Final Results

RNS Number : 2293D

Pathfinder Properties PLC

30 November 2009

 



FOR IMMEDIATE RELEASE                                                                    30 November 2009     

    PATHFINDER PROPERTIES PLC

    REPORT AND FINANCIAL STATEMENTS

    FOR THE YEAR ENDED 31 DECEMBER 2008

CHAIRMAN'S STATEMENT

Please find enclosed accounts for the year ending 31 December 2008. Also enclosed is a circular which is asking shareholders to vote on the future direction of the company.

As you are no doubt aware the property market has severely declined in the present economic climate, and this is especially the case with development sites. Our main asset in Newark, on which we have bank loan of £2.9m, was professionally valued in August 2008 at £5.9m, the revaluation in August 2009 saw a reduction of over £4m.

Clearly a company of our size would find it difficult to continue trading when it is in breach of its banking covenants by such a large amount.

Therefore in order for the company to survive the board looked for a solution. The enclosed circular sets out the new direction for the company. The board believes this transaction will give shareholders value in the future.

Proposals from the Circular

Following the disposal of the Ilford site and the Brewery site in Newark as announced on 22 May 2009, the Group has been left with a single development at the Newark development site, being the River Edge and the Road Frontage. This development has been progressed to a position whereby the Group can no longer fund any further development from its existing resources. However, the Directors believe that it is not worthwhile progressing with further development of this site in the current economic climate. As a result, the Company effectively has no sustainable business to justify its status as an AIM traded entity. Accordingly, the Directors believe that it is in Shareholders' interests to dispose of its property and, at the same time, release the Group from its liability for the associated bank financing on the Newark site of the Group, in order to establish a new investing policy in an area in which the Directors' believe could best provide the basis for establishing Shareholder value. The Company has been approached by a group of investors involved in mining proposals who have the ability to attract investors. The Directors unanimously believe that the proposed change of direction is in the best interests of the Company and its Shareholders. 

The Company has agreed to dispose of the River Edge and Road Frontage sites at the Newark development for £1. These two remaining developments are held in a wholly owned subsidiary of the Company, Newark Property Development Limited ("NPD"), which was specifically formed for holding these properties. The Company is therefore proposing to sell NPD to Kerrington Limited ("Kerrington"), a company controlled by a Director of the Company, Gerry Lee. Kerrington will assume responsibility for repayment of the debt of £2.9m due from NPD to Royal Bank of Scotland PLC. Although the Newark development sites are valued at £2.9m in the Company's balance sheet as at 31 December 2008, a current valuation has been undertaken by Knight Frank which values them at £1.85m.  

Pathfinder's proposed strategy is to turn it into an investing company and establish a new investing policy to acquire mainly significant minority interests in both listed and unlisted companies and/or assets which the Directors believe represent opportunities to create Shareholder value, specifically within the natural resource sectors, with a focus on Central Asia and Sub-Saharan Africa although such companies may operate worldwide. The focus will be on metals and mature resource situations with both established resources and the ability to increase these through additional exploration and also bring these into production. The Company will be an active investor.

In addition, Pathfinder is proposed to complete a Capital Reorganisation to facilitate the Proposals, to adopt New Articles of Association, to issue Convertible Loan Agreements raising £506,000 and issue Warrants in conjunction with this and then make an initial Investment in IM Minerals Ltd, an exploration company with licences over TiO2 prospects in Mozambique. Further details of these proposals are included in a Shareholder Circular sent out to Shareholders along with the Report and Accounts.

Edward Azouz

Chairman

26th November 2009

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2008

		Year ended 31 December 2008	Year ended 31 December 2007
	Notes	£'000	£'000
Revenue
Group and share of joint ventures		70	32
- less: share of joint ventures		-	(5)
		______	______
Group Revenue	2	70	27
Cost of sales	3	(8,746)	(7)
		______	______
Gross (loss)/profit		(8,676)	20
Administration expenses	3	(474)	(741)
Goodwill written off		(154)	-
		______	______
		(9,304)	(721)
Other income		2	88
		______	______
Operating (loss)	3	(9,302)	(633)
Profit on sale of investment properties		-	3
Profit on sale of fixed asset investments		-	53
		______	______
(Loss) on ordinary activities before investment income, interest and taxation		(9,302)	(577)
Finance income	4	19	50
Finance costs	5	(385)	(521)
		______	______
(Loss) on ordinary activities before taxation		(9,668)	(1,048)
Taxation	8	(333)	104
		______	______
(Loss) on ordinary activities after taxation		(10,001)	(944)
Equity minority interests		-	(7)
		______	______
(Loss) for the year attributable to members of the parent company		(10,001)	(951)
		______	______
		Pence	Pence
(Loss)/per share - Basic and diluted	9	(12.5)	(1.19)

All operations principally relate to Property Development which declined throughout the year and is to be discontinued (see Post Balance Sheet Events Note 26).

