REG - Trafalgar PropertyGp - Final Results
25/09/2024 07:00
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RNS Number : 5153F Trafalgar Property Group PLC 25 September 2024
25 September 2024
TRAFALGAR PROPERTY GROUP PLC
("Trafalgar", the "Company" or "Group")
Final Results for the year ended 31 March 2024
Trafalgar (AIM:TRAF), the AIM quoted residential and assisted living property
developer, announces its final results for the twelve months ended 31 March
2024.
The Company's Annual Report has been posted to shareholders, a copy can also
be found on the Company's website.
Enquires:
Trafalgar Property Group Plc +44 (0) 1732 700 000
Paul Treadaway
Spark Advisory Partners Ltd - Nominated Adviser +44 (0) 20 3368 3550
Matt Davis
Peterhouse Capital Limited - Broker +44 (0) 20 7409 0930
Duncan Vasey/Lucy Williams
CHAIRMAN'S STATEMENT
On behalf of the Board, I present Trafalgar Property Group Plc (the Group),
results for the year ended 31 March 2024 which includes one investment
property sale completed in the year. The overall result continues to be
disappointing, as can be seen in the attached Accounts and Strategic Report.
However, we continue to seek property opportunities with one construction
project being undertaken during the year at Speldhurst, Kent with the property
being available for sale at the year end and currently on the market for
£800,000.
Orchard House in Hildenborough was sold in September 2023 for a consideration
of £940,000.
During the year the company issued 377,250,000 new ordinary shares during the
year with the issuance of 125,000,000 at a price of 0.1p per share, raising
£125,000 before costs for the Group, the issuance of 226,250,000 at a price
of 0.4p per share to satisfy the 2022 CLN with Mr C Johnson and the issuance
of 26,000,000 at a price of 0.1p per share raising £26,000 to settle specific
trading debts.
Financials
The year under review saw the Group turnover at £nil (2023: £18,183), with a
loss after tax of £516,723 (2023: Loss £843,626).
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.
Due to the uncertainties and timing of the construction of new developments
and the potential sale of those properties, it has been agreed by management
not to include any future anticipated profits of developments in their
assessment.
The cash on the balance sheet at the end of the year was £8,906 (2023:
£17,148) and the Group continues to have sufficient bank facilities for all
current day to day activities.
Business Environment and Outlook
No new directors were appointed to the Group in the year.
The effects of market forces and the property market in general together with
the UK having been in a period of high inflation and high cost of living
affecting the property sector and the business of the group. However,
inflationary pressures are easing and slowly the Bank of England are reducing
the cost of borrowing with a recent 0.25% reduction in base rate. It is hoped
therefore that the market for property will start to improve as demonstrated
by the increase in property prices albeit a challenge for many potential
buyers still adjusting to recent higher mortgage costs. Like most businesses,
we are aware of our need to conduct ourselves carefully to preserve the health
of our staff and customers and to conserve our cash reserves.
Paul Treadaway
Paul Treadaway
Chairman
24 September 2024
CHIEF EXECUTIVE OFFICER 'S REPORT
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 (Selmat)
Combe Bank Homes (Oakhurst) Limited (Oakhurst) Combe Homes (Borough Green)
Limited (Borough Green)
Life Hydroponic Assets Ltd
TNH continues to be the main trading subsidiary but given the lack of activity
in Selmat, Life Hydroponic Assets Ltd and TR+ it was decided that an
impairment provision be made against these inter company accounts with TPG
together with provision against the associated management charges issued by
TPG. The effects on the company balance sheet can be seen in note 9 to the
company accounts.
Mortgages of £nil (2023: £675,698 ) exist on the properties held by Selmat
and a mortgage of £450,100 (2023 - £nil) exist on the property held by TNH..
As notified in an RNS dated 29 May 2024, the company is in preliminary
discussions regarding the possible acquisition of Ecap Esport Ltd, these
discussions remain ongoing. Should such a transaction proceed on the currently
envisaged terms, it would be classified as a reverse takeover in accordance
with Rule 14 of the AIM Rules for Companies. Accordingly, the Company's shares
were suspended from trading on AIM and will remain so until either the
publication of an admission document setting out, inter alia, details of the
proposed transaction or until confirmation is given that these discussions
have ceased.
The principal activity of the Group continues to be that of a regional
property developer focused upon Kent, Surrey, Sussex and the M25 ring south of
London together with investment in residential property, which have a rental
income of £nil (2023: £18,183). The consolidated results of the year's
trading are shown below. The consolidated loss for the year was £516,723
(2023: Loss £843,626). Management believes the key indicators of performance
for the Group are the revenue and profitability achieved during the year.
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. Direct costs may escalate and eat into gross profit margins due to
unexpected interest rate movements and high inflation rates putting pressure
on material costs.
2. There may be uncertainty in obtaining adequate finance thus putting
pressure on the going concern of the Group.
3. Heavy overheads may be incurred especially when projects have been
completed and before others have been commenced.
4. The Group could commit too much to future capital projects.
5. The Group's reliance on key members of staff.
6. The market may deteriorate, damaging liquidity of the Group and
future revenues.
7. The potential reverse takeover, announced by the Group on 29 May
2024, may not complete.
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 for the
initial purchase of potential development sites. The Plc also has access to
shareholder funding via placing of shares in the market. A full statement
regarding going concern is shown in the accounting policies on page 23.
2. Direct costs are outsourced on a fixed price contract basis, thereby
passing on to the contractor all risk of 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. Buying decisions for capital projects are taken at Board level, after
careful research by the Directors personally, who have substantial experience
in various business sectors and markets.
The Group has focused 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. 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 corporate governance policy appropriate for a small
publicly listed Company with ambitions substantially to raise its profile
within the wider investor community.
7. The directors will consider alternative reverse takeover opportunities
and have underpinned any cash flow implications of the current target by
taking a loan from them to be used for any abort fees.
Operations review
A summary of the results for the year is as follows:-
2024 2023
£ £
Revenue for the year - 18,183
Gross (loss)/profit 78 (12,717)
Administration expenses (379,627) (571,928)
Loss on disposal of property (including cost) - (12,382)
(Loss) Profit on revaluation - (122,751)
Other Income 17,158 -
Impairment of asset (25,000) -
Interest payable and similar charges (129,333) (123,848)
Loss after taxation (516,723) (843,626)
Group turnover for the year amounted to £nil (2023: £18,183), as there was
no rental income received given the remaining investment property had been
disposed of during the year and this had been written down to its sale value
in the 2023 accounts. The group carried forward at 31 March 2024 the costs
incurred relating to the Speldhurst construction amounting to £775,374 as
shown in Note 11 to the accounts.
.
After taking into account the overheads of the Group, there was a loss
recorded for the year of £516,723 (2023: £843,626).
There will be no tax charge and the Company now has tax losses being carried
forward of £6,704,650 (2023: losses £6,296,440).
The loss per share during the year was (0.15p), (2023: loss per share 0.34p).
Directors' duties under S172
The Directors believe that, individually and together, they have acted in a
way that they have consider, in good faith, would be most likely to promote
the success of the Company for the benefit of its members as a whole, having
regard, amongst other things, to:
a. the likely consequences of any decision in the long term,
b. the interests of the Company's employees,
c. the need to foster the Company's business relationship with suppliers,
customers and others,
d. the impact of the Company's operations on the community and environment,
e. the desirability of the Company maintaining a reputation for high standards
of business conduct, and
f. the need to act fairly between members of the Company.
The Board of Directors is collectively responsible for formulating the
Company's strategy, which is to invest in property development but will also
consider other opportunities where those prospects will better deliver growth
to its shareholders as indicated by the RNS issued 29 May 2024 where the
directors are in early stage discussions with Ecap Esport Ltd for a potential
reverse takeover. Of course, the Board cannot predict the future but aims to
make decisions that it considers are in the best interest of all shareholders
at the time.
The Board engages with its stakeholders in a number of pre-planned ways, these
include; review meetings with our brokers and advisors, shareholders have the
ability to email the Company directly and the Board will reply to questions
within the regulatory limits, the Company issues RNS communications on a
regular basis and the Company's web site is continuously updated to inform our
stakeholders. The Company's annual report is also an opportunity to update our
stakeholders.
Our employees are one of the primary assets of our business and will be
critical to the future success of the Company. First and foremost, the
Directors strive to ensure a safe working environment for all its staff and
contractors, and we are proud of our safety achievements in 2023/24. We also
seek to reward employees with remuneration packages which align the interests
of the Company and its shareholders with those of the employees. Employees are
also provided with challenging work and external training opportunities to
ensure their continual development.
The Directors believe they have acted in the way they consider most likely to
promote the success of the Company for the benefit of its members as a whole,
as required by Section 172 (1) of the Companies Act 2006.
Key performance indicators (KPIs)
Management are closely involved in the day to day operations of the Group and
constantly monitor cashflows and expenditure. However, Management believe
the key indicators of performance for the Group are the revenue and
profitability achieved during the period together with the net liability
position. These measures are disclosed above in the operations review.
Development Pipeline & outlook
Shortly after the year end we acquired a new site in Tunbridge Wells at Talbot
Park for £490,000. We have submitted an application to demolish the existing
bungalow and build a scheme of detached houses, which should achieve in the
region of £950,000 each. We have no build costings as yet but expect to have
a decision on the planning by the end of September. It is Officer recommended
for approval. Once we have consent we will either be able to seek funding for
the build or dispose of the consented development. The initial cost of the
site was partly funded by CPF Limited with the balance through directors
loans.
Paul Treadaway
Paul Treadaway
CEO
24 September 2024
DIRECTORS' REPORT
The Directors present their Report and Audited Financial Statements for the
year ended 31 March 2024.
Results and dividends
The results for the year are set out on page 20.
The Directors do not recommend the payment of a final dividend for the year
(2023: nil).
Directors
The following Directors have held office since 1 April 2023 and have all
served for the entire accounting year: N A C Lott
P A Treadaway
G Thorneycroft
Dr P Challinor
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 2024, the
Directors have authorised no such conflicts or potential conflicts.
