TIDMTRAF
RNS Number : 5165A
Trafalgar Property Group PLC
30 September 2020
TRAFALGAR PROPERTY GROUP PLC
("Trafalgar", the "Company" or "Group")
Final Results for the year ended 31 March 2020 and notice of
Annual General Meeting
Trafalgar (AIM: TRAF), the AIM quoted residential property
developer operating in southeast England, announces its final
results for the twelve months ended 31 March 2020.
The Company's Annual Report is being posted to shareholders
today and contains notice of the Annual General Meeting of the
Company to be held at the Company's offices at Chequers Barn, Bough
Beech, Edenbridge, Kent TN8 7PD at 11.00 a.m. on Tuesday 27th
October 2020.
Enquiries:
Trafalgar Property Group Plc +44 (0) 1732 700
James Dubois 000
Spark Advisory Partners Ltd - AIM Nominated
Adviser
Matt Davis +44 (0) 20 3368 3550
Peterhouse Capital Limited - Broker
Duncan Vasey/Lucy Williams
Trafalgar Property Group Plc
CHAIRMAN'S STATEMENT
for the year ended 31 March 2020
On behalf of the Board, I present Trafalgar Property Group Plc
(the Group), results for the year ended 31 March 2020 which
includes two property sales and a car park space sale completed in
the year. The overall result was disappointing, as can be seen in
the attached Accounts and Strategic Report, although an improvement
on the previous year's loss. We are continuing to search for
profitable sites for planning gains and development
possibilities.
Financials
The year under review saw the Group turnover at GBP1,970,106
(2019: GBP2,128,189), with a loss after tax of GBP1,022,898 (2019:
Loss GBP2,296,422), after taking into account exceptional items as
detailed in note 20 to the accounts.
Management have performed a review of the assets and liabilities
of the underlying subsidiaries which form the value of the
anticipated profits on ongoing developments. In addition, the value
of land options in TR+ have been re-assessed. At the time of
approval of the financial statements there is no confirmed planning
permission on these land options.
Due to the uncertainties and timing of developments it has been
agreed by management not to include any future anticipated profits
of developments in their assessment. Therefore, the net asset value
of the underlying investments and inventory does not support the
Group's carrying value of investments in the subsidiaries.
Management have concluded that an impairment of the investments
is prudent and that these will be written down
to zero, resulting in an exceptional charge of GBP595,452 (2019: GBP1,559,319).
The cash on the balance sheet at the end of the year was
GBP27,969 (2019: GBP32,800) and the Group continues to have
sufficient bank facilities for all planned activities.
In July 2020 we completed a share issue raising GBP750,000 of
cash, before expenses, which provides additional cash reserves for
our planned activities.
Business Environment and Outlook
Our recent move into the assisted living sector has not proved
to be a success so we are now concentrating on our core activity of
property development for residential homes and apartments.
On 27 May, 2019 Chris Johnson and his son Alex Johnson stepped
down from the Group Board, although they remain involved as
Directors of subsidiaries. On the same day, Paul Treadaway was
appointed as the new Group Managing Director which strengthens the
Board with his particular expertise in the sector for assisted
living developments as well as conventional property developments.
This retains a good balance of complementary skills on the Board.
We are currently progressing offers of finance alongside our
planning applications so that we should be well placed to commence
our developments as soon as planning permits.
The effects of the Covid 19 pandemic have affected our business
since March as sales of completed units have been delayed by some
months. Fortunately we had completed the construction phase of
these units although there have also been delays to the obtaining
of planning permission for other potential new sites. Like most
businesses, we are aware of our need to conduct ourselves carefully
to preserve the health of our staff and customers.
I would refer you to the Strategic Report that covers our
activities in more detail.
James Dubois
Chairman
29th September 2020
Trafalgar Property Group Plc
STRATEGIC REPORT
for the year ended 31 March 2020
Business review, results and dividends
All trading and property assets of Trafalgar Property Group Plc
(Group) are held in the name of the Group or its subsidiaries as
follows:
Trafalgar New Homes Limited (TNH)
Trafalgar Retirement+ Limited (TR+)
Selmat Limited - acquired April 2019 (Selmat)
Combe Bank Homes (Oakhurst) Limited (Oakhurst)
Combe Homes (Borough Green) Limited (Borough Green)
All bank and mortgage borrowings are the liability of TNH, the
wholly owned subsidiary of the Group, apart from the mortgages on
the four properties held by Selmat. The shares of the Group are
quoted on the London Stock Exchange AIM market.
The principal activity of the Group continues to be that of home
building and property development and the consolidated results of
the year's trading, are shown below. The consolidated loss for the
year was GBP1,022,898 (2019: Loss GBP 2,296,422) after taking into
account exceptional items as mentioned in note 20 to the
accounts.
Principal risks & uncertainties
Set out below are certain risk factors which could have an
impact on the Group's long-term performance. The factors discussed
below should not be regarded as a complete and comprehensive
statement of all potential risks and uncertainties facing the
Group.
The principal risks and uncertainties facing the Group are:
1. Any possibility that lending criteria from the Group's
bankers may harden with little prior notice.
2. Construction costs may escalate and eat into gross profit margins.
3. Heavy overheads may be incurred especially when projects have
been completed and before others have been commenced.
4. The Group could pay too much for land acquisitions.
5. The Group's reliance on key members of staff.
6. The market may deteriorate, damaging liquidity of the Group and future revenues.
The Group considers that it mitigates these risks with the
following policies and actions:
1. The Group affords its bankers and other lenders a strong
level of asset and income cover and maintains good relationships
with a range of funding sources from which it is able to secure
finance on favourable terms.
2. Construction costs are outsourced on a fixed price contract
basis, thereby passing on to the contractor all risk of development
cost overspend, including from increased material, labour or other
costs.
3. Most other professional services are also outsourced, thus
providing a known fixed cost before any project is taken forward
and avoiding the risk that can arise in employing in-house
professionals at a high unproductive overhead at times when
activity is slack.
4. Land buying decisions are taken at board level, after careful
research by the Directors personally, who
have substantial experience of the house building industry,
potential construction issues and the local market.
The Group focuses on a niche market sector of new home
developments in the range of four to twenty units. Within this unit
size, competition to purchase development sites from land buyers is
relatively weak, as this size is unattractive to major national and
regional house builders who require a larger scale to justify their
administration and overheads, whilst being too many units for the
smaller independent builder to finance or undertake as a project.
Within this market, there are opportunities to negotiate land
acquisitions on favourable terms. Many competitors who also focus
on this niche have yet to recapitalise and are unable to raise
finance.
5. Many of the activities are outsourced and each of the
Directors is fully aware of the activities of all members.
6. The Group has a rigorous corporate governance policy
appropriate for a publicly quoted company with ambitions
substantially to raise its profile within the wider investor
community.
Operations review
A summary of the results for the year is as follows:-
2020 2019
GBP GBP
Restated
Revenue for the year 1,970,106 2,128,189
Gross profit/(loss) 154,068 (264,171)
Loss after taxation (1,022,898) (2,296,422)
Group turnover for the year amounted to GBP1,970,106 (2019:
GBP2,128,189), representing the sale of two (2019: five)
residential properties plus a car park space. During the first six
months to 30 September, 2019 the Group reclassified four properties
from Trading Stock to Investment Property. These were assessed to
be at fair market value and transferred to a newly acquired
investment company. In the interim accounts this was recorded on
the face of the profit and loss account as turnover and cost of
sales at no profit. As part of the year-end audit process the
treatment of this transaction has been amended and removed from
turnover and cost of sales in the Group accounts and shown instead
as an inter-group transfer. This adjustment has had no effect on
profit or cashflow.
After taking into account the overheads of the Group, there was
a loss recorded for the year of GBP1,022,898 after exceptional
items as detailed in note 20.
There will be no tax charge and the Company now has tax losses
being carried forward of GBP4,381,991
(2019: losses GBP3,364,609).
The loss per share during the year was (0.21p), (2019: loss per
share 0.54p).
As can be seen from the above , the Group failed to achieve a
profit for the year under review and, as at the year end, all
remaining residential units have been sold being the executive
house at Saxons, the sale of an option in Ewell and the remaining
car park space at Borough Green site. Going forward five of a total
of six units at the Sheerness Site are, as at the date of this
report, all under offer with further options opportunities being
explored.
Directors' duties under S172
The Directors believe that, individually and together, they have
acted in the way they consider, in good faith, would be most likely
to promote the success of the Group for the benefit of its members
as a whole, having regard to the stakeholders and matters set out
in s172(1)(a-f) of the companies Act 2006 in the decisions taken
during the year ended 31 March 2020.
Our Board of Directors remain aware of their responsibilities
both within and outside of the Group. Within the limitations of a
Group with so few employees we endeavour to follow these
principles:
-- Purpose, vision and strategy : this is set out on pages 3 and
4 of the Strategic Report and we recognise our role in identifying
opportunities to develop homes and apartments to the best quality
standards.
-- Group policies : these are reviewed annually and staff and
Directors are encouraged to improve their skillset as
appropriate.
-- Culture and people : we fully support a culture where all
customers, staff and suppliers are treated in an open and honest
fashion, irrespective of race, gender, ethnic, disabilities or
other scenarios.
-- Board structure : the role of the Board is reviewed annually
with a clear focus on the specific roles assigned to each
individual to enable the Board to properly support each member of
staff.
-- Freedom within a framework : we are developing a new
framework for communicating this freedom in a straight-forward
methodology.
-- Risk and internal control framework : risks and controls are
subject to discussion at quarterly Board meetings. Every project
undertaken by the Group is analysed with a view to limiting the
risks to the Group and its Stakeholders before proceeding with
implementation.
Key performance indicators (KPIs)
Management are closely involved in the day to day operations of
the Group and are very aware of cashflows and expenditure. However,
Management believe that the key indicators of performance for the
Group are the revenue and profitability achieved during the period.
These measures are disclosed above in the operations review.
Development Pipeline & outlook
The year under review was not without its difficulties. In the
residential division delays occurred on the building programme for
the various properties that were still in the course of
construction, or being finished off, with contractors appointed to
complete the works but unable to follow the timetable laid down for
completion of those works.
The delays lead to escalating interest costs on borrowing and
therefore affected the profitability of the completed units that
were for sale, on the disposal of the same.
During the year under review, Selmat was acquired to enable the
retention of selected unsold properties rather than selling them
into a declining market. Four properties were transferred as an
intergroup transaction and let out on Assured Shorthold Tenancy
Agreements, the rental income generated being substantially in
excess of the borrowing cost of each property. Currently the Group
holds these four rented properties, valued at GBP1,975,000 as
investment property.
