Annual Financial Report
Secured Property Developments plc
Annual report and financial statements
Registered number 2055395
For the year ended 31 December 2014
Contents
Notice of meeting 1
Company information 2
Chairman’s statement 3
Strategic report 5
Directors' report 7
Statement of directors’ responsibilities in respect of the Strategic report,
the Directors’ report and the financial statements 9
Independent auditor’s report to the members of Secured Property
Developments plc 10
Consolidated profit and loss account 12
Consolidated balance sheet 13
Company balance sheet 14
Consolidated cash flow statement 15
Consolidated Statement of Total Recognised Gains and Losses 16
Reconciliation of movements in shareholders’ funds 17
Notes to the financial statements 18
Form of proxy for use at the annual general meeting on 15 July 2015 28
Notice of meeting
NOTICE IS HEREBY GIVEN that the Twenty fourth Annual General Meeting of Secured Property Developments plc will be held at The Small Mall Room, The Royal Automobile Club, 89 Pall Mall, London, SW1Y 5HS on 15 July 2015 at 11am for the following purposes:
- To receive and adopt the financial statement for the year ended 31 December 2014 together with the reports of the Directors and the Auditor thereon.
- To re-elect R Shane as a director (retired by rotation)
- To re-elect J Soper as a director (retired by rotation)
- To authorise, by special resolution in accordance with s701 of the Companies Act 2006, the Board to purchase up to 5% of the Company’s own shares in the open market at a minimum price of 20p per share and a maximum price of 60p per share, such powers to expire at the AGM to be held in 2016, or on 15 July 2016 if earlier.
- To appoint as Auditors KPMG LLP, and to authorise the Directors to agree their remuneration, such powers to expire at the AGM held in 2016.
- To consider and, if deemed fit, pass the following resolution as a special resolution:
- THAT the regulations set forth in the printed document produced to this meeting and for the purposes of identification signed by the chairman hereof, be approved and adopted as the articles of association of the Company, in substitution for, and to the exclusion of, all existing articles thereof
The purpose of this resolution is to enable the members to transfer their shares in uncertificated form (via CREST) and to send notices by electronic means.
- To transact any other ordinary business of the Company.
By order of the board
| I H Cobden Secretary |
Date: 15 June 2015 |
Notes:
- Enclosed with these accounts is a letter concerning the supply of documents and information by e-mail. Please read this letter and, if you would like to receive documents and information in this way, please complete and return the enclosed form.
- A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Company. Proxy forms must be lodged at the Registered Office not later than forty-eight hours before the time fixed for the meeting.
- We would draw the attention of members proposing to attend the meeting to the RAC Club dress code, which requires men to wear a tailored jacket and trousers, collared shirt and tie at all times and women to dress with commensurate formality.
Company information
| Directors | R France G Green R Shane P Stansfield D Duffield J Soper |
| Secretary | I Cobden |
| Registered office | Unit 6 42 Orchard Road London N6 5TR |
| Auditor | KPMG LLP 8 Princes Parade Liverpool L3 1QH |
| Bankers | The Royal Bank of Scotland Plc Piccadilly Circus Branch 48 Haymarket London SW17 4SE |
| Solicitors | Summers 22 Welbeck Street London W1G 8EF |
| Share Dealing | The Company’s Ordinary shares are quoted on the ICAP Security and Derivative Exchange (ISDX) and persons can buy or sell shares through their stockbroker. |
| Registrars | Avenir Registrars Ltd Suite A, 6 Honduras Street, London EC1Y 0TH ylva.baeckstrom@avenir-registrars.co.uk www.avenir-registrars.co.uk Telephone 020 7692 5500 |
| Share Price | The middle market price of the Ordinary shares were quoted at 31 December 2014 on the ISDX (previously the PLUS Market) at 20.5p pence per share (2013: 12.5 pence per share) |
Chairman’s statement
In February of this year the Board approved a change of Company strategy to focus on acquisitions and development of UK residential property. Since the parliamentary election there has been renewed interest in residential property, particularly from international investors. Indeed Savills are now predicting price increases across the UK of around 19.3% over the next five years.
As part of this change of strategy the Board also approved the disposal of three of the Company’s retail properties and repayment of the RBS loan.
On 26 March 2015, commercial units at 14 St Sampson’s Square York, and 11 & 13 Newborough Scarborough were sold at auction for an amount of £1,325,000. Upon completion on 12 May 2015 the RBS loan facility of £1,500,000 was repaid in full using a combination of net sale proceeds and existing cash holdings. This leaves the Company free of bank debt and in a strong position to pursue residential property acquisitions and development opportunities.