Directors' interests in the shares of the Company, including family interests,
at 31 March 2024 were as follows: -
Directors' interests in shares 31.03.2024 31.03.2023
Ordinary shares - 0.1p each Ordinary shares - 0.1p each
N Lott 50,000 50,000
P Treadaway 133,409,829 19,733,466
G Thorneycroft 23,327,273 600,000
31.03.2024 31.03.2023
Deferred shares - 0.9p each Deferred shares - 0.9p each
No. held No. held
N Lott 550,000 550,000
P Treadaway 10,648,466 10,648,466
Other substantial shareholdings
As at 23 September 2024, 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 Shareholdings
No. 0.1p %
Paul Arthur Treadaway 133,409,829 20.43
Forum Energy Services Limited 75,000,000 11.48
Peter Wylde 56,818,182 8.70
Gary Thorneycroft 23,327,273 3.57
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 International Financial
Reporting Standards adopted in the UK ("UK 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
implemented corporate governance procedures during the previous year and
continued to use these during the financial year to 31 March 2024. These
procedures are 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"). The Company has
decided to apply the QCA Corporate Governance Code ("QCA Code") issued by the
QCA in 2023 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. The Board has considered the
Streamlined Energy and Carbon Reporting requirements and conclude that the
Group has not consumed more than 40,000 kWh of energy and therefore qualifies
as a low energy user and is exempt from reporting under these regulations.
Board Structure
The Board consists of four Directors (2023: four) of which three are executive
and one non-executive, two executive and one non-executive directors 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 quarter 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 and also addressed in note 18.
Future Developments
Information relating to future developments is included in the Strategic
Report on pages 4-7.
Post Balance Sheet Events
As stated in the announcement by the Group on 29 May 2024 we are in
discussions with parties relating to a potential reverse takeover, non-binding
heads of terms have been signed. These discussions continue and further
announcements will be made in due course. A further announcement on 03 June
2024 stated that Ecap Esports Ltd had agreed to loan the Company the sum of
£250,000, the proceeds of which will be ring fenced to cover costs associated
with the proposed reverse takeover, should the transaction not occur. As
announced in March 2024 Mr C Johnson introduced £99,550 into Trafalgar by way
of a loan being the consideration he received for the 2022 Conversion Shares.
In return, Trafalgar will issue Mr C Johnson with a new, nil coupon, unsecured
convertible loan note (the "2024 CLN"). The 2024 CLN will be convertible in
full into 226,250,000 Ordinary Shares at £0.00044 per ordinary share ("2024
CLN Exercise Price") and can be converted at any time by Mr C Johnson, subject
inter alia to his entire holding being less than 29.99 per cent of the voting
rights in issue in the Company. At the date of these financial statements this
CLN has not yet been signed.
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 needed 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, 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
Paul Treadaway
Director
24 September 2024
Trafalgar Property Group Plc
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TRAFALGAR PROPERTY GROUP PLC
for the year ended 31 March 2024
To the Members of Trafalgar Property Group plc
For the purpose of this report, the terms "we" and "our" denote MHA in
relation to UK legal, professional and regulatory responsibilities and
reporting obligations to the members of Trafalgar Property Group plc. For the
purposes of the table on pages 13 to 15 that sets out the key audit matters
and how our audit addressed the key audit matters, the terms "we" and "our"
refer to MHA. The Group financial statements, as defined below, consolidate
the accounts of Trafalgar Property Group plc and its subsidiaries (the
"Group"). The "Parent Company" is defined as Trafalgar Property Group plc, as
an individual entity. The relevant legislation governing the Company is the
United Kingdom Companies Act 2006 ("Companies Act 2006").
Opinion
We have audited the financial statements of Trafalgar Property Group plc for
the year ended 31 March 2024.
The financial statements that we have audited comprise:
· the Consolidated Statement of Comprehensive Income
· the Consolidated Statement of Financial Position
· the Consolidated Statement of Changes in Equity
· the Consolidated Statement of Cash Flows
· Notes 1 to 20 to the consolidated financial statements, including
significant accounting policies
· the Company Balance Sheet
· the Company Statement of Changes in Equity and
· Notes 1 to 15 to the Company financial statements, including
significant accounting policies.
The financial reporting framework that has been applied in the preparation of
the Group financial statements is applicable law and International Financial
Reporting Standards adopted in the United Kingdom ("UK adopted IFRS"). 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 2024 and of
the Group's loss for the year then ended;
· the Group financial statements have been properly prepared in
accordance United Kingdom adopted International Financial Reporting Standards
(UK Adopted IFRS);
· 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.
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 Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the
Group 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 other
ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material uncertainty related to going concern
We draw your attention to Note 3a Going Concern section in the financial
statements which states that the Group incurred substantial losses during the
year and there was continued requirement for successful future equity or debt
fund raising. The impact of this together with other matters set out in the
note, indicate a material uncertainty 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.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Our evaluation of the Directors' assessment of the Group's and the Parent
Company's ability to continue to adopt the going concern basis of accounting
included:
· The consideration of inherent risks to the Group's and Parent
company's operations and specifically their business model.
· The evaluation of how those risks might impact on the Group's and
Parent company's available financial resources.
· Review of the mathematical accuracy of the cashflow forecast
model prepared by management and corroboration of key data inputs to
supporting documentation for consistency of assumptions used with our
knowledge obtained during the audit.
· Challenging management for reasonableness of assumptions in
respect of the timing and quantum of cash receipts and payments included in
the cash flow model.
· Where additional resources may be required, the reasonableness
and practicality of the assumptions made by the Directors when assessing the
probability and likelihood of those resources becoming available.
· Holding discussions with management regarding future financing
plans, corroborating these where necessary and assessing the impact on the
cash flow forecast.
· Evaluating the accuracy of historical forecasts against actual
results to ascertain the accuracy of management's forecasts.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Overview of our audit approach
Scope Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group's system of internal control, and assessing
the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the directors that may have
represented a risk of material misstatement.
The Group consists of seven reporting components, of which two were considered
to be significant components: Trafalgar Property Group plc and Trafalgar New
Homes Limited. The significant components were subjected to full scope audits
for the purposes of our audit report on the Group financial statements.
Significant components were determined based on:
1) financial significance of the component to the Group as a whole, and
2) assessment of the risk of material misstatements applicable to each
component.
We undertook specified audit procedures on the material balances and
transactions in the year on a further 3 of the components: Trafalgar
Retirement+ Limited, Selmat Limited and Combe House (Borough Green) Ltd.
Analytical procedures were undertaken on the two remaining components: Life
Hydroponics Limited and Combe Bank (Oakhurst) Ltd.
Our audit scope results in all major operations of the Group being subject to
audit work.
Overall Materiality 2024 2023
Group £28,000 £26,400 1% of net liabilities (2023: 2% of gross assets)
Parent Company £4,900 £19,600 2% of gross liabilities (2023: 2% of gross liabilities)
Key audit matters
Recurring · Undisclosed related party transactions
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. 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. In
addition to the matter described in the Material Uncertainty related to going
concern section, we have determined the matters described below to be the key
audit matters to be communicated in our report.
Undisclosed related party transactions
Key audit The Group enters into a significant number of transactions with related
parties, both intra-group transactions and with individuals related to the
matter description Group.
There is a risk that transactions (particularly any transactions which are not
at arm's length) and balances with related parties are undisclosed or
misclassified.
How the scope of our audit responded to the key audit matter Our audit work in this area included the following procedures:
· Identifying the susceptibility of the financial statements to
material misstatements from related party transactions and relationships.
· Obtaining management's record of related parties - who they are,
the nature of these relationships, whether any related party transactions have
been entered into in the year and the nature of those transactions.
· We performed independent searches of the Board of Directors'
other appointments and shareholdings and to identify any counterparties on the
list which were not included in the related party disclosures.
· We reviewed the movement on these balances during the year and
vouched items to supporting evidence.
· We reviewed the minutes of meetings of the board of directors to
identify any undisclosed related party relationships.
· We discussed with management the nature and purpose of these
items and considered whether disclosure sufficiently addressed these matters.
· In addition, we obtained written confirmation of the balances
from all disclosed parties and confirmed key terms to agreements.
Key observations
Nothing has come to our attention which indicates that related party
transactions and balances are incomplete.
Our application of materiality
Our definition of materiality considers the value of error or omission on the
financial statements that, individually or in aggregate, would change or
influence the economic decision of a reasonably knowledgeable user of those
financial statements. Misstatements below these levels will not necessarily
be evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole. Materiality is
used in planning the scope of our work, executing that work and evaluating the
results.
Performance materiality is the application of materiality at the individual
account or balance level, set at an amount to reduce, to an appropriately low
level, the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole.
The determination of performance materiality reflects our assessment of the
risk of undetected errors existing, the nature of the systems and controls and
the level of misstatements arising in previous audits.
Based on our professional judgement, we determined materiality for the
financial statements as a whole as follows:
Group financial statements Parent Company financial statements
Overall materiality £28,000 (2023: £26,400) £4,900 (2023: £19,600)
How we determined it 1% of net liabilities (2023: 2% of gross assets) 2% of gross liabilities (2023: 2% of gross liabilities)
Rationale for the benchmark applied Given the Group have liquidated the majority of its cash generating assets and The Parent Company is largely a holding company incurring limited costs and
the Parent Company actively pursuing a potential future Reverse Takeover, we financing the group. As a result of historic losses and the impairment of
now deem the net liability position of the Group to be the main measure by investments, we have considered gross liabilities as the most appropriate
which the users of the financial statements assess the prospects and success benchmark for materiality.
of the Group. Therefore, we consider this to be the most appropriate benchmark
for Group materiality.
Performance materiality £16,800 (2023: £15,840) which represents 60% (2023: 60%) of overall £2,940 (2023: £11,760) which represents 60% (2023: 60%) of overall
materiality. materiality.
We agreed to report any corrected or uncorrected adjustments exceeding £1,400
(2023: £1,320) for the Group and £245 (2023: £980) for the Parent Company
respectively to the Board of Directors as well as differences below this
threshold that, in our view, warranted reporting on qualitative grounds.
Overview of the scope of the Group and Parent Company audits
Our assessment of audit risk, evaluation of materiality and our determination
of performance materiality sets our audit scope for each company within the
Group. Taken together, this enables us to form an opinion on the consolidated
financial statements. This assessment takes into account the size, risk
profile, changes in the business environment and other factors when assessing
the level of work to be performed at each component.
The Group consists of 7 components, all of which are based in the UK and
audited by the Group audit team.
Number of components Revenue Total assets Total liabilities Loss before tax
Full scope audit 2 N/A 96% 79% 85%
Specified Procedures 3 N/A 4% 21% 15%
Analytical Review 2 N/A 0% 0% 0%
Total 7 N/A 100% 100% 100%
The control environment
We evaluated the design and implementation of those internal controls of the
Group, including the Parent Company, which are relevant to our audit, such as
those relating to the financial reporting cycle.
