Final Results

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

James Dubois

 

+44 (0) 1732 700 000

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

Financials

Business Environment and Outlook

 

 

 

 

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 £1,022,898  (2019: Loss £ 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

    £   £

    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 £1,970,106 (2019: £2,128,189), 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 £1,022,898 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 £4,381,991

  (2019: losses £3,364,609). 

 

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 £1,975,000 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 £240,000 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 - 0.1p each

Ordinary shares - 0.1p 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
No.

 


Shareholding
%

 

 

 

 

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.

 

 

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

 

£68K

 

2% of gross assets

Company

 

£7K

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

 

 

Result of our procedures

 

 

 

 

 

 

Undisclosed Related Party transactions

 

The Risk

Our response

 

 

 

Result of our procedures

 

 

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 £68K and for the parent company was £7K 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

 ended

 

31 March

Year

 ended

 

31 March

 

Note

2020

2019

Restated

 

 

£

£

 

 

 

 

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

 

£

£

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)

Profit & loss account

 

  (5,896,601)

(4,873,703 )

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

acquisition

 reserve

Retained

 profits

 /(losses)

Total equity

 

 

 

£

£

£

£

£

 

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

 

£

£

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

IFRS 16 Leases

New and revised IFRS Standards in issue but not yet effective

 

 

 

 

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.

 

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 (£), 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 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.

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:

Revenues analysed by geographic location are as follows:

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

    ££

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

Consultancy Services - P Treadaway

Debt forgiveness

994,395

70,108

(70,108)

1,862,457

-

-

 

2,952,887

4,424,611

 

4  EMPLOYEES AND DIRECTORS' REMUNERATION

Staff costs during the year were as follows:

 

 

2020

2019

 

£

£

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

 

£

£

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

 

Consultancy fees of £ 4,994 (2019: £4,994) 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 £ 10,102 (2019: £ 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 £ 118,177 (2019: £145,434) has been accounted for in the profit & loss within cost of sales together with an impairment provision of £ nil (2019: £126,661)  on account of the reduction of likely selling prices being achieved since  the year end. 

6  TAXATION

 

2020

2019

 

£

£

 

 

 

Current tax

-

-

 

 

 

Tax charge

-

-

 

 

2020

2019

 

£

£

 

 

 

(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   £4,381,991  (2019: £3,364,609) 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

 

 

£

£

 

 

 

(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

 

 

 

 

£

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

1 April 2019

Additions

31 March 2020

 

NET BOOK VALUE

At 31 March 2020

 

At 31 March 2019

 

Fair Value at 31 March 2020 is represented by:

Valuation in 2020

 

 

 

 

2020

£

-

1,975,000  1,975,000

 

 

1,975,000

 

-

 

 

1,975,000

 

 

2019

£

-

  -

-

 

 

-

 

-

 

 

-

 

 

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 £1,975,000.00.

 

 

10  TRADE AND OTHER RECEIVABLES

 

 

 

2020

2019

 

 

 

 

£

 

 

 

 

 

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

 

£

£

 

 

 

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

 

 

 

 

 

 

£

 

 

 

 

 

 

 

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

 

 

 

 

£

 

 

 

 

 

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

 

 

 

 

£

 

 

 

 

 

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 £ 300,000 (2019: £300,000) 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).

The remaining balance is disclosed in note 17. 

 

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 £ 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

 

 

 

 

£

 

 

 

 

 

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 £ Nil (2019: £ Nil) was paid to Mr C C Johnson. The rate of interest on the loan is 5% pa (2019: 5% pa). Interest of  £36,000 (2019: £36,000) 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 £ 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

 

 

 

£

£

 

 

 

 

 

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

 

 

 

£

£

 

 

 

 

 

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. 

 

 

 

 

2020

2019

 

 

 

£

£

 

 

 

 

 

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

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, £ 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 £ 14,794 (2019: £25,025).

 

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

    £   £ £

 

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 £ 432,268 (2019:  £ 1,850,364)  less potential deferred tax of  nil  (2019: £ 291,045) has been written off in the financial statements. Within TNH the sum of £ 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

    £     

 

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    £   £   £

 

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.

 

         Trafalgar Property Group Plc

              COMPANY BALANCE SHEET 
              For the year ended 31 March 2020

 

 

Note

2020

2019

 

 

£

£

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 £ 135,165 (2019: Loss  £2,531,344 ).

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

acquisition

 reserve

Retained

 profits

 /(losses)

Total equity

 

 

£

£

£

£

£

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

          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  £135,165  (2019: Loss £2,531,344).  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 £10,000 (2019: £10,000) and an impairment adjustment of  £ nil (2019: £ 2,354,732) - see note 8.

6  EMPLOYEES AND DIRECTORS' REMUNERATION

 

2020

2019

 

£

£

 

 

 

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.

£ 4,994 (2019: £4,994) was paid to Mr Norman Lott for his professional services.

Additional directors remuneration of £ 45,000 (2019: £60,000) was paid to a director through subsidiary entities.

 

 

 

7  INVESTMENTS 

The company owns the following undertakings, all of which are incorporated in the United Kingdom and have their registered offices at Chequers Barn, Chequers Hill, Bough Beech, Edenbridge, Kent, TN8 7PD.

 

 

Class of shares held

% Shareholding

Principal Activity

Held directly

 

 

 

 

Trafalgar New Homes Limited

Ordinary shares

100%

Residential property developers

 

 

 

 

Trafalgar Retirement + Limited

Ordinary shares

100%

Residential property & assisted living scheme

 

 

 

 

Selmat Limited

Ordinary shares

100%

Residential property renting

 

 

 

 

Held indirectly through Trafalgar New Homes Limited

 

 

 

 

Combe Bank Homes (Oakhurst) Limited

Ordinary shares

100%

Residential property developers

 

 

 

 

Held indirectly through Trafalgar Retirement + Limited

 

 

 

 

Randell House Limited

Ordinary shares

100%

Assisted living developers

(dissolved 22 September 2020)

 

 

 

 

 

 

 

Controlled via Deed of Trust

 

 

 

 

Combe House (Borough Green) Limited

Ordinary shares

100%

Residential property 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

 

 

 

 

£

 

 

 

 

 

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

 

 

 

 

£

 

 

 

 

 

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

 

 

 

 

 

£

 

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 in year

62,500,000

-

 

 

 

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 £ 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.

 

 

2020

2019

£

£

425,190

425,190

62,500

-

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

 

 

 

£

£

 

 

 

 

 

Balance brought forward

 

 

2,510,462

2,510,462

Premium on issue of new shares

Cost of issue 

 

 

187,500

(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 £2,000,000 nominal of shares; those authorities were replaced on 13 July 2020 by authorities to allot up to £593,750 nominal of shares.  On 14 July 2020 937,500,000 ordinary shares of 0.01p were issued, raising £750,000 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:

Chequers Barn

Chequers Hill

Bough Beech

Edenbridge

Kent

TN8 7PD

By order of the Board

Nicholas Narraway

Secretary

 

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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