat has also granted to Paragon Mortgages, legal charges over the
freehold property at Hildenborough and leasehold properties of one of the
three flats purchased in the year at Burnside. These mortgages are interest
only, for a term of 7 years with a fixed interest rate for the first 5
years.
The bank borrowings are repayable as follows:
2020 2019
£ £
On demand or within one year 555,000 2,502,462
In the second year - -
In the third to fifth years inclusive - -
After five years 924,373 -
1,479,373 2,502,462
Less amount due for settlement within 12 months (included in current 555,000 2,502,462
liabilities)
Amount due for settlement after 12 months 924,373 -
The weighted average interest rates paid on the bank loans were as follows:
Bank loans: 2.03 % (2019: 7.18%)
All of the Directors' loans are repayable after more than 1 year. All loans
are interest bearing and charged accordingly. However Mr C C Johnson has
waived his right to interest in the year and as a result interest of £ Nil
(2019: £ Nil) was paid to Mr C C Johnson. The rate of interest on the loan is
5% pa (2019: 5% pa). Interest of £36,000 (2019: £36,000) was paid to
Mr J Dubois at the rate of 12% pa (2019: 12% pa).
15 Share capital
Authorised Share Capital
2020 2019
Number Number
Ordinary shares of 0.1p in issue 425,190,380 425,190,380
Ordinary shares of 0.1p issued in year 62,500,000 -
Total number of Ordinary shares 487,690,380 525,190,380
Deferred shares of 0.9p in issue 238,375,190 238,375,190
726,065,570 663,565,570
On 3l May 2019 62,500,000 Ordinary shares of 0.1p were issued at 0.4p per
share.
Ordinary shares entitle the holder to receive notice of and to attend or vote
at any general meeting of the Company or to receive dividends or other
distributions.
Deferred shares do not entitle the holder to receive notice of and to attend
or vote at any general meeting of the Company or to receive dividends or other
distributions. Upon winding up or dissolution of the Company the holders of
deferred shares shall be entitled to receive an amount equal to the nominal
amount paid up thereon, but only after holders of Ordinary shares have
received £ 100,000 per Ordinary Share. Holders of deferred shares are not
entitled to any further rights of participation in the assets of the
Company. The Company has the right to purchase the deferred shares in issue
at any time for no consideration.
Issued, allotted and fully paid
2020 2019
£ £
Ordinary shares 425,190 425,190
Deferred shares 2,145,377 2,145,377
Issued in year - ordinary shares 62,500 -
2,633,067 2,570,567
16 Share PREMIUM ACCOUNT
2020 2019
£ £
Balance brought forward 2,510,462 2,510,462
Premium on issue of new shares 187,500 -
Share issue costs (37,100) -
Balance carried forward 2,660,862 2,510,462
17 RELATED PARTY TRANSACTIONS
Mr C C Johnson holds 38.3% (2019: 43.94%) of the total issued share capital of
the Group as at 31 March, 2020
During the year four properties were sold by TNH to another Group Company,
Selmat, at market value.
Mr D C Stocks held 80,330,532 ordinary shares of the Group as at 31 March,
2020. He has since sold his entire shareholding.
Mr P Treadaway held 106,484,658 ordinary shares of the Group as at 31 March,
2020.
Further details relating to an issue of shares post year end can be found
under note 18.
The following working capital loans have been provided by the Directors:
2020 2019
£ £
C C Johnson
Opening balances 2,417,146 2,170,657
Loan repayments - -
Personal drawings (141,910) (73,511)
Capital injected 896,275 320,000
Interest payable - -
Balance carried forward 3,171,511 2,417,146
J Dubois
300,000 300,000
D Stocks
-
(23,935)
P
Treadaway
-
(108)
Balance carried forward 3,471,511 2,693,103
Mr Johnson's Loan bore interest during the year at 5% (2019: 5% pa), but he
has chosen to forego the interest in the year. Mr Johnson is no longer a
Director , but he served as a Director for part of the year and remains a
shareholder. Mr Dubois's Loan, which is from his Pension Fund of which he is
the sole beneficiary, was at 12% pa interest (2019: 12% pa).
Mrs S Johnson, wife of Mr C C Johnson provided a Loan of £380,000 which bore
interest of 5% pa, (2019: nil), to Selmat, a subsidiary of the Group This has
been included within Mr C C Johnson's loan balance above.