Reporting on other information
The other information comprises the information included in the annual report
other than the financial
statements and our auditor's report thereon. The Directors are responsible for
the other information contained within the annual report. Our opinion on 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. 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 course of 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 this gives rise to a
material misstatement in the financial statements themselves. 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.
We have nothing to report in this regard.
Strategic report and directors' report
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.
In the light of the knowledge and understanding of the Group and the Parent
Company and their environment obtained in the course of the audit, we have not
identified material misstatements in the Strategic report or the Directors'
report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our
opinion:
· adequate accounting records have not been kept by the Parent
company, or returns adequate 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.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, as set
out on page x, 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 Group's and the Parent 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 Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor 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 financial statements is
located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud.
These audit procedures were designed to provide reasonable assurance that the
financial statements were free from fraud or error. The risk of not detecting
a material misstatement due to fraud is higher than the risk of not detecting
one resulting from error and detecting irregularities that result from fraud
is inherently more difficult than detecting those that result from error, as
fraud may involve collusion, deliberate concealment, forgery or intentional
misrepresentations. Also, the further removed non-compliance with laws and
regulations is from events and transactions reflected in the financial
statements, the less likely we would become aware of it.
Identifying and assessing potential risks arising from irregularities,
including fraud
The extent of the procedures undertaken to identify and assess the risks of
material misstatement in respect of irregularities, including fraud, included
the following:
· We considered the nature of the industry and sector, the control
environment, business performance including remuneration policies and the
Group's, including the Parent Company's, own risk assessment that
irregularities might occur as a result of fraud or error. From our sector
experience and through discussion with the directors, we obtained an
understanding of the legal and regulatory frameworks applicable to the Group
focusing on laws and regulations that could reasonably be expected to have a
direct material effect on the financial statements, such as provisions of the
Companies Act 2006, UK tax legislation or those that had a fundamental effect
on the operations of the Group.
· We enquired of the directors and management concerning the
Group's and the Parent Company's policies and procedures relating to:
- identifying, evaluating and complying with the laws and regulations
and whether they were aware of any instances of non-compliance;
- detecting and responding to the risks of fraud and whether they had
any knowledge of actual or suspected fraud; and
- the internal controls established to mitigate risks related to fraud
or non-compliance with laws and regulations.
· We discussed among the engagement team regarding how and where
fraud might occur in the financial statements and any potential indicators of
fraud.
· We assessed the susceptibility of the financial statements to
material misstatement, including how fraud might occur by evaluating
management's incentives and opportunities for manipulation of the financial
statements. This included utilising the spectrum of inherent risk and an
evaluation of the risk of management override of controls. We determined that
the principal risks were related to posting inappropriate journal entries to
increase revenue or reduce costs, creating fictitious transactions to hide
losses or to improve financial performance, and management bias in any
accounting estimates.
Audit response to risks identified
In respect of the above procedures:
· we corroborated the results of our enquiries through our review
of the minutes of the Group's and the Parent Company's board meetings and
enquiries of management regarding any ongoing legal cases;
· audit procedures performed by the engagement team in connection
with the risks identified included:
- We have undertaken a review of minutes of meetings of those charged
with governance.
- Performing audit work over the risk of management override of
controls, including testing of journal entries and other adjustments for
appropriateness, evaluating the business rationale of significant transactions
outside the normal course of business, and reviewing accounting estimates for
bias.
- Reviewing financial statement disclosures and testing to supporting
documentation to assess compliance with applicable laws and regulations.
- Challenging assumptions and judgements made by management in their
significant accounting estimates.
· the Senior Statutory Auditor considered the experience and
expertise of the engagement team to ensure that the team had the appropriate
competence and capabilities; and
· we communicated relevant laws and regulations and potential fraud
risks to all engagement team members and remained alert to any indications of
fraud or non-compliance with laws and regulations throughout the audit.
Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent
Company's members as a body, for our audit work, for this report, or for the
opinions we have formed.
Simon Knibbs MA FCA (Senior Statutory Auditor)
for and on behalf of MHA, Statutory Auditor
London, United Kingdom
24 September 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability
partnership in England and Wales (registered number OC312313)
Year Year
ended ended
31 March 2024 31 March 2023
Note £ £
Revenue 1 - 18,183
-
Cost of sales 2 78 (30,900)
Gross profit/(loss) 78
(12,717)
Administrative expenses 2 (379,626)
(571,928)
Fair value movement on investment property 8 - (122,751)
(Loss) on disposal of investment property 8 - (12,382)
Impairment of assets 7 (25,000) -
Operating loss before interest 2 (404,548) (719,778)
Other income 17,158 -
Interest payable and similar charges 4 (129,333) (123,848)
Loss before taxation (516,723) (843,626)
-
Income tax 5 -
(516,723) (843,626)
Loss after taxation for the year attributable to equity holders of the parent
Other comprehensive income attributable to equity holders of the parent - -
(516,723) (843,626)
Total comprehensive loss for the year
Loss attributable to:
Equity holders of the Parent (516,723) (843,626)
Total comprehensive loss for the year attributable to:
Equity holders of the Parent (516,723) (843,626)
(LOSS) PER ORDINARY SHARE: Basic/diluted (0.15)p (0.34) p
6
All results in the current and preceding financial year derive from continuing
operations.
The notes on pages 31 to 42 are an integral part of these consolidated
financial statements.
As at As at
Note 31 March 2024 31 March 2023
£ £
TOTAL ASSETS
Non-current assets
Plant and equipment 7 640 25,853
640 25,853
Current assets
Inventory 11 775,374 317,796
Investment Properties 8 - 927,249
Trade and other receivables 9 79,576 34,033
Cash and cash equivalents 10 8,906 17,148
863,856 1,296,226
Total assets 864,496 1,322,079
EQUITIES & LIABILITIES
Current liabilities
Trade and other payables 12 285,614 222,863
Borrowings 13 - 874,697
285,614 1,097,560
Non-current liabilities
Deferred tax 5 - -
Borrowings 13 3,415,728 3,573,217
3,415,728 3,573,217
Total liabilities 3,701,342 4,670,777
Net liabilities (2,836,846) (3,348,698)
Called up share capital 14 3,237,400 2,860,150
Share premium 4,136,240 3,484,915
Reverse acquisition reserve (2,817,633) (2,817,633)
Loan note equity reserve 14 & 16 - 107,204
Capital contribution reserve 17 400,147 400,147
Profit & loss account (7,793,000) (7,383,481)
Total Equity (2,836,846) (3,348,698)
Total Equity & Liabilities 864,496 1,322,079
These financial statements were approved by the Board of Directors and
authorised for issue on 24 September 2024 and are signed on its behalf by:
P Treadaway: … Paul Treadaway.………… G Thorneycroft: … Gary
Thorneycroft………………
Share Share Loan Note Reverse Profit Capital Total
Capital Premium Equity acquisition & loss Contribution Equity
Reserve reserve account Reserve
£ £ £ £ £ £ £
At 1 April 2022 2,726,817 3,250,249 30,303 (2,817,633) (6,620,120) 157,777 (3,272,607)
Loss for the year - - - - (843,626) - (843,626)
Total comprehensive income for the year - - - - (843,626) (843,626)
-
- - 76,901 - 80,165 - 157,066
Loan note equity reserve
Capital Contribution during the period - - - - - 242,370 242,370
Shares issued during the year net of costs 133,333 234,666 - - 100 - 368,099
At 31 March 2023 3,484,915 107,204 (2,817,633) (7,383,481) 400,147 (3,348,698)
2,860,150
At 1 April 2023 2,860,150 3,484,915 107,204 (2,817,633) (7,383,481) 400,147 (3,348,698)
Loss for the year - - - - (516,723) (516,723)
-
Total comprehensive income for the year - - - - (516,723) (516,723)
-
Loan Note Equity Reserve (107,204) 107,204 -
Shares issued during the year on conversion of loan notes 226,250 678,750 905,000
Shares issued during the year net of costs 151,000 (27,425) - - - 123,575
At 31 March 2024 3,237,400 4,136,240 - (2,817,633) (7,793,000) (2,836,846)
400,147
The reverse acquisition reserve was created in accordance with IFRS3 'Business
Combinations'. The reserve relates to a reverse acquisition between the
Company and Combe Bank Homes Ltd (CBH) on 11/11/2011 via a share for share
exchange. This reserve arises as a result of the elimination of the Plc's
investment in CBH resulting in the shareholders of PLC becoming majority
shareholders in the enlarged group.
Retained profit/(losses) are the cumulative net gains and losses less
distributions made and items of other comprehensive income not accumulated in
another separate reserve.
Loan note equity reserve relates to the equity portion of the convertible loan
notes and is the amount that has been provided for in respect of the
difference between the cash value and the liability element of the loan notes.
The remaining balance has been reversed following the conversion of the Loan
Note during the year (2023: adjustment of £76,901)
Capital contribution reserve arises due to amounts waived in respect of
previously accrued interest on shareholders or related party loan accounts.
Capital contribution reserves are shown in note 17.
Further details of shares issues in the year are shown in note 14.
The notes on pages 31 to 42 are an integral part of these consolidated
financial statements.
2024 2023
£ £
Cash flow from operating activities
(Loss) after taxation (516,723) (843,626)
Depreciation 213 284
(Increase) in inventory (457,578) (321,889)
Decrease/(Increase) in receivables (45,543) 6,467
Increase in payables 62,751 95,001
Loss on disposal - 12,382
Inventory written-off - 29,750
Property revaluation - 122,751
Loan note equity movement (107,204) 157,066
Impairment of plant and equipment 25,000 -
Interest payable and similar charges 129,333 123,848
Net cash outflow from operating activities (909,751) (617,966)
Investing activities:
Disposal of investment property 927,249 649,618
Purchase of equipment - (25,000)
927,249 624,618
Financing activities:
Issue of shares (net of costs) 1,028,575 368,100
New loan borrowings 741,975 105,116
Repaid loan borrowings (1,066,530) (270,191)
Related party new loan borrowing 264,100 188,153
Related party loan repayment (971,731) (259,752)
Repayment of other borrowings - (90,000)
Interest paid (22,129) (43,683)
Net cash (outflow) from financing (25,740) (2,257)
(Decrease)/increase in cash and cash equivalents in the year (8,242) 4,395
Cash and cash equivalents at the beginning of the year 17,148 12,753
Cash and cash equivalents at the end of the year 8,906 17,148
The notes on pages 31 to 42 are an integral part of these consolidated
financial statements.
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 domiciled and incorporated in England and
Wales. (Company number is 04340125). The Company's registered office is
Chequers Barn, Chequers Hill, 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 4-7.