During the year work has continued on the 6 town house site at
Sheerness, Kent where, again, contractor difficulties were
experienced with the appointed contractor ceasing work on site
resulting in the Group having to appoint an alternative contractor
to complete the works. Work on site has been completed and five of
these properties are under offer, under the Government's Help To
Buy Scheme.
Whilst TR+ continue to identify and secure new land
opportunities for extra/care and assisted living, they are equally
focused on obtaining a successful outcome on the sites currently
under option and/or in for planning. Once planning has been
achieved then the sites can be built out and placed for sale on the
open market, or in the case of the smaller residential schemes,
sold on with planning, both options being profitable to the
business. Options have been secured for residential development in
Ashtead, Epsom, Leatherhead and Send Surrey. Of these sites,
Ashtead and Epsom were sold on once planning permission had been
granted to show a profit in the current year. It is our intention
to develop the Leatherhead and Send sites once planning is
granted.
During the year TR+ entered into a guarantee agreement for
GBP240,000 for funds supplied by Mr C Johnson, being a deposit
forfeited by Randell House Ltd, a subsidiary of TR+. This is
related to the acquisition of an assisted living site in Camberley
Surrey, where the acquisition was not completed owing to a lack of
funding. Since then, Randell House Ltd has been dissolved on 22
September, 2020.
Financial Instruments
Information relating to the financial instruments is now
included in the Directors' Report on pages 9-12.
Paul Treadaway
Director
29th September, 2020
Trafalgar Property Group Plc
DIRECTORS' REPORT
for the year ended 31 March 2020
DIRECTORS' REPORT
The Directors present their Report and Audited Financial
Statements for the year ended 31 March 2020.
Results and dividends
The results for the year are set out on page 17.
The Directors do not recommend the payment of a final dividend
for the year (2019: nil).
Directors
The following Directors have held office since 1 April 2019 and
have all served for the entire accounting year:-
N A C Lott
J Dubois
Appointed in year:
P A Treadaway - appointed 27/5/19
Resignations in the year:
C C Johnson - resigned 27/05/19
A D Johnson - resigned 27/05/19
D C Stocks - resigned 10/12/19
The Company has in place an insurance policy in relation to
Directors indemnity during both years.
Conflicts of interest
Under the articles of association of the company and in
accordance with the provisions of the Companies Act 2006, a
Director must avoid a situation where he has, or can have, a direct
or indirect interest that conflicts, or possibly may conflict with
the company's interests. However, the Directors may authorise
conflicts and potential conflicts, as they deem appropriate. As a
safeguard, only Directors who have no interest in the matter being
considered will be able to take the relevant decision, and the
Directors will be able to impose limits or conditions when giving
authorisation if they think this is appropriate. During the
financial year ended 31 March 2020, the Directors have authorised
no such conflicts or potential conflicts.
Directors' interests in shares
Directors' interests in the shares of the Company, including
family interests, at 31 March 2020 were as follows:-
31.03.2020 31.03.2019
Ordinary shares Ordinary shares - 0.1p
- 0.1p each each
C C Johnson 186,815,803 186,815,803
A Johnson 1,868 1,868
J Dubois 4,000,000 1,500,000
N Lott 500,000 500,000
D C Stocks 80,330,532 80,330,532
P Treadaway 106,484,658 106,484,658
On 31 May 2019 62,500,000 additional shares were issued being
ordinary 0.01p shares and 0.03p premium shares.
P Treadaway was a shareholder as at 31 March, 2019 but not a
Group Director at that time.
C C Johnson, A D Johnson and D C Stocks were Directors and
shareholders as at 31 March, 2019 but only shareholders at 31
March, 2020.
Other substantial shareholdings
As at 16 September, 2020, being the latest practicable date
before the issue of these financial statements, the company had
been notified of the following shareholdings which constitute 3% or
more of the total issued shares of the company at that date.
Ordinary
shares Shareholding
No. %
C.C. Johnson 186,815,803 13.11
C Akers 145,190,380 10.17
P Treadaway 187,734,658 13.17
Statement of directors' responsibilities
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the consolidated financial statements in
accordance with EU adopted IFRS and the Company financial
statements in accordance with FRS 102 and applicable law. Under
company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and of the profit or loss of the
Group for that year. In preparing these financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will continue
in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and enable them to ensure that the
financial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
They are further responsible for ensuring that the Strategic
Report and the Report of the Directors and other information
included in the Annual Report and Financial Statements is prepared
in accordance with applicable law in the United Kingdom.
The maintenance and integrity of the Group website is the
responsibility of the Directors; the work carried out by the
auditors does not involve the consideration of these matters and,
accordingly, the auditors accept no responsibility or any changes
that may have occurred in the accounts since they were initially
presented on the website.
Legislation in the United Kingdom governing the preparation and
dissemination of the accounts and the other information included in
annual reports may differ from legislation in other
jurisdictions.
Corporate Governance Statement
The Board of the Group recognise the value of good corporate
governance and has through the year ended 31 March 2020 implemented
corporate governance procedures appropriate for the present size of
the entity having given due regard to the Corporate Governance Code
for Small and Mid-Size Quoted Companies issued by the Quoted
Companies Alliance ("QCA"). In accordance with AIM Rule 26 as
amended, the Company has decided to apply the QCA Corporate
Governance Code ("QCA Code") issued by the QCA in May 2018 and has
published on its website details of the QCA Code, how the Company
has complied with the QCA Code and, where it departs from the QCA
Code, an explanation of the reasons for doing so.
Board Structure
The Board consists of three Directors of which one is executive
and two non-executive, all of whom hold shares in the Group.
The Board meets as and when required and is satisfied that it is
provided with information in an appropriate form and quality to
enable it to discharge its duties. All Directors are required to
retire by rotation with one third of the board seeking re-election
each year.
Due to the current size of the Group, the duties that would
normally be attributed to The Nomination Committee, have been
undertaken by the board as a whole.
The board has undertaken a formal assessment of the auditor's
independence and will continue to do so at least annually. This
assessment includes:
-- a review of non-audit services provided to the company and the related fees;
-- a review of the auditor's own procedures for ensuring the
independence of the audit firm and parties
and staff involved in the audit, including regular rotation of
the audit partner; and
-- obtaining confirmation from the auditor that, in their
professional judgement, they are independent.
Internal Controls
The Board is responsible for the Group's system of internal
controls and for reviewing their effectiveness. The internal
controls are designed to ensure the reliability of financial
information for both internal and external purposes. The Directors
are satisfied that the current controls are effective with regard
to the size of the Group. Any internal control system can only
provide reasonable, but not absolute assurance against material
mis-statement or loss. Given the size of the Group, the Board has
assessed that there is currently no need for an internal audit
function.
Financial Instruments
The Group's principal financial instruments comprise cash at
bank, bank loans, other loans and various items within current
assets and current liabilities that arise directly from its
operations. The Directors consider that the key financial risk is
liquidity. This risk is explained in the section headed 'Principal
risks and uncertainties' in the Annual Report and Accounts on page
5.
Information relating to the financial instruments is now
included in the Strategic Report on pages 5-8.
Future Developments
Information relating to future developments is included in the
Strategic Report on pages 5-8.
Provision of information to auditor
Each of the persons who are Directors at the time when this
Directors' Report is approved has confirmed that:
-- so far as that Director is aware, there is no relevant audit
information of which the Group's auditor is unaware; and
-- that Director has taken all the steps that ought to have been
taken as a Director in order to be aware of any information need by
the Group's auditor in connection with preparing their report and
to establish that the Group's auditor is aware of the
information.
Auditor
The auditor, MHA MacIntyre Hudson, will be proposed for
re-appointment in accordance with Section 489 of the Companies Act
2006.
This report was approved by the board and signed on its
behalf.
Paul Treadaway Director
29th September 2020
Independent auditor's report to the members of Trafalgar
Property Group plc
1. Our Opinion
We have audited the financial statements of Trafalgar Property
Group plc (the parent) and its subsidiaries (the group) for the
year ended 31 March 2020.
The financial statements that we have audited comprise:
-- Consolidated statement of comprehensive income
-- Group and company statement of financial position
-- Group statement of changes in equity
-- Statement of changes in equity
-- Group and company statement of cashflows
-- Notes of the financial statements, including the accounting policies.
The financial reporting framework of the group that has been
applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European
Union. The financial reporting framework that has been applied in
the preparation of the parent company financial statements is
applicable law and United Kingdom Accounting Standards, including
Financial Reporting Standard 102 The Financial Reporting Standard
applicable in the UK and Republic of Ireland (United Kingdom
Generally Accepted Accounting Practice).
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the parent company's affairs as at 31
March 2020 and the Group's loss for the year then ended;
-- the group financial statements have been properly prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union;
-- the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006; as regards the
group financial statements, Article 4 of the IAS Regulation.
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the group
and the parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the
UK, including the FRC's Ethical Standard as applied to listed
entities, and we have fulfilled our ethical responsibilities in
accordance with those requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
3. Material uncertainty regarding going concern
We draw your attention to note 3 in the financial statements
which states that the group incurred substantial losses during the
year and the continued requirements for successful future equity or
debt fund raising. The impact of this together with other matters
set out in the note, indicate that a material uncertainty exists
that may cast significant doubt on the group's ability to continue
as a going concern. Our opinion is not modified in respect of this
matter.
Overview
Materiality
Group GBP68K 2% of gross assets
Company GBP7K 2% of gross assets
Key audit matters
Group
* Valuation of inventory
* Undisclosed Related Party transactions
------------------------------------------------------
4. Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those matters
which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the efforts of
the engagement team and, as required for listed entities, our
results from those procedures. These matters were addressed in the
context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Valuation of inventory
The Risk Our response
There is a risk that We reviewed the accounting policy to be
inventory in the financial adopted by management and assessed its
statements might not consistency with the requirements of IAS
be valued correctly 2 on inventories.
either at initial
recognition or when We reviewed and discussed each material
assessing the recoverability inventory item, as these relate to specific
at the year end. sites being developed, with the Directors.
This balance is required We tested additions to inventory in the
to be measured at year and corroborated to supporting evidence.
the lower of cost
and net realisable A material element of these balances was
value. capitalised borrowing costs and we considered
this against the requirements of IAS 32
This requires significant and confirmed that the requirements were
judgement from management. appropriately applied.
These factors increase
the risk of a material We reviewed the Directors assessment of
misstatement. the recoverability of each inventory item
and confirmed these to post year end sales
were possible.