CONSOLIDATED BALANCE SHEET

as at 31 December 2008

		Year ended 31 December 2008	Year ended 31 December 2007
	Notes	£'000	£'000
Assets
Non Current Assets
Goodwill	10	-	154
Property, plant and equipment	11	-	15
Investment in joint ventures	12
- Share of gross assets		-	23
- Share of gross liabilities		-	(22)
		______	______
		-	1
		______	______
Total Non Current Assets		-	170
		______	______
Current Assets
Inventories	15	2,900	14,135
Trade and other receivables	16	351	1,305
Cash and cash equivalents		20	926
		______	______
Total Current Assets		3,271	16,366
		______	______
Total Assets		3,271	16,536
		______	______
Liabilities
Current Liabilities
Trade and other payables	17	81	434
Interest-bearing loans and borrowings	17	3,109	3,529
		______	______
		3,190	3,963
Liabilities
Non Current Liabilities
Interest-bearing loans and borrowings	18	-	2,141
		______	______
Total Liabilities		3,190	6,104
		______	______
		81	10,432
Equity minority interests		-	(350)
		______	______
Total Net Assets		81	10,082
		______	______
Equity
Share capital	20	7,997	7,997
Share premium	21	1,970	1,970
Other reserves	21	-	2,647
Retained earnings	21	(9,886)	(2,532)
		______	______
Total Equity attributable to equity holders of the parent		81	10,082
		______	______

Approved by the Board on 26th November 2009 and signed on its behalf by

Gerard Lee

Director

COMPANY BALANCE SHEET

as at 31 December 2008

		Year ended 31 December 2008	Year ended 31 December 2007
	Notes	£'000	£'000
Assets
Non Current Assets
Property, plant and equipment	11	-	5
Investments in subsidiary undertakings	13	-	27,371
		______	______
Total Non Current Assets		-	27,376
		______	______
Current Assets
Trade and other receivables	16	385	51
Cash and cash equivalents		6	546
		______	______
Total Current Assets		391	597
		______	______
Total Assets		391	27,973
Liabilities
Current Liabilities
Trade and other payables	17	101	18,124
Interest-bearing loans and borrowings	17	209	-
		______	______
Total Liabilities		310	18,124
		______	______
Total Net Assets		81	9,849
		______	______
Equity
Share capital - issued and fully paid	20	7,997	7,997
Share premium	21	1,970	1,970
Retained earnings	21	(9,886)	(118)
		______	______
Total Equity		81	9,849
		______	______

Approved by the Board on 26th November 2009 and signed on its behalf by

Gerard Lee

Director

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

Group			Share capital	Share premium	Other reserves	Retained earnings	Total
			£'000	£'000	£'000	£'000	£'000
1 January 2007			7,997	1,970	2,647	(1,581)	11,033
Loss for the year			-	-	-	(951)	(951)
			______	______	______	______	______
31 December 2007			7,997	1,970	2,647	(2,532)	10,082
			______	______	______	______	______

1 January 2008	7,997	1,970	2,647	(2,532)	10,082
Loss for the year	-	-	-	(10,001)	(10,001)
Adjustment (see below)	-	-	(2,647)	2,647	-
	______	______	______	______	______
31 December 2008	7,997	1,970	-	(9,886)	81
	______	______	______	______	______

Company			Share capital	Share premium		Retained earnings	Total
			£'000	£'000		£'000	£'000
1 January 2007			7,997	1,970		340	10,307
Loss for the year			-	-		(458)	(458)
			______	______		_____	_____
31 December 2007			7,997	1,970		(118)	9,849
			______	______		_____	_____

1 January 2008	7,997	1,970		(118)	9,849
Loss for the year	-	-		(9,768)	(9,768)
	______	______		______	______
31 December 2008	7,997	1,970		(9,886)	81
	______	______		______	______

The adjustment from other reserves represents the derecognition of the historically created Merger Reserve and Capital Reserve due to the negligible net asset values of all subsidiaries as at 31 December 2008.