RBS Swap Claim
In May 2014 following the resolution of the Group’s original interest rate swap dispute with Royal Bank of Scotland, a provisional basic address payment of £476,309 was received from RBS. This payment was subject to additional claims for consequential loss and additional tax which were submitted to RBS in July 2014.
In March 2015 RBS made an offer in settlement of the additional claims in the sum of £43,930. For various reasons this offer has been challenged by the Company and a response from RBS is now awaited. As such no amount has been recognised in these accounts in respect of the consequential loss claim.
2014 Accounts
Turnover in 2014 has increased to £148,437 compared with £131,003 in 2013.
The profit before taxation was £404,044 compared with a loss of £78,011 in 2013, due mainly to the compensation payment from RBS received in the year and disclosed as an exceptional item in the Profit and Loss account.
Electronic Communication
Accompanying the notice of AGM is a letter to all members relating to the supply of documents and information in electronic form. In common with other listed companies your Board recommends approval to electronic communication and the consequential revisions to the Company’s Articles of Association.
Cash resources and dividends
We continue to maintain a tight control of the Company’s cash resources, which we consider adequate to support current levels of expenditure, although we keep them under constant review.
In current circumstances the Board considers it is not appropriate to recommend the payment of a dividend for the year ending 31 December 2014.
I should like to welcome John Soper as a member of the Board with effect from 19 December 2014. John is a chartered accountant and has considerable experience in the property industry.
Chairman’s statement (continued)
AGM
The annual general meeting will take place at the Royal Automobile Club, 89 Pall Mall London, SW1Y 5HS on 15 July 2015 at 11am and the directors look forward to meeting those shareholders, who can attend.
D Duffield
Chairman
Strategic report
Principal Activities
The principal activity of Secured Property Developments plc is investment in commercial property. The group comprises the holding company, a finance company and a second property company.
Business Model
At Secured Property Developments, we focus on maximising the return from our portfolio of properties whilst looking for new acquisitions where we can by development increase value and thereby create value for shareholders.
We create value by:-
Acquiring Properties
- We seek to acquire properties and unlock value.
Optimise Income
- Optimising income by development and carrying out improvements and good estate management.
- Employ our knowledge of occupiers’ needs to let to high quality tenants from a wide range of businesses and to minimise the level of voids in our portfolio.
- Collecting our rental income on due date.
Recycle Capital
- Identify properties for disposal where value has been optimised and dispose of those which do not fit the Group’s long-term plans.
Maintain robust and flexible financing
- Negotiate flexible financing and retain a healthy level of interest cover and gearing
Business Review
The results for the year are set out on page 12 of these consolidated financial statements.
The group’s investment properties are let at rents commensurate with local market conditions and on terms that include periodic upwards adjustment, financed by bank borrowings. A review of the business is included in the Chairman’s Statement set out on page 3 and 4.
Principal Risks and Uncertainties
Going Concern
The directors have prepared the financial statements on a going concern basis for the reasons set out in note 1 to the financial statements.
Derivatives and other financial instruments
The group’s financial instruments comprise borrowings, some cash and liquid resources, convertible unsecured loan stock and various items, such as trade debtors and trade creditors, that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the group’s operations.
The main risks arising from the group’s financial instruments are interest rate risk and liquidity risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.
Strategic report (continued)
Interest rate risk
The group has financed its operations through bank borrowings. The group’s policy is to borrow at the lowest rates for periods that do not carry excessive time premiums.
Liquidity risk
As regards liquidity, the group’s policy has throughout the year been to ensure that the group is able at all times to meet its financial commitments as and when they fall due. The maturity date of the loan to the group is set out in note 16 of these financial statements. The current status of the negotiations in respect of the Group’s financing facilities is set out in the Chairman’ Statement and note 1 to the financial statements.
Future Developments
Following the settlement of the “swap†situation as detailed in the Chairman’s report, the Directors will now be able to actively consider opportunities that may arise including alternative sources of financing.
Signed on behalf of the Board
R Shane Dated: 15 June 2015
Director
Directors’ report
Proposed dividend and transfer to reserves
The directors do not recommend the payment of a dividend (2013: £nil).
The profit for the year retained in the group is £359,525 (2013: £78,011 loss).
Directors and directors’ interests
The directors who held office during the year were as follows:
D Duffield
R France
G Green
R Shane
P Stansfield
J Soper
The directors who held office at the end of the financial year had the following interests in the shares and loan stock of the group companies as recorded in the register of directors’ share and debenture interests.