Result of our procedures
We concluded that inventory was appropriately valued and presented
within the financial statements.
Undisclosed Related Party transactions
The Risk Our response
The Group enters into Our procedures included an assessment
a significant number of the presentation of related party transactions
of transactions with in the financial statements. This focussed
related parties, both primarily on the Directors' loan accounts.
intra-group transactions
and with individuals We reviewed movements on these balances
related to the Group. in the year and vouched items to supporting
There is a risk that evidence.
transactions (particularly
any transactions which We discussed with management the nature
are not at arm's length) and purpose of these items and considered
and balances with whether disclosure sufficiently addressed
related parties are these matters.
undisclosed.
In addition we obtained written confirmations
of the balances from all disclosed parties
and confirmed key terms to agreements.
Result of our procedures
We concluded that the classification and disclosure of related
party transactions is complete and appropriate.
5. Our application of materiality
Our definition of materiality considers the value of error or
omission in the financial statements that would change or influence
the economic decision of a reasonably knowledgeable person.
Materiality is used in planning the scope of our work, executing
that work and evaluating the results.
Materiality in respect of the group was set at GBP68K and for
the parent company was GBP7K which was determined based on 2% of
gross assets.
6. An overview of the scope of our audit
The group consists of 6 reporting components all of which were
considered to be significant components of the group, Trafalgar
Property Group Plc, Trafalgar New Homes Limited, Trafalgar
Retirement + Limited, Combe Bank Homes (Oakhurst) Limited, Combe
Homes (Borough Green) Ltd and Selma Limited. The significant
components were subjected to full scope audits for the purposes of
our audit report on the group financial statements.
7. We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information. The
other information comprises the information included in the Annual
Report, other than the financial statements and our auditor's
report thereon. Our opinion of the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
8. Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the strategic report or
the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires is to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
9. Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
10. Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: [website link]. This description forms part
of our auditor's report.
11. Use of our report
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Andrew Moyser FCA FCCA
Senior Statutory Auditor
for and on behalf of MHA MacIntyre Hudson
Chartered Accountants and Statutory Auditor
London
29 September 2020
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2020
Year Year
ended ended
31 March 31 March
2020 2019
Note Restated
GBP GBP
Revenue 1 1,970,106 2,128,189
Cost of sales (1,816,038) (2,392,360)
----------- -----------
Gross profit/(loss) 154,068 (264,171)
Administrative expenses (541,397) (472,932)
Operating (loss) 3 (387,329) (737,103)
(Loss) before interest (387,329) (737,103)
Other income 2 - -
Exceptional items 20 (595,452) (1,559,319)
Interest payable and similar charges 5 (40,117) -
(Loss) before taxation (1,022,898) (2,296,422)
Tax payable on (loss) on ordinary activities 6 - -
(Loss) after taxation for the year attributable
to equity
holders of the parent (1,022,898) (2,296,422)
=========== ===========
Other comprehensive income attributable to
equity
holders of the parent - -
Total comprehensive (loss) for the year (1,022,898) (2,296,422)
(Loss) attributable to:
Equity holders of the Parent (1,022,898) (2,296,422)
Total comprehensive (loss) for the year attributable
to:
Equity holders of the Parent (1,022,898) (2,296,422)
(LOSS) PER ORDINARY SHARE:
Basic/diluted 7 (0.21)p (0.54)p
=========== ===========
All results in the current and preceding financial year derive
from continuing operations.
The notes on pages 21 to 37 are an integral part of these
consolidated financial statements.
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 March 2020
31 March 31 March
Note 2020 2019
TOTAL ASSETS GBP GBP
Non-current assets
Plant and equipment 8 1,423 1,339
Investment property 9 1,975,000 -
------------ -----------
1,976,423 1,339
Current assets
Inventory 12 1,212,692 4,481,230
Trade and other receivables 10 42,299 92,092
Cash and cash equivalents 11 27,969 32,800
------------ -----------
1,282,960 4,606,122
Total assets 3,259,383 4,607,461
============ ===========
EQUITIES & LIABILITIES
Current liabilities
Trade and other payables 13 548,804 442,203
Borrowings 14 555,000 2,502,462
1,103,804 2,944,665
Non-current liabilities
Deferred tax 6 - -
Borrowings 14 5,575,884 4,273,103
Total liabilities 6,679,688 7,217,768
Equity attributable to equity holders of
the Company
Called up share capital 15 2,633,067 2,570,567
Share premium account 16 2,660,862 2,510,462
Reverse acquisition reserve (2,817,633) (2,817,633)
(4,873,703
Profit & loss account (5,896,601) )
Total Equity (3,420,305) (2,610,307)
Total Equity & Liabilities 3,259,383 4,607,461
============ ===========
These financial statements were approved by the Board of
Directors and authorised for issue on 29 September, 2020 and are
signed on its behalf by:
P Treadaway: .............................................. J Dubois: ...................................................
The notes on pages 21 to 37 are an integral part of these
consolidated financial statements.
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 March 2020
Re
Share capital Share premium Reverse Retained Total equity
acquisition profits
reserve /(losses)
GBP GBP GBP GBP GBP
At 1 April 2018 2,570,567 2,510,462 (2,817,633) (2,577,281) (313,885)
Loss for the year - - - (2,296,422) (2,296,422)
Total comprehensive
income for the
year - - - (2,296,422) (2,296,422)
------------- ------------- ------------ ------------------- --------------
Issue of shares - - - - -
Share issue costs - - - - -
At 31 March 2019 2,570,567 2,510,462 (2,817,633) (4,873,703) (2,610,307)
------------- ------------- ------------ ------------------- --------------
At 1 April 2019 2,570,567 2,510,462 (2,817,633) (4,873,703) (2,610,307)
(Loss) for year - - - (1,022,898) (1,022,898)
Total comprehensive
(loss) for the
year - - - (1,022,898) (1,022,898)
------------- ------------- ------------ ------------------- --------------
Issue of shares 62,500 187,500 - - 250,000
Share issue costs - (37,100) - - (37,100)
At 31 March 2020 2,633,067 2,660,862 (2,817,633) (5,896,601) (3,420,305)
------------- ------------- ------------ ------------------- --------------
The reverse acquisition reserve was created in accordance with
IFRS3 'Business Combinations'. The reserve arises due to the
elimination of the Company's investment in TNH (formerly Combe Bank
Homes Limited). Since the shareholders of TNH became the majority
shareholders of the enlarged group, the acquisition is accounted
for as though there is a continuation of the legal subsidiary's
financial statements. In reverse acquisition accounting, the
business combination's costs are deemed to have been incurred by
the legal subsidiary. Retained profit/(losses) relate to the
profits/ losses earned by the business that have not been
distributed and have built up over the years of trading.
For the purpose of preparing the consolidated financial
statement of the Group, share capital represents the nominal value
of the issued share capital of 0.1p per share (2018: 0.1p per
share). Share premium represents the excess over nominal value of
the fair value consideration received for equity shares net of
expenses plus deferred shares of 0.9p after issued share capital of
1p.
On 31 May 2019 62,500,000 additional shares were issued being
ordinary 0.01p shares and 0.03p premium shares. The notes on pages
21 to 37 are an integral part of these consolidated financial
statements.
Trafalgar Property Group Plc
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2020
2020 2019
GBP GBP
Cash flow from operating activities
(Loss) after taxation (1.022,898) (2,296,422)
Depreciation 902 740
Decrease in inventory 1,303,640 3,494,598
Decrease in receivables 49,783 2,752
Increase in payables 106,601 47,948
Interest payable and similar charges 118,177 145,434
------------ ------------
Net cash outflow from operating activities 556,215 1,395,050
------------ ------------
Investing activities
Purchase of tangible fixed assets (986) -
------------ ------------
(986) -
------------ ------------
Taxation - (291,045)
------------ ------------
Financing activities
Issue of shares 212,900 -
New loan borrowings 1,479,373 -
Repaid loan borrowings (2,502,462) (606,048)
Related party new loan borrowing 778,408 320,000
Related party loan repayment - (794,715)
Repayment of other borrowings (400,000) (120,000)
Interest paid (128,279) (328,651)
------------ ------------
Net cash (outflow) from financing (560,060) (1,529,414)
------------ ------------
(Decrease) in cash and cash equivalents in
the year (4,831) (425,409)
------------ ------------
Cash and cash equivalents at the beginning
of the year 32,800 458,209
Cash and cash equivalents at the end of the
year 27,969 32,800
============ ============
The notes on pages 21 to 37 are an integral part of these
consolidated financial statements.
Trafalgar Property Group Plc
GROUP ACCOUNTING POLICIES
For the year ended 31 March 2020
BASIS OF ACCOUNTING
These financial statements are for Trafalgar Property Group Plc
("the Company") and its subsidiary undertakings ('the Group'). The
Company is a public company, limited by shares and incorporated in
England and Wales. (company number is 04340125). The Company's
registered office is Chequers Barn, Bough Beech, Edenbridge, Kent,
TN8 7PD.
The nature of the Group's operations and its principal
activities are set out in the Strategic Report on page 5.
BASIS OF PREPARATION
The Group financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) and
interpretations adopted by the European Union ("EU") and as applied
in accordance with the provisions of the Companies Act 2006. These
financial statements are for the year ended 31 March 2020 and are
presented in pounds sterling ("GBP"). The comparative year is for
the year to 31 March 2019.
The financial statements have been prepared under the historical
cost convention in accordance with applicable
United Kingdom law. The principal accounting policies adopted are set out below.
GOING CONCERN
The Directors have reviewed forecasts and budgets for the coming
year, which have been drawn up with appropriate regard for the
current economic environment and the particular circumstances in
which the Group operates. These were prepared with reference to
historical and current industry knowledge, taking into account
future strategy of the Group.
The Group continues to utilise banking sources for the financing
of its developments, together with loans from third party
investors, to ensure that there is sufficient money available for
the Group to undertake and complete its various developments.
The Group do not operate an overdraft facility but borrow on a
site specific basis from various bankers, with a mix of loans from
outside investors geared to some of the development properties and
otherwise loaned on a general basis to the Group.
The Board is comfortable with the structure of its bank finance,
which usually involves the bank lending a modest sum towards the
land purchase for the modest sized residential development schemes,
with the Group putting up the rest of the funds required to acquire
the site and the costs associated with the acquisition and then for
the bank to provide 100% of the build finance. However,
difficulties have been experienced in the raising of finance for
the substantial larger extra care/assisted living schemes which the
Group wishes to undertake and the Group is accordingly actively
seeking the finance for such developments at the present time.