CASH FLOW STATEMENTS

for the year ended 31 December 2008

	Group	Group		Company	Company
	Year ended 31 December 2008	Year ended  31 December 2007		Year ended 31 December 2008	Year ended 31 December 2007
	£'000	£'000		£'000	£'000
Cash flows used in operating activities
Operating (loss)	(9,302)	(633)		(9,734)	(253)
Adjustments for:
Depreciation of property, plant and equipment	15	5		5	3
Goodwill written off	154	-		-	-
Net Investment in Subsidiaries written off	-	-		9,590	-
	______	______		______	______
Operating cash used before working capital changes	(9,133)	(628)		(139)	(250)
Decrease/(increase) in inventories	11,235	(1,880)		-	-
Decrease/(increase) in trade and other receivables	621	108		(334)	1
(Decrease) in trade and other payables	(353)	(99)		(242)	(276)
	______	______		______	______
Cash generated from/(used in) operations	2,370	(2,499)		(715)	(525)
Interest paid	(385)	(521)		(40)	(232)
Taxes paid	-	(220)		-
	______	______		______	______
Net cash generated from/(used in) operating activities	1,985	(3,240)		(755)	(757)
	______	______		______	______
Investing activities
Interest received	19	50		6	27
Proceeds from sale of investment properties	-	14		-
Proceeds from sale of investments	-	205		-	69
	______	______		______	______
Net cash generated from investing activities	19	269		6	96
	______	______		______	______
Financing activities
Minority interest	(350)	(7)		-	-
Proceeds from borrowings	655	2,386		655	-
Repayment of borrowings	(3,216)	-		(446)	-
Joint ventures	1	-		-	-
	______	______		______	______
Net cash (used in)/generated from financing activities	(2,910)	2,379		209	-
	______	______		______	______
Net (decrease) in cash and cash equivalents	(906)	(592)		(540)	(661)
Cash and cash equivalents at beginning of year	926	1,518		546	1,207
	______	______		______	______
Cash and cash equivalents at end of year	20	926		6	546
	______	______		______	______

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2008

ACCOUNTING POLICIES

Basis of Accounting

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRIC interpretations endorsed by the European Union and those parts of the Companies Act 1985 applicable to companies reporting under IFRS and were approved by the Board on  26th November 2009.

The consolidated financial statements comprise the financial statements of the company, its subsidiary undertakings and the group's share of interests in joint ventures. Where a subsidiary is acquired during the year, the profit attributable to shareholders includes only the profits or losses from the effective date of acquisition. Where a subsidiary has been disposed of during the year, the profit attributable to shareholders includes only profit or losses to the effective date of disposal. The group's interests in joint ventures were accounted for using the gross equity method.

The directors have prepared the group and company financial statements on a going concern basis.

Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing 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 revision and future periods if the revision affects both current and future periods.

Details of accounting estimates and judgements that have the most significant effect on the amounts recognised in the financial statements have been disclosed under the relevant note or accounting policy for each area where disclosure is required.

Judgements made by management in the application of IFRS that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the year are discussed in the notes.

New standards and interpretations

The IASB and IFRIC have issued the following standards and interpretations with an effective date after the date of these financial statements:

International Accounting Standards/International Financial Reporting Standards (IAS/IFRS)		Effective date
IAS 1 (revised)	Presentation of Financial Statements (revised 2007 and 2008)	1 January 2009
IAS 16	Property, Plant and Equipment (revised May 2008)	1 January 2009
IAS 19	Employee Benefits (revised May 2008)	1 January 2009
IAS 20	Government Grants and Disclosures of Government Assistance (revised May 2008)	1 January 2009
IAS 23	Borrowing Costs (revised 2007 and May 2008)	1 January 2009
IAS 27	Consolidated and separate Financial Statements (revised 2008)	1 January 2009 and 1 July 2009

International Accounting Standards/International Financial Reporting Standards (IAS/IFRS)		Effective date
IAS 28	Investments in Associates (revised 2008)	1 January 2009 and 1 July 2009
IAS 29	Financial Reporting in Hyperinflationary Economies (revised May 2008)	1 January 2009
IAS 31	Interests in Joint Ventures (revised 2008)	1 January 2009 and 1 July 2009
IAS 32	Financial Instruments: Presentation (revised 2008)	1 January 2009
IAS 36	Impairment of Assets (revised May 2008)	1 January 2009
IAS 38	Intangible Assets (revised May 2008)	1 January 2009
IAS 39	Financial Instruments: Recognition and Measurement (revised May 2008)	1 January 2009
IAS 40	Investment Property (revised May 2008)	1 January 2009
IAS 41	Agriculture (revised May 2008)	1 January 2009
IFRS 1	First time Adoption of International Financial Reporting Standards (revised May 2008)	1 January 2009
IFRS 2	Share-based Payment (revised 2008)	1 January 2009
IFRS 3	Business Combinations (revised 2008)	1 July 2009
IFRS 5	Non current Assets Held for Sale and Discontinued Operations (revised May 2008)	1 July 2009
IFRS 8	Operating Segments	1 January 2009

International Financial Interpretations Committee (IFRIC)

IFRIC 15	Agreements for the construction of real estate	1 January 2009
IFRIC 16	Hedges of a net investment in a foreign entity	1 January 2009

The Directors have chosen not to early adopt the above standards and interpretations as it is anticipated that these will not have a material impact on the financial position or the financial performance of the Group.