During the year rents were paid of £10,000 (2019: £10,259) to the Combe Bank
Homes Pension Scheme which owns the freehold offices at Chequers Barn. Mr C
C Johnson is a Trustee and Beneficiary of that Pension Scheme.
Prior to Mr P Treadaway's appointment as a Director, charges of £70,108 were
paid to him in relation to consultancy services.
During the year payments were made to Mr D Stocks of £68,936 for consultancy
services.
18 SHARE OPTIONS AND WARRANTS
There are no share options or warrants as at the year end.
On 14 July, 2020 warrants to subscribe for ordinary shares of 0.01p were
granted as follows:-
Subscribers to the placing effected in July 2020 were granted warrants to
subscribe for up to 937,500,000 shares for a period of two years,
exercisable at 0.2p per share;
Peterhouse Capital Limited was granted warrants to subscribe for shares
equivalent up to 3% of the issued ordinary share capital for a period of two
years, exercisable at 0.08p per share.
Further, on 14 July 2020, £ 600,000 of convertible loan notes were issued to
Mr C C Johnson as part of arrangements to reorganise loans between him and the
Group. The notes are convertible into 300,000,000 ordinary shares at 0.2p
per share for a period of two years. On conversion, warrants to subscribe
for up to 300,000,000 ordinary shares will be granted to Mr C C Johnson,
exercisable for a period of two years from the date of grant at 0.2p per
share.
19 CATEGORIES OF Financial instruments
All financial instruments are measured under IFRS 9 at amortised cost.
Capital risk management
The Group considers its capital to comprise its share capital and share
premium. The Group's capital management objectives are to safeguard the
entity's ability to continue as a going concern, so that it can continue to
provide returns for shareholders and benefits for other stakeholders and to
provide an adequate return to shareholders by pricing products and services
commensurately with the level of risk.
Significant Accounting Policies
Details of the significant accounting policies and methods adopted, including
the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument are disclosed on pages 21 to
27 to these financial statements.
Foreign currency risk
The Group has minimal exposure to the differing types of foreign currency
risk. It has no foreign currency denominated monetary assets or liabilities
and does not make sales or purchases from overseas countries.
Interest rate risk
The Group is sensitive to changes in interest rates principally on the loans
from Lloyds Bank, where interest is charged on a variable rate basis. The
Paragon mortgages are based on a fixed rate for the first 5 years of the 7
year term.
The impact of a 100 basis point increase in interest rates on these loans
would result in additional interest cost for the year of £ 14,794 (2019:
£25,025).
Credit risk management
Credit risk refers to the risk that a counter-party will default on its
contractual obligations resulting in financial loss to the Group.
Liquidity risk management
This is the risk of the Group not being able to continue to operate as a going
concern.
The Directors have, after careful consideration of the factors set out above,
concluded that it is appropriate to adopt the going concern basis for the
preparation of the financial statements and the financial statements do not
include any adjustments that would result if the going concern basis was not
appropriate.
Derivative financial instruments
The Group does not currently use derivative financial instruments as hedging
is not considered necessary. Should the Group identify a requirement for the
future use of such financial instruments, a comprehensive set of policies and
systems as approved by the Directors will be implemented.
Financial liabilities
Due within Due within Due over
Total 1
year 1-5 years 5 Years
£
£ £
Trade payables
545,382 545,382
Borrowings - Directors' loan
3,471,511 3,471,511
Borrowings - Bank
loan
1,479,373 555,000
- 924,373
Borrowings - Other loans
1,180,000
1,180,000
Total
6,676,266 1,100,382
4,651,511 924,373
20 EXCEPTIOnAL ITEM
Management have performed a review of the assets of its trading subsidiaries.
This assessment concluded that the land options in TR+ should be written down
to zero. Consequently, inventory valued at £ 432,268 (2019: £
1,850,364) less potential deferred tax of nil (2019: £ 291,045) has
been written off in the financial statements. Within TNH the sum of £ 163,184
has been written off which related to costs incurred to date on a site where
planning permission has not been achieved despite several submission attempts
and finally this was taken to appeal where this was also turned down.