Investor loans that are not related to specific sites are long
term loans with repayment dates extending beyond the year end and
have, in the past, been renewed when they come up for
repayment.
The existing operations have been generating funds to meet
short-term operating cash requirements and management are confident
that the expected sales will allow the Group to meet loan
repayments due within the next twelve months or that the loans will
be refinanced.
As a result of these considerations, at the time of approving
the financial statements, the Directors consider that the Company
and the Group have sufficient resources to continue in operational
existence for the foreseeable future.
However given that a degree of uncertainty exists in the timing
of future sales, and management's ability to refinance all loans
due in the next twelve months, there exists a material uncertainty
in relation to the going concern basis adopted in the preparation
of the financial statements.
REVENUE RECOGNITION
Revenue represents the amounts receivable from the sale of
properties during the year and other income directly associated
with property development. Revenue from the sale of properties is
recognised when the amounts of revenue and cost can be measured
reliably, the significant risks and rewards of ownership have been
transferred to the buyer, neither continuing managerial involvement
nor effective control of the property is retained and it is
probable that the economic benefits associated with the sale will
flow to the Group/company. In the majority of cases properties are
treated as sold and profits are recognised at the point of legal
completion.
The Directors are of the opinion that this accounting policy
accurately reflects commercial reality and the recording of revenue
for the Group.
STANDARDS ISSUED BUT NOT YET EFFECTIVE
The financial statements comply with IFRS as adopted by the
European Union. A number of new and revised Standards and Interpretations
have been adopted in the current period by the Group for the
first time and do not have a material impact on the Group.
In the current year, the Group has applied a number of amendments
to IFRS Standards and Interpretations issued by the IASB that
are effective for an annual period that begins on or after
1 January 2019. Their adoption has not had any material impact
on the disclosures or on the amounts reported in these financial
statements.
IFRIC 23 Uncertainty over Income Tax Treatments
The Group has adopted IFRIC 23 for the first time in the current
year. IFRIC 23 sets out how to determine the accounting tax
position when there is uncertainty over income tax treatments.
The Interpretation requires the Group to: -- determine whether
uncertain tax positions are assessed separately or as a group;
and -- assess whether it is probable that a tax authority will
accept an uncertain tax treatment used, or proposed to be used,
by an entity in its income tax filings: - If yes, the Group
should determine its accounting tax position consistently with
the tax treatment used or planned to be used in its income
tax filings. - If no, the Group should reflect the effect of
uncertainty in determining its accounting tax position using
either the most likely amount or the expected value method.
IFRS 16 Leases
IFRS 16 introduces new or amended requirements with respect
to lease accounting. It introduces significant changes to lessee
accounting by removing the distinction between operating and
finance lease and requiring the recognition of a right-of-use
asset and a lease liability at commencement for all leases,
except for short-term leases and leases of low value assets.
In contrast to lessee accounting, the requirements for lessor
accounting have remained largely unchanged. The impact of the
adoption of IFRS 16 on the Group's consolidated financial statements
is described below.
The date of initial application of IFRS 16 for the Group is
1 April 2019.
The Group only have short-term leases and leases of low value
assets. Therefore there has been no impact on the Group financial
statements as a result of IFRS 16.
New and revised IFRS Standards in issue but not yet effective
At the date of authorisation of these financial statements,
the Group has not applied the following new and revised IFRS
Standards that have been issued but are not yet effective and
[in some cases] had not yet been adopted by the EU:
IFRS 10 and IAS 28 (amendments) Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
Amendments to IFRS 3 Definition of a business
Amendments to IAS 1 and IAS 8 Definition of material
Conceptual Framework Amendments to References to the Conceptual
Framework in IFRS Standards
The directors do not expect that the adoption of the Standards
listed above will have a material impact on the financial statements
of the Group in future periods.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial
statements of the Group and its subsidiaries.
The results of subsidiaries acquired during the year are
included from the date of acquisition, being the date on which the
Group obtains control. They are deconsolidated on the date that
control ceases.
The consideration transferred for the acquisition of a
subsidiary is the fair value of the assets transferred, the
liabilities incurred and the equity interests issued by the Group.
This fair value includes any contingent consideration.
Acquisition-related costs are expensed as incurred.
When the Group ceases to have control or significant influence,
any retained interest in the entity is remeasured to its fair
value, with the change in carrying amount recognised in profit or
loss. The fair value is the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an
associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may
mean the amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
Control is achieved when the Group:
- has the power over the investee;
- is exposed or his rights, to variable returns from its
involvement with the investee; and
- has the ability to use its power to affect its returns.
FUNCTIONAL CURRENCY
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional
currency'). The consolidated financial statements are presented in
Pounds Sterling (GBP), which is the Company's functional and the
Group's presentation currency.
DEFINED CONTRIBUTION PENSION PLAN
The Group operates a defined contribution plan for its
employees. A defined contribution plan is a pension plan under
which the Group pays fixed contributions into a separate entity.
Once the contributions have been paid the Group has no further
payments obligations.
The contributions are recognised as an expense in the Statement
of Comprehensive Income when they fall due. Amounts not paid are
shown in accruals as a liability in the Statement of Financial
Position. The assets of the plan are held separately from the Group
in independently administered funds
FINANCIAL INSTRUMENTS
The Company recognises financial instruments when it becomes a
party to the contractual arrangements of the instrument. Financial
instruments are de-recognised when they are discharged or when the
contractual term expire. The Company's accounting policies in
respect of financial instruments transactions are explained
below:
Financial assets and financial liabilities are initially
measured at fair value.
Financial assets:
All recognised financial assets are subsequently measured in
their entirety at either fair value or amortised cost, depending on
the classification of the financial assets.
Fair value through profit or loss
All of the Company's financial assets other than those which
meet the criteria to be measured at amortised cost are subsequently
measured at fair value at the end of each reporting period, with
any fair value gains or losses being recognised in profit or loss
to the extent they are not part of a designated hedging
relationship. The net gain or loss recognised in profit or loss
includes any dividend or interest earned on the financial
asset.
Debt instruments at amortised cost
Debt instruments are subsequently measured at amortised cost
where they are financial assets held within a business model whose
objective is to hold financial assets in order to collect
contractual cash flows and selling the financial assets, and the
contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. Amortised cost is
calculated using the effective interest method and represents the
amount measured at initial recognition less repayments of principal
plus the cumulative amortisation using the effective interest
method of any difference between the initial amount and the
maturity amount, adjusted for any loss allowance.
Trade payables
Trade payables are initially measured at fair value and are
subsequently measured at amortised cost, using the effective
interest rate method.
Equity instruments
Equity instruments issued by the company are recorded at the
proceeds received, net of direct issue costs. Shares issued are
held at their fair value.
Share capital
Ordinary share capital is classified as equity. Interim ordinary
dividends are recognised when paid and final ordinary dividends are
recognised as a liability in the year in which they are
approved.
Impairment of financial assets
The Company recognises a loss allowance for expected credit
losses (ECL) on investments in debt instruments that are measured
at amortised cost or FVTOCI, lease receivables, amounts due from
customers under construction contracts, as well as on loan
commitments and financial guarantee contracts. No impairment loss
is recognised for investments in equity instruments. The amount of
expected credit losses is updated at each reporting date to reflect
changes in credit risk since initial recognition of the respective
financial instrument.
The Company recognises lifetime ECL on all financial instruments
where there has been a significant increase in credit risk since
initial recognition. The assessment of whether lifetime ECL should
be recognised is based on significant increase in the likelihood or
risk of a default occurring since initial recognition instead of on
evidence of a financial asset being credit-impaired at the
reporting date or an actual default occurring.
Lifetime ECL represents the expected credit losses that will
result from all possible default events over the expected life of a
financial instrument. In contract, 12 month ECL represents the
portion of lifetime ECL that is expected to result from default
events on a financial instrument that are possible within 12 months
after the reporting date.
In assessing whether the credit risk on a financial instrument
has increased, the following shall be taken into account:
- Actual or expected significant deterioration in the financial
instrument's external or internal credit rating; or
- Significant deterioration in external market conditions;
or
- Existing or forecast adverse changes in business, financial or
economic conditions that will impact the
debtor's ability to meet debt obligations; or
- Actual or expected deterioration in the operating results of
the debtor; or
- Actual or expected significant adverse changes in the
regulatory or technological environment of the debtor that will
impact the debtor's ability to meet debt obligations.
For certain categories of financial asset, such as trade
receivables, assets that are assessed not to be impaired
individually are subsequently assessed for impairment on a
collective basis. Objective evidence of impairment for a portfolio
of receivables could include the Company's past experience of
collecting payments, an increase in the number of delayed payments
in the portfolio past the average credit period of 30 days, as well
as observable changes in the national or local economic conditions
that correlate with default on receivables.
Financial liabilities:
Fair value through profit or loss
Financial liabilities are classified as at fair value through
profit or loss, when the financial liability is held for trading,
or is designated as at fair value through profit or loss. This
designation may be made if such designation estimates or
significantly reduces a measurement or recognition inconsistency
that would otherwise arise, or the financial liability forms part
of a group of financial instruments which is managed and its
performance is evaluated on a fair value basis, or the financial
liability forms part of a contract containing one or more embedded
derivatives, and IFRS 9 permits the entire combined contract to be
designated as at fair value through profit or loss. Any gains or
losses arising on changes in fair value are recognised in profit or
loss to the extent that they are not part of a designated hedging
relationship.
At amortised cost
Financial liabilities which are neither contingent consideration
of an acquirer in a business combination, held for trading, nor
designated as at fair value through profit or loss are subsequently
measured at amortised cost using the effective interest method.
This is a method of calculating the amortised cost of a financial
liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly
discounts estimated future cash payments through the expected life
of the financial liability, or where appropriate a shorter period,
to the amortised cost of a financial liability.
Derecognition of financial liabilities
The company derecognises financial liabilities when, and only
when, the company's obligations are discharged, cancelled or they
expire.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and deposits
held at call with banks with maturities of three months or less
from inception.
INVENTORIES
Inventories consist of properties under construction and are
stated at the lower of cost and net realisable value. Cost
comprises direct materials and, where applicable, direct labour
costs and those overheads that have been incurred in bringing the
inventories to their present location and condition. Interest on
sums borrowed that finance specific projects is added to cost. Net
realisable value represents the estimated selling price less all
estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
PROPERTY PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost, net of
depreciation and any provision for impairment. Depreciation is
calculated to write down the cost less estimated residual value of
all tangible fixed assets using the reducing balance method over
their expected useful economic lives. The rates generally
applicable are:
Fixtures, fittings and equipment - 25% on reducing balance
INVESTMENT PROPERTY
Investment property, which is property held to earn rentals
and/or for capital appreciation (including property under
construction for such purposes), is measured initially at cost,
including transaction costs. Subsequent to initial recognition,
investment property is measured at fair value. Gains or losses
arising from changes in the fair value of investment property are
included in profit or loss in the period in which they arise."
