TIDMSGG
RNS Number : 2301D
Sterling Green Group PLC
14 May 2012
14 May 2012
STERLING GREEN GROUP PLC
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2012
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the financial statements of Sterling
Green Group plc ("the Company") covering the year ended 31 March
2012.
Results and dividends
The loss after taxation for the year amounted to GBP516,000
(2011 - GBP1,902,000). The loss includes costs and losses amounting
to GBP344,000 in respect of the disposal of the Company's principal
trading subsidiaries in December 2011. Ongoing administrative
expenses remained relatively unchanged compared to the previous
financial year.
Proposed acquisition
Following the fundamental change of the trading business of the
Company in December 2011, the Directors have been seeking to
acquire another company or business in exchange for the issue of
ordinary shares.
I am pleased to report that full details of such a proposed
acquisition are being announced today and an AIM Admission Document
containing full details of the proposals has been posted to
shareholders today. Under the AIM Rules the proposed acquisition
will constitute a reverse takeover due to the current size of
acquisition relative to the current size of the Company. The
Company is also proposing to raise GBP10,000,000 before expenses
through a conditional placing of 90,909,091 new ordinary shares at
a placing price of 11 pence per share (following its share
consolidation described below) to provide working capital for the
enlarged group. It is also proposed that the Company will effect a
re-organisation of its existing share capital whereby each holding
of 38 existing ordinary shares will be consolidated into one new
ordinary share.
The AIM Admission Document contains a notice of General Meeting,
which contains resolutions seeking shareholders' approval of the
proposals. Should shareholders approve the proposed acquisition,
placing and related matters, the enlarged group will be focussed on
developing projects and opportunities in the oil and gas
sector.
Notice of Annual General Meeting and posting of accounts
The Company announces that its 2012 Annual Report and Accounts
for the year ended 31 March 2012, together with a Notice of the
Annual General Meeting have been posted to shareholders and are now
available to download from the Company's website at
http://sterlinggreen.co.uk/sgg/
The Company's forthcoming Annual General Meeting will be held at
10.00 a.m. on 8 June 2012 at the Number 14, The Embankment, Vale
Road, Heaton Mersey, Stockport SK4 3GN.
J M Edelson
Chairman
14 May 2012
Contact Details:
Sterling Green Group plc Tel:
Michael Edelson +44 (0) 845 217 8293
Shore Capital (Nominated Adviser & Broker)
Nomad
Bidhi Bhoma
Edward Mansfield
Corporate Broking
Jerry Keen +44 (0) 20 7408 4090
FTI Consulting
Billy Clegg
Edward Westropp +44 (0) 207 831 3113
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2012
2012 2011
Note GBP000 GBP000
Administrative expenses (172) (175)
Loss from continuing operations (172) (175)
Loss from discontinued operations 5 (344) (1,727)
-------- ---------
Loss and total comprehensive income
for the year attributable to equity
holders of the parent (516) (1,902)
======== =========
Loss per share - basic and diluted 7
From continuing operations (0.06) (0.06)
From discontinued operations (0.11) (0.57)
From continuing and discontinued (0.17) (0.63)
operations
-------- ---------
There were no other items of comprehensive income other than the
loss for the year.