21 Net debt reconciliation
2020 2019
£ £
Cash at bank
27,969 32,800
Cash and cash
equivalents
27,969 32,800
Borrowing repayable within one year (including
overdrafts)
(6,130,884) (6,775,565)
Net
Debt
(6,102,915) (6,742,765)
Cash
and Gross Total
cash
liquid borrowings and liquid
investments with a
fixed investments
interest
rate
£
£
£
Net debt as at 1 April 2018
458,209
(7,976,328) (7,518,119)
Cash
flows
(425,409)
1,200,763 (775,354)
Net debt as at 31 March 2019
32,800
(6,775,565) (6,742,765)
Cash
flows
(4,831)
644,681 639,850
Net debt as at 31 March 2020
27,969
(6,130,884) (6,102,915)
22 SUBSEQUENT EVENTS
Events subsequent to the year end that provide additional information about
the Group's position at the reporting date and are adjusting events are
reflected in the financial statements. Events subsequent to the year end
that are not adjusting events are disclosed in the notes when material.
Authorities were granted on 27 March 2020 to allot up to £2,000,000 nominal
of shares; those authorities were replaced on 13 July 2020 by authorities to
allot up to £593,750 nominal of shares. On 14 July 2020 937,500,000
ordinary shares of 0.01p were issued, raising £750,000 before costs.
Trafalgar Property Group Plc
COMPANY BALANCE SHEET
For the year ended 31 March 2020
Note 2020 2019
£ £
FIXED ASSETS
Investments 7 - -
- -
Current assets
Stocks - 5,292
Debtors 9 350,134 278,363
Cash at bank and in hand 3,538 9,561
353,672 293,216
Creditors: amounts falling due within one year 10 978,264 995,543
Net current liabilities (624,592) (702,327)
Net (liabilities)/assets (624,592) (702,327)
Capital and reserves
Called up share capital 12 2,633,067 2,570,567
Share premium account 13 2,660,862 2,510,462
Profit and loss account (5,918,521) (5,783,356)
Equity - attributable to the owners of the Parent (624,592) (702,327)
The loss for the financial year dealt with in the financial statements of the
Parent Company was Loss £ 135,165 (2019: Loss £2,531,344 ).
The financial statements were approved by the Board of Directors on 29
September, 2020 and authorised for issue and are signed on its behalf by:
P Treadaway: ………………………………………. J
Dubois: ……………………………………………
Company Registration Number: 04340125
The notes on pages 40 to 45 form an integral part of these financial
statements
Trafalgar Property Group Plc
COMPANY STATEMENT OF CHANGES IN EQUITY
31 March 2020
Share capital Share premium Reverse Retained Total equity
acquisition profits
reserve /(losses)
£ £ £ £ £
At 1 April 2018 2,570,567 2,510,462 - (3,252,012) 1,829,017
Loss for the year - - - (2,531,344) (2,531,344)
Total comprehensive income for the year - - - (2,531,344) (2,531,344)
Issue of shares - - - - -
Share issue costs - - - - -
At 31 March 2019 2,570,567 2,510,462 - (5,783,356) (702,327)
At 1 April 2019 2,570,567 2,510,462 - (5,783,356) (702,327)
Loss for year - - - (135,165) (135,165)
Total comprehensive income for the year - - - (135,165) (135,165)
Issue of shares 62,500 187,500 - - 250,000
Share issue costs - (37,100) - - (37,100)
At 31 March 2020 2,633,067 2,660,862 - (5,918,521) (624,592)
The notes on pages 40 to 45 form an integral part of these financial
statements.
Trafalgar Property Group Plc
NOTES TO THE COMPANY FINANCIAL STATEMENTS
for the year ended 31 March 2020
1 GENERAL INFORMATION
Nature of operations
Trafalgar Property Group Plc ("the Company") is the UK holding company of a
group of companies which are engaged in property development. The Company is
registered in England and Wales. Its registered office and principal place
of business is Chequers Barn, Bough Beech, Edenbridge, Kent TN8 7PD.
2 BASIS OF PREPARATION
The financial statements have been prepared under the historical cost
convention and in accordance with applicable United Kingdom law, FRS 102 and
accounting standards. The principal accounting policies are described below.
They have all been applied consistently throughout the year and preceding
year.
The Company has taken advantage of the exemption allowed under section 408 of
the Companies Act 2006 and has not presented its own Statement of
Comprehensive Income to these financial statements.