FINANCIAL LIABILITIES AND EQUITY
Financial liabilities and equity instruments issued by the Group
are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial
liability and an equity instrument. An equity instrument is any
contract that evidences a residual interest in the assets of the
Group after deducting all of its liabilities. The accounting
policies adopted for specific financial liabilities and equity
instruments are set out below.
BORROWING COSTS
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that take a substantial period of time to be completed for sale,
are added to the cost of property held as stock at the year end.
All other borrowing costs are recognised in the statement of
comprehensive income in the year in which they relate.
CURRENT AND DEFERRED TAXATION
Current tax assets and liabilities for the current and prior
years are measured at the amount expected to be recovered from or
paid to the tax authorities. The tax rates and the tax laws used to
compute the amount are those that are enacted or substantively
enacted, by the reporting date.
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting
profit.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the year when the liability is settled or the asset is
realised. Deferred tax is charged or credited in profit or loss,
except when it relates to items charged or credited directly to
other comprehensive income, in which case the deferred tax is also
dealt with in other comprehensive income.
PROVISIONS
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event and
it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Where the
Group expects some or all of a provision to be reimbursed, the
reimbursement is recognised as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any
provision is presented in the income statement net of any
reimbursement. If the effect of the time value of money is
material, provisions are discounted using a current pre-tax rate
that reflects, where appropriate, the risks specific to the
liability. Where discounting is used, the increase in the provision
due to the passage of time is recognised as a borrowing cost.
COMMITMENTS AND CONTINGENCIES
Commitments and contingent liabilities are disclosed in the
financial statements. They are disclosed unless the possibility of
an outflow of resources embodying economic benefits is remote. A
contingent asset is not recognised in the financial statements but
disclosed when an inflow of economic benefits is virtually
certain.
CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND
UNCERTAINTY
The preparation of financial statements in conformity with IFRS
as adopted by the EU requires the use of certain critical
accounting estimates. It also requires management to exercise its
judgment in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgment or
complexity, or areas where assumptions and estimates are
significant to the Group financial statements are disclosed
below.
Estimates and judgments are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
present circumstances.
Valuation of Inventory
The Group assesses the net realisable value of inventories under
development and completed properties held for sale according to
their recoverable amounts based on the realisability of these
properties, taking into account estimated costs to completion based
on past experience and committed contracts and estimated net sales
based on prevailing market conditions. Provision is made when
events or changes in circumstances indicate that the carrying
amounts may not be realised. The carrying value is reduced by its
selling price less costs to complete and sell. This impairment loss
is recognised immediately in the Statement of Comprehensive Income.
The assessment requires the use of judgment and estimates. The
carrying amount of inventory is disclosed in note 12 to the
financial statements.
Recognition of deferred tax assets
The recognition of deferred tax assets is based upon whether it
is more likely than not that sufficient and suitable taxable
profits will be available in the future against which the reversal
of temporary differences can be deducted. To determine the future
taxable profits, reference is made to the latest available profit
forecasts. Where the temporary differences are related to losses,
relevant tax law is considered to determine the availability of the
losses to offset against the future taxable profits.
Impairment of non financial assets
At each statement of financial position date the company reviews
the carrying amounts of its tangible and intangible assets with
finite lives to determine whether there is an indication that those
assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
If the recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. Impairment losses are recognised
as an expense immediately, unless the relevant asset is land or
buildings at a revalued amount, in which case the impairment loss
is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset in prior years. A
reversal of an impairment loss is recognised as income immediately,
unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
Trafalgar Property Group Plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2020
1 SEGMENTAL REPORTING
For the purpose of IFRS 8, the chief operating decision maker
("CODM") takes the form of the Board of Directors. The Directors'
opinion of the business of the Group is as follows.
The principal activity of the Group was property development.
All the Group's non-current assets are located in the UK.
Based on the above considerations, there is considered to be one
reportable segment. The internal and external reporting is on a
consolidated basis with transactions between Group companies
eliminated on consolidation. Therefore the financial information of
the single segment is the same as that set out in the consolidated
statement of comprehensive income, the consolidated statement of
changes in equity, the consolidated statement of financial position
and cashflows.
Revenue
An analysis of revenue is as follows:
The Group's revenue, which is all attributable to their
principal activity, can be split as follows:
2020 2019
GBP GBP
Restated
Development sales 1,891,000 2,123,500
Rental income 79,106 4,689
1,970,106 2,128,189
Timing of revenues are as follows:
2020 2019
GBP GBP
Goods transferred at a point in time 1,891,000 2,123,500
Services transferred over time
79,106 4,689
1,970,106 2,128,189
Revenues analysed by geographic location are as follows:
2020 2019
GBP GBP
United Kingdom
1,970,106 2, 128,189
2 OTHER INTEREST RECEIVABLE AND SIMILAR INCOME
Rental income has now become part of the principal activity of
the Group, and is therefore shown in revenue
with a subsequent restatement of the prior year.
3 LOSS FOR THE YEAR
Operating loss is stated after charging / (crediting) the
following:
2020 2019
GBP GBP
Subcontractor costs and cost of inventories recognised as an
expense
1,687,759 2,063,709
Interest charges 128,279 328,651
1,816,038 2,392,360
Depreciation of property, plant and equipment
902 740
Auditor's remuneration - audit services - Group 10,000
10,000
Auditor's remuneration - audit services - Group entities 7,000
6,000
17,000 16,000
Operating expenses by nature:
Subcontractors costs, interest and consumables 1,816,038 2,392,360
Employee expenses 141,552 169,054
Depreciation 902 740
Other expenses 994,395 1,862,457
Consultancy Services - P Treadaway 70,108 -
Debt forgiveness (70,108) -
2,952,887 4,424,611
========= =========
4 EMPLOYEES AND DIRECTORS' REMUNERATION
Staff costs during the year were as follows:
2020 2019
GBP GBP
Wages and salaries 113,000 138,000
Social security costs 8,512 11,394
Other pension costs 20,040 19,660
141,552 169,054
======= =======
The average number of employees of the Group during the year
was:
2020 2019
Number Number
Directors 3 4
Management 2 2
====== ======
Key management are the Group's Directors. Remuneration in
respect of key management was as follows:
2020 2019
GBP GBP
Short-term employee benefits:
- Emoluments for qualifying services C C Johnson - -
- Emoluments for qualifying services A Johnson 48,550 65,617
- Emoluments for qualifying services J Dubois 15,879 15,907
64,429 81,524
====== ======
There are retirement benefits accruing to Mr C C Johnson for
whom a company contribution was paid during the year of GBP18,000
(2019: GBP18,000) and Mr A Johnson GBP 1,350 (2019: GBP1,200).
Consultancy fees of GBP 4,994 (2019: GBP4,994) were paid to Mr N
Lott during the year.
5 INTEREST PAYABLE AND SIMILAR CHARGES
During the year the mortgage interest paid on borrowings
relating to ongoing developments was capitalised as part of
inventory GBP 10,102 (2019: GBP 183,217) with the interest on
properties sold in the year forming part of cost of sales and
transferred to profit & loss accordingly.
For sites where the construction had been completed, the
mortgage interest paid of GBP 118,177 (2019: GBP145,434) has been
accounted for in the profit & loss within cost of sales
together with an impairment provision of GBP nil (2019: GBP126,661)
on account of the reduction of likely selling prices being achieved
since the year end.
6 TAXATION
2020 2019
GBP GBP
Current tax - -
Tax charge - -
==== ====
2020 2019
GBP GBP
(Loss)/profit on ordinary activities before
tax (1,022,898) (2,296,422)
Based on (loss) for the year:
Tax at 19% (2018: 19%) (194,350) (436,320)
Unrelieved tax losses 76,411 138,799
Impairment 116,968 296,271
Disallowable expenses 971 1,250
Tax charge for the year - -
=========== ===========
Deferred tax
No deferred tax asset has been recognised in respect of
historical losses due to the uncertainty in future profits against
which to offset these losses. As at the 31 March 2020, the Group
had cumulative tax losses of GBP4,381,991 (2019: GBP3,364,609) that
are available to offset against future taxable profits.
7 (LOSS) PER ORDINARY SHARE
The calculation of (loss)/profit per ordinary share is based on
the following profits/(losses) and number of shares:
2020 2019
GBP GBP
(Loss) for the year (1,022,898) (2,296,422)
=========== ===========
Weighted average number of shares for basic
(loss) per share 487,690,380 425,190,380
=========== ===========
Weighted average number of shares for diluted
(loss) per share 487,690,380 425,190,380
=========== ===========
(LOSS) PER ORDINARY SHARE:
Basic (0.21)p (0.54)p
=========== ===========
Diluted (0.21)p (0.54)p
=========== ===========
8 PROPERTY, PLANT AND EQUIPMENT
Plant and equipment 2020 2019
GBP GBP
Cost
At 1 April 6,205 6,205
Additions 986 -
At 31 March 7,191 6,205
===== =====
Depreciation
At 1 April 4,866 4,126
Charge for the year 902 740
At 31 March 5,768 4,866
===== =====
Net book value at 31 March 1,423 1,339
-------------- -------
9 INVESTMENT PROPERTY
FAIR VALUE 2020 2019
1 April 2019 GBP GBP
Additions - -
31 March 2020 1,975,000 -
1,975,000 -
NET BOOK VALUE
At 31 March 2020
1,975,000 -
At 31 March 2019
- -
Fair Value at 31 March 2020
is represented by:
Valuation in 2020 1,975,000 -
The Directors consider there has been no change in the valuation
since purchase of the properties in August 2019 and therefore
the property remains in the accounts as at 31 March 2020 at
GBP1,975,000.00.
10 TRADE AND OTHER RECEIVABLES
2020 2019
GBP GBP
Other receivables 24,000 75,389
Other taxes 16,480 14,629
Prepayments 1,819 2,074
42,299 92,092
====== ======
There are no receivables that are past due but not impaired at
the year-end. There are no provisions for irrecoverable debt
included in the balances above.
11 CASH AND CASH EQUIVALENTS
All of the Group's cash and cash equivalents at 31 March 2020
are in sterling and held at floating interest rates.
