Annual Financial Report Year end 31st December ...

Secured Property Developments plc Directors' report and financial statements Registered number 2055395 31 December 2008 Contents Notice of meeting 1 Company information 2 Chairman's statement 3 Directors' report 4 Statement of directors' responsibilities in respect of the Directors' Report and the financial statements 6 Independent auditors' report to the members of Secured Property Developments plc 7 Consolidated profit and loss account 9 Consolidated balance sheet 10 Company balance sheet 11 Consolidated cash flow statement 12 Reconciliation of operating profit to operating Cash flows 12 Reconciliation of net cash flow to movement in net debt 12 Statement of total recognised gains and losses 13 Reconciliation of movements in shareholders' funds 13 Notes 14 Form of proxy for use at the annual general meeting on 19th May 2099 27 Notice of meeting NOTICE IS HEREBY GIVEN that the Twentieth Annual General Meeting of Secured Property Developments plc will be held at The Small Mall Room, The Royal Automobile Club, 89 Pall Mall, London, SW1Y 5HS on 19th May 2009 at 11 a.m. for the following purposes: 1. To receive and adopt the financial statements for the year ended 31 December 2008, together with the reports of the Directors and Auditors thereon. 2. To re-elect as Directors R E France and G W Green. 3. To approve a dividend of Â½ penny per Ordinary Share, recommended by the Directors for payment to shareholders on the register at the close of business on 15th May 2009. 4. To authorise, by special resolution in accordance with s95 of the Companies Act 1985, the Board to purchase up to 5% of the Company's own shares in the open market at a minimum price of 20p per share and a maximum price of 60p per share: such powers to expire at the AGM to be held in 2010, or on 19th May 2010 if earlier. 5. To re-appoint as Auditors KPMG Audit Plc, and to authorise the Directors to agree their remuneration. 6. To transact any other ordinary business of the Company. By order of the board R B DobrÃ©e 17th April 2009 Secretary Notes: 1. A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Company. Proxy forms must be lodged at the Registered Office not later than forty-eight hours before the time fixed for the meeting. 2. We would draw the attention of members proposing to attend the meeting to the RAC Club dress code, which requires men to wear a tailored jacket and trousers, collared shirt and tie at all times and women to dress with commensurate formality. Company information Directors P Cottam (Chairman) R E France G W Green R A Shane P R Stansfield Secretary R B DobrÃ©e Registered office Rowlandson House 289/293 Ballards Lane London N12 8NP Auditors KPMG Audit plc St James' Square Manchester M2 6DS Bankers The Royal Bank of Scotland Piccadilly Circus Branch 48 Haymarket London SW17 4SE Solicitors Stephenson Harwood 1 St Paul's Churchyard London EC4M 8SH Share Dealing The Company's Ordinary shares are quoted on the PLUS market and persons can buy or sell shares through their stockbroker. Share Price The middle market price of the Ordinary shares were quoted at 31st December 2008 on the PLUS Market at 32.50 pence per share (2007:50 pence per share) Chairman's statement The property revaluation as at 31st of March 2008 incorporated in last year's accounts resulted in a write-down in value of 21.85%, which was considered by the directors at the time to be conservative. The directors have taken the view that it is appropriate to make no further change in the 2008 accounts, bearing in mind that there is no current intention to dispose of any of the properties and the present market makes objective property valuation extremely difficult. Notwithstanding the loss for the year, the Board considers it appropriate to recommend the payment of a dividend subject to approval at the forthcoming Annual General Meeting at the reduced rate of 2Â½% (Â½ penny per share), which will cost Â£9,903. 