Revenue

Revenue comprises gross rental income and service charges receivable from investment properties.

Revenue is derived from activities undertaken in the United Kingdom.

Goodwill

In accordance with IFRS 3 and as allowed by IFRS 1, goodwill was frozen at its net book value as at 1 January 2006 for the year ended 31 December 2007. Goodwill is tested annually for impairment with any impairment losses being recognised immediately in the income statement and goodwill has been fully written off in the income statement for the year ended 31 December 2008.

Non current assets and depreciation

Non current assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

    Equipment, fixtures and fittings over 3 years

Financial Instruments

The group's financial instruments comprise bank loans, loans from Directors, cash, trade receivables and trade payables and they are recognised in the group's balance sheet when the group becomes a party to the contractual provisions of the instrument.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits held at the bank.

Investments

Investments are stated at cost, less any provision for diminution in value.

Inventories

Developments in progress are valued at the lower of cost and net realisable value. Provision is made for any anticipated losses. Cost includes costs of acquisition and development including directly attributable fees and expenses.

Deferred taxation

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 taxable profits of group companies and its results as stated in the financial statements.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.

2.    SEGMENTAL ANALYSIS

The group's turnover and results for the year arise principally from property development activities and from activities carried out in the UK.

3.    LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION

Profit on ordinary activities before taxation is stated after charging:

		Year ended 31 December 2008	Year ended 31 December 2007
		£'000	£'000
Depreciation of property, plant and equipment		15	5
Auditors remuneration:
- audit services		15	95
- other services		33	25
Goodwill written off		154	-
And after crediting:
- Revenue: rent and similar income receivable from investment properties		70	27

The fees for audit services in relation to the year ended 31 December 2007 and fees for other services in both years were payable to the previous auditor.

Cost of sales amounting to £8,746,000 includes the write downs to net realisable values of the development properties sold in September 2008 and the remaining development property the subject of the proposed sale referred to in the Post Balance Sheet Note 26.

4.    FINANCE INCOME

		Year ended 31 December 2008	Year ended 31 December 2007
		£'000	£'000
Interest on cash and cash equivalents		19	50
		______	______

5.    FINANCE COSTS

		Year ended 31 December 2008	Year ended 31 December 2007
		£'000	£'000
Interest on interest-bearing loans and borrowings		385	521
		______	______

6.    DIRECTORS EMOLUMENTS AND INTERESTS    

		Year ended 31 December 2008	Year ended 31 December 2007
		£'000	£'000
Total emoluments of all directors:
Fees and salaries		156	225
		______	______
Emoluments of the highest paid director		56	75
		______	______

No pension contributions are paid in respect of any director.

The executive directors are paid a salary, with the exception of Mr Lee who receives director's fees. The fees and salaries are reviewable annually by the Remuneration Committee.

The following table shows the remuneration of directors for the years ended 31 December 2008 and 2007. No benefits in kind, bonuses or share-based payments have been made.

	2008	2007
	£'000	£'000
Edward Azouz	56	75
Jeffrey Azouz	6	25
John Guy Davies	25	25
Gerard Lee	56	75
Victor Lipien	13	25

Messrs Azouz, Azouz and Lee waived their entitlement to remuneration from 25 September 2008. Mr Lipien waived his entitlement to remuneration from 1 July 2008.

Details of other transactions in which directors have interests are given in note 22 to the financial statements.

7.    EMPLOYEES    

The average number of employees, including the executive directors, employed by the group during the year was 6 (2007 - 9). Salaries and social security costs amounted to £204,000 (2007 - £359,000) and £19,000 (2007 - £25,000) respectively.

Key management compensation solely relates to the Directors' emoluments as disclosed in note 6.