Director |
Company |
Class |
Interest at 31 December 2014 Number |
Interest at 1 January 2014 Number |
| D Duffield | SPD plc* | Ordinary shares | - | - |
| R France | SPD plc* | Ordinary shares | 88,888 | 88,888 |
| G Green | SPD plc* | Ordinary shares | 90,000 | 90,000 |
| Deferred shares | 30,000 | 30,000 | ||
| R Shane | SPD plc* | Ordinary shares | 574,456 | 574,456 |
| Deferred shares | 154,666 | 154,666 | ||
| P Stansfield | SPD plc* | Ordinary shares | 6,250 | 6,250 |
| J Soper | SPD plc* | Ordinary shares | - | - |
* SPD plc is used above as an abbreviation for Secured Property Developments plc.
According to the register of directors’ interests, no rights to subscribe for shares in or debentures of the Company or any other group company was granted to any of the directors or their immediate families, or exercised by them, during the financial year.
Substantial shareholding of ordinary shares of 20p each as at 31 December 2014
R France 4.51%
G Green 4.57%
R Shane 29.15%
Disclosure of information to the auditor
The directors who held office at the date of approval of this Directors’ report confirm that, so far as they are each aware, there is no relevant audit information of which the Company’s auditor is unaware; and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.
Directors’ report (continued)
Auditor
In accordance with Section 489 of the Companies Act 2006, a resolution for the re-appointment of KPMG LLP as auditor of the Company is to be proposed at the forthcoming Annual General Meeting.
By order of the board
| I Cobden Secretary Date: 15 June 2015 Registered number: 2055395 |
Unit 6 42 Orchard Road London N6 5TR |
Statement of directors’ responsibilities in respect of the Strategic report, the Directors’ report and the financial statements
The directors are responsible for preparing the Strategic report and the Directors' report and the group and parent company financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare group and parent company financial statements for each financial year. Under that law they have elected to prepare the group and parent company financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).
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 parent company and of their profit or loss for that period. In preparing each of the group and parent company financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments and estimates that are reasonable and prudent;
- state whether applicable UK 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 and the parent company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.
Independent auditor’s report to the members of Secured Property Developments Plc
We have audited the financial statements of Secured Property Developments plc for the year ended 31 December 2014 set out on pages 12 to 27. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice).
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.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities Statement set out on page 9, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's web-site at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion the financial statements:
- give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2014 and of the group's profit for the year then ended;
- have been properly prepared in accordance with UK Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
|
|
Independent auditor’s report to the members of Secured Property Developments plc (continued)
Opinion on other matter prescribed by the Companies Act 2006
In our opinion 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the parent company, or returns adequate 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.
Hywel Jones (Senior Statutory Auditor)
For and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
8 Princes Parade
Liverpool
L3 1QH
Date: 15 June 2015
Consolidated profit and loss account
for the year ended 31 December 2014
| Note | 2014 | 2013 | |||
| £ | £ | ||||
| Turnover | 2 | 148,437 | 131,003 | ||
| Cost of sales | (3,991) | (3,439) | |||
| Gross profit | 144,446 | 127,564 | |||
| Administrative expenses | (109,435) | (104,476) | |||
| Operating profit Exceptional Item |
6 |
35,011 431,976 |
23,088 |
||
| Other interest receivable and similar income | 7 | 2,728 | 2,701 | ||
| Interest payable and similar charges | 8 | (65,671) | (103,800) | ||
| Profit/(loss) on ordinary activities before taxation | 2-8 | 404,044 | (78,011) | ||
| Tax on profit/(loss) on ordinary activities | 9 | (44,519) | - | ||
| Profit/(loss) for the financial year | 19 | 359,525 | (78,011) | ||
| Profit/(loss) per share | 11 | 18.2p | (3.9)p | ||
All income is from continuing operations.
The notes on pages 18 to 27 form part of these financial statements.