2009 is expected to prove to be a difficult year. Not least because the Group's cash balance is currently earning interest at a rate significantly below the cost of the term borrowings. The annual general meeting will take place at the Royal Automobile Club, 89 Pall Mall London, SW1Y 5HS on the Tuesday 19th of May 2009 at 11 a.m., and the directors look forward to meeting those shareholders, who can attend. Philip Cottam Chairman Date: 17 April 2009 Directors' report The directors present their directors' report and financial statements for the year ended 31 December 2008. Principal activities The principal activity of Secured Property Developments plc is investment in commercial property. The group comprises the holding company, a finance company and a second property company. Business review The results for the year are set out on page 9 of these consolidated financial statements. The group's investment properties are let at rents commensurate with local market conditions and on terms that include periodic upwards adjustment, financed by medium-term borrowings. Derivatives and other financial instruments The group's financial instruments comprise borrowings, some cash and liquid resources, convertible unsecured loan stock and various items, such as trade debtors, trade creditors, that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the group's operations. The main risks arising from the group's financial instruments are interest rate risk and liquidity risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. These policies have remained unchanged since the beginning of 2002. Interest rate risk The group finances its operations through bank borrowings. Currently the group borrows at a rate of interest fixed by a swap agreement on all its borrowings. The group's policy is to borrow at the lowest rates for periods that do not carry excessive time premiums. Liquidity risk As regards liquidity, the group's policy has throughout the year been to ensure that the group is able at all times to meet its financial commitments as and when they fall due. The maturity dates of the various loans to the group are set out in note 15 of these financial statements. Proposed dividend and transfer to reserves The directors recommend the payment of a dividend of Â½ penny per share, payable on 22nd June 2009 to those on the register of shareholders at the close of business on 15th May 2009. The loss for the year retained in the group is Â£18,442 (2007: profit Â£140,383). Directors and directors' interests The directors who held office during the year were as follows: P Cottam R E France G W Green R A Shane P R Stansfield Directors' report (continued) Directors and directors' interests (continued) The directors who held office at the end of the financial year had the following interests in the shares and loan stock of the group companies as recorded in the register of directors' share and debenture interests. Interest Interest at at Director Company Class 1 April 1 April 2009 2008 P Cottam SPD plc* Ordinary shares 27,375 27,375 Deferred shares 4,000 4,000 R E France SPD plc* Ordinary shares 88,888 88,888 G W Green SPD plc* Ordinary shares 90,000 90,000 Deferred shares 30,000 30,000 R A Shane SPD plc* Ordinary shares 574,456 574,456 Deferred shares 154,666 154,666 P R Stansfield SPD plc* Ordinary shares 6,250 6,250 * SPD plc is used above as an abbreviation for Secured Property Developments plc. The interests of the directors shown above at 1 April 2009 and 1 April 2008 were held respectively at 31 December 2008 and 31 December 2007. According to the register of directors' interests, no rights to subscribe for shares in or debentures of the company or any other group company was granted to any of the directors or their immediate families, or exercised by them, during the financial year. Substantial shareholding of ordinary shares of 20p each as at 1 April 2009 R E France 4.51% G W Green 4.57% R A Shane 27.32% Political and charitable contributions The group made no political or charitable donations during the year. Disclosure of information to auditors The directors who held office at the date of approval of this directors' report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditors are unaware; and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information. Auditors In accordance with Section 384 of the Companies Act 1985, a resolution for the re-appointment of KPMG Audit Plc as auditors of the Company is to be proposed at the forthcoming Annual General Meeting. By order of the board R B DobrÃ©e Rowlandson House Secretary 289/293 Ballards Lane London N12 8NP 17 April 2009 Statement of directors' responsibilities in respect of the Directors' Report and the financial statements The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice). The financial statements are required by law to give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that its financial statements comply with the Companies Act 1985. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities. KPMG Audit Plc St James' Square Manchester M2 6DS United Kingdom Independent auditors' report to the members of Secured Property Developments plc We have audited the group and parent company financial statements (the "financial statements") of Secured Property Developments plc for the year ended 31 December 2008 which comprise the Consolidated Profit and Loss Account, the Consolidated and Company Balance Sheets, the Consolidated Cash Flow Statement, the Consolidated Statement of Total Recognised Gains and Losses, the Reconciliations of Movements in Shareholders' Funds and the related notes. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the company's members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors The directors' responsibilities for preparing the Directors' Report and the financial statements in accordance with applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice) are set out in the Statement of Directors' Responsibilities on page 6. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the Directors' Report is consistent with the financial statements. In addition we report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed. We read the Directors' Report and consider the implications for our report if we become aware of any apparent misstatements within it. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group's and company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Independent auditors' report to the members of Secured Property Developments plc (continued) Opinion In our opinion: - the financial statements give a true and fair view, in accordance with UK Generally Accepted Accounting Practice, of the state of the group's and the parent company's affairs as at 31 December 2008 and of the group's loss for the year then ended; - the financial statements have been properly prepared in accordance with the Companies Act 1985; and - the information given in the Directors' Report is consistent with the financial statements. KPMG Audit Plc [Date] Chartered Accountants 20 April 2009 Registered Auditor Consolidated profit and loss account for the year ended 31 December 2008 Note 2008 2007 Â£ Â£ Turnover from continuing 2 143,032 290,929 operations Cost of sales (10,765) - Gross profit 132,267 290,929 Administrative expenses (95,901) (64,213) Operating profit from 36,366 226,716 continuing operations Other interest receivable and 6 26,776 2,995 similar income Interest payable and similar 7 (81,564) (70,189) charges (Loss)/Profit on ordinary activities before taxation 2-7 (18,422) 159,522 Tax recoverable/(payable) on 8 - (19,139) (loss)/ profit on ordinary activities (Loss)/Profit on ordinary activities after taxation and retained 18 (18,422) 140,383 for the financial year Earnings per share 10 (0.9)p 7.12p Consolidated balance sheet at 31 December 2008 Note 2008 2008 2007 2007 Â£ Â£ Â£ Â£ Fixed assets Tangible assets 11 2,110,000 2,110,000 Current assets Debtors 13 17,804 7,759 Cash at bank and in hand 698,152 234,514 715,956 242,273 Creditors: amounts falling due 14 (57,475) (1,045,663) within one year Net current assets / 658,481 (803,390) (liabilities) _______ _______ Total assets less current 2,768,481 1,306,610 liabilities Creditors: amounts falling due 15 (1,500,000) - after more than one year Net assets 1,268,481 1,306,610 Capital and reserves Called up share capital 17 418,861 418,861 Share premium account 18 3,473 3,473 Revaluation reserve 18 661,861 661,861 Profit and loss account 18 184,286 222,415 Shareholders' funds 1,268,481 1,306,610 These financial statements were approved by the board of directors on 17 April 2009 and were signed on its behalf by: P Cottam R A Shane Director Director Company balance sheet at 31 December 2008 Note 2008 2008 2007 2007 Â£ Â£ Â£ Â£ Fixed assets Tangible assets 11 610,000 610,000 Investments 12 947,263 263,263 1,557,263 873,263 Current assets Debtors 13 55,642 28,443 Cash at bank and in hand 688,447 212,892 744,089 241,335 Creditors: amounts falling due 14 (15,323) (296,546) within one year Net current assets / 728,766 (55,211) (liabilities) Total assets less current 2,286,029 818,052 liabilities Creditors: amounts falling due 15 (1,500,000) - after more than one year Net assets 786,029 818,052 Capital and reserves Called up share capital 17 418,861 418,861 Share premium account 18 3,473 3,473 Revaluation reserve 18 198,763 198,763 Profit and loss account 18 164,932 196,955 Shareholders' funds 786,029 818,052 These financial statements were approved by the board of directors on 17 April 2009 and were signed on its behalf by: P Cottam R A Shane Director Director Consolidated cash flow statement for the year ended 31 December 2008 Note 2008 2007 Â£ Â£ Cash flow from operating 25,276 257,778 activities Returns on investments and 20 (54,788) (67,194) servicing of finance Taxation (19,197) (1,557) Dividends (18,116) (9,903) Cash inflow before financing (66,825) 179,124 Financing 20 530,463 (17,728) Increase/(decrease) in cash 21 463,638 161,396 in the year Reconciliation of operating profit to operating cash flows for the year ended 31 December 2008 2008 2007 Â£ Â£ Operating profit 36,366 226,716 (Increase)/decrease in (10,045) 31,221 debtors Increase/(decrease) in (1,045) (159) creditors Net cash inflow from 25,276 257,778 operating activities Reconciliation of net cash flow to movement in net debt for the year ended 31 December 2008 Note 2008 2007 Â£ Â£ Increase in cash in the year 21 463,638 161,396 Cash (inflow)/outflow from (530,463) 17,728 (increase)/ decrease in debt Movement in net debt in the (66,825) 179,124 year Net debt at beginning of the 21 (735,023)(914,147) year Net debt at end of the year 21 (801,848)(735,023) Statement of total recognised gains and losses for the year ended 31 December 2008 Group Company 2008 2007 2008 2007 Â£ Â£ Â£ Â£ (Loss)/Profit for the (18,422) 140,383 (12,316) 120,528 financial year Unrealised loss on - (590,000) - (90,000) revaluation of properties Total recognised gains and (18,422) (449,617) (12,316) 30,528 losses Reconciliation of movements in shareholders' funds for the year ended 31 December 2008 Group Company 2008 2007 2008 2007 Â£ Â£ Â£ Â£ (Loss)/ profit for the (18,422) 140,383 (12,316) 120,528 financial year Dividends (19,707) (9,903) (19,707) (9,903) Loss on revaluation of - (590,000) - (90,000) properties Net (reduction in) / addition (38,129) (459,520) (32,023) 20,625 to shareholders' funds Opening shareholders' funds 1,306,610 1,766,130 818,052 797,427 Closing shareholders' funds 1,268,481 1,306,610 786,029 818,052 Notes (forming part of the financial statements) 1 Accounting policies The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements, except as noted below. Basis of preparation The financial statements have been prepared under the historical cost accounting rules as modified by the revaluation of investment properties and in accordance with applicable accounting standards. The financial statements are in compliance with the Companies Act 1985 except that, as noted below, investment properties are not depreciated. Basis of consolidation The group financial statements consolidate the financial statements of Secured Property Developments plc and its subsidiary undertakings. These financial statements are made up to 31 December 2008. Unless otherwise stated, the acquisition method of accounting has been adopted. Under this method, the results of subsidiary and associated undertakings acquired or disposed of in the year are included in the consolidated profit and loss account from the date of acquisition or up to the date of disposal. In accordance with section 230(4) of the Companies Act 1985 Secured Property Developments plc is exempt from the requirement to present its own profit and loss account. The result for the financial year dealt with in the financial statements of Secured Property Developments plc is disclosed in note 18 to these financial statements. Investment properties In accordance with SSAP 19, depreciation is not charged on investment properties held by the group. This is a departure from the requirements of the Companies Act 1985 which requires all properties to be depreciated. Such properties are not held for consumption but for investment and the directors consider that to depreciate them would not give a true and fair view. Investment properties are revalued annually by the directors and periodic external valuations are completed when considered necessary, usually over a five year period. The aggregate surplus or deficit is transferred to a revaluation reserve. The directors consider that this policy results in the accounts giving a true and fair view. Taxation The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. Deferred tax is recognised without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by Financial Reporting Standard 19. Notes (continued) 1 Accounting policies (continued) Classification of financial instruments issued by the Group Following the adoption of FRS 25, financial instruments issued by the Group are treated as equity (i.e. forming part of shareholders' funds) only to the extent that they meet the following two conditions: - they include no contractual obligations upon the Company (or Group as the case may be) to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Company (or Group); and - where the instrument will or may be settled in the Company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company's own equity instruments or is a derivative that will be settled by the Company's exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments. To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the