8.    TAXATION    

(a)    UK corporation tax on the results for the year

		Year ended 31 December 2008	Year ended 31 December 2007
		£'000	£'000
Current tax - UK corporation tax at 28% to 30% (2007 - 30%)
Group		-	-
		______	______
		-	-
		______	______
Deferred tax
Group		333	(104)
		______	______
Charge/(credit) for the year		333	(104)
		______	______

The deferred tax assets of the group brought forward at 1 January 2008, which was made up of tax losses, have been written off in full.

 (b)    Factors affecting the tax charge for the year

The corporation tax charge (2007 - credit) for the year is lower than the tax credit or charge, which would be assessed, based on the UK standard rate of corporation tax at 28% - 30%. The differences are explained as follows:

		Year ended 31 December 2008	Year ended 31 December 2007
		£'000	£'000
(Loss) on ordinary activities before tax		(9,668)	(1,048)
		______	______
(Loss) on ordinary activities multiplied by the standard rate of corporation tax 28% - 30% (2007 - 30%)		(2,755)	(314)
Effects of:
Expenses not deductible for tax purposes		44	-
Income not taxable		-	(26)
Unrelieved tax losses carried forward		3,044	236
		______	______
Current tax charge/(credit) for the year		333	(104)
		______	______

9.    LOSS PER SHARE    

The calculation of loss per share is based on a loss of £10,001,000 (2007 - loss of £951,000) and on 79,971,393 (2007 - 79,971,393) ordinary shares, being the weighted average number of ordinary shares in issue during the year. There are no factors surrounding the question of dilution of the loss per share calculations.

10.    GOODWILL    

Goodwill of £154,000 arose on the consolidation of Pathfinder Recovery Ventures Limited, Pathfinder (River Quay) Limited, Fletcher Gate Limited and Newark Property Development Limited and this was written off as at 31 December 2008 to reflect the negligible net asset values of all subsidiaries as at 31 December 2008.

11.    PROPERTY, PLANT AND EQUIPMENT    

Group

	Equipment, fixtures and fittings	Investment properties	Total
	£'000	£'000	£'000
Cost
1 January 2007 and 2008	24	4	28
Additions	-	-	-
Disposals	(24)	-	(24)
	______	______	______
31 December 2008	-	4	4
	______	______	______
Depreciation & Impairment
1 January 2007	8	-	8
Charge for year	5	-	5
Disposals	-	-	-
	______	______	______
31 December 2007	13	-	13
	______	______	______
Charge for 2008	11	4	11
Disposals	(24)	-	(24)
31 December 2008	______	______	______
	-	4	-
	______	______	______
Net book value at 31 December 2008	-	-	-
	______	______	______
Net book value at 31 December 2007	11	4	15
	______	______	______

All properties are freehold. Based on open market value at 31 December 2008 it is the opinion of the directors that there is no significant value in these investment properties and an impairment charge of £4,000, equivalent to the cost of these assets has been made.

11.    PROPERTY, PLANT AND EQUIPMENT continued.../    

	Equipment, fixtures and fittings
	£'000
Company
Cost	12
1 January 2007 and 2008	-
Additions	-
Disposals	______
31 December 2008	12
	______
Depreciation
1 January 2007	4
Charge for the year	3
Disposals	-
	______
31 December 2007	7
	______
Charge for 2008	5
Disposals	(12)
31 December 2008	______
	-
	______
Net book value at 31 December 2008	-
Net book value at 31 December 2007	______
	5
	______

12.    JOINT VENTURES 

During the year ended 31 December 2008 all Joint Venture Arrangements were ceased.

The disclosures relating to the existence of Joint Venture Arrangements in 2007 are as follows:-

	Participating interest	Loans to undertakings in which the company has a participating interest	Share of profits and losses	Total
	£'000	£'000	£'000	£'000
1 January 2007	1	72	-	73
Repaid	-	(72)	-	(72)
	______	______	______	______
31 December 2007	1	-	-	1
	______	______	______	______

The investment in joint ventures comprised the following companies and their subsidiaries.

	Proportion of voting rights and shares held			Nature of business
Excelmode Limited	50%			Property development
Viewland Limited	50%			Property investment
PFP Management Limited	59%			Provision of management services

A summary of the group's share of profits of joint ventures for the year ended 31 December 2007 is as follows:

		Year ended 31 December 2007
		£'000
Turnover		5
		______
Operating profit		3
Dividends		(3)
		______
Profit retained		-
		______

A summary of the group's share of assets and liabilities of joint ventures as at 31 December 2007 is as follows:

		Year ended 31 December 2007
		£'000
Share of gross assets		23
Share of gross liabilities		(22)
		______
		1
		______

During 2007 the group entered into loan transactions, in the ordinary course of business, with joint ventures, which are related parties of the group. The outstanding balances at the year-end were as follows: 

		PFP Management	Excelmode Limited
		£'000	£'000
31 December 2007
Loans to joint ventures		38	-
		______	______
1 January 2007
Loans to joint ventures		56	3
		______	______

Loans to joint ventures were interest free.