2020 2019
GBP GBP
Cash and cash equivalents 27,969 32,800
====== ======
The Directors consider that the carrying amount of cash and cash
equivalents approximates to their fair value.
12 INVENTORY
2020 2019
GBP GBP
Work in progress 1,212,692 4,481,230
========= ===============
See note 5 for details of interest capitalised as part of the
value of inventory.
13 TRADE AND OTHER PAYABLES
2020 2019
GBP GBP
Trade payables 85,950 21,602
Other payables 28,130 2,462
Taxation & social security 3,422 6,149
Accruals 431,302 411,990
548,804 442,203
======= =======
14 BORROWINGS
2020 2019
GBP GBP
Directors' loans 3,471,511 2,693,103
Other loans 1,180,000 1,580,000
Bank loans - see under 1,479,373 2,502,462
6,130,884 6,775,565
========= =========
Included in Directors' loans is the sum of GBP 300,000 (2019:
GBP300,000) advanced by the DFM Pension Scheme of which Mr J Dubois
is the principal beneficiary. This loan bears interest at 12% per
annum (2019: 12% per annum).
Within Directors' loans is the sum of GBP 240,000 provided by Mr
C C Johnson for a deposit on an option which was not taken up.
The remaining balance is disclosed in note 17.
Included in other loans is GBP 650,000 (2019: GBP980,000)
advanced by Mr. G Howard (son-in-law of Mr. C C Johnson) to the
company at a rate of 10% per annum (2019: 10% pa). GBP 530,000
(GBP2019: GBP600,000) has been advanced by C Rowe, an employee of
the Group, at a rate of 10% per annum.
Lloyds Bank hold a legal charge over land at Wellesley Road,
Sheerness, Kent, together with charges over two term life policies
on two of the Directors.
Mrs S Johnson, wife of Mr C C Johnson has a legal charge
relating to her loan of GBP 380,000 to Selmat.
Selmat has also granted to Paragon Mortgages, legal charges over
the freehold property at Hildenborough and leasehold properties of
one of the three flats purchased in the year at Burnside. These
mortgages are interest only, for a term of 7 years with a fixed
interest rate for the first 5 years.
The bank borrowings are repayable as follows:
2020 2019
GBP GBP
On demand or within one year 555,000 2,502,462
In the second year - -
In the third to fifth years
inclusive - -
After five years 924,373 -
1,479,373 2,502,462
========= =========
Less amount due for settlement
within 12 months (included
in current liabilities) 555,000 2,502,462
Amount due for settlement after
12 months 924,373 -
========= =========
The weighted average interest rates paid on the bank loans were
as follows:
Bank loans: 2.03 % (2019: 7.18%)
All of the Directors' loans are repayable after more than 1
year. All loans are interest bearing and charged accordingly.
However Mr C C Johnson has waived his right to interest in the year
and as a result interest of GBP Nil (2019: GBP Nil) was paid to Mr
C C Johnson. The rate of interest on the loan is 5% pa (2019: 5%
pa). Interest of GBP36,000 (2019: GBP36,000) was paid to Mr J
Dubois at the rate of 12% pa (2019: 12% pa).
15 Share capital
Authorised Share Capital
2020 2019
Number Number
Ordinary shares of 0.1p in
issue 425,190,380 425,190,380
Ordinary shares of 0.1p issued
in year 62,500,000 -
Total number of Ordinary shares 487,690,380 525,190,380
Deferred shares of 0.9p in
issue 238,375,190 238,375,190
726,065,570 663,565,570
=========== ===========
On 3l May 2019 62,500,000 Ordinary shares of 0.1p were issued at
0.4p per share.
Ordinary shares entitle the holder to receive notice of and to
attend or vote at any general meeting of the Company or to receive
dividends or other distributions.
Deferred shares do not entitle the holder to receive notice of
and to attend or vote at any general meeting of the Company or to
receive dividends or other distributions. Upon winding up or
dissolution of the Company the holders of deferred shares shall be
entitled to receive an amount equal to the nominal amount paid up
thereon, but only after holders of Ordinary shares have received
GBP 100,000 per Ordinary Share. Holders of deferred shares are not
entitled to any further rights of participation in the assets of
the Company. The Company has the right to purchase the deferred
shares in issue at any time for no consideration.
Issued, allotted and fully paid
2020 2019
GBP GBP
Ordinary shares 425,190 425,190
Deferred shares 2,145,377 2,145,377
Issued in year - ordinary shares 62,500 -
2,633,067 2,570,567
16 Share PREMIUM ACCOUNT
2020 2019
GBP GBP
Balance brought forward 2,510,462 2,510,462
Premium on issue of new shares 187,500 -
Share issue costs (37,100) -
Balance carried forward 2,660,862 2,510,462
========== ===========
17 RELATED PARTY TRANSACTIONS
Mr C C Johnson holds 38.3% (2019: 43.94%) of the total issued
share capital of the Group as at 31 March, 2020
During the year four properties were sold by TNH to another
Group Company, Selmat, at market value.
Mr D C Stocks held 80,330,532 ordinary shares of the Group as at
31 March, 2020. He has since sold his entire shareholding.
Mr P Treadaway held 106,484,658 ordinary shares of the Group as
at 31 March, 2020.
Further details relating to an issue of shares post year end can
be found under note 18.
The following working capital loans have been provided by the
Directors:
2020 2019
GBP GBP
C C Johnson
Opening balances 2,417,146 2,170,657
Loan repayments - -
Personal drawings (141,910) (73,511)
Capital injected 896,275 320,000
Interest payable - -
Balance carried forward 3,171,511 2,417,146
========= =========
J Dubois 300,000 300,000
D Stocks - (23,935)
P Treadaway - (108)
Balance carried forward 3,471,511 2,693,103
========= =========
Mr Johnson's Loan bore interest during the year at 5% (2019: 5%
pa), but he has chosen to forego the interest in the year. Mr
Johnson is no longer a Director , but he served as a Director for
part of the year and remains a shareholder. Mr Dubois's Loan, which
is from his Pension Fund of which he is the sole beneficiary, was
at 12% pa interest (2019: 12% pa).
Mrs S Johnson, wife of Mr C C Johnson provided a Loan of
GBP380,000 which bore interest of 5% pa, (2019: nil), to Selmat, a
subsidiary of the Group This has been included within Mr C C
Johnson's loan balance above.
During the year rents were paid of GBP10,000 (2019: GBP10,259)
to the Combe Bank Homes Pension Scheme which owns the freehold
offices at Chequers Barn. Mr C C Johnson is a Trustee and
Beneficiary of that Pension Scheme.
Prior to Mr P Treadaway's appointment as a Director, charges of
GBP70,108 were paid to him in relation to consultancy services.
During the year payments were made to Mr D Stocks of GBP68,936
for consultancy services.
18 SHARE OPTIONS AND WARRANTS
There are no share options or warrants as at the year end.
On 14 July, 2020 warrants to subscribe for ordinary shares of
0.01p were granted as follows:-
Subscribers to the placing effected in July 2020 were granted
warrants to subscribe for up to 937,500,000 shares for a period of
two years, exercisable at 0.2p per share;
Peterhouse Capital Limited was granted warrants to subscribe for
shares equivalent up to 3% of the issued ordinary share capital for
a period of two years, exercisable at 0.08p per share.
Further, on 14 July 2020, GBP 600,000 of convertible loan notes
were issued to Mr C C Johnson as part of arrangements to reorganise
loans between him and the Group. The notes are convertible into
300,000,000 ordinary shares at 0.2p per share for a period of two
years. On conversion, warrants to subscribe for up to 300,000,000
ordinary shares will be granted to Mr C C Johnson, exercisable for
a period of two years from the date of grant at 0.2p per share.
19 CATEGORIES OF Financial instruments
All financial instruments are measured under IFRS 9 at amortised
cost.
Capital risk management
The Group considers its capital to comprise its share capital
and share premium. The Group's capital management objectives are to
safeguard the entity's ability to continue as a going concern, so
that it can continue to provide returns for shareholders and
benefits for other stakeholders and to provide an adequate return
to shareholders by pricing products and services commensurately
with the level of risk.
Significant Accounting Policies
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised, in respect of each class of financial asset, financial
liability and equity instrument are disclosed on pages 21 to 27 to
these financial statements.
Foreign currency risk
The Group has minimal exposure to the differing types of foreign
currency risk. It has no foreign currency denominated monetary
assets or liabilities and does not make sales or purchases from
overseas countries.
Interest rate risk
The Group is sensitive to changes in interest rates principally
on the loans from Lloyds Bank, where interest is charged on a
variable rate basis. The Paragon mortgages are based on a fixed
rate for the first 5 years of the 7 year term.
The impact of a 100 basis point increase in interest rates on
these loans would result in additional interest cost for the year
of GBP 14,794 (2019: GBP25,025).
Credit risk management
Credit risk refers to the risk that a counter-party will default
on its contractual obligations resulting in financial loss to the
Group.
Liquidity risk management
This is the risk of the Group not being able to continue to
operate as a going concern.
The Directors have, after careful consideration of the factors
set out above, concluded that it is appropriate to adopt the going
concern basis for the preparation of the financial statements and
the financial statements do not include any adjustments that would
result if the going concern basis was not appropriate.
Derivative financial instruments
The Group does not currently use derivative financial
instruments as hedging is not considered necessary. Should the
Group identify a requirement for the future use of such financial
instruments, a comprehensive set of policies and systems as
approved by the Directors will be implemented.
Financial liabilities
Due within Due within Due over
Total 1 year 1-5 years 5 Years
GBP GBP GBP
Trade payables 545,382 545,382
Borrowings - Directors' loan 3,471,511 3,471,511
Borrowings - Bank loan 1,479,373 555,000 - 924,373
Borrowings - Other loans 1,180,000 1,180,000
Total 6,676,266 1,100,382 4,651,511 924,373
20 EXCEPTIOnAL ITEM
Management have performed a review of the assets of its trading
subsidiaries. This assessment concluded that the land options in
TR+ should be written down to zero. Consequently, inventory valued
at GBP 432,268 (2019: GBP 1,850,364) less potential deferred tax of
nil (2019: GBP 291,045) has been written off in the financial
statements. Within TNH the sum of GBP 163,184 has been written off
which related to costs incurred to date on a site where planning
permission has not been achieved despite several submission
attempts and finally this was taken to appeal where this was also
turned down.