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2012
Company number: 5316808
2012 2011
Note GBP000 GBP000
Non-current assets
Investment in subsidiaries 8 - 700
Current assets
Trade and other receivables 10 287 4
Cash and cash equivalents 9 149 1
-------- --------
Total current assets 436 5
-------- --------
Current liabilities
Trade and other payables 11 (274) (27)
Total current liabilities (274) (27)
-------- --------
Net current assets/(liabilities) 162 (22)
-------- --------
Net assets 162 678
======== ========
Equity
Called up share capital 12 304 304
Share premium account 1,794 1,794
Capital reserve 6 6
Other reserve - 891
Accumulated losses (1,942) (2,317)
-------- --------
Total equity 162 678
======== ========
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2012
2012 2011
Note GBP000 GBP000
Cash flows used in operating activities
Loss before tax (516) (1,902)
Adjustments for:
Impairment loss on liquidation of subsidiary 346 2,232
Impairment loss on disposal of subsidiaries 64 -
Investment income (105) (505)
-------- --------
Operating cash flows before movement in
working capital (211) (175)
Increase in trade and other receivables (283) (1)
Increase/(Decrease) in trade and other
payables 247 (2)
Net cash used in operating activities (247) (178)
-------- --------
Cash flows from investing activities
Loans repaid by subsidiaries 585 179
Loans to subsidiaries (190) -
-------- --------
Net cash from investing activities 395 179
-------- --------
Net increase in cash and cash equivalents 148 1
Cash and cash equivalents at the start 1 -
of the year
Cash and cash equivalents at the end of
the year 9 149 1
-------- --------
Net cash used in operating activities includes outflows of
GBP39,000 (2011 - GBP nil) and net cash from investing activities
includes inflows of GBP395,000 (2011 - GBP179,000) that relate to
discontinued operations.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2012
Share Share Capital Other Accum-ulated Total
capital premium reserve reserve losses
account
GBP000
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2010 304 1,794 6 891 (415) 2,580
Loss and total comprehensive
income for the year - - - - (1,902) (1,902)
At 31 March 2011 304 1,794 6 891 (2,317) 678
Loss and total comprehensive
income for the year - - - - (516) (516)
Reclassification - - - (891) 891 -
At 31 March 2012 304 1,794 6 - (1,942) 162
========= ========= ========= ========= ============= =========
Other reserve
The other reserve is a merger reserve created on the acquisition
of Sterling Green Limited. Following the appointment on 3 February
2012 of a liquidator for Sterling Green Limited, the merger reserve
has been reclassified at the balance sheet date to accumulated
losses.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2012
1. Accounting policies
Sterling Green Group plc is a company incorporated in the United
Kingdom under the Companies Act 2006.
The principal accounting policies are summarised below. They
have been consistently applied throughout the period covered by the
financial statements.
Basis of preparation
The financial information set out in this announcement has been
prepared in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the European Union and with those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS.
The Directors have considered the Company's financial position
and prospects using detailed forecasts covering the period ending
31 December 2013. These forecasts have been drawn up on the basis
that the proposed reverse takeover is approved by shareholders at a
General Meeting, whilst at the same time a proposed fundraising is
completed at an estimated amount of GBP10,000,000 before costs. On
this basis, and having made appropriate consideration, the Board
believes that the Company has adequate resources to continue
trading for the foreseeable future, and accordingly, the going
concern basis has been adopted in preparing these financial
statements as shareholder approval is considered likely to
occur.
However, the Directors have also considered the Company's
financial position on the basis that the proposed reverse takeover
is not approved by shareholders and no further funds are raised.
The Directors believe that, after taking account of professional
fees relating to an unsuccessful transaction, the Company would not
have sufficient funds available to enable it to continue as a going
concern whilst remaining an AIM listed company. Accordingly, the
Directors believe that the correct course of action would be to
propose to shareholders that the Company be wound up.
This represents a material uncertainty related to events or
conditions which may cast significant doubt on the Company's
ability to continue as a going concern and, therefore, that it may
be unable to realise its assets and discharge its liabilities in
the normal course of business. However, subject to this uncertainty
the Board believes that the Company has adequate resources to
continue trading for the foreseeable future, and accordingly, the
going concern basis has been adopted in preparing these financial
statements.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of financial statements in conformity with IFRS
requires management to make estimates and judgements that affect
the reported amounts of assets and liabilities as well as the
disclosure of contingent assets and liabilities at the year end and
the reported amounts of revenues and expenses during the reporting
period. Estimates and judgements 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 circumstances.
The estimates and judgements that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are as follows:
a) Key sources of estimation uncertainty
Investments and intergroup balances impairment
The carrying value of the company's investment in its
subsidiaries, including all intergroup balances, is assessed for
impairment at each year end.