13.    INVESTMENTS    

	Shares in subsidiary undertakings	Loans to subsidiary undertakings	Participating interest	Loans to undertakings in which the company has a participating interest	Total
	£'000	£'000	£'000	£'000	£'000
Company
Cost
1 January 2008	7,458	19,939	1	3	27,401
Additions	-	-	-	-	-
Disposals	-	(17,772)	(1)	(3)	(17,776)
	______	______	______	______	______
31 December 2008	7,458	2,167	-	-	9,625
	______	______	______	______	______
Amounts provided
1 January 2008	-	30	-	-	30
Transfers	-	-	-	-	-
Arising in the year	7,458	2,137	-	-	9,595
	______	______	______	______	______
31 December 2008	7,458	2,167	-	-	9,625
	______	______	______	______	______
Net book value
31 December 2008	-	-	-	-	-
	______	______	______	______	______
31 December 2007	7,458	19,979	1	3	27,371
	______	______	______	______	______

The cost of shares in subsidiary undertakings included the associated costs of acquisition.

Details of the group's and the company's investments, which are all entities incorporated in the United Kingdom, are as follows:-

		Proportion of shares held
		Group	Company		Nature of business
Subsidiary undertakings:
Crannon Limited		60%	-		Property development
Drayhawk Limited		100%	-		Property development
Forgeglade Limited		60%	-		Property development
Pathfinder Recovery 1 Limited		96%	96%		Property investment and development
Pathfinder Recovery Ventures Limited		96%	-		Property investment and development
Pathfinder Repossessions Limited		100%	-		Property investment
Pathfinder Repossessions II Limited		100%	-		Property investment
Pathfinder Residential Investments Limited		96%	-		Property investment
Pathfinder (Clyde Street) Limited		96%	-		Property development
Pathfinder (Glasgow) Limited		96%	-		Property development
Newark Property Development Limited		100%	-		Property development
Fletcher Gate Limited*		100%	-		Property development
Newark Property LCS Limited		100%	-		Dormant
Newark Property Pocklington Limited		100%	-		Dormant
Pathfinder (River Quay) Limited		96%	-		Property development
Merchant City Limited		100%	100%		Property investment
Merchant Village Limited		100%	-		Property investment
Pathfinder Construction Services Limited		100%	-		Dormant
Property Action Limited		96%	-		Dormant
Plainrise Limited*		100%	100%		Property development
Joint ventures:+
Excelmode Limited		50%	-		Property development
PFP Management Limited		59%	-		Provision of management services
Viewland Limited		50%	-		Property investment

* Fletcher Gate Limited and Plainrise Limited were sold on 30 September 2008.  

+ The Joint Venture Arrangements were ceased during the year ended 31 December 2008.

All investment held are in ordinary shares.

14.    DISPOSAL OF SUBSIDIARIES    

In accordance with the passing of the ordinary resolutions to approve the disposal by the Company of the Ilford development site to an acquisition vehicle controlled by Gerard Lee for consideration of £3.5 million and to approve the disposal by the company of the Victorian Brewery at the Newark development site to an acquisition vehicle controlled by Gerard Lee for consideration of £500,000 the subsidiary undertakings that held those interest, Plainrise Limited and Fletcher Gate Limited respectively, were sold to Kerrington Limited for nominal amounts. On the effective date of transfer, being 30 September 2008, the net realisable values of the inventories were written down to the value of the bank loan and holding company loan indebtedness as follows:-

	Plainrise Limited		Fletcher Gate Limited
	£'000		£'000
Inventories	3,500		500
Bank loan	(2,214)		(500)
Holding company loan	(1,286)		-
Net current assets	-		-

15.    INVENTORIES - GROUP

		31 December 2008	31 December 2007
		£'000	£'000
Land and buildings held for development and property in the course of construction		2,900	14,135
		______	______

16.    TRADE AND OTHER RECEIVABLES    

		Group		Company
		31 December 2008	31 December 2007	31 December 2008	31 December 2007
		£'000	£'000	£'000	£'000
Current:
Trade receivables		46	-	-	-
Amounts owed by group undertakings		-	-	80	37
Other receivables		305	896	305	6
Prepayments and accrued income		-	76	-	8
		______	______	______	______
		351	972	385	51
Non current:
Deferred tax		-	333	-	-
		______	______	______	______
		351	1,305	385	51
		______	______	______	______