21 Net debt reconciliation
2020 2019
GBP GBP
Cash at bank 27,969 32,800
Cash and cash equivalents 27,969 32,800
Borrowing repayable within one year (including overdrafts) (6,130,884) (6,775,565)
Net Debt (6,102,915) (6,742,765)
Cash and Gross Total cash
liquid borrowings and liquid
investments with a fixed investments
interest rate GBP GBP GBP
Net debt as at 1 April 2018 458,209 (7,976,328) (7,518,119)
Cash flows (425,409) 1,200,763 (775,354)
Net debt as at 31 March 2019 32,800 (6,775,565) (6,742,765)
Cash flows (4,831) 644,681 639,850
Net debt as at 31 March 2020 27,969 (6,130,884) (6,102,915)
22 SUBSEQUENT EVENTS
Events subsequent to the year end that provide additional
information about the Group's position at the reporting date and
are adjusting events are reflected in the financial statements.
Events subsequent to the year end that are not adjusting events are
disclosed in the notes when material.
Authorities were granted on 27 March 2020 to allot up to
GBP2,000,000 nominal of shares; those authorities were replaced on
13 July 2020 by authorities to allot up to GBP593,750 nominal of
shares. On 14 July 2020 937,500,000 ordinary shares of 0.01p were
issued, raising GBP750,000 before costs.
Trafalgar Property Group Plc
COMPANY BALANCE SHEET
For the year ended 31 March 2020
Note 2020 2019
GBP GBP
FIXED ASSETS
Investments 7 - -
------------ -----------
- -
Current assets
Stocks - 5,292
Debtors 9 350,134 278,363
Cash at bank and in hand 3,538 9,561
------------ -----------
353,672 293,216
Creditors: amounts falling due within one
year 10 978,264 995,543
------------ -----------
Net current liabilities (624,592) (702,327)
Net (liabilities)/assets (624,592) (702,327)
============ ===========
Capital and reserves
Called up share capital 12 2,633,067 2,570,567
Share premium account 13 2,660,862 2,510,462
Profit and loss account (5,918,521) (5,783,356)
Equity - attributable to the owners of
the Parent (624,592) (702,327)
============ ===========
The loss for the financial year dealt with in the financial
statements of the Parent Company was Loss GBP 135,165 (2019: Loss
GBP2,531,344 ).
The financial statements were approved by the Board of Directors
on 29 September, 2020 and authorised for issue and are signed on
its behalf by:
P Treadaway: .............................................. J Dubois: ...................................................
Company Registration Number: 04340125
The notes on pages 40 to 45 form an integral part of these
financial statements
Trafalgar Property Group Plc
COMPANY STATEMENT OF CHANGES IN EQUITY
31 March 2020
Share capital Share premium Reverse Retained Total equity
acquisition profits
reserve /(losses)
GBP GBP GBP GBP GBP
At 1 April 2018 2,570,567 2,510,462 - (3,252,012) 1,829,017
Loss for the year - - - (2,531,344) (2,531,344)
Total comprehensive
income for the
year - - - (2,531,344) (2,531,344)
------------- ------------- ------------ ----------- ------------
Issue of shares - - - - -
Share issue costs - - - - -
At 31 March 2019 2,570,567 2,510,462 - (5,783,356) (702,327)
------------- ------------- ------------ ----------- ------------
At 1 April 2019 2,570,567 2,510,462 - (5,783,356) (702,327)
Loss for year - - - (135,165) (135,165)
Total comprehensive
income for the
year - - - (135,165) (135,165)
------------- ------------- ------------ ----------- ------------
Issue of shares 62,500 187,500 - - 250,000
Share issue costs - (37,100) - - (37,100)
At 31 March 2020 2,633,067 2,660,862 - (5,918,521) (624,592)
------------- ------------- ------------ ----------- ------------
The notes on pages 40 to 45 form an integral part of these
financial statements.
Trafalgar Property Group Plc
NOTES TO THE COMPANY FINANCIAL STATEMENTS
for the year ended 31 March 2020
1 GENERAL INFORMATION
Nature of operations
Trafalgar Property Group Plc ("the Company") is the UK holding
company of a group of companies which are engaged in property
development. The Company is registered in England and Wales. Its
registered office and principal place of business is Chequers Barn,
Bough Beech, Edenbridge, Kent TN8 7PD.
2 BASIS OF PREPARATION
The financial statements have been prepared under the historical
cost convention and in accordance with applicable United Kingdom
law, FRS 102 and accounting standards. The principal accounting
policies are described below. They have all been applied
consistently throughout the year and preceding year.
The Company has taken advantage of the exemption allowed under
section 408 of the Companies Act 2006 and has not presented its own
Statement of Comprehensive Income to these financial
statements.
The Company has taken advantage of the disclosure exemption from
the requirements of section 7 Statement of Cashflow, as permitted
by the FRS 102 "The Financial Reporting Standard applicable in the
UK and Republic of Ireland".
3 SIGNIFICANT ACCOUNTING POLICIES
(a) GOING CONCERN
The Directors have reviewed forecasts and budgets for the coming
year, which have been drawn up with appropriate regard for the
current economic environment and the particular circumstances in
which the Company operates. These were prepared with reference to
historical and current industry knowledge, taking into account
future strategy of the Company and wider Group.
The existing operations have been generating funds to meet
short-term operating cash requirements. As a result of these
considerations, at the time of approving the financial statements,
the Directors consider that the Company and the Group have
sufficient resources to continue in operational existence for the
foreseeable future. It is appropriate to adopt the going concern
basis in the preparation of the financial statements.
As with all business forecasts, the Directors' statement cannot
guarantee that the going concern basis will remain appropriate
given the inherent uncertainty about the future events.
(b) INVESTMENTS
Investments held as fixed assets are stated at cost less
provision for impairment.
(c) TAXATION
Current tax, including UK corporation tax and foreign tax, is
provided at amounts expected to be paid (or recovered) using the
tax rates and laws that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the balance sheet date
where transactions or events that result in an obligation to pay
more tax in the future or a right to pay less tax in the future
have occurred at the balance sheet date. Timing differences are
differences between the company's taxable profits and its results
as stated in the financial statements that arise from the inclusion
of gains and losses in tax assessments in years different from
those in which they are recognised in the financial statements.
A deferred tax asset is regarded as recoverable and therefore
recognised only when, on the basis of all available evidence, it
can be regarded as more likely than not that there will be suitable
taxable profits from which the future reversal of the underlying
timing differences can be deducted.
(d) FINANCIAL INSTRUMENTS
Financial assets and liabilities are recognised in the
statements of financial position when the Company has become a
party to the contractual provisions of the instruments.
The Company's financial assets and liabilities are initially
measured at fair value plus any directly attributable
transaction costs. The carrying value of the Company's financial
assets, primarily cash and bank balances, and liabilities,
primarily the Company's payables and other accrued expenses,
approximate to their fair values.
(i) Financial assets
On initial recognition, financial assets are classified as
either financial assets at fair value through profit or loss,
held-to-maturity investments, loans and receivables financial
assets, or available-for-sale financial assets, as appropriate.
Trade and other receivables
Trade and other receivables (including deposits and prepayments)
that have fixed or determinable payments that are not quoted in an
active market are classified as other receivables, deposits, and
prepayments. Other receivables, deposits, and prepayments are
measured at amortised cost using the effective interest method,
less any impairment loss. Interest income is recognised by applying
the effective interest rate, except for short-term receivables when
the recognition of interest would be immaterial.
(ii) Financial liabilities and equity instruments
Financial liabilities are classified as liabilities or equity in
accordance with the substance of the contractual arrangement.
Financial liabilities
Financial liabilities comprise long-term borrowings, short-term
borrowings, trade and other payables and accruals, measured at
amortised cost using the effective interest method.
The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
income over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash payments
(including all fees on points paid or received that form an
integral part of the effective interest rate, transaction costs and
other premiums or discounts) through the expected life of the
financial liability, or, where appropriate, a shorter period to the
net carrying amount on initial recognition.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all its
liabilities. Equity instruments issued by the Company are
recognised at the proceeds received, net of direct issue costs.
4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company's accounting policies, which
are described in note 3, the Directors are required to make
judgements, estimates and assumptions about the carrying amounts of
assets and liabilities that are not apparent from other sources.
The estimates and assumptions are based on historical experience
and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
The following are the key assumptions concerning the future and
other key sources of estimation uncertainty at the statement of
financial position date that have a significant risk of causing a
significant adjustment to the carrying amounts of assets and
liabilities in the financial statements:
Carrying value of investments in subsidiaries and
intercompany
Management's assessment for impairment of investment in
subsidiaries is based on the estimation of value in use of the
subsidiary by forecasting the expected future cash flows expected
on each development project. The value of the investment in
subsidiaries is based on the subsidiaries being able to realise
their cash flow projections.
Recognition of deferred tax assets
The recognition of deferred tax assets is based upon whether it
is more likely than not that sufficient and suitable taxable
profits will be available in the future against which the reversal
of temporary differences can be deducted. To determine the future
taxable profits, reference is made to the latest available profit
forecasts. Where the temporary differences are related to losses,
relevant tax law is considered to determine the availability of the
losses to offset against the future taxable profits.
5 LOSS FOR FINANCIAL PERIOD
The Company has taken advantage of section 408 of the Companies
Act 2006 and, consequently, a profit and loss account for the
Company alone has not been presented. The Company's loss for the
financial period was GBP135,165 (2019: Loss GBP2,531,344). The
Company's loss for the financial year has been arrived at after
charging auditor's remuneration payable to MHA MacIntyre Hudson for
audit services to the Company of GBP10,000 (2019: GBP10,000) and an
impairment adjustment of GBP nil (2019: GBP 2,354,732) - see note
8.
6 EMPLOYEES AND DIRECTORS' REMUNERATION
2020 2019
GBP GBP
Directors' fees 15,000 15,000
Social security costs 879 907
Management fees 4,994 4,994
20,873 20,901
====== ======
The average number of employees of the Company during the year
was:
2020 2019
Number Number
Directors and management 3 3
====== ======
There are no retirement benefits accruing to any of the
Directors.
GBP 4,994 (2019: GBP4,994) was paid to Mr Norman Lott for his
professional services.
Additional directors remuneration of GBP 45,000 (2019:
GBP60,000) was paid to a director through subsidiary entities.
7 INVESTMENTS
The company owns the following undertakings, all of which are
incorporated in the United Kingdom and have their registered
offices at Chequers Barn, Chequers Hill, Bough Beech, Edenbridge,
Kent, TN8 7PD.