BASIS OF PREPARATION
The Group financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted in the United Kingdom
("UK adopted IFRS") and those parts of the Companies Act 2006 that are
relevant to companies which report in accordance with IFRS. These financial
statements are for the year ended 31 March 2024 and are presented in pounds
sterling ("GBP") rounded to the nearest pound. The comparative year is for the
year to 31 March 2023.
The financial statements have been prepared under the historical cost
convention and on an accrual method of accounting, except for certain
financial assets and liabilities which are measured at fair value as explained
in the accounting policies below.
AUDIT EXEMPTION OF SUBSIDIARIES
The following subsidiaries are exempt from the requirements of the UK
Companies Act 2006 relating to the audit of individual accounts by virtue of
s479A of the Act.
Company
name
Registered number
Trafalgar New Homes
Ltd
06003791
Trafalgar Retirement+
Ltd
10431083
Selmat Ltd
09428992
Combe Homes (Borough Green) Ltd
08965850
Combe Bank Homes (Oakhurst) Ltd
07532693
Life Hydroponic Assets
Ltd
14437592
The outstanding liabilities at 31 March 2024 of the above named subsidiaries
have been guaranteed by the Company pursuant to s479AC of the Act. In the
opinion of the directors, the possibility of the guarantees being called upon
is remote.
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.
During the year the Company raised £125,000 before costs for working capital
purposes by way of an issue of 125,000,000 shares at 0.1p per share, issued
26,000,000 shares at 0.1p to settle outstanding creditor balances and
crystalised the 2022 CLN with Mr C Johnson by way of an issue of 226,250,000
shares at 0.4p per share.
The total amount of loans remaining in the Group following the sale of the
investment property during the year amounts to £3,415,728 (2023 -
£4,447,914) as shown in note 13. Of the balance of the loans remaining
outstanding of £3,415,728, a sum of £2,219,818 relates to loans owed to Mr C
Johnson, plus connected parties, a director of subsidiary companies. The
balance of amounts owed were to independent third parties.
The Group continues to utilise banking and other financial institution sources
for the financing of its developments, together with significant loans from
third party investors as stated in note 13, which is after the disposal of its
investment properties, to ensure that there is sufficient money available for
the Group to undertake and complete its various developments.
The Group does not operate an overdraft facility but borrow on a site specific
basis from various bankers or financial institutions, 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. Mr C Johnson has confirmed that he
will provide necessary funding to the subsidiary companies as and when
required over the next twelve months, should it be required.
The Board is comfortable with the structure of its finances, which usually
involves borrowing a modest sum towards the land purchase for the modest sized
residential development schemes, with Mr C Johnson or 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 or financial institution to provide 100%
of the build finance.
We have submitted an application to demolish the existing bungalow and build a
scheme of detached houses at the Talbot Park site, acquired shortly after the
year end, which should achieve in the region of £950,000 each. We have no
build costings as yet but expect to have a decision on the planning by the end
of September. It is Officer recommended for approval. Once we have consent we
will either be able to seek funding for the build or dispose of the consented
development. This project is expected to make additional funds available to
the group.
The board are also continuing to consider a reverse takeover as stated in note
20 and have taken a loan from the target company to cover any abort fees
should the deal not complete.
However, given that a degree of uncertainty exists in the timing of future
sales, the Company's ability to raise further funds through share placements
and the potential reliance on further funding been provided by the directors,
there exists a material uncertainty that may cast significant doubt on the
Group's ability to continue as a going concern.
REVENUE RECOGNITION
Revenue represents the amounts receivable from the investment in residential
property during the year and other income directly associated with property
development. This will take the form of rental income and sales of investment
property.
Rental income is recognized at the point of receipt being the contractual date
in accordance with the tenancy agreements.
Revenue from customers arising from the sales of development property are
recognized at the transaction price which reflects the amount of consideration
that is expected to be received and is recognized at a point in time when
ownership passes to the customer, which in the majority of cases is the point
of legal completion of the property sale
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 following new standards or amendments to existing standards were
applicable for the first time and have not had an impact on the financial
statements.
New standards, interpretations and amendments:
Amendments to IAS 21 - Lack of Exchangeability
(issued August 2023)
The amendment is effective for financial years beginning on or after 1 January
2025.
Amendment to IFRS 9 and IFRS 7 - Classification and Measurement of
Financial Instruments
(issued May 2024)
The amendment is effective for financial years beginning on or after 1 January
2026.
IFRS 18 Presentation and Disclosure in Financial Statements
(issued April 2024)
This is the new standard on presentation and disclosure in financial
statements, with a focus on updates to the statement of profit or loss. The
key new concepts introduced in IFRS 18 relate to:
· the structure of the statement of profit or loss;
· required disclosures in the financial statements for certain
profit or loss performance measures that are reported outside an entity's
financial statements (that is, management-defined performance measures); and
· enhanced principles on aggregation and disaggregation which apply
to the primary financial statements and notes in general.
The amendment is effective for financial years beginning on or after 1 January
2027.
IFRS 19 Subsidiaries without Public Accountability: Disclosures
(issued May 2024)
The amendment is effective for financial years beginning on or after 1 January
2027.
The Group does not expect a material impact on its consolidated financial
statements form these standards.
Adoption of the following standards does not have an impact on the
consolidated financial statement of the Group:
Amendment to IAS 7 and IFRS 7 - Supplier finance
(issued May 2023)
The amendment is effective for financial years beginning on or after 1 January
2024
The Group considers there will be no material impact on its consolidated
financial statements from these amendments.
Amendments to IFRS 16, Lease liability in a Sale and Leaseback
The amendment is effective for financial years beginning on or after 1 January
2024
The Group considers there will be no impact on its consolidated financial
statements from these amendments.
Amendments to IAS 1 Presentation of Financial Statements: Classification of
Liabilities as Current or Non-current (issued January 2020)
The amendment is effective for financial years beginning on or after 1 January
2024 and has not yet been adopted for use in the United Kingdom.
The Group does not expect a material impact on its consolidated financial
statements from these amendments.
Amendments to IAS 1 and IFRS Practice Statement - Disclosure of Accounting
policies (issued in February 2021)
The amendments enhance the disclosure requirements relating to an entity's
accounting policies and clarify that the notes to a complete set of financial
statements are required to include material accounting policy information.
Material accounting policy information, when considered with other information
included in the financial statements, can reasonably be expected to influence
decisions that the primary users of financial statements make on the basis of
the financial statements. The amendments help preparers determine what
constitutes material accounting policy information and notes that accounting
policy information which focuses on how IFRS has been applied to its own
circumstances is more useful for users of financial statements than
standardised information or information duplicating the requirements of IFRS.
The amendment also states that immaterial accounting policy information need
not be disclosed but when it is disclosed it shall not obscure material
accounting policy information. Further, if accounting policy information is
not deemed material this does not affect the materiality of related disclosure
requirements of IFRS.
The disclosure of judgements made in applying accounting policies should
reflect those that have had the most significant effect on items recognised in
the financial statements.
The amendment is effective for financial years beginning on or after 1 January
2023 and has not yet been adopted for use in the United Kingdom.
The Group does not expect a material impact on its consolidated financial
statements from these amendments.
Amendments to IAS 8 - Definition of Accounting Estimates (issued in February
2021)
The amendments introduce a new definition of accounting estimates and also
clarify the distinction between changes in accounting estimates, changes in
accounting policies and the correction of errors.
The amendment is effective for financial years beginning on or after 1 January
2023 and has not yet been adopted for use in the United Kingdom.
The Group does not expect a material impact on its consolidated financial
statements from these amendments.
Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising
from a Single Transaction (issued 7 May 2021)
The amendments specify how companies should account for deferred tax on
transactions such as leases and decommissioning obligations.
In specified circumstances, companies are exempt from recognising deferred tax
when they recognise assets or liabilities for the first time. Previously,
there had been some uncertainty about whether the exemption applied to
transactions such as leases and decommissioning obligations-transactions for
which companies recognise both an asset and a liability.
The amendments clarify that the exemption does not apply and that companies
are required to recognise deferred tax on such transactions. The aim of the
amendments is to reduce diversity in the reporting of deferred tax on leases
and decommissioning obligations.
The amendments are effective for financial years beginning on or after 1
January 2023 and have not yet been adopted for use in the United Kingdom.
The Group does not expect a material impact on its consolidated financial
statements from these amendments.
Business Combination
On the acquisition of a subsidiary, the business combination is accounted for
using the acquisition method. The cost of an acquisition is measured as the
aggregated amount of the fair value of the consideration transferred, measured
at the date of acquisition. The consideration paid is allocated to the assets
acquired and liabilities (including contingent liabilities) assumed on the
basis of fair values at the date of acquisition. Acquisition costs are
expensed when incurred and included in general and administrative expenses.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of
the company 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.
When the Group ceases to have control or significant influence, any retained
interest in the entity is re measured 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 Company:
· 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.
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 profit or loss 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, including trade and other receivables, are
initially recognized at the transaction price and subsequently measured at
amortised cost using the effective interest rate method.
Trade payables
Trade payables are initially measured at fair value and are subsequently
measured at amortised cost, using the effective interest rate method.
Convertible loan notes
Convertible loan notes are regarded as compound instruments, consisting of a
liability component and an equity component. At the date of issue, the fair
value of the liability component is estimated using the prevailing market
interest rate for similar non-convertible debt. The difference between the
proceeds of issue of the convertible loan notes and the fair value assigned to
the liability component, representing the embedded option to convert the
liability into equity of the Group, is included in equity. Issue costs are
apportioned between the liability and equity components of the convertible
loan notes based on their relative carrying amounts at the date of issue. The
portion relating to the equity component is charged directly against equity.
The interest expense on the liability component is calculated by applying the
prevailing market interest rate for similar non-convertible debt to the
liability component of the instrument. The difference between this amount and
the interest paid is added to the carrying amount of the convertible loan
note.
Share capital
Ordinary share capital is classified as equity. Interim ordinary dividends are
recognised when paid and final ordinary dividends are recognised when they are
authorized and are no longer at the discretion of the entity and as a
liability in the year in which they are approved.
Deferred shares were created as part of a subdivision of shares but carry no
voting rights and no right to participate in the profits of the company.
Impairment of financial assets
IFRS 9 offers two approaches for measuring and recognizing the loss allowance:
General and Simplified. The general approach should be applied for all
financial assets subject to impairment, except for trade receivables or
contract assets (IFRS 15) without significant financing component, for these
assets simplified approach should be applied. The Group's financial
instruments measured at amortised cost falling within the scope of the
standard are (i) trade and other receivables and (ii) cash and cash
equivalents. While cash and cash equivalents are also subject to the
impairment requirements of IFRS 9, the identified impairment loss was
immaterial.