Consolidated balance sheet
at 31 December 2014
| Note | 2014 | 2014 | 2013 | 2013 | |
| £ | £ | £ | £ | ||
| Fixed assets | |||||
| Tangible assets | 12 | 1,550,000 | 1,550,000 | ||
| Current assets | |||||
| Debtors | 14 | 26,806 | 69,807 | ||
| Cash at bank and in hand | 859,284 | 379,697 | |||
| 886,090 | 449,504 | ||||
| Creditors: amounts falling due within one year | 15 | (1,701,910) | (1,624,849) | ||
| Net current liabilities | (815,820) | (1,175,345) | |||
| Total assets less current liabilities | 734,180 | 374,655 | |||
| Creditors: amounts falling due after more than one year | 16 | - | - | ||
| Net assets | 734,180 | 374,655 | |||
| Capital and reserves | |||||
| Called up share capital | 18 | 418,861 | 418,861 | ||
| Share premium account | 19 | 3,473 | 3,473 | ||
| Revaluation reserve | 19 | 101,861 | 101,861 | ||
| Profit and loss account | 19 | 209,985 | (149,540) | ||
| Shareholders’ funds | 734,180 | 374,655 | |||
The notes on pages 18 to 27 form part of these financial statements.
These financial statements were approved by the board of directors on 15 June 2015 and were signed on its behalf by:
D Duffield R Shane
Director Director
Registered number: 2055395
Company balance sheet
at 31 December 2014
| Note | 2014 | 2014 | 2013 | 2013 | |
| £ | £ | £ | £ | ||
| Fixed assets | |||||
| Tangible assets | 12 | 500,000 | 500,000 | ||
| Investments | 13 | 947,263 | 947,263 | ||
| 1,447,263 | 1,447,263 | ||||
| Current assets | |||||
| Debtors | 14 | 4,504 | 125,889 | ||
| Cash at bank and in hand | 845,157 | 365,571 | |||
| 849,661 | 491,460 | ||||
| Creditors: amounts falling due within one year | 15 | (1,782,638) | (1,607,651) | ||
| Net current liabilities | (932,977) | (1,116,191) | |||
| Total assets less current liabilities | 514,286 | 331,072 | |||
| Creditors: amounts falling due after more than one year | 16 | - | - | ||
| Net assets | 514,286 | 331,072 | |||
| Capital and reserves | |||||
| Called up share capital | 18 | 418,861 | 418,861 | ||
| Share premium account | 19 | 3,473 | 3,473 | ||
| Revaluation reserve | 19 | 88,763 | 88,763 | ||
| Profit and loss account | 19 | 3,189 | (180,025) | ||
| Shareholders’ funds | 514,286 | 331,072 | |||
The notes on pages 18 to 27 form part of these financial statements.
These financial statements were approved by the board of directors on 15 June 2015 and were signed on its behalf by:
D Duffield R Shane
Director Director
Registered number: 2055395
Consolidated cash flow statement
for the year ended 31 December 2014
| Note | 2014 | 2013 | |||
| £ | £ | ||||
| Cash inflow from operating activities | 155,073 | 64,527 | |||
| Returns on investments and servicing of finance | 21 | (62,943) | (101,099) | ||
| Exceptional item | 431,976 | - | |||
| Taxation | (44,519) | - | |||
| Cash inflow before financing | 479,587 | (36,572) | |||
| Financing | - | - | |||
| Increase/(decrease) in cash in the year | 22 | 479,587 | (36,572) | ||
Reconciliation of operating profit to operating cash flows
for the year ended 31 December 2014
| 2014 | 2013 | ||||
| £ | £ | ||||
| Operating profit | 35,011 | 23,088 | |||
| Decrease in debtors | 43,001 | 18,378 | |||
| Increase in creditors | 77,061 | 23,061 | |||
| Net cash inflow from operating activities | 155,073 | 64,527 | |||
Reconciliation of net cash flow to movement in net debt
for the year ended 31 December 2014
| Note | 2014 | 2013 | |||
| £ | £ | ||||
| Increase/(decrease) in cash in the year | 22 | 479,587 | (36,572) | ||
| Movement in net debt in the year | 479,587 | (36,572) | |||
| Net debt at beginning of the year | 22 | (1,120,303) | (1,083,731) | ||
| Net debt at end of the year | 22 | (640,716) | (1,120,303) | ||
The notes on pages 18 to 27 form part of these financial statements
Consolidated Statement of Total Recognised Gains and Losses
for the year ended 31 December 2014
| 2014 | 2013 | |
| £ | £ | |
| Profit/(loss) for the financial year | 359,525 | (78,011) |
| Unrealised profits/deficits | - | - |
| Total recognised gains and losses relating to the financial year | 359,525 | (78,011) |
Reconciliation of movements in shareholders’ funds
for the year ended 31 December 2014
| Group | Company | ||||
| 2014 | 2013 | 2014 | 2013 | ||
| £ | £ | £ | £ | ||
| Profit/(loss) for the financial year | 359,525 | (78,011) | 183,214 | (73,808) | |
| Dividends on shares classified in shareholders’ funds | - | - | - | - | |
| Net increase/(reduction) in shareholders’ funds | 359,525 | (78,011) | 183,214 | (73,808) | |
| Opening shareholders’ funds | 374,655 | 452,666 | 331,072 | 404,880 | |
| Closing shareholders’ funds | 734,180 | 374,655 | 514,286 | 331,072 | |
Notes to the financial statements
(forming part of the financial statements)
1 Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements, except as noted below.