Trade and other receivables
GBP285,000 of costs relating to the proposed reverse takeover
have been deferred and will be reclassified as a cost of investment
once the proposed reverse takeover has been approved. Should the
proposed reverse takeover not be approved then these costs will be
limited to GBP167,000 and expensed.
Trade and other payables
Included in accruals is an amount of GBP249,000 in respect of
the estimated costs of the proposed reverse takeover that had been
incurred prior to the year end. Should the proposed reverse
takeover not be approved by shareholders then these costs would be
limited to GBP167,000.
b) Critical judgements in applying the Company's accounting
policies
As the Company is a non-trading cash shell at the year end there
have been no critical judgements made in the preparation of these
financial statements.
New standards and interpretations
There were a number of standards and interpretations which were
in issue at 31 March 2012 but were either not effective at 31 March
2012 or have not been applied in preparing these financial
statements. The Directors have assessed the full impact of these
accounting changes on the Company. To the extent that they may be
applicable, the Directors have concluded that none of these
pronouncements will cause material adjustments to the Company's
financial statements.
Investments
Investments in subsidiary undertakings are stated at cost except
where, in the opinion of the Directors, there has been a permanent
diminution in the value of an investment, in which case an
appropriate impairment adjustment is made. Cost includes those
costs directly related to acquisitions. In the current year as the
acquisition had not been completed, these costs have been carried
forward in trade and other receivables and will be reclassified
once shareholder approval of the transaction has been obtained.
Financial instruments
Financial instruments are classified on initial recognition as
financial assets, financial liabilities or equity instruments in
accordance with the substance of the contractual arrangement.
Financial instruments are recognised on the balance sheet at fair
value when the Company becomes party to the contractual provisions
of the instrument. Financial assets are reduced by appropriate
allowances for estimated irrecoverable amounts. Interest earned
from financial assets and interest paid on financial liabilities is
recognised in the income statement on an accruals basis over the
term of the financial asset or liability using the effective rate
of interest.
Trade and other receivables are stated at their nominal value,
as the interest that would be recognised from discounting future
cash receipts over the short credit period is not considered to be
material.
Trade and other payables are stated at their original invoiced
value, as the interest that would be recognised from discounting
future cash payments over the short term payment period is not
considered material.
Deferred taxation
Deferred tax is provided in full using the liability method.
Deferred tax is the future tax consequences of temporary
differences between the carrying amounts and tax bases of assets
and liabilities shown on the balance sheet. Deferred tax assets and
liabilities are not recognised if they arise in the following
situations: the initial recognition of goodwill; or the initial
recognition of assets and liabilities that affect neither
accounting nor taxable profit. The amount of deferred tax provided
is based on the expected manner of recovery or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantially enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised. The carrying amount of the
deferred tax assets are reviewed at each balance sheet date and
reduced
to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the asset
to be recovered.
Cash and cash equivalents
Cash comprises cash on hand and bank balances. Cash equivalents
are short-term, highly liquid investments that are readily
convertible to known amounts of cash, which are subject to an
insignificant risk of changes in value and have a maturity of three
months or less at the date of acquisition.
For the purposes of the statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined
above.
2. Publication of Non-Statutory Accounts
The financial information set out in this announcement does not
constitute the Company's statutory financial statements for the
year ended 31 March 2012 or 2011. The financial information for
2011 is derived from the statutory financial statements for 2011.
Full audited accounts in respect of that financial period have been
delivered to the Registrar of Companies. The statutory financial
statements for 2012 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting. The auditor has
reported on the 2012 and 2011 financial statements. The 2012 and
2011 financial statements did not contain a statement under the
Companies Act 2006 s498(2) and both received an unqualified audit
opinion. However there was an emphasis of matter in relation to
going concern in both opinions.