Financial liabilities:
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 de-recognise 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 the original acquisition of land for development,
including costs associated with planning, and 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, less accumulated
depreciation and accumulated 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
Any gain or loss on disposal of an item of property, plant and equipment is
recognised in profit or loss.
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."
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 inventory at the year end. All other borrowing costs are recognised
in the profit or loss 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 and tax laws
that have been enacted or substantively enacted at 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 and tax laws that have been
enacted or substantively enacted at the reporting date 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.
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 law & United
Kingdom adopted International Financial Reporting Standards (UK adopted IFRS)
and IFRS in conformity with the requirements of the Companies Act 2006
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 written down amount is recognised immediately
in profit or loss. The assessment requires the use of judgment and
estimates. The carrying amount of inventory is disclosed in note 11 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 assets recoverable amount is
estimated in order to determine the extent of the impairment loss (if any).
The recoverable amount is the higher of (a) fair value less costs to sell and
(b) value in use.
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.
At the year end there were no intangible assets held by the company.
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.
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 is that of a regional property developer
focused upon Kent, Surrey, Sussex and the M25 ring south of London together
with investment in residential property.
Based on the above considerations, the Directors' consider there to be one
reportable geographical segment which is in the UK 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. Therefore, no
segmental reporting is required.
Revenue
An analysis of revenue is as follows:
2024 2023
£ £
The Group's revenue, which is all attributable to their principal
activity, can be shown as follows:
Rental Income - 18,183
18,183
2024 2023
£ £
Timing of Revenue are as follows:
Rental income transferred over time - 18,183
18,183
2024 2023
£ £
Revenues analysed by geographic location are as follows:
United Kingdom - 18,183
2. LOSS FOR THE YEAR
Operating loss is stated after charging/(crediting) the following:
2023 2022
£ £
Subcontractor costs and cost of inventories recognised as an expense (78) 1,150
Write-off of Inventory - 29,750
(78) 30,900
Impairment of assets 25,000 -
Depreciation of property, plant and equipment 213 284
Auditor's remuneration - audit services - Group 50,000 31,750
Auditor's remuneration - other assurance services - Group - 4,750
50,000 36,500
Operating expenses by nature:
Employee expenses 104,433 228,184
Depreciation 213 284
Legal and professional fees 205,635 217,886
Management Fees - 78,591
Office rent and associated costs 19,705 19,740
Insurance 11,299 9,835
Mortgage redemption costs 20,511 10,187
Other expenses 17,830 7,221
379,626 571,928
The Group incurred direct operating expenses totalling £3,637 (2023: £8,033)
which did not generate any rental income in the year
3. EMPLOYEES AND DIRECTORS' REMUNERATION
Staff costs during the year were as follows:
2024 2023
£ £
Wages and salaries 78,000 185,567
Social security costs 8,943 20,627
Other pension costs 17,490 21,990
104,433 228,184
The average number of employees of the Group during the year was:
2024 2023
Number Number
Directors 4 6
Mr C Johnson and Mr A Johnson are directors of subsidiary entities
Management 1 1
Directors Remuneration was as follows:
2024 2023
£ £
- Emoluments for qualifying services J Dubois - 8,333
- Emoluments for qualifying services A Johnson (director of subsidiary entity) 60,000 60,000
- Emoluments for qualifying services P Treadaway - 50,000
- Emoluments for qualifying services P Challinor - 6,731
- Emoluments for qualifying services N Lott - 3,333
- Emoluments for qualifying services G Thorneycroft - 39,169
60,000 167,566
Highest paid director - gross salary including company pension contributions
was £60,000 (2023 - £61,800)
There are retirement benefits accruing to Mr C Johnson (director of subsidiary
entities) for whom a Company contribution was paid during the year of £16,800
(2023: £18,000), Mr A Johnson (director of subsidiary entities) £1,800(2023:
£1,800) and Mr G Thorneycroft £Nil (2023: £1,500).
4. INTEREST PAYABLE AND SIMILAR CHARGES
For sites where the construction had been completed, the bank loan interest
paid during the year on these sites of £nil (2023: £920) has been accounted
for in the profit & loss within cost of sales. Total interest in the year
of £129,333 (2023: £86,451) has been paid and accrued on general funding
loans, loan notes and on rental property mortgage loan plus an adjustment for
the loan note equity reserve due to the CLN being converted at the year end.
Further details are provided in notes 13 and 15.
2024 2023
£ £
Mr C Johnson -
DFM Pension Scheme (pension scheme for J Dubois (former director)) - 1,559
G Howard 10,000 10,000
C Rowe - 584
Mrs S Johnson - 198
Loan notes - Mr C Johnson 107,204 80,165
Paragon mortgage 11,424 30,422
Bank loan 705 920
129,333 123,848
5. TAXATION
2024 2023
£ £
Current tax - -
Tax charge - -
UK corporation tax rate has been reviewed upward to 25% effective April 2023
2024 2023
£ £
Loss on ordinary activities before tax (516,723) (843,626)
Based on (loss) for the year:
Tax at 19% (2022: 19%) (98,177) (160,289)
Unrelieved tax losses -
Impairment -
Tax losses carried forward 98,177 160,289
Tax charge for the year - -
Deferred tax
No deferred tax assets have been provided in respect of property revaluation
as there are historical losses upon which to offset. As at the 31 March
2024, the Group had cumulative tax losses of £6,704,650 (2022:
£6,296,440) that are available to offset against future taxable profits of
the same trade.
2024 2023
£ £
Fair value movement on property revaluation - (122,751)
Tax at 19% - (23,323)
Tax losses available - 23,323
Deferred tax for the year - -
The UK Government announced in the 2021 budget that from 1 April 2023, the
rate of corporation tax in the United Kingdom will increase from 19% to 25%.
Companies with profits of £50,000 or less will continue to be taxed at 19%,
which is a new small profits rate. Where taxable profits are between £50,000
and £250,000, the higher 25% rate will apply
but with a marginal relief applying as profits. UK corporation tax rate has
been reviewed by the Group as a result of this changes.
6. (LOSS) PER ORDINARY SHARE
The calculation of (loss)/profit per ordinary share is based on the following
(losses) and the number of shares used should be that retrospectively adjusted
for the effect of consolidation:
2024 2023
£ £
(Loss) for the year (516,723) (843,626)
Weighted average number of shares for basic (loss) per share 354,915,789 249,525,835
Weighted average number of shares for diluted (loss) per share 354,915,789 249,525,835
(Loss) per Ordinary Share:
Basic (0.15)p (0.34)p
Diluted (0.15)p (0.34)p
7. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment 2024 2023
£ £
Cost
At 1 April 32,790 7,790
Additions - 25,000
Impairment (25,000) -
At 31 March 7,790 32,790
Depreciation
At 1 April 6,937 6,653
Charge for the year 213 284
At 31 March 7,150 6,937
Net book value at 31 March 640 25,853
The impaired asset related to the hydroponic equipment held in Life Hydroponic
Assets Ltd. The directors considered that as the company had not commenced to
trade and the technology in the hydroponic space was forever changing that the
asset would now unlikely be able to attract any proceeds should it be
necessary for it to be sold. The corresponding creditor balance of £18,333
that remained outstanding was also written off from trade creditors.
8. CURRENT ASSET: INVESTMENT PROPERTIES
2024 2023
FAIR VALUE £ £
As at 01 April 927,249 1,712,000
Additions - -
Disposals (927,249) (662,000)
Fair Valuation Adjustment - (122,751)
31 March - 927,249
NET BOOK VALUE
As at 31 March - 927,249
Fair Value at 31 March is represented by:
Revaluation in 2024 (2023: at revalued amount) - 927,249
Loss on Disposal:
Fair value 927,249 662,000
Disposal proceeds (net of costs) 927,249 649,618
Loss on Disposal - 12,382
In 2023, fair value has been assessed by using level 3 fair value hierarchy
and using the selling price achieved following the sale of the remaining
asset in September 2023.
9. TRADE AND OTHER RECEIVABLES
2024 2023
£ £
Other receivables 39,269 2,300
Other taxes 13,467 9,457
Prepayments 26,840 22,276
79,576 34,033
No IFRS9 provision has been recognized on the above financial instruments on
the basis that this provision has been deemed to be immaterial.
10. CASH AND CASH EQUIVALENTS
All of the Group's cash and cash equivalents at year end are in Sterling and
held at floating interest rates.
2024 2023
£ £
Cash and cash equivalents 8,906 17,148
The Directors consider that the carrying amount of cash and cash equivalents
approximate to their fair value.
11. INVENTORY
2024 2023
£ £
Work in progress 775,374 317,796
Inventories recognised as an expense during the period totalled £nil (2023:
£nil). Borrowing costs capitalized in the year total £38,208 (2023: -
£6,393 ).
Write-down of inventories recognised as an expense in the period totalled
£nil (2023: £29,750). For 2023, it was due to the owners of the
Leatherhead site taking an alternative offer for their project from an
independent third party.
Inventories pledged as security for liabilities as at the year end totalled
£275,000 (2023: £275,000 ).
A 10% fall in the estimated future value of the property would result in an
impairment totalling £80,000.
12. TRADE AND OTHER PAYABLES
2024 2023
£ £
Trade payables 152,745 122,697
Taxation & social security 12,130 14,211
Accruals 120,739 85,955
285,614 222,863
13. BORROWINGS
2024 2023
£ £
Directors' loans 2,219,819 3,086,949
Other loans 719,500 560,000
Bank loans - see under 476,410 800,965
3,415,729 4,447,914
Being:
Less than one year - 874,697
More than one year 3,415,729 3,573,217
3,415,729 4,447,914
Historic loan notes with a nominal value of £600,000 and £200,000
respectively were rolled up in to a new convertible loan note agreement in the
year 2022 along with related party loans of £105,000 to create a new
convertible loan note with a nominal value of £905,000. The liability in
respect of this transaction is disclosed within directors loans above with a
present value as at 31(st) March 2024 of £nil due to the conversion of the
loan notes during the period (2023: £797,796 ). As a financial instrument
with both debt and equity components, an amount had been recognised directly
into a Loan Note Equity Reserve on issue, , with the debt element being
unwound at an implied interest rate of 10% and the interest recognized through
profit and loss. During the year, the Loan Note Equity Reserve was reversed
following the conversion of the Loan Note. Refer to note 14 for further
details.
The remaining directors loan balance is disclosed in note 15.