The Company has taken advantage of the disclosure exemption from the
requirements of section 7 Statement of Cashflow, as permitted by the FRS 102
"The Financial Reporting Standard applicable in the UK and Republic of
Ireland".
3 SIGNIFICANT ACCOUNTING POLICIES
(a) GOING CONCERN
The Directors have reviewed forecasts and budgets for the coming year, which
have been drawn up with appropriate regard for the current economic
environment and the particular circumstances in which the Company operates.
These were prepared with reference to historical and current industry
knowledge, taking into account future strategy of the Company and wider Group.
The existing operations have been generating funds to meet short-term
operating cash requirements. As a result of these considerations, at the time
of approving the financial statements, the Directors consider that the Company
and the Group have sufficient resources to continue in operational existence
for the foreseeable future. It is appropriate to adopt the going concern basis
in the preparation of the financial statements.
As with all business forecasts, the Directors' statement cannot guarantee that
the going concern basis will remain appropriate given the inherent uncertainty
about the future events.
(b) INVESTMENTS
Investments held as fixed assets are stated at cost less provision for
impairment.
(c) TAXATION
Current tax, including UK corporation tax and foreign tax, is provided at
amounts expected to be paid (or recovered) using the tax rates and laws that
have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right
to pay less tax in the future have occurred at the balance sheet date. Timing
differences are differences between the company's taxable profits and its
results as stated in the financial statements that arise from the inclusion of
gains and losses in tax assessments in years different from those in which
they are recognised in the financial statements.
A deferred tax asset is regarded as recoverable and therefore recognised only
when, on the basis of all available evidence, it can be regarded as more
likely than not that there will be suitable taxable profits from which the
future reversal of the underlying timing differences can be deducted.
(d) FINANCIAL INSTRUMENTS
Financial assets and liabilities are recognised in the statements of financial
position when the Company has become a party to the contractual provisions of
the instruments.
The Company's financial assets and liabilities are initially measured at
fair value plus any directly attributable
transaction costs. The carrying value of the Company's financial assets,
primarily cash and bank balances, and liabilities, primarily the Company's
payables and other accrued expenses, approximate to their fair values.
(i) Financial assets
On initial recognition, financial assets are classified as either financial
assets at fair value through profit or loss, held-to-maturity investments,
loans and receivables financial assets, or available-for-sale financial
assets, as appropriate.
Trade and other receivables
Trade and other receivables (including deposits and prepayments) that have
fixed or determinable payments that are not quoted in an active market are
classified as other receivables, deposits, and prepayments. Other
receivables, deposits, and prepayments are measured at amortised cost using
the effective interest method, less any impairment loss. Interest income is
recognised by applying the effective interest rate, except for short-term
receivables when the recognition of interest would be immaterial.
(ii) Financial liabilities and equity instruments
Financial liabilities are classified as liabilities or equity in accordance
with the substance of the contractual arrangement.
Financial liabilities
Financial liabilities comprise long-term borrowings, short-term borrowings,
trade and other payables and accruals, measured at amortised cost using the
effective interest method.
The effective interest method is a method of calculating the amortised cost of
a financial liability and of allocating interest income over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash payments (including all fees on points paid or received
that form an integral part of the effective interest rate, transaction costs
and other premiums or discounts) through the expected life of the financial
liability, or, where appropriate, a shorter period to the net carrying amount
on initial recognition.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of an entity after deducting all its liabilities. Equity instruments
issued by the Company are recognised at the proceeds received, net of direct
issue costs.
4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF
ESTIMATION UNCERTAINTY
In the application of the Company's accounting policies, which are described
in note 3, the Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not
apparent from other sources. The estimates and assumptions are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
The following are the key assumptions concerning the future and other key
sources of estimation uncertainty at the statement of financial position date
that have a significant risk of causing a significant adjustment to the
carrying amounts of assets and liabilities in the financial statements:
Carrying value of investments in subsidiaries and intercompany
Management's assessment for impairment of investment in subsidiaries is based
on the estimation of value in use of the subsidiary by forecasting the
expected future cash flows expected on each development project. The value of
the investment in subsidiaries is based on the subsidiaries being able to
realise their cash flow projections.
Recognition of deferred tax assets
The recognition of deferred tax assets is based upon whether it is more likely
than not that sufficient and suitable taxable profits will be available in the
future against which the reversal of temporary differences can be deducted.