3. Auditor's remuneration
2012 2011
GBP000 GBP000
Fees payable to the auditor for the
audit of the annual financial statements 14 9
Fees payable to the auditor for other
services: Taxation 3 1
Corporate finance 25 -
42 10
======== ========
4. Staff costs and Directors' remuneration
Staff costs, which include the remuneration of the Directors,
were as follows:
2012 2011
GBP000 GBP000
Salaries and fees 68 74
Social security costs 4 4
72 78
======== ========
In addition to the Directors, the Company employed one member of
staff during the current and preceding year.
Directors' remuneration
The remuneration of the Directors' during the year was as
follows:
2012 2012 2012 Benefits 2012 2011
Salary/fees Compensation GBP000 Total Total
GBP000 for loss of GBP000 GBP000
office
GBP000
Short term benefits:
J.M. Edelson 21 - - 21 25
S.T. Ali - - - - -
J. McClean - - - - -
I. Aspinall 21 - 1 22 17
P.E. Kanas 14 5 - 19 15
L.J. Avigdori 1 - - 1 15
------------- -------------- -------------- -------- --------
57 5 1 63 72
============= ============== ============== ======== ========
5. Discontinued operations
2012 2011
GBP000 GBP000
Investment income 105 505
Administrative expenses (39) -
Impairment loss on disposal of (64) -
subsidiaries
Impairment loss on liquidation
of subsidiary (346) (2,232)
-------- --------
Loss from discontinued operations (344) (1,727)
======== ========
No revenue was generated from discontinued operations other than
investment income being dividends received from subsidiaries. For
the reasons explained in note 5 there is no related tax credit.
6. Income tax
2012 2011
GBP000 GBP000
Current year income tax - -
========= ========
At 31 March 2012 the Company had approximately GBP466,000
of excess management expenses which, should the proposed
reverse acquisition be approved by shareholders, cannot
be utilised against any future profits in the Company.
The income tax for the year can be reconciled to the Statement
of Comprehensive Income as follows:
2012 2011
GBP000 GBP000
Loss before tax (516) (1,902)
========= ========
Tax at the income tax rate of 26%
(2011 - 28%)
Effects of: (134) (533)
Expenses not deductible for tax purposes 144 625
Group income - 20
Group relief surrender - (112)
Utilisation of tax losses (10) -
--------- --------
Current tax for the year - -
========= ========
7. Loss per share - basic and diluted
The calculation of loss per share is based on the following:
2012 2011
Loss for the year
Loss for the year from continuing
operations (GBP000) (172) (175)
Loss for the year from discontinued
operations (GBP000) (344) (1,727)
------------- -------------
Loss for the year from continuing
and discontinued operations (GBP000) (516) (1,902)
------------- -------------
Number of shares
Weighted average number of shares 303,675,390 303,675,390
------------- -------------
Loss per share
Loss per share from continuing
operations (pence) (0.06) (0.06)
------------- -------------
Loss per share from discontinued
operations (pence) (0.11) (0.57)
------------- -------------
Loss per share from continuing
and discontinued operations (pence) (0.17) (0.63)
------------- -------------
Diluted loss per share is calculated by adjusting the weighted
average number of ordinary shares in issue assuming conversion of
all dilutive potential ordinary shares. During the year the
Company's potential ordinary shares consist of share options. Due
to losses in the current and preceding year there are no dilutive
ordinary shares.
8. Investments in subsidiaries
Cost of shares Loans Total
GBP000 GBP000 GBP000
Cost
At 1 April 2010 1,142 1,464 2,606
Additions in the year - 326 326
--------------- -------- ---------
At 31 March 2011 1,142 1,790 2,932
Additions in the year - 295 295
Repayments in the year - (585) (585)
On disposal - (64) (64)
--------------- -------- ---------
At 31 March 2012 1,142 1,436 2,578
--------------- -------- ---------
Impairment
At 1 April 2010 - - -
Charge for the year 1,142 1,090 2,232
--------------- -------- ---------
At 31 March 2011 1,142 1,090 2,232
Charge for the year - 410 410
On disposal - (64) (64)
--------------- -------- ---------
At 31 March 2012 1,142 1,436 2,578
--------------- -------- ---------
Carrying value
At 31 March 2010 1,142 1,464 2,606
--------------- -------- ---------
At 31 March 2011 - 700 700
--------------- -------- ---------
At 31 March 2012 - - -
--------------- -------- ---------
a) Sterling Green Limited
The rate of interest charged on the loan to Sterling Green
Limited during the year was 7.5% (2011 - 7.5%).