Company's own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares. Finance payments associated with financial liabilities are dealt with as part of interest payable and similar charges. Finance payments associated with financial instruments that are classified as part of shareholders' funds, are dealt with as appropriations in the reconciliation of movements in shareholders' funds. Cash and liquid resources Cash, for the purpose of the cash flow statement, comprises cash in hand and deposits repayable on demand, less overdrafts payable on demand. Turnover Turnover represents the amounts (excluding value added tax) derived from rental income from investment properties and from interest earned on loans during the year. 2 Turnover and profit on ordinary activities before taxation Turnover and profit on ordinary activities before taxation are attributable to the principal activities of the group. Turnover was derived from the activities of the group as follows: 2008 2007 Â£ Â£ Rental income from investment properties 141,375 149,500 Interest earned on loans 1,657 141,429 143,032 290,929 All turnover and pre-tax profit on ordinary activities before taxation was earned in the UK. Notes (continued) 3 Profit on ordinary activities before taxation 2008 2007 Â£ Â£ (Loss)/profit on ordinary activities before taxation is stated after charging: Auditors' remuneration Audit services 9,660 9,000 Other services - compliance tax work 2,250 1,550 The audit fee of the group of Â£9,660 includes Â£5,660 (2007: Â£5,000) in relation to the company. 4 Remuneration of directors The chairman received fees of Â£10,192 (2007: Â£9,648) and one other director received fees of Â£24,972 (2007: Â£19,350) which was paid to his employer in respect of his services (see note 22). 5 Staff numbers and costs The average number of persons employed by the Company (including directors) during the year, analysed by category, was as follows: Number of employees 2008 2007 Directors 5 5 ____ ____ There are no payroll costs other than those disclosed in note 4. 6 Other interest receivable and similar income 2008 2007 Â£ Â£ Bank interest receivable 26,776 2,995 ____ ____ 7 Interest payable and similar charges 2008 2007 Â£ Â£ On bank loans 81,564 70,189 Notes (continued) 8 Taxation Analysis of charge in year 2008 2007 Â£ Â£ UK corporation tax Current tax on income for the year - 19,197 Adjustments in respect of prior periods - (58) ____ ____ Total current tax - 19,139 ____ ____ Tax on profit on ordinary activities - 19,139 ____ ____ Factors affecting the tax charge for the current period The current tax charge for the year is higher (2007: lower) than the standard rate of corporation tax in the UK (28%, 2007: 30%). The differences are explained below. 2008 2007 Â£ Â£ Current tax reconciliation Profit on ordinary activities before tax (18,422) 159,522 Current tax at 28% (2007: 30%) (5,158) 47,856 Effects of: Expenses not deductible for tax purposes 84 121 Movement in tax losses 5,074 (18,820) Lower tax rate relief - (9,960) Total current tax charge (see above) - 19,197 Notes (continued) 9 Deferred tax An analysis of the unrecognised deferred taxation asset is set out below. Group Company 2008 2007 2008 2007 Â£ Â£ Â£ Â£ Deferred tax asset at (46,166) (80,608) (11,793) (48,424) beginning of year Under provision in prior year 34,373 14,780 - - Deferred tax asset at (11,793) (65,828) (11,793) (48,424) beginning of year, as restated Tax losses incurred in the (5,074) - (3,363) - period Utilisation of tax losses - 18,820 - 35,789 Effect of change in tax rate - 842 - 842 Deferred tax asset at end of (16,867) (46,166) (15,156) (11,793) year The deferred tax asset has not been recognised on the basis that the timing differences and tax losses may not be recovered in the foreseeable future. Notes (continued) 10 Earnings per share The calculation of the earnings per share figure is based on the following: 2008 2007 (Loss)/Profit after tax Â£(18,422) Â£140,383 Weighted average number of ordinary shares 1,970,688 1,970,688 Earnings per share (0.9)p 7.12p 11 Tangible fixed assets Group Investment properties Â£ Cost or valuation At beginning and end of year 2,110,000 ____ Net book value At 31 December 2008 2,110,000 ____ At 31 December 2007 2,110,000 ____ 2008 2007 Â£ Â£ Historical cost of revalued assets 1,448,139 1,448,139 ____ ____ Historical cost net book value of revalued assets 1,448,139 1,448,139 ____ ____ Notes (continued) 11 Tangible fixed assets (continued) Company Investment properties Â£ Cost or valuation At beginning and end of year 610,000 ____ Net book value At 31 December 2008 