17.    CURRENT LIABILITIES    

		Group		Company
		31 December 2008	31 December 2007	31 December 2008	31 December 2007
		£'000	£'000	£'000	£'000
Interest-bearing loans and borrowings (see note 19)		3,109	3,529	209	-
Trade payables		-	18	-	-
Amount owed to group undertakings		-	-	-	17,772
Amounts owed to undertakings in which the group has a participating interest		-	38	-	9
Other payables		5	87	25	97
Accruals and deferred income		76	291	76	246
		______	______	______	______
		3,190	3,963	310	18,124
		______	______	______	______

18.    NON CURRENT LIABILITIES

		Group		Company
		31 December 2008	31 December 2007	31 December 2008	31 December 2007
		£'000	£'000	£'000	£'000
Interest-bearing loans and borrowings		-	2,141	-	-
		______	______	______	______

19.    BORROWINGS AND OTHER FINANCIAL INSTRUMENTS - GROUP

Details of the group's policies for the use of financial instruments in managing risk are included in the Directors' Report. The group's financial instruments comprise bank loans, cash and various items such as trade receivables and trade payables that arise directly from its operations. Cash, bank loans and loans from Directors are used to finance the group's operations.

 (a)    Borrowings

		31 December 2008	31 December 2007
		£'000	£'000
Interest-bearing loans and borrowings
- Repayable within one year		3,109	3,529
- Repayable after one year		-	2,141
		______	______
		3,109	5,670
		______	______

Interest-bearing bank loans and borrowings are secured against inventories in specific subsidiary undertakings. The bank loans are at variable interest rates determined by reference to LIBOR or bank base rate.

Loans from directors as detailed in the Related Party Transactions Note 22 charge interest of 8% per annum which was also charged on the balances due on the related current account.

(b)    Financial assets

The group's financial assets comprise cash and cash equivalent on deposit amounting to £20,000 (2007 - £926,000), which bears interest based on bank base rates.

(c)    Fair value

There is no material difference between the fair value of borrowings, cash and other financial instruments and their book value at the balance sheet date.

(d)    Maturity

		Group
		31 December 2008	31 December 2007
		£'000	£'000
Repayable within one year		3,109	3,529
Repayable in two to five years		-	2,141
		______	______
Total borrowings		3,109	5,670
		______	______

(e)    Undrawn borrowing facilities

At 31 December 2008 and 2007 the group had no undrawn borrowing facilities.

20.    SHARE CAPITAL

		31 December 2008	31 December 2007
		£'000	£'000
Authorised:
250,000,000 (2007: 250,000,000) ordinary shares of 10p each		25,000	25,000
		______	______
Allotted, issued and fully paid:
79,971,393 (2007 - 79,971,393) ordinary shares of 10p each		7,997	7,997
		______	______

21.    SHARE PREMIUM AND OTHER RESERVES

		Share premium account	Merger reserve	Capital reserve	Retained earnings
		£'000	£'000	£'000	£'000
GROUP
1 January 2008		1,970	2,494	153	(2,532)
Loss for the year		-	-	-	(10,001)
Adjustment		-	(2,494)	(153)	2,647
		______	______	______	______
31 December 2008		1,970	-	-	(9,886)
		______	______	______	______

The adjustment from the Merger Reserve and Capital Reserve represents the derecognition on consolidation due to the negligible net asset values of all subsidiaries as at 31 December 2008.

		Share premium account			Retained earnings
		£'000			£'000
COMPANY
1 January 2008		1,970			(118)
Loss for the year		-			(9,768)
		______			______
31 December 2008		1,970			(9,886)
		______			______

22.    RELATED PARTY TRANSACTIONS

The following charges have been incurred by the group in connection with services provided by related parties during the year:

				Year ended  31 December 2008	Year ended  31 December 2007
				£'000	£'000
				Transactions for the year
GROUP
Kerrington Developments Limited
Property development costs				1,687	1,490
Kerrington Property Services Limited,
Office costs				8	13
Management Fees				20	20
Elesys Limited
Office costs				3	2
Directors fees				13	25
Kerrington Limited
Rent				20	8
Sentinal Properties Limited
Directors fees				56	75

During 2008, the group received loans of £455,000 (2007 - 250,000) from Kerrington Limited. Interest of 8% was charged on the loans. The loans were repaid during the year, and interest of £15,000 (2007 - less than £1,000) was charged to the group to include interest on current account balances. The balance outstanding at the year end was £302,000 due to the company (2007 - £nil).