Included in other loans is £560,000 (2023: £560,000 ) advanced by Mr G
Howard (son-in-law to Mr C Johnson) to the Company at rates of 10% & 5%
per annum (2023: 10% & 5% pa) and loans provided during the year by
Period Homes at £134,500 and Forum Energy Services Ltd at £25,000. Details
of the negotiated loan interest reduction with Mr G Howard for accrued
interest are given in note 17.
Selmat had also granted to Paragon Mortgages a legal charge over the freehold
property at Hildenborough. The mortgage was interest only, for a term of seven
years with a fixed interest rate for the first five years. The property had
been rented out but was sold during the year.
The bank borrowings are repayable as follows: 2024 2023
£ £
On demand or within one year -
In the second year -
In the third to fifth years inclusive -
After five years 476,410 800,965
476,410 800,965
Less amount due for settlement within twelve months -
(included in current liabilities)
Amount due for settlement after twelve months 476,410 800,965
The weighted average interest rates paid on the bank loans were as follows:
Bank loans: 3.4 % (2023: 3.4%)
All of the Directors' loans are repayable after more than 1 year . All loans
are interest bearing and charged accordingly. However, Mr C Johnson has
waived his right to interest in the current year and the previous year.
Interest of £nil (2023: £1,559) was paid to Mr J Dubois at the rate of 12%
pa (2022: 12% pa).
14. SHARE CAPITAL
Issued allotted & paid share capital 2024 2023
Number Number
Ordinary shares
Ordinary shares of 0.1p in issue 275,852,371 142,519,038
Ordinary shares of 0.1p issued in year 377,250,000 133,333,333
Total ordinary shares of 0.1p in issue 653,102,371 275,852,371
Deferred shares
Deferred shares of 0.9p in issue 287,144,228 287,144,228
Deferred shares of 0.9p arising in year - -
Total Deferred shares of 0.9p in issue 287,144,228 287,144,228
Background and current year position - Ordinary shares, warrants and loan
notes
Ordinary Shares:
On 18 August 2023, the company issued 125,000,000 new ordinary shares at 0.1p
as a result of placing of shares that raised gross proceeds of £125,000. The
funds raised provide the Company with additional working capital.
On 27 March 2024, 26,000,000 ordinary shares at 0.1p per ordinary share were
issued in order to settle certain liabilities amounting to £26,000.
On 27 March 2024, a convertible loan note with an aggregate amount of
£905,000 was fully converted into 226,250,000 ordinary shares at 0.4p per
ordinary shares. Previously, in year 2022, the Company agreed with Mr C
Johnson a consolidation and variation of terms of the two unsecured
convertible loan notes and direct debt held by him. As a result of the
consolidation and variation agreement, the total amount owed to Mr C. Johnson
was converted into an unsecured convertible loan note with an aggregate amount
of £905,000, which was set to expire on 31 July 2024 but was fully converted
into equity during the year. Further to the conversion, Mr C Johnson has
instructed the Company's Broker, Peterhouse Capital Limited ("Peterhouse") to
immediately place the entirety of the 2022 Conversion Shares, at a price of
£0.00044 per share (a 12% discount to the mid-market closing price of
£0.0005 on 20 March 2024, the last practical date prior to this
announcement), raising £99,550. Of the £99,550 total cash consideration
received by Mr C Johnson for the 2022 Conversion Shares, £50,000 is to be
subscribed for by Paul Treadaway, Trafalgar's Chief Executive Officer, and
£10,000 by Gary Thorneycroft, the Company's Group Financial Director.
Deferred Shares:
On 13 July 2020 the Company undertook a sub-division of its ordinary shares,
which sub divided the 487,690,380 0.1p ordinary shares of 0.1p each into
487,690,380 ordinary shares of 0.01p each and 487,690,380 0.09p deferred
shares of 0.09p each. The 0.09p deferred shares of 0.09p each were
consolidated into deferred shares of 0.9p each ranking pari passu as one class
with the existing deferred shares of 0.9p each.
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 2024 2023
£ £
Ordinary shares b/fwd 275,852 142,519
Deferred shares b/fwd 2,584,298 2,584,298
Issued in year - ordinary shares 377,250 133,333
Issued in year - deferred shares - -
3,237,400 2,860,150
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 (2023: 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.
15. RELATED PARTY TRANSACTIONS
Mr C Johnson, a subsidiary Director who served during the year, held
18,681,580 ordinary 0.1p shares in the Group as at 31 March 2024 (2023
18,681,580 ordinary 0.1p).
Mr N Lott, who served as a Director during the year, held 50,000
ordinary 0.1p shares in the Group as at 31 March 2024 (2023: 50,000 ordinary
0.1p).
Mr P Treadaway who served as a Director during the year, held 133,409,829
ordinary 0.1p shares in the Group as at 31 March 2024 (2023: 19,733,466
ordinary 0.1p).
Mr G Thorneycroft who served as a Director during the year, held 23,327,273
ordinary 0.1p shares in the Group as at 31 March 2024 (2023: 600,000 ordinary
0.1p).
Further details relating to warrants can be found under note 16.
The following working capital loans have been provided by the following 2024 2023
Directors:
£ £
Mr C Johnson
Opening balances 3,123,798 2,938,382
Loan repayments (993,297) (63,255)
Personal drawings (15,283) (19,587)
Capital injected 104,600 268,258
Balance carried forward 2,219,818 3,123,798
J Dubois
Opening balances - 100,000
Loan repayments - (100,000)
Balance carried forward - -
P Treadaway
Opening balance (36,849) -
Drawn in year (120) (36,849)
Closing balance (36,969) (36,849)
Mr C Johnson's Loan bore interest during the year at 5% (2023: 5% pa), but he
has chosen to forego the interest as he did in 2023. Mr C Johnson was due
interest of £nil in the year (2023: £nil). Mr C Johnson is no longer a
Director of Trafalgar Property Group Plc, but remains a director of other
entities to the Group and remains a shareholder. Mr Dubois's Loan, which is
from his Pension Fund of which he is the sole beneficiary, was paid interest
of £nil (2023: £1,559) at 12% pa interest (2022: 12% pa). This loan was
fully repaid on 16(th) May 2022.
Mr. G. Howard (son-in-law to Mr. C Johnson) had previously advanced loans of
£560,000 (2023: £560,000) to the Company at rates of 10% & 5% per
annum (2023: 10% & 5% pa)
During the year rents were paid of £9,142 (2023: £10,000) to the Combe Bank
Homes Pension Scheme which owns the freehold offices at Chequers Barn. Mr
C Johnson is a Trustee and Beneficiary of that Pension Scheme.
During the year payments amounting to £1,938 (2023: £15,900 ) were made to
Real Time Accounting Ltd for bookkeeping services. Gary Thorneycroft is a
majority shareholder and director of Real Time Accounting Ltd.
During the year payments amounting to £nil (2023: £12,000) were made to May
Barn Horticultural Consultancy Ltd, for hydroponic consultancy services, a
company that Dr P Challinor was a director and major shareholder During the
year it was agreed to write-off the balance due to May Barn of £18,333 for
the hydroponic assets owned by Dr P Challinor on the basis that both parties
have agreed to waive the amount payable.
16. SHARE WARRANTS
Following the conversion of the 2022 CLN with Mr C Johnson the warrants
attaching to that CLN have now expired and there are no warrants remaining.
17. CAPITAL CONTRIBUTION RESERVE
The capital contribution reserve of £400,147 (2023: £400,147 ) related to
the renegotiation of interest accruing on loans from Mr G Howard to below
market rate terms. Interest was reduced from 10% pa to 5% pa for the entire
term of the loans and is now non compound.
As Mr. G Howard is related to Mr. C Johnson, a related party, a Capital
Reserve was created. In the current year, a further provision of £nil
(2023:242,370) was recognized as a result of Mr. Howard waiving all interest
due on the loan outstanding.
18. CATEGORIES OF FINANCIAL INSTRUMENTS
All financial instruments are measured under IFRS 9 at amortised cost.
Financial Risk Management
The Group and Company's financial instruments comprise investments designated
at fair value through profit or loss, cash and various items such as trade and
other receivables, and trade and other payables, all of which arise directly
from its normal operations. The carrying values of all of the Group and
Company's financial instruments approximate their fair values at 31 March 2024
and 31 March 2023. The Accounting Policies described on pages 29 - 30 outlines
how the financial instruments are measured.
Through its normal operations the Group is exposed to a number of financial
risks. The Board reviews and agrees policies for managing each of these risks
as summarised below:
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 convertible debt are disclosed on pages 23 to
31 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 where interest is charged
on a variable rate basis. This risk has been minimized by:
· the original bank loan with Lloyds Bank has been replaced by a loan
with CPF One Ltd after the year end, following completion of the construction
work, changing from a variable rate basis on to a fixed rate facility.,
· renegotiation of interest rates on some of the other loans from 10%
to 5% (all fixed rates) all then being forgone by the lender,
· partial repayments made in the year on other loans and,
Credit risk management
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. There is
limited exposure due to no trade receivables and that the primary exposure
relates to cash and cash equivalents, which are all deposited with reputable
banks.
Liquidity risk management
This is the risk of the Group not being able to continue to operate as a going
concern. The sale of the completed Speldhurst property, that is on the balance
sheet at cost, will provide cash flow to the business. The new project at
Talbot Park, once planning permission is granted, is expected to provide a
good profit as it will allow two properties to be built and sold. Current
financing is provided by external financial institutions supported by Mr C
Johnson.
The Directors have, after careful consideration of the risks 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 31 March 2024
Due within Due within
Total Due within Due within one to five years Due over
One year Five years
£ £ £ £
Trade payables 273,484 273,484 -
Borrowings - Directors' loan 2,219,819 - 2,219,819
Borrowings - Bank loan 476,410 - - 476,410
Borrowings - Other loans 719,500 159,500 560,000 -
Total 3,689,213 432,984 2,779,819 476,410
Financial liabilities 31 March 2023
Due within Due within Due over
Total Due within Due within one to five years Due over
One year Five years
£ £ £ £
Trade payables 208,652 208,652
Borrowings - Directors' loan 3,086,949 874,697 2,212,252
Borrowings - Bank loan 800,965 800,965
Borrowings - Other loans 560,000 560,000
Total 4,656,566 1,083,349 2,772,252 800,965
19. NET DEBT RECONCILIATION
2024 2023
£ £
Cash at bank 8,906 17,148
Cash and cash equivalents 8,906 17,148
Borrowing repayable (including overdrafts) (3,415,728) (4,447,914)
Net Debt (3,406,822) (4,430,766)
Cash and liquid investment Gross borrowings with a fixed interest rate Total cash and liquid investments
£ £ £
Net debt as at 31 March 2022 12,753 (3,924,724) (3,911,971)
Cash flows 4,395 (523,190) (518,795)
Net debt as at 31 March 2023 17,148 (4,447,914) (4,430,766)
Cash flows (8,242) 1,032,186 1,023,944
Net debt as at 31 March 2024 8,906 (3,415,728) (3,406,822)
20. SUBSEQUENT EVENTS
Events following 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.