The Directors considered that the Company's investment in
Sterling Green Limited was impaired at 31 March 2011 and
accordingly an impairment provision was made amounting to
GBP2,232,000 in the financial statements for the year ended 31
March 2011. Following the appointment of a liquidator for Sterling
Green Limited on 3 February 2012 the entire outstanding amount has
been provided for at the year end resulting in a further impairment
provision of GBP346,000 being made in the financial statements for
the year ended 31 March 2012.
b) Taxdebts Limited and Sterling Green (Mortgages) Limited
On 21 December 2011 Taxdebts Limited was sold for GBP105 and
Sterling Green (Mortgages) Limited was sold for GBP100. As part of
the conditions of the sale of these companies, the remaining debt
book not disposed of by Sterling Green Limited on 1 December 2011
was sold to Taxdebts Limited for GBP10,000 and, in addition,
Taxdebts Limited took over the responsibility for the employment of
12 members of Sterling Green Limited's staff. The disposal resulted
in the write off of a loan from Sterling Green Group plc to
Taxdebts Limited amounting to GBP64,000.
9. Cash and cash equivalents
2012 2011
GBP000 GBP000
Cash at bank 149 1
-------- --------
10. Trade and other receivables
2012 2011
GBP000 GBP000
Amounts due within one year
Prepayments and accrued income 2 4
Cost of reverse takeover 285 -
-------- --------
287 4
======== ========
The cost of the reverse takeover has been deferred and will be
reclassified as a cost of investment once the reverse takeover has
been approved by shareholders. Details of the uncertainty in this
estimate are disclosed in note 1.
11. Trade and other payables
2012 2011
GBP000 GBP000
Trade payables 6 12
Social security and other
taxes 2 2
Accruals and deferred income 266 13
-------- --------
274 27
======== ========
Trade payables comprise amounts outstanding for ongoing
administration overhead. The carrying amount of trade payables
approximates to their fair value. All trade payables are paid
within credit terms.
Accruals include an amount of GBP249,000 in respect of the
estimated costs of the proposed reverse takeover incurred prior to
the year end. Details of the uncertainty in this estimate are
disclosed in note 1.
12. Share capital
2012 2011
GBP000 GBP000
Allotted, called up and fully paid
303,675,390 Ordinary Shares of 0.1p
each 304 304
======== ========
13. Financial risk management
The Company's limited operations expose it to some financial
risks arising from its use of financial instruments, the most
significant ones being liquidity risk, market risk and credit risk.
The Board of Directors is responsible for the Company's risk
management policies. The main policies for managing these risks are
as follows:
Liquidity risk
Liquidity risk arises from the management of working
capital.
The Directors have prepared forecasts for the enlarged group for
the period ending 31 December 2013 assuming the approval of the
proposed reverse takeover and they consider the Company has
sufficient working capital to cover all budgeted commitments during
that forecast period.
However, should approval not be obtained then, after paying the
estimated costs of an unsuccessful transaction, the Directors
believe that the correct course of action would be to propose to
shareholders that the Company be wound up.
Market risk
Market risk arises from the use of interest bearing financial
instruments and represents the risk that future cash flows of a
financial instrument will fluctuate as a result of changes in
interest rates.
Given the low levels of bank balances held by the Company, the
Directors do not believe that there is a significant interest rate
risk.
Credit risk
Credit risk is the risk that the counterparty will default on
its contractual obligations resulting in financial loss. Credit
risk arises from cash and cash equivalents and from exposure via
loans to subsidiary companies.
For cash and cash equivalents, the Company only uses recognised
banks with high credit ratings. All cash and cash equivalents at 31
March 2012 are held with the Company's bankers, Allied Irish Bank
(GB).