Gerard Lee is a director and shareholder of Kerrington Developments Limited, Kerrington Property Services Limited, Kerrington Limited and Sentinal Properties Limited. Kerrington Developments Limited is a property development company which was engaged during the year to develop the site at Newark, Nottingham. The property development was conducted on an arms length basis.

Victor Lipien is a director and shareholder of Elesys Limited.

During 2008 the group received a loan of £200,000 from AR & V. Investments Limited. Interest of 8% was charged on the loan and interest of £9,000 was charged to the group. The balance outstanding at the year end was £209,000. Edward and Jeffrey Azouz are directors and shareholders of AR & V. Investments Limited.

There are no other related party transactions other than key management compensation which is disclosed in note 6.

23.    CAPITAL COMMITMENTS

There are no capital commitments entered into by the group or the company.

24.    CONTINGENT LIABILITY

The company has no outstanding guarantees in respect of interest-bearing loans and borrowings of subsidiary undertakings (2007 such guarantees existed amounting to £5,670,000). 

25.    COMPANY PROFIT AND LOSS ACCOUNT

As permitted by s230 Companies Act 1985, the company has not presented its own income statement. The amount of group loss dealt with in the accounts of the company is a loss of £9,768,000 (2007: loss of £458,000).

26.    POST BALANCE SHEET EVENTS

• The Company has entered into a Share Purchase Agreement with Kerrington under the terms of which Kerrington has agreed to pay the Company £1 in consideration of the transfer to Kerrington of the entire issued share capital of NPD. The Completion of the Share Purchase Agreement is conditional on the passing of a resolution by the Shareholders of the Company authorising the disposal of the sites owned by NPD known as the River Edge site and the Road Frontage sites at Northgate, Newark.

Kerrington has agreed to purchase the shares in NPD subject to charges registered in favour of the Royal Bank of Scotland Plc in relation to an outstanding debt of £2.9m.

• It is proposed that the 79,971,393 Existing Ordinary Shares will be consolidated and sub-divided on the basis of and according to the steps set out as follows:-

It is proposed that every Existing Ordinary Share shall be sub-divided and reclassified as one Ordinary Share of 0.1p (Subdivided Share) and one deferred share of 9.9p (Deferred Share).

It is then proposed that every 20,000 Subdivided Shares will be consolidated into 1 New Ordinary Share of £20 unless a shareholding therefore equals or exceeds 20,000 Existing Ordinary Shares then Shareholders will be left with a fractional entitlement to the resulting Ordinary Shares if the Resolutions are approved.

Following the sub-division of the Existing Ordinary Shares and subsequent consolidation of the Subdivided Shares, the nominal value of each Ordinary Share will be £20 each. The 2006 Act provides that a Company may only lawfully issue new shares for a subscription price at or above the nominal value of those shares. In order that the Company may issue the New Ordinary Shares, pursuant to the Proposals, the Company proposes that each ordinary share in the capital of the Company then having a nominal value of £20 be sub-divided into 2,000 Ordinary Shares of 1 pence each.

• The Company has entered into Convertible Loan Agreements to provide an aggregate loan amount of £506,000 for a term of two years from the date of drawdown. Following a six month period from the date of drawdown of Convertible Loan monies, the Company shall also be entitled to repay the Loan monies. At any time after one calendar month following the drawdown of Convertible Loan monies the Lender is entitled to request that any amount still outstanding of such loan be converted into Ordinary Shares in the Company at a conversion price of 1.5p per Ordinary Share.

• The Company intends to invest £200,000 into IM Minerals Ltd to acquire a 4.67% shareholding.

• The Interim Financial Statements for the six months ended 30th June 2009 have been released coterminously with these financial statements.

The Company's Report and Accounts have been posted to shareholders, and a copy can be found on the Company's website, www.pathfinderplc.co.uk.

For further information:

Edward Azouz, Chairman, Pathfinder Properties plc on 020 7603 7495

Roland Cornish, Beaumont Cornish Limited on 020 7628 3396

Note to the announcement:

The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2007 and 31 December 2008, but is derived from those accounts. Statutory accounts for 2007 have been delivered to the Registrar of Companies in England and Wales, and those for 2008 will be delivered shortly. The auditors have reported on the 2007 and 2008 accounts: their report was unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985.

ANNUAL GENERAL MEETING

Notice is given that the Annual General Meeting of the Company will be held at Avenue House, East End Road, Finchley, London N3 3QE on 21 December 2009 at 11.00 am.

 

END

 

 

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