As stated in the announcement by the Group on 29 May 2024 we are in
discussions with parties relating to a potential reverse takeover, non-binding
heads of terms have been signed. These discussions continue and further
announcements will be made in due course. A further announcement on 03 June
2024 stated that Ecap Esports Ltd had agreed to loan the Company the sum of
£250,000, the proceeds of which will be ring fenced to cover costs associated
with the proposed reverse takeover, should the transaction not occur. As
announced in March 2024 Mr C Johnson introduced £99,550 into Trafalgar by way
of a loan being the consideration he received for the 2022 Conversion Shares.
In return, Trafalgar will issue Mr C Johnson with a new, nil coupon, unsecured
convertible loan note (the "2024 CLN"). The 2024 CLN will be convertible in
full into 226,250,000 Ordinary Shares at £0.00044 per ordinary share ("2024
CLN Exercise Price") and can be converted at any time by Mr C Johnson, subject
inter alia to his entire holding being less than 29.99 per cent of the voting
rights in issue in the Company. At the date of these financial statements this
CLN has not yet been signed.
2024 CLN Issue
Further to the conversion of 2022 CLN, in order to provide additional funds to
the Company, Mr C Johnson has agreed to reinvest the entirety of the £99,550
consideration he will receive for the 2022 Conversion Shares back into the
Company. In return, Trafalgar will issue Mr C Johnson with a new, nil coupon,
unsecured convertible loan note (the "2024 CLN"). The 2024 CLN will be
convertible in full into 226,250,000 Ordinary Shares at £0.00044 per ordinary
share ("2024 CLN Exercise Price") and can be converted at any time by Mr C
Johnson, subject inter alia to his entire holding being less than 29.99 per
cent of the voting rights in issue in the Company.
As per Company Act 2006, the Company is required to convene a general meeting
in order to undertake a share reorganisation (the "Reorganisation"). A
circular ("Circular") containing further details of the Reorganisation and
notice of the general meeting to approve the resolutions is required to
implement the Reorganisation, and was expected to be published and dispatched
to Trafalgar's shareholders last 31 May 2024, but a postponement was announced
on 30 May 2024 following a disclosure dated 29 May 2024 regarding a discussion
on a potential reverse takeover and that its shares is being suspended from
trading on AIM, thereby postponing the posting of the said Circular for the
required general meeting.
New Loan Agreement with Ecap Esports Ltd.
On 3 June 2024, the Group announced that it has entered into a loan agreement
with Ecap Esports Ltd ("Ecap Esports"). Ecap Esports has agreed to loan the
Company the sum of £250,000, the proceeds of which will be ringfenced to
cover costs associated with the recently announced proposed reverse takeover,
should the transaction not occur. In the event the proposed transaction does
not complete, any funds remaining following payment of all accrued transaction
fees shall be returned to the lender. The loan bears no interest.
Note
2024 2023
£ £
Fixed Assets
Investments 7 - -
Current assets
Debtors 8 32,140 54,220
Cash at bank and in hand 3,406 3,842
35,546 58,062
TOTAL ASSET 35,546 58,062
EQUITIES & LIABILITIES
Current liabilities
Trade & other payables 9 224,856 961,756
Non-current liabilities
Borrowings 10 25,000 -
TOTAL LIABILITIES 249,856 961,756
NET (LIABILITIES) (214,310) (903,694)
Called up share capital 12 3,237,400 2,860,150
Share premium account 4,136,240 3,484,915
Loan note equity reserve - 107,204
Profit and loss account (7,587,950) (7,355,963)
Equity - attributable to the owners of the Parent (214,310) (903,694)
TOTAL EQUITY AND LIABILITIES 35,546 58,062
The loss for the financial year dealt with in the financial statements of the
Parent Company was loss of £339,191 (2023: loss £408,699).
The financial statements were approved by the Board of Directors on 24
September 2024 and authorised for issue and are signed on its behalf by:
P Treadaway: … Paul Treadaway………. G Thorneycroft: … Gary
Thorneycroft ………
Company Registration Number: 04340125
The notes on pages 45 to 52 form an integral part of these financial
statements
Share Share Loan Note Profit Total
Capital Premium Equity & loss Equity
Reserve account
£ £ £ £ £
At 1 April 2022 2,726,817 3,250,249 30,303 (6,947,264) (939,895)
Loss for the year - - - (488,864) (488,864)
Total comprehensive loss for the year - - - (488,864) (488,864)
Movement in Loan note equity reserve 76,901 80,165 157,066
Shares issued during the year net of costs 133,333 234,666 - - 367,999
At 31 March 2023 2,860,150 3,484,915 107,204 (7,355,963) (903,694)
At 1 April 2023 2,860,150 3,484,915 107,204 (7,355,963) (903,694)
Loss for the year - - - (339,191) (231,987)
Total comprehensive loss for the year - - - (339,191 (231,987)
Loan Note Equity Reserve (107,204) 107,204 -
Shares issued during the year on conversion of loan notes 226,250 678,750 - 905,000
Shares issued during the year net of costs 151,000 (27,425) - 123,575
At 31 March 2024 3,237,400 4,136,240 - (7,587,950) (214,310)
Further details of share capital are shown in Note 12.
Loan note equity reserve is the amount that has been provided for in respect
of the difference between the cash value and the liability element of the loan
notes. The remaining balance has been reversed following the conversion of the
loan note during the year (2023: adjustment of £76,901)
The notes on pages 45 to 52 form an integral part of these financial
statements.
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 residential property development and
charges an appropriate management fee for general costs incurred 2024 -
£43,344 (2023 - £78,591). The Company is a private company limited by
shares and is registered in England and Wales. Its registered office and
principal place of business is Chequers Barn, Chequers Hill, 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 United Kingdom Accounting Standards,
including Financial Reporting Standard 102, 'The Financial Reporting Standard
applicable in the United Kingdom and the Republic of Ireland ('FRS 102') and
the Companies Act 2006. 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 board are also continuing to consider a reverse takeover and have taken a
loan from the target company to cover any abort fees should the deal not
complete, as stated in note 14 to the Company financial statements.
During the year the Company raised £125,000 before costs for working capital
purposes by way of an issue of 125,000,000 shares at 0.1p per share, issued
26,000,000 shares at 0.1p to settle outstanding creditor balances and
crystalised the 2022 CLN with Mr C Johnson by way of an issue of 226,250,000
shares at 0.4p per share.
As indicated in note 14, subsequent to the balance sheet date, the Company has
raised £99,550 from a contribution by Mr C Johnson following the conversion
of his 2022 CLN at the year end. This is to be used for working capital
purposes. A new CLN is to be issued to Mr C Johnson as stated in note 14.
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 material uncertainty about the
future events.
However, given that a degree of uncertainty exists in the timing of future
sales, the Company's ability to raise further funds through share placements
and the potential reliance on further funding been provided by the directors
and management's ability to refinance all loans due in the next twelve months,
there exists a material uncertainty that may cast significant doubt on the
Group's ability to continue as a going concern.
(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, 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) 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 convertible debt
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, 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.
Convertible debt
Convertible debt issued by the Group are classified according to the substance
of the contractual arrangements entered into and the definitions of a
financial liability and convertible debt instrument. Convertible debt consists
of new unsecured loan notes convertible totaling £nil (2023: £905,000) in
full, into 226,250,000 ordinary shares at 0.4p per ordinary share and can be
convertible at any time by Mr C Johnson for two years from July 2022, further
details are provided within note 12.
As stated in note 12, the convertible debt was converted during the year.
The accounting policies adopted for specific financial liabilities and
convertible debts are set out below.
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.
All balances with subsidiaries have been fully impaired during the year
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 £339,191 (2023:
Loss £408,699).
6. EMPLOYEES AND DIRECTORS' REMUNERATION
2024 2023
£ £
Directors' fees - 107,567
Social security costs - 11,211
Directors' pension contribution - 1,500
Management fees - -
- 120,278
The average number of employees of the Company during the year was:
2024 2023
Number Number
Directors and management 4 5
There are no retirement benefits accruing to any of the Directors.
Additional directors remuneration of £60,000 (2023: £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.
Valuation 2024 2023
Cost:
At 1 April 3,855,438 3,855,338
Additions - 100
At 31 March 3,855,438 3,855,438
Impairment:
At 1 April (3,855,438) (3,855,338)
Additions - (100)
At 31 March (3,855,438) (3,855,438)
Net Value at 31 March - -
Held directly Class of shares % Shareholding Principal Activity
held
Trafalgar New Homes Ordinary shares
Limited 100% Residential property developers
Trafalgar Retirement + Limited Ordinary shares
100% Residential property & assisted living scheme
Selmat Limited Ordinary shares
100% Residential property renting
Life Hydroponic Assets Ltd Ordinary shares 100% Holding of hydroponic assets
Held indirectly through Trafalgar New Homes Limited
Combe Bank Homes (Oakhurst) Limited Ordinary shares 100% Residential property developers
Controlled via Deed of Trust
Combe House (Borough Green) Limited Ordinary shares 100% Residential property developers
8. DEBTORS
2024 2023
£ £
Amounts owed by Group undertakings - 36,298
Other debtors 32,140 17,922
32,140 54,220
All amounts owed by Group undertakings £36,298 (2023 - nil) have been
impaired during the year.
9. TRADE AND OTHER PAYABLES
2024 2023
£ £
Trade creditors 143,457 95,754
Taxation and social security 637 20,191
Accruals / Other creditors 62,004 27,545
Directors' loan - 789,947
Amounts owed to Group undertakings 18,758 28,319
224,856 961,756
The loan with its subsidiary is interest free and repayable on demand.
10. BORROWINGS
2024 2023
£ £
Other loans 25,000 -
25,000 -
Other loans are related to loans provided by Forum Energy Services Ltd at
£25,000 (2023: £nil), a shareholder of the Company. This loan is interest
free and repayable on demand.