At the balance sheet date the Company's maximum credit risk
exposure was GBP149,000 (2011 - GBP1,000) represented by cash and
cash equivalents.
Categories of Company financial instruments
2012 2011
GBP000 GBP000
Financial assets:
Cash and cash equivalents 149 1
------- -------
Total financial assets 149 1
------- -------
Financial liabilities:
Trade and other payables (272) (25)
Total financial liabilities (272) (25)
------- ------
Net (123) (24)
======= ======
All financial assets are categorised as loans and receivables
and all financial liabilities are categorised as financial
liabilities measured at amortised cost.
The amortised cost of all financial assets and liabilities shown
above is considered to also be the fair value of the Company's
assets and liabilities.
14. Capital management
The Company is not subject to any externally imposed capital
requirements. Accordingly, the Directors' primary objective when
managing capital is to provide future returns to shareholders,
whilst ensuring the Company's ability to continue as a going
concern.
15. Related Party transactions
Key management are those persons having authority and
responsibility for planning, controlling and directing the
activities of the Company. In the opinion of the Board, the
Company's key management are the directors of Sterling Green Group
plc. Information regarding their compensation is given in note 3 to
the financial statements.
The services of J M Edelson were provided to the Company under a
service agreement by London & City Credit Corporation Limited.
Amounts charged to the Company during the year for his services
amounted to GBP20,833 (2011 - GBP25,000). At 31 March 2012 GBPnil
(2011 - GBP2,500) of this amount remained outstanding.
During the year the Company loaned Sterling Green Limited an
additional GBP126,000. Sterling Green Limited repaid GBP585,000 of
the total loan to the Company during the year (2011 - GBP179,000
repaid). The interest charge on the entire loan during the year
amounted to GBP105,307 (2011 - GBP104,850).
On 21 December 2011 two wholly owned trading subsidiaries were
also disposed of. Taxdebts Limited was sold for GBP105 and Sterling
Green (Mortgages) Limited was sold for GBP100. S.T Ali continued to
be a Director of both of these companies after the disposal whilst
J McClean also became a consultant to Taxdebts Limited. As part of
the conditions relating to the sale of these companies, the
remaining debt book not disposed of by Sterling Green Limited on 1
December 2011 was sold to Taxdebts Limited for GBP10,000 and, in
addition, Taxdebts Limited took over the responsibility for the
employment of 12 members of Sterling Green Limited's staff. The
disposal resulted in the write off of a loan from Sterling Green
Group plc to Taxdebts Limited amounting to GBP64,000.
The interests of the Directors who held office at 31 March 2012
in the issued share capital of the Company at the beginning (or
date of appointment if later) and at the end of the financial year
were as follows:
Number of ordinary shares of
0.1p each
31 March 2012 1 April 2011
J. M. Edelson 35,050,390 35,050,390
I. Aspinall 12,250,000 12,250,000
The shares held by J. M. Edelson include 1,000,000 held by his
wife, J. B. Edelson, 1,000,000 held as a trustee of the Morris
Edelson Settlement, 1,750,000 held by Novabank Capital Limited and
3,800,390 held by London and City Credit Corporation Limited.
The shares held by I. Aspinall include 8,250,000 held
non-beneficially as a trustee of The Blueberry Charitable Trust and
4,000,000 held non-beneficially by his wife, J.M. Aspinall as a
trustee of The Cheshire Children's Charitable Trust.
Throughout the year J. M. Edelson held options over 5,000,000
ordinary shares of 0.1 pence each with an exercise price of 0.1
pence per share. These options are exercisable at any time up to 29
October 2016.
Throughout the year I. Aspinall held options over 625,000
ordinary shares of 0.1 pence each with an exercise price of 0.1
pence per share. These options are exercisable at par any time up
to 29 October 2016.
There have been no changes in the Director's interest in shares
or share options between 31 March 2012 and the date these financial
statements were approved.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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