Class of shares % Shareholding Principal Activity
held
Held directly
Trafalgar New Ordinary shares 100% Residential property
Homes Limited developers
Trafalgar Retirement Ordinary shares 100% Residential property
+ Limited & assisted living
scheme
Selmat Limited Ordinary shares 100% Residential property
renting
Held indirectly through Trafalgar New Homes Limited
Combe Bank Homes Ordinary shares 100% Residential property
(Oakhurst) Limited developers
Held indirectly through Trafalgar Retirement + Limited
Randell House Ordinary shares 100% Assisted living developers
Limited
(dissolved 22
September 2020)
Controlled via Deed of Trust
Combe House (Borough Ordinary shares 100% Residential property
Green) Limited developers
8 IMPAIRMENT
The investment carried in the Plc entity financial statements
reflects the entity's control over TNH, Oakhurst and Borough Green,
TR+ and Selmat.
There has been minimal trading in Oakhurst and Borough Green and
both entities now hold no inventory.
Development continues in TNH and there have been sales of two
properties in the year and the transfer of four properties to
Selmat, however due to the factors laid out in the Operations
review, there has been some erosion of the margins that had been
anticipated at the start of the year.
Management have performed a review of the assets and liabilities
of the underlying subsidiaries which form the value of the
investment.
In performing this assessment TR+ have been re-assessed. At the
time of approval of the financial statements there is no confirmed
planning permission on these land options.
Where the 'real' net asset value is in excess of the carrying
value of the investment in the Plc entity statement of financial
position, there is no indication of impairment.
Due to the uncertainties and timing of developments it has been
agreed by management not to include any future anticipated profits
of developments in their assessment. Therefore the net asset value
of the underlying investments does not support the Group's carrying
value of investments in TNH, Oakhurst, Borough Green and TR+.
Management have concluded that an impairment of the investments
is prudent and that these will be written down to zero.
9 debtors
2020 2019
GBP GBP
Amounts owed by group undertakings 343,068 274,304
Other debtors 1,822 1,136
Other taxes and social security 5,244 2,923
350,134 278,363
======= =======
10 CREDITORS: Amounts falling due within one yeaR
2019 2019
GBP GBP
Trade creditors 36,860 2,939
Taxation and social security 1,323 1,323
Other creditors 30,300 30,300
Director's loan account 105,000 100,000
Amounts owed to group undertakings 804,781 860,981
978,264 995,543
======= =======
11 FINAncial Instruments
2020 2019
GBP GBP
Financial assets
Financial assets measured at amortised cost:
Amounts owed by group undertakings and other
debtors 344,890 275,440
Financial liabilities
Financial liabilities measured
at amortised cost 976,947 994,220
Financial liabilities include, trade creditors, other creditors
and amounts due to group undertakings.
12 Share capital
Authorised Share Capital 2020 2019
Number Number
Ordinary shares of 0.1p in issue 425,190,380 425,190,380
Ordinary shares of 0.1p each issued 62,500,000 -
in year
Deferred shares of 0.9p in issue 238,375,190 238,375,190
726,065,570 663,565,570
Deferred shares do not entitle the holder to receive notice of
and to attend or vote at any general meeting of the Company or to
receive dividends or other distributions. Upon winding up or
dissolution of the Company the holders of deferred shares shall be
entitled to receive an amount equal to the nominal amount paid up
thereon, but only after holders of Ordinary shares have received
GBP 100,000 per Ordinary Share. Holders of deferred shares are not
entitled to any further rights of participation in the assets of
the Company. The company has the right to purchase the deferred
Shares in issue at any time for no consideration.
Issued, allotted and fully paid 2020 2019
GBP GBP
Ordinary shares 425,190 425,190
Issued in year 62,500 -
Deferred shares 2,145,377 2,145,377
2,633,067 2,570,567
On 31 May, 2019 62,500,000 Ordinary shares of 0.1p were issued
at 0.4p per share.
13 Share PREMIUM ACCOUNT
2020 2019
GBP GBP
Balance brought forward 2,510,462 2,510,462
Premium on issue of new shares 187,500 -
Cost of issue (37,100) -
Balance carried forward 2,660,862 2,510,462
========= =========
14 INTERCOMPANY TRANACTIONS
The company has taken advantage of the exemption conferred by
FRS102 Section 33 "Related Party disclosures" not to disclose
transactions undertaken with other wholly owned members of the
Group.
15 POST BALANCE SHEET EVENTS
Authorities were granted on 27 March 2020 to allot up to
GBP2,000,000 nominal of shares; those authorities were replaced on
13 July 2020 by authorities to allot up to GBP593,750 nominal of
shares. On 14 July 2020 937,500,000 ordinary shares of 0.01p were
issued, raising GBP750,000 before costs.
Explanation of resolutions at the Annual General Meeting
Information relating to resolutions to be proposed at the Annual
General Meeting is set out below. The notice of AGM is set out on
page 47.
Ordinary business at the AGM
The following ordinary business resolutions will be proposed at
the AGM:
(a) Resolution 1: to approve the annual report and accounts. The
Directors are required to lay before the Company at the AGM the
accounts of the Company for the financial year ended 31 March 2020,
the report of the Directors and the report of the Company's
auditors on those accounts.
(b) Resolution 2: to approve the re-appointment of MHA MacIntyre
Hudson as auditors of the Company. The Company is required to
appoint auditors at each general meeting at which accounts are
laid, to hold office until the next such meeting.
(c) Resolution 3: to approve the remuneration of the auditors for the next year.
(d) Resolution 4: to re-appoint Norman Lott as a Director;
Norman is retiring by rotation and submitting himself for
re-election.
Attendance at the AGM
Due to Covid-19 and related legal restrictions and guidance from
government authorities, Shareholders may not physically attend the
AGM other than to form a quorum, and will not be permitted access
to the venue on the day of the meeting. Shareholders are strongly
encouraged to participate in the meeting by voting by proxy ahead
of the meeting. Given the restrictions on attendance in person, you
are encouraged to appoint the Chairman of the meeting to submit
proxy votes at the meeting, rather than a named person who will not
be permitted to attend the physical meeting.
Any shareholder who wishes to raise a question is asked to
contact the Company on 01732 700000.
TRAFALGAR PROPERTY GROUP PLC
(Registered in England No. 04340125)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 2020 Annual General Meeting of
the Company will be held at the Company's offices at Chequers Barn,
Bough Beech, Edenbridge, Kent TN8 7PD at 11.00 a.m. on Tuesday 27th
October 2020, for the following purposes:
RESOLUTIONS
To consider and, if thought fit, to pass resolutions 1 to 4 as
ordinary resolutions:
1 To receive and adopt the directors' report, the auditor's
report and the Company's accounts for the year ended 31 March
2020.
2 To re-appoint MHA MacIntyre Hudson as auditor in accordance
with section 489 of the Companies Act 2006, to hold office until
the conclusion of the Annual General Meeting of the Company in
2021.
3 To authorise the Directors to determine the remuneration of the auditor.
4 To re-appoint Norman Lott as a Director of the Company.
Dated: 29 September 2020
Registered Office : By order of the Board
Chequers Barn Nicholas Narraway
Chequers Hill Secretary
Bough Beech
Edenbridge
Kent
TN8 7PD
Notes:
1. Due to Covid-19 and related legal restrictions and guidance
from government authorities, shareholders may not physically attend
the meeting other than to form a quorum, and will not be permitted
access to the venue on the day of the meeting. Shareholders are
strongly encouraged to participate in the meeting by voting by
proxy ahead of the meeting.
2. As a member of the Company, you are entitled to appoint a
proxy to exercise all or any of your rights to attend, speak and
vote at the Meeting and you should have received a proxy form with
this notice of meeting. You can only appoint a proxy using the
procedures set out in these notes and the notes to the proxy
form.
3. A proxy does not need to be a member of the Company but must
attend the Meeting to represent you. Details of how to appoint the
Chairman of the Meeting or another person as your proxy using the
proxy form are set out in the notes to the proxy form. Given the
restrictions on attendance in person, you are encouraged to appoint
the Chairman of the meeting to submit proxy votes at the meeting,
rather than a named person who will not be permitted to attend the
physical meeting.
4. You may appoint more than one proxy provided each proxy is
appointed to exercise rights attached to different shares. You may
not appoint more than one proxy to exercise rights attached to any
one share. To appoint more than one proxy, you may photocopy the
enclosed proxy form.
5. If you do not give your proxy an indication of how to vote on
any resolution, your proxy will vote or abstain from voting at his
or her discretion. Your proxy will vote (or abstain from voting) as
he or she thinks fit in relation to any other matter which is put
before the Meeting.
6. The notes to the proxy form explain how to direct your proxy
how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:
(a) completed and signed;
(b) sent or delivered to the Company's Registrars, Neville
Registrars Limited, Neville House, Steelpark Road, Halesowen B62
8HD; and
(c) received by no later than 11.00a.m. on 23 October 2020.
Any power of attorney or any other authority under which the
proxy form is signed (or a duly certified copy of such power or
authority) must be included with the proxy form.
7. To change your proxy appointment, simply submit a new proxy
appointment using the methods set out above. Note that the cut-off
time for receipt of proxy appointments (see above) also apply in
relation to amended instructions; any amended proxy appointment
received after the relevant cut-off time will be disregarded.
Where you have appointed a proxy using the hard-copy proxy form
and would like to change the instructions using another hard-copy
proxy form, you may photocopy the enclosed proxy form.
If you submit more than one valid proxy appointment, the
appointment received last before the latest time for the receipt of
proxies will take precedence.
8. In order to revoke a proxy appointment you will need to
inform the Company by sending a signed hard copy notice clearly
stating that you revoke your proxy appointment to Neville
Registrars Limited, Neville House, Steelpark Road, Halesowen, B62
8HD. Any power of attorney or any other authority under which the
revocation notice is signed (or a duly certified copy of such power
or authority) must be included with the revocation notice.
The revocation notice must be received by no later than 11.00
a.m. on 23 October 2020.
If you attempt to revoke your proxy appointment but the
revocation is received after the time specified then, subject to
the paragraph directly below, your proxy appointment will remain
valid.
Appointment of a proxy does not preclude you from attending the
Meeting and voting in person.
9. Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, only those members registered in the register of
members of the Company as at 6.00 p.m. on 23 October 2020 shall be
entitled to attend and vote at this Meeting in respect of the
number of shares registered in their name at that time. Changes to
entries on the relevant register of securities after such time
shall be disregarded in determining the rights of any person to
attend or vote at this Meeting.
The Annual Report will be posted to the shareholders today and
will be made available on the Company's website (
http://www.trafalgarproperty.group/ ) at that time.
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END
FR KKCBPBBKBFCB
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September 30, 2020 02:00 ET (06:00 GMT)
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