To determine the future taxable profits, reference is made to the latest
available profit forecasts. Where the temporary differences are related to
losses, relevant tax law is considered to determine the availability of the
losses to offset against the future taxable profits.
5 LOSS FOR FINANCIAL PERIOD
The Company has taken advantage of section 408 of the Companies Act 2006 and,
consequently, a profit and loss account for the Company alone has not been
presented. The Company's loss for the financial period was £135,165
(2019: Loss £2,531,344). The Company's loss for the financial year has been
arrived at after charging auditor's remuneration payable to MHA MacIntyre
Hudson for audit services to the Company of £10,000 (2019: £10,000) and an
impairment adjustment of £ nil (2019: £ 2,354,732) - see note 8.
6 EMPLOYEES AND DIRECTORS' REMUNERATION
2020 2019
£ £
Directors' fees 15,000 15,000
Social security costs 879 907
Management fees 4,994 4,994
20,873 20,901
The average number of employees of the Company during the year was:
2020 2019
Number Number
Directors and management 3 3
There are no retirement benefits accruing to any of the Directors.
£ 4,994 (2019: £4,994) was paid to Mr Norman Lott for his professional
services.
Additional directors remuneration of £ 45,000 (2019: £60,000) was paid to a
director through subsidiary entities.
7 INVESTMENTS
The company owns the following undertakings, all of which are incorporated in
the United Kingdom and have their registered offices at Chequers Barn,
Chequers Hill, Bough Beech, Edenbridge, Kent, TN8 7PD.
Class of shares held % Shareholding Principal Activity
Held directly
Trafalgar New Homes Limited Ordinary shares 100% Residential property developers
Trafalgar Retirement + Limited Ordinary shares 100% Residential property & assisted living scheme
Selmat Limited Ordinary shares 100% Residential property renting
Held indirectly through Trafalgar New Homes Limited
Combe Bank Homes (Oakhurst) Limited Ordinary shares 100% Residential property developers
Held indirectly through Trafalgar Retirement + Limited
Randell House Limited Ordinary shares 100% Assisted living developers
(dissolved 22 September 2020)
Controlled via Deed of Trust
Combe House (Borough Green) Limited Ordinary shares 100% Residential property developers
8 IMPAIRMENT
The investment carried in the Plc entity financial statements reflects the
entity's control over TNH, Oakhurst and Borough Green, TR+ and Selmat.
There has been minimal trading in Oakhurst and Borough Green and both entities
now hold no inventory.
Development continues in TNH and there have been sales of two properties in
the year and the transfer of four properties to Selmat, however due to the
factors laid out in the Operations review, there has been some erosion of the
margins that had been anticipated at the start of the year.
Management have performed a review of the assets and liabilities of the
underlying subsidiaries which form the value of the investment.
In performing this assessment TR+ have been re-assessed. At the time of
approval of the financial statements there is no confirmed planning permission
on these land options.
Where the 'real' net asset value is in excess of the carrying value of the
investment in the Plc entity statement of financial position, there is no
indication of impairment.
Due to the uncertainties and timing of developments it has been agreed by
management not to include any future anticipated profits of developments in
their assessment. Therefore the net asset value of the underlying investments
does not support the Group's carrying value of investments in TNH, Oakhurst,
Borough Green and TR+.
Management have concluded that an impairment of the investments is prudent and
that these will be written down to zero.
9 debtors
2020 2019
£ £
Amounts owed by group undertakings 343,068 274,304
Other debtors 1,822 1,136
Other taxes and social security 5,244 2,923
350,134 278,363
10 CREDITORS: Amounts falling due within one yeaR
2019 2019
£ £
Trade creditors 36,860 2,939
Taxation and social security 1,323 1,323
Other creditors 30,300 30,300
Director's loan account 105,000 100,000
Amounts owed to group undertakings 804,781 860,981
978,264 995,543
11 FINAncial Instruments
2020 2019
£ £
Financial assets
Financial assets measured at amortised cost:
Amounts owed by group undertakings and other debtors 344,890 275,440
Financial liabilities
Financial liabilities measured at amortised cost 976,947 994,220
Financial liabilities include, trade creditors, other creditors and amounts
due to group undertakings.