11. FINANCIAL INSTRUMENTS
Financial assets 2024 2023
£ £
Financial assets:
Financial assets measured at amortised cost:
Amounts owed by group undertakings and other debtors 32,140 54,220
Financial liabilities:
Financial liabilities measured at amortised cost 170,369 914,020
Financial liabilities includes Trade creditors, Other creditors and Amount due
to group undertakings.
12. SHARE CAPITAL
Issued, allotted and paid share capital
2024 2023
Number Number
Ordinary shares:
Ordinary shares of 0.1p in issue 275,852,371 142,519,038
Ordinary shares of 0.1p issued in year 377,250,000 133,333,333
Total Ordinary Shares of 0.1p in issue 653,102,371 275,852,371
Deferred shares:
Deferred shares of 0.9p in issue 287,144,228 287,144,228
Deferred shares of 0.9p arising in year - -
Total Deferred Shares of 0.9p in issue 287,144,228 287,144,228
Issued, allotted and paid share capital
2024 2023
£ £
Ordinary shares:
Ordinary shares of 0.1p in issue 275,852 142,519
Ordinary shares of 0.1p issued in year 377,250 133,333
Total Ordinary Shares of 0.1p in issue 653,102 275,852
Deferred shares:
Deferred shares of 0.9p in issue 2,584,298 2,584,298
Deferred shares of 0.9p arising in year - -
Total Deferred Shares of 0.9p in issue 2,584,298 2,584,298
Total Ordinary and Deferred Shares issued 3,237,400 2,860,150
Background - ordinary shares, warrants and loan notes
Ordinary Shares:
On 18 August 2023, the company issued 125,000,000 new ordinary shares at 0.1p
as a result of placing of shares that raised gross proceeds of £125,000. The
funds raised provide the Company with additional working capital.
On 27 March 2024, 26,000,000 ordinary shares at 0.1p per ordinary share were
issued in order to settle certain liabilities amounting to £26,000.
On 27 March 2024, a convertible loan note with an aggregate amount of
£905,000 was fully converted into 226,250,000 ordinary shares at 0.4p per
ordinary shares. Previously, in year 2022, the Company agreed with Mr C
Johnson a consolidation and variation of terms of the two unsecured
convertible loan notes and direct debt held by him. As a result of the
consolidation and variation agreement, the total amount owed to Mr C Johnson
was converted into an unsecured convertible loan note with an aggregate amount
of £905,000, which was set to expire on 31 July 2024 but was fully converted
into equity during the year. The conversion of the total amount owed to him by
the Company has resulted in the issue to Mr C Johnson of an unsecured
convertible loan note for an aggregate amount of £905,000, expiring 31 July
2024, which was converted during the year. Further to the conversion, Mr C
Johnson has instructed the Company's Broker, Peterhouse Capital Limited
("Peterhouse") to immediately place the entirety of the 2022 Conversion
Shares, at a price of £0.00044 per share (a 12% discount to the mid-market
closing price of £0.0005 on 20 March 2024, the last practical date prior to
this announcement), raising £99,550. Of the £99,550 total cash consideration
received by Mr C Johnson for the 2022 Conversion Shares, £50,000 is to be
subscribed for by Paul Treadaway, Trafalgar's Chief Executive Officer, and
£10,000 by Gary Thorneycroft, the Company's Group Financial Director.
Deferred Shares:
On 13 July 2020 the Company undertook a sub-division of its ordinary shares,
which sub divided the 487,690,380 0.1p ordinary shares of 0.1p each into
487,690,380 ordinary shares of 0.01p each and 487,690,380 0.09p deferred
shares of 0.09p each. The 0.09p deferred shares of 0.09p each were
consolidated into deferred shares of 0.9p each ranking pari passu as one class
with the existing deferred shares of 0.9p each.
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.
13. INTERCOMPANY TRANSACTIONS
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. In addition, there were no
transactions with Forum Energy Services Ltd, the provider of a shareholders
loan, as per note 10.
14. SUBSEQUENT EVENTS
2024 CLN Issue
Further to the conversion of 2022 CLN, in order to provide additional funds to
the Company, Mr C Johnson has agreed to reinvest the entirety of the £99,550
consideration he will receive for the 2022 Conversion Shares back into the
Company. In return, Trafalgar will issue Mr C Johnson with a new, nil coupon,
unsecured convertible loan note (the "2024 CLN"). The 2024 CLN will be
convertible in full into 226,250,000 Ordinary Shares at £0.00044 per ordinary
share ("2024 CLN Exercise Price") and can be converted at any time by Mr C
Johnson, subject inter alia to his entire holding being less than 29.99 per
cent of the voting rights in issue in the Company.
As per Company Act 2006, the Company is required to convene a general meeting
in order to undertake a share reorganisation (the "Reorganisation"). A
circular ("Circular") containing further details of the Reorganisation and
notice of the general meeting to approve the resolutions is required to
implement the Reorganisation, and was expected to be published and dispatched
to Trafalgar's shareholders last 31 May 2024, but a postponement was announced
on 30 May 2024 following a disclosure dated 29 May 2024 regarding a discussion
on a potential reverse takeover and that its shares is being suspended from
trading on AIM, thereby postponing the posting of the said Circular for the
required general meeting.
New Loan Agreement with Ecap Esports Ltd.
On 3 June 2024, the Group announces that it has entered into a loan agreement
with Ecap Esports Ltd ("Ecap Esports"). Ecap Esports has agreed to loan the
Company the sum of £250,000, the proceeds of which will be ringfenced to
cover costs associated with the recently announced proposed reverse takeover,
should the transaction not occur. In the event the proposed transaction does
not complete, any funds remaining following payment of all accrued transaction
fees shall be returned to the lender. The loan bears no interest.
15. CONTROLLING PARTY
The company has no controlling party.
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 54.
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 2024, 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 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 Paul Treadaway as a Director;
Paul is retiring by rotation and submitting himself for re-election.
Special business at the AGM
The following special business resolutions will be proposed at the AGM:
(a) Resolutions 5 and 6: to renew residual authorities (i) to
allot securities under section 551 of the Companies Act 2006, in the amount of
up to £250,000 (250,000,000 ordinary shares of 0.1p), representing
approximately 38% of the existing issued ordinary share capital; and (ii) to
disapply pre-emption rights on the allotment of securities for cash for the
purposes of section 561 of the Companies Act 2006, in the amount of up to
£250,000 (250,000,000 ordinary shares of 0.1p), representing approximately
38% of the existing issued ordinary share capital.
The authorities under these resolutions would subsist until the conclusion of
the Annual General Meeting of the Company to be held in 2025 or, if earlier,
15 months after the date on which this resolution has been passed, provided
that the Company may, before such expiry, make an offer, agreement or other
arrangement which would or might require shares and/or rights to subscribe for
or to convert any security into shares to be allotted after such expiry and
the directors may allot such shares and/or rights to subscribe for or to
convert any security into shares in pursuance of such offer, agreement or
other arrangement as if the authority conferred hereby had not expired.
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 2024 Annual General Meeting of the Company
will be held at the Company's offices at Chequers Barn, Bough Beech,
Edenbridge, Kent TN8 7PD at 11am on 21 October 2024, for the following
purposes:
RESOLUTIONS
Ordinary business
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 2024.
2. To re-appoint MHA 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 2025.
3. To authorise the Directors to determine the remuneration of the
auditor.
4. To re-appoint Paul Treadaway as an executive director of the
Company.
Special business
To consider and, if thought fit, to pass resolution 5 as an ordinary
resolution and resolutions 6 as special resolution:
5. THAT, in addition to all existing authorities conferred on the
directors to allot shares or to grant rights to subscribe for or to convert
any securities into shares, the directors be authorised generally and
unconditionally pursuant to Section 551 of the Companies Act 2006 as amended
to exercise all the powers of the Company to allot shares and/or rights to
subscribe for or to convert any security into shares, provided that the
authority conferred by this resolution shall be limited to the allotment of
equity securities and/or rights to subscribe or convert any security into
shares of the Company up to an aggregate nominal value of £250,000
(250,000,000 ordinary shares of 0.1p), such authority (unless previously
revoked, varied or renewed) to expire on the conclusion of the Annual General
Meeting of the Company to be held in 2025 or, if earlier, 15 months after the
date on which this resolution has been passed, provided that the Company may,
before such expiry, make an offer, agreement or other arrangement which would
or might require shares and/or rights to subscribe for or to convert any
security into shares to be allotted after such expiry and the directors may
allot such shares and/or rights to subscribe for or to convert any security
into shares in pursuance of such offer, agreement or other arrangement as if
the authority conferred hereby had not expired.
6. THAT, in addition to all existing authorities conferred on the
directors to allot shares or to grant rights to subscribe for or to convert
any securities into shares, the directors be and are hereby generally
empowered to allot equity securities (within the meaning of Section 560 of the
Companies Act 2006) pursuant to the general authority conferred by resolution
5 above for cash or by way of sale of treasury shares as if Section 561 of the
Companies Act 2006 or any pre-emption provisions contained in the Company's
articles of association did not apply to any such allotment, provided that the
power conferred by this resolution shall be limited to:
(a) any allotment of equity securities where such
securities have been offered (whether by way of rights issue, open offer or
otherwise) to holders of equity securities in proportion (as nearly as may be
practicable) to their then holdings of such securities, but subject to the
directors having the right to make such exclusions or other arrangements in
connection with such offer as they deem necessary or expedient to deal with
fractional entitlements or legal or practical problems arising in, or pursuant
to, the laws of any territory or the requirements of any regulatory body or
stock exchange in any territory or otherwise howsoever;
(b) the allotment (otherwise than pursuant to
sub-paragraph (a) above) of equity securities up to an aggregate nominal value
of £250,000 (250,000,000 ordinary shares of 0.1p), such authority (unless
previously revoked, varied or renewed) to expire on the conclusion of the
Annual General Meeting of the Company to be held in 2025 or, if earlier, 15
months after the date on which this resolution has been passed, provided that
the Company may, before such expiry, make an offer, agreement or other
arrangement which would or might require shares and/or rights to subscribe for
or to convert any security into shares to be allotted after such expiry and
the directors may allot such shares and/or rights to subscribe for or to
convert any security into shares in pursuance of such offer, agreement or
other arrangement as if the authority conferred hereby had not expired.
Dated: 24 September 2024
Registered Office: By order of the Board
Chequers Barn Nicholas Narraway
Chequers Hill Secretary
Bough Beech
Edenbridge
Kent
TN8 7PD
Notes:
1. Shareholders are strongly encouraged to participate in the
meeting by returning forms of 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.
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 a.m. on 17 October 2024.
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 a.m. on 17 October
2024.
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 17 October 2024 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.
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