Basis of preparation
The financial statements have been prepared under the historical cost accounting rules as modified by the revaluation of investment properties and in accordance with applicable accounting standards. The financial statements are in compliance with the Companies Act 2006 except that, as noted below, investment properties are not depreciated.
Basis of consolidation
The group financial statements consolidate the financial statements of Secured Property Developments plc and its subsidiary undertakings. These financial statements are made up to 31 December 2014.
Unless otherwise stated, the acquisition method of accounting has been adopted. Under this method, the results of subsidiary and associated undertakings acquired or disposed of in the year are included in the consolidated profit and loss account from the date of acquisition or up to the date of disposal.
In accordance with s408 of the Companies Act 2006 Secured Property Developments plc is exempt from the requirement to present its own profit and loss account. The result for the financial year dealt with in the financial statements of Secured Property Developments plc is disclosed in note 19 to these financial statements.
Going concern
These financial statements have been prepared on the going concern basis of accounting notwithstanding that the Group and Parent Company had net current liabilities of £815,820 and £932,977 as at 31 December 2014 respectively.
The directors have prepared cash flow forecasts for a period of 12 months following the approval of these financial statements to support the Company’s ability to continue as a going concern. After the year end, the Group has generated cash from the sale of certain properties and has repaid the bank loan in full. After the year end the directors consider that the Group to have sufficient cash to be able to meet its financial obligations for at least the next 12 months, based on these cash flow forecasts.
For these reasons, they continue to adopt the going concern basis in preparing the annual financial statements. Accordingly, the financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.
Notes (continued)
1 Accounting policies (continued)
Investment properties
In accordance with SSAP 19, depreciation is not charged on investment properties held by the group. This is a departure from the requirements of the Companies Act 2006 which requires all properties to be depreciated. Such properties are not held for consumption but for investment and the directors consider that to depreciate them would not give a true and fair view. Investment properties are revalued annually by the directors and periodic external valuations are completed when considered necessary, usually over a five year period. The aggregate surplus or deficit is transferred to a revaluation reserve. The directors consider that this policy results in the accounts giving a true and fair view.
Taxation
The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. Deferred tax is recognised without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by Financial Reporting Standard 19.
Classification of financial instruments issued by the Group
Following the adoption of FRS 25, financial instruments issued by the Group are treated as equity (i.e. forming part of shareholders’ funds) only to the extent that they meet the following two conditions:
- they include no contractual obligations upon the Company (or Group as the case may be) to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Company (or Group); and
- where the instrument will or may be settled in the Company’s own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company’s own equity instruments or is a derivative that will be settled by the Company’s exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the Company’s own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.
Finance payments associated with financial liabilities are dealt with as part of interest payable and similar charges. Finance payments associated with financial instruments that are classified as part of shareholders’ funds, are dealt with as appropriations in the reconciliation of movements in shareholders’ funds.
Investments
| In the Company’s financial statements, investments in subsidiary undertakings, associates and joint ventures are stated at cost less amounts written off. |
Notes (continued)
1 Accounting policies (continued)
Cash and liquid resources
Cash, for the purpose of the cash flow statement, comprises cash in hand and deposits repayable on demand, less overdrafts payable on demand.
Turnover
Turnover represents the amounts (excluding value added tax) derived from rental income from investment properties.
2 Turnover
Turnover and profit on ordinary activities before taxation are attributable to the principal activities of the group.
Turnover was derived from the activities of the group as follows:
| 2014 | 2013 | |
| £ | £ | |
| Rental income from investment properties | 148,437 | 131,003 |
| 148,437 | 131,003 | |
All turnover and pre-tax profit on ordinary activities before taxation was earned in the UK.
3 Profit on ordinary activities before taxation
| 2014 | 2013 | |
| £ | £ | |
| Profit/(loss) on ordinary activities before taxation is stated after charging: | ||
| Auditor’s remuneration | ||
| Audit services | 11,000 | 11,000 |
| Other services – compliance tax work | 5,150 | 2,000 |
The audit fee of the group of £11,000 includes £5,500 (2013: £5,500) in relation to the company.