12 Share capital
Authorised Share Capital 2020 2019
Number Number
Ordinary shares of 0.1p in issue 425,190,380 425,190,380
Ordinary shares of 0.1p each issued in year 62,500,000 -
Deferred shares of 0.9p in issue 238,375,190 238,375,190
726,065,570 663,565,570
Deferred shares do not entitle the holder to receive notice of and to attend
or vote at any general meeting of the Company or to receive dividends or other
distributions. Upon winding up or dissolution of the Company the holders of
deferred shares shall be entitled to receive an amount equal to the nominal
amount paid up thereon, but only after holders of Ordinary shares have
received £ 100,000 per Ordinary Share. Holders of deferred shares are not
entitled to any further rights of participation in the assets of the
Company. The company has the right to purchase the deferred Shares in issue
at any time for no consideration.
Issued, allotted and fully paid 2020 2019
£ £
Ordinary shares 425,190 425,190
Issued in year 62,500 -
Deferred shares 2,145,377 2,145,377
2,633,067 2,570,567
On 31 May, 2019 62,500,000 Ordinary shares of 0.1p were issued at 0.4p per
share.
13 Share PREMIUM ACCOUNT
2020 2019
£ £
Balance brought forward 2,510,462 2,510,462
Premium on issue of new shares 187,500 -
Cost of (37,100) -
issue
Balance carried forward 2,660,862 2,510,462
14 INTERCOMPANY TRANACTIONS
The company has taken advantage of the exemption conferred by FRS102 Section
33 "Related Party disclosures" not to disclose transactions undertaken with
other wholly owned members of the Group.
15 POST BALANCE SHEET EVENTS
Authorities were granted on 27 March 2020 to allot up to £2,000,000 nominal
of shares; those authorities were replaced on 13 July 2020 by authorities to
allot up to £593,750 nominal of shares. On 14 July 2020 937,500,000
ordinary shares of 0.01p were issued, raising £750,000 before costs.
Explanation of resolutions at the Annual General Meeting
Information relating to resolutions to be proposed at the Annual General
Meeting is set out below. The notice of AGM is set out on page 47.
Ordinary business at the AGM
The following ordinary business resolutions will be proposed at the AGM:
(a) Resolution 1: to approve the annual report and
accounts. The Directors are required to lay before the Company at the AGM
the accounts of the Company for the financial year ended 31 March 2020, the
report of the Directors and the report of the Company's auditors on those
accounts.
(b) Resolution 2: to approve the
re-appointment of MHA MacIntyre Hudson as auditors of the Company. The
Company is required to appoint auditors at each general meeting at which
accounts are laid, to hold office until the next such meeting.
(c) Resolution 3: to approve the
remuneration of the auditors for the next year.
(d) Resolution 4: to re-appoint Norman Lott
as a Director; Norman is retiring by rotation and submitting himself for
re-election.
Attendance at the AGM
Due to Covid-19 and related legal restrictions and guidance from government
authorities, Shareholders may not physically attend the AGM other than to form
a quorum, and will not be permitted access to the venue on the day of the
meeting. Shareholders are strongly encouraged to participate in the meeting
by voting by proxy ahead of the meeting. Given the restrictions on
attendance in person, you are encouraged to appoint the Chairman of the
meeting to submit proxy votes at the meeting, rather than a named person who
will not be permitted to attend the physical meeting.
Any shareholder who wishes to raise a question is asked to contact the
Company on 01732 700000.
TRAFALGAR PROPERTY GROUP PLC
(Registered in England No. 04340125)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 2020 Annual General Meeting of the Company
will be held at the Company's offices at Chequers Barn, Bough Beech,
Edenbridge, Kent TN8 7PD at 11.00 a.m. on Tuesday 27th October 2020, for the
following purposes:
RESOLUTIONS
To consider and, if thought fit, to pass resolutions 1 to 4 as ordinary
resolutions:
1 To receive and adopt the directors'
report, the auditor's report and the Company's accounts for the year ended 31
March 2020.
2 To re-appoint MHA MacIntyre Hudson as
auditor in accordance with section 489 of the Companies Act 2006, to hold
office until the conclusion of the Annual General Meeting of the Company in
2021.
3 To authorise the Directors to
determine the remuneration of the auditor.
4 To re-appoint Norman Lott as a
Director of the Company.