610,000 ____ At 31 December 2007 610,000 ____ 2008 2007 Â£ Â£ Historical cost of revalued assets 411,237 411,237 ____ ____ Historical cost net book value of revalued assets 411,237 411,237 ____ ____ Group and company The directors revalued the investment properties of the Group on 31 December 2007. This resulted in a reduction of Â£590,000 from the previously shown value of Â£2,700,000. The revaluation took account of a professional revaluation of both the Scarborough and York property by Chartered Surveyors Atis Real UK Ltd, as at 31st March 2008. Both external valuations were completed in accordance with the current edition of the Practice Statements and Guidance Notes of the Appraisal and Valuation Standards prepared by the Royal Institution of Chartered Surveyors. The valuation of 31st March 2008 resulted in a write down of the Group's property values by 21.85% and was considered at the time by the Directors to be conservative. The Directors have taken the view that it is appropriate to leave the values unchanged for the purpose of these accounts. Notes (continued) 12 Investments Company Loans to Shares in subsidiaries subsidiaries Total Â£ Â£ Â£ Cost At beginning of year 305,376 4 305,380 Increase during the year 684,000 - 684,000 ____ ____ ____ At the end of the year 989,376 4 989,380 ____ ____ ____ Provisions for diminution in value At beginning and end of the 42,117 - 42,117 year ____ ____ ____ Net book value At 31 December 2008 947,259 4 947,263 ____ ____ ____ At 31 December 2007 263,259 4 263,263 ____ ____ ____ Shares in group undertakings represent the company's investment in SPD Discount Limited and Secured Property Developments (Scarborough) Limited. At 31 December 2008 and 2007 the company held 100% of the ordinary share capital of each of the subsidiary undertakings. Both subsidiary undertakings are registered in England and Wales. The principal activity of SPD Discount Limited is that of a finance company and that of Secured Property Developments (Scarborough) Limited is property investment. 13 Debtors Group Company 2008 2007 2008 2007 Â£ Â£ Â£ Â£ Trade debtors 13,573 5,224 - - Amounts owed by subsidiary - - 32,020 16,264 undertakings Prepayments 4,231 2,535 4,353 2,768 Taxes and social security - - 19,269 9,411 ____ ____ ____ ____ 17,804 7,759 55,642 28,443 ____ ____ ____ ____ All amounts fall due within one year. Notes (continued) 14 Creditors: amounts falling due within one year Group Company 2008 2007 2008 2007 Â£ Â£ Â£ Â£ Bank loans (see note 15) - 969,537 - 280,095 Corporation tax - 19,197 - 390 Taxes and social security 3,636 7,419 1,924 1,933 Other creditors 15,112 4,692 4,739 4,258 Accruals and deferred income 38,727 44,818 8,660 9,870 ____ ____ ____ ____ 57,475 1,045,663 15,323 296,546 ____ ____ ____ ____ 15 Creditors: amounts falling due after more than one year Group Company 2008 2007 2008 2007 Â£ Â£ Â£ Â£ Bank loans 1,500,000 - 1,500,000 - ____ ____ ____ ____ The prior year bank loans were repaid in full within May and July 2008. These loans were replaced with a single bank loan which is secured by a fixed charge on the properties of Secured Property Developments (Scarborough) Limited and of the Company. It is repayable on 2nd June 2013. The interest rate is fixed by a swap agreement to 6.92%. Analysis of other loans Group Company 2008 2007 2008 2007 Â£ Â£ Â£ Â£ Amounts falling due: In one year or less, or on - 969,537 - 280,095 demand Between one and two years - - - - Between two and five years 1,500,000 - 1,500,000 - ____ ____ ____ ____ 1,500,000 969,537 1,500,000 280,095 ____ ____ ____ ____ Notes (continued) 16 Derivatives and other financial instruments The group's policies with regard to financial instruments are set out on page 15. Short term debtors and creditors have been omitted from all disclosures. Financial assets The group has Â£698,152 (2007: Â£234,514) held in cash as financial assets as well as short term debtors. Financial liabilities The interest rate profile of the group's financial liabilities as at 31 December 2008 was: Fixed rate Weighted Financial weighted average liabilities Fixed rate average period for on which no financial interest which rate interest is Total liabilities rate is fixed charged Â£ Â£ % Years Â£ 2008 1,500,000 1,500,000 6.92 4.42 nil 2007 969,537 969,537 6.69 0.28 nil 2006 997,265 997,265 6.69 1.28 nil 2005 1,003,636 1,003,636 6.68 2.46 nil Maturity of financial liabilities The maturity profile at 31 December 2008 of the group's financial liabilities, other than short term creditors such as trade creditors and accruals is set out in note 15. Fair values of the group's financial asset and liabilities There is no