4 Remuneration of directors
The chairman received fees of £16,792 (2013: £16,482), one director received fees of £30,930 (2013: £32,000) which was paid to his employer in respect of his services, and one other director received £2,136 (2013: £nil) in respect of his services (see note 23).
Notes (continued)
5 Staff numbers and costs
There are no other staff costs other than those disclosed in note 4. The average number of persons employed by the Group (including directors) during the year, analysed by category, was as follows:
| Number of employees | ||
| 2014 | 2013 | |
| Directors | 6 | 5 |
6 Exceptional Item
This represents compensation received (less related expenses incurred in the year) in respect of the claim for mis-selling by RBS of its financial products.
7 Other interest receivable and similar income
| 2014 | 2013 | |
| £ | £ | |
| Bank interest receivable | 2,728 | 2,701 |
8 Interest payable and similar charges
| 2014 | 2013 | |
| £ | £ | |
| On bank loans | 65,671 | 103,800 |
Notes (continued)
9 Taxation
Analysis of charge in year
| 2014 | 2013 | |
| £ | £ | |
| UK corporation tax | ||
| Current tax on income for the year | 44,519 | - |
| Total current tax | 44,519 | - |
| Tax on profit on ordinary activities | 44,519 | - |
Factors affecting the tax charge for the current year
The current tax charge for the year is lower (2013: higher) than the standard rate of corporation tax in the UK. The differences are explained below.
| 2014 | 2013 | |
| £ | £ | |
| Current tax reconciliation | ||
| Profit / (loss) on ordinary activities before tax | 404,044 | (78,011) |
| Current tax at 21.5% (2013: 23.25%) | 86,869 | (18,138) |
| Effects of: | ||
| Movement in tax losses | (40,358) | 18,138 |
| Marginal relief | (1,992) | - |
| Total current tax charge (see above) | 44,519 | - |
10 Deferred tax
An analysis of the unrecognised deferred taxation asset is set out below.
| Group | Company | |||
| 2014 | 2013 | 2014 | 2013 | |
| £ | £ | £ | £ | |
| Tax Losses | (10,504) | (33,305) | (10,504) | (32,465) |
The deferred tax asset has not been recognised on the basis that the timing differences and tax losses may not be recovered in the foreseeable future. Tax losses for which a deferred tax asset has not been recognised as at 31 December 2014 are £nil.
11 Earnings per share
The calculation of the earnings per share figure is based on the following:
| 2014 | 2013 | |
| Profit/(loss) after tax | 359,525 | (78,011) |
| Weighted average number of ordinary shares | 1,970,688 | 1,970,688 |
| Profit/(loss) per share | 18.2p | (3.9)p |
Notes (continued)
12 Tangible fixed assets
| Group | Investment properties |
|
| £ | ||
| Cost or valuation | ||
| At beginning of year | 1,550,000 | |
| Net book value | ||
| At 31 December 2014 | 1,550,000 | |
| At 31 December 2013 | 1,550,000 | |
| 2014 | 2013 | |
| £ | £ | |
| Historical cost of revalued assets | 1,448,139 | 1,448,139 |
| Historical cost net book value of revalued assets | 1,448,139 | 1,448,139 |
| Company | Investment Properties |
|
| £ | ||
| Cost or valuation | ||
| At beginning and end of year | 500,000 | |
| Revaluation | - | |
| Net book value | ||
| At 31 December 2014 | 500,000 | |
| At 31 December 2013 | 500,000 | |
| 2014 | 2013 | |
| £ | £ | |
| Historical cost of revalued assets | 411,237 | 411,237 |
| Historical cost net book value of revalued assets | 411,237 | 411,237 |
Group and company
The investment properties were valued in July 2013 by Jones Lang LaSalle. The external valuation was completed in accordance with the current edition of the Practice Statements and Guidance Notes of the Appraisal and Valuation Standards prepared by the Royal Institution of Chartered Surveyors. The Directors believe this valuation still to be appropriate as at 31 December 2014.