Dated: 29 September 2020
Registered Office: By order of the Board
Chequers Barn Nicholas Narraway
Chequers Hill Secretary
Bough Beech
Edenbridge
Kent
TN8 7PD
Notes:
1. Due to Covid-19 and related legal
restrictions and guidance from government authorities, shareholders may not
physically attend the meeting other than to form a quorum, and will not be
permitted access to the venue on the day of the meeting. Shareholders are
strongly encouraged to participate in the meeting by voting by proxy ahead of
the meeting.
2. As a member of the Company, you are
entitled to appoint a proxy to exercise all or any of your rights to attend,
speak and vote at the Meeting and you should have received a proxy form with
this notice of meeting. You can only appoint a proxy using the procedures
set out in these notes and the notes to the proxy form.
3. A proxy does not need to be a member of
the Company but must attend the Meeting to represent you. Details of how to
appoint the Chairman of the Meeting or another person as your proxy using the
proxy form are set out in the notes to the proxy form. Given the
restrictions on attendance in person, you are encouraged to appoint the
Chairman of the meeting to submit proxy votes at the meeting, rather than a
named person who will not be permitted to attend the physical meeting.
4. You may appoint more than one proxy
provided each proxy is appointed to exercise rights attached to different
shares. You may not appoint more than one proxy to exercise rights attached
to any one share. To appoint more than one proxy, you may photocopy the
enclosed proxy form.
5. If you do not give your proxy an
indication of how to vote on any resolution, your proxy will vote or abstain
from voting at his or her discretion. Your proxy will vote (or abstain from
voting) as he or she thinks fit in relation to any other matter which is put
before the Meeting.
6. The notes to the proxy form explain how
to direct your proxy how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:
(a) completed and signed;
(b) sent or delivered to the Company's
Registrars, Neville Registrars Limited, Neville House, Steelpark Road,
Halesowen B62 8HD; and
(c) received by no later than 11.00a.m. on
23 October 2020.
Any power of attorney or any other authority under which the proxy form is
signed (or a duly certified copy of such power or authority) must be included
with the proxy form.
7. To change your proxy appointment,
simply submit a new proxy appointment using the methods set out above. Note
that the cut-off time for receipt of proxy appointments (see above) also apply
in relation to amended instructions; any amended proxy appointment received
after the relevant cut-off time will be disregarded.
Where you have appointed a proxy using the hard-copy proxy form and would like
to change the instructions using another hard-copy proxy form, you may
photocopy the enclosed proxy form.
If you submit more than one valid proxy appointment, the appointment received
last before the latest time for the receipt of proxies will take precedence.
8. In order to revoke a proxy appointment
you will need to inform the Company by sending a signed hard copy notice
clearly stating that you revoke your proxy appointment to Neville Registrars
Limited, Neville House, Steelpark Road, Halesowen, B62 8HD. Any power of
attorney or any other authority under which the revocation notice is signed
(or a duly certified copy of such power or authority) must be included with
the revocation notice.
The revocation notice must be received by no later than 11.00 a.m. on 23
October 2020.
If you attempt to revoke your proxy appointment but the revocation is received
after the time specified then, subject to the paragraph directly below, your
proxy appointment will remain valid.
Appointment of a proxy does not preclude you from attending the Meeting and
voting in person.
9. Pursuant to Regulation 41 of the
Uncertificated Securities Regulations 2001, only those members registered in
the register of members of the Company as at 6.00 p.m. on 23 October 2020
shall be entitled to attend and vote at this Meeting in respect of the number
of shares registered in their name at that time. Changes to entries on the
relevant register of securities after such time shall be disregarded in
determining the rights of any person to attend or vote at this Meeting.
The Annual Report will be posted to the shareholders today and will be made
available on the Company's website (http://www.trafalgarproperty.group/
(http://www.trafalgarproperty.group/) ) at that time.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR KKCBPBBKBFCBRecent news on Trafalgar Property
See all newsREG - Trafalgar PropertyGp - Half-year Report
AnnouncementREG - AIM - AIM Notice - 13/11/2024
AnnouncementREG - Trafalgar PropertyGp - CLN Conversion and Issuance of Shares
AnnouncementREG - AIM - AIM Notice - 06/11/2024
AnnouncementREG - Trafalgar PropertyGp - Update to capital reorganisation timetable
Announcement