Notes (continued)
13 Investments
| Company | Loans to subsidiaries |
Shares in Subsidiaries |
Total |
|
| £ | £ | £ | ||
| Cost | ||||
| At beginning of year | 947,259 | 4 | 947,263 | |
| Net book value | ||||
| At 31 December 2014 | 947,259 | 4 | 947,263 | |
| At 31 December 2013 | 947,259 | 4 | 947,263 | |
Shares in group undertakings represent the Company’s investment in SPD Discount Limited and Secured Property Developments (Scarborough) Limited. At 31 December 2014 and 2013 the Company held 100% of the ordinary share capital of each of the subsidiary undertakings. Both subsidiary undertakings are registered in England and Wales. SPD Discount Limited was trading as a finance company but has not traded in the current or prior year, and the principal activity of Secured Property Developments (Scarborough) Limited is property investment.
14 Debtors
| Group | Company | |||
| 2014 | 2013 | 2014 | 2013 | |
| £ | £ | £ | £ | |
| Amounts owed by subsidiary undertakings | - | - | - | 111,569 |
| Prepayments and accrued income | 26,806 | 69,807 | 4,504 | 14,320 |
| 26,806 | 69,807 | 4,504 | 125,889 | |
All amounts fall due within one year.
15 Creditors: amounts falling due within one year
| Group | Company | |||
| 2014 | 2013 | 2014 | 2013 | |
| £ | £ | £ | £ | |
| Bank loans and overdrafts | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 |
| Taxes and social security | 51,567 | 8,594 | 7,104 | 2,634 |
| Amounts due to group undertakings | - | - | 158,475 | 13,259 |
| Other creditors | 27,874 | 25,242 | 27,874 | 25,242 |
| Accruals and deferred income | 122,469 | 91,013 | 89,185 | 66,516 |
| 1,701,910 | 1,624,849 | 1,782,638 | 1,607,651 | |
| The bank loan is secured by a fixed charge on the properties of Secured Property Developments (Scarborough) Limited and of the Company. | ||||
Notes (continued)
16 Creditors: amounts falling due after more than one year
| Group | Company | |||
| 2014 | 2013 | 2014 | 2013 | |
| £ | £ | £ | £ | |
| Bank loan | - | - | - | - |
Analysis of bank loan
| Group | Company | |||
| 2014 | 2013 | 2014 | 2013 | |
| £ | £ | £ | £ | |
| Amounts falling due: | ||||
| Less than one year | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 |
| Between one and two years | - | - | - | - |
17 Derivatives and other financial instruments
The group’s policies with regard to financial instruments are set in note 1. Short term debtors and creditors have been omitted from all disclosures.
Financial assets
The group has £859,284 (2013: £379,697) held in cash as financial assets as well as short term debtors.
Financial liabilities
The interest rate profile of the group’s financial liabilities as at 31 December 2014 was:
Total |
Variable rate financial liabilities |
Variable rate weighted average interest rate |
Weighted average period for which rate is fixed |
Financial liabilities on which no interest is charged |
|
| £ | £ | % | Years | £ | |
| 31 December 2014 | 1,500,000 | 1,500,000 | 1.85 | - | - |
Maturity of financial liabilities
The maturity profile at 31 December 2014 of the group’s financial liabilities, other than short term creditors such as trade creditors and accruals is set out in note 16.
Fair values of the group’s financial asset and liabilities
There is no material difference between the fair value and the book value of the group’s financial assets and liabilities which have been recognised.
Notes (continued)
18 Called up share capital
| 2014 | 2013 | |
| £ | £ | |
| Allotted, called up and fully paid | ||
| 1,970,688 ordinary shares of 20p each | 394,138 | 394,138 |
| 1,236,154 deferred shares of 2p each | 24,723 | 24,723 |
| 418,861 | 418,861 | |
The respective rights of the shareholders are as follows:
Ordinary shares
The ordinary shares have the right to all available capital and distributable profits subject only to any right available to the deferred shares on winding up.
Deferred shares
The deferred shares have no rights to vote, receive notices, or attend general meetings, nor to any income. On the return of capital on a winding-up or otherwise the deferred shares have no entitlement until the sum of £100,000 per ordinary share shall have been distributed.
19 Reserves
| Group | Share premium account |
Revaluation Reserve |
Profit and loss Account |
|
| £ | £ | £ | ||
| At beginning of year | 3,473 | 101,861 | (149,540) | |
| Profit for the financial year | - | - | 359,525 | |
| At end of year | 3,473 | 101,861 | 209,985 | |
| Company | Share premium account |
Revaluation Reserve |
Profit and loss Account |
|
| £ | £ | £ | ||
| At beginning of year | 3,473 | 88,763 | (180,025) | |
| Profit for the financial year | - | - | 183,214 | |
| At end of year | 3,473 | 88,763 | 3,189 | |
Notes (continued)
20 Commitments
Neither the group nor the Company had any contractual commitments at the year end (2013: £nil).
21 Analysis of items netted in the cash flow statement
| 2014 | 2013 | |
| £ | £ | |
| Return on investments and servicing of finance | ||
| Interest paid | (65,671) | (103,800) |
| Interest received | 2,728 | 2,701 |
| Net cash outflow from returns on investments and servicing of finance | (62,943) | (101,099) |
22 Analysis of changes in net debt
| 31 December 2013 |
Cash flows |
31 December 2014 |
||
| £ | £ | £ | ||
| Cash in hand and at bank | 379,697 | 479,587 | 859,284 | |
| Debt due | (1,500,000) | - | (1,500,000) | |
| (1,120,303) | 479,587 | (640,716) | ||
23 Related party transactions
St James’s Property Services Limited of which R Shane is a director and shareholder has received £30,930 (2013: £32,000) from the holding company in respect of management services, including directors’ fees of £30,930 (2013: £32,000). The amount outstanding at the year end is £62,930 (2013: £32,000). Guildhall Brokers and Consultants Limited of which R A Shane is a director and shareholder has received £6,004 (2013: £3,439) for insurance premiums. The amount outstanding at the year end is £nil (2013: £nil). D Duffield has received fees amounting to £16,792 (2013: £16,482) from the holding company in respect of professional fees. The amount outstanding at the year end is £16,792 (2013: £16,482). J Soper has received £2,136 (2013: £nil) in respect of professional fees. The amount outstanding at the year end is £2,136 (2013: £nil).
- Post Balance Sheet events
On 26 March 2015, commercial units at 14 St Sampson’s Square York, and 11 & 13 Newborough Scarborough were sold at auction for an amount of £1,325,000. Following completion of the property sales, the RBS loan facility of £1,500,000 was repaid in full on 12 May 2015 using a combination of net sale proceeds and existing cash holdings. This is a non-adjusting post balance sheet event.
Form of proxy for use at the annual general meeting on 15 July 2015
I/We _______________________________________________________________________________
(Please insert full name in BLOCK CAPITALS)
of _________________________________________________________________________________
(Please insert address in BLOCK CAPITALS)
being (a) member(s) of the above named Company HEREBY APPOINT the Chairman of the meeting (see note 6)
___________________________________________________________________________________
to act as my/our proxy at the Annual General Meeting of the Company to be held on 15 July 2015 and at any adjournment thereof, and to vote on my/our behalf as indicated below:
| Resolution No. | For | Against |
| 1 To adopt the directors’ report and financial statements for the year ended 31 December 2014 | ||
| 2 To re-elect R Shane as a director | ||
| 3 To re-elect J Soper as a director | ||
| 4 To authorise, by special resolution in accordance with s701 of the Companies Act 2006, the Board to purchase up to 5% of the Company’s own shares in the open market at a minimum price of 20p per share and a maximum price of 60p per share, such powers to expire at the AGM to be held in 2016, or on 15 July 2016 if earlier. | ||
| 5 THAT KPMG LLP be and are hereby appointed auditors of the Company and will hold office from the conclusion of this meeting until the conclusion of the next general meeting at which accounts are laid before the company, and that their remuneration be fixed by the Directors. | ||
| 6 THAT the regulations set forth in the printed document produced to this meeting and for the purposes of identification signed by the chairman hereof, be approved and adopted as the articles of association of the Company, in substitution for, and to the exclusion of, all existing articles thereof |
Please indicate with an “X†in the space provided how you wish your votes to be cast on a poll. Should this form be returned duly completed and signed, but without a specific direction, the proxy will vote or abstain at his discretion.
Dated ______________________________ 2015 Signature __________________________________
Notes
- A proxy need not be a Member of the Company.
- In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders. For this purpose seniority is determined by the order in which the names stand in the Register of Members.
- In the case of a corporation this proxy must be given under its Common Seal or be signed on its behalf by an officer, attorney or other person duly authorised.
- To be valid this proxy must be deposited at the Company’s Registered Office not later than 48 hours before the time appointed for holding the Meeting together, if appropriate, with the power of attorney or other authority under which is a signed or potentially certified copy of such power of authority.
- Any alterations made on this form should be initialled.
- If it is desired to appoint as a proxy any person other than the Chairman of the Meeting, his/her name and address should be inserted in the relevant place, reference to the Chairman deleted and the alteration initialled.
|
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Secured Property Developments plc.
Unit 6 Orchard Mews
42 Orchard Road
London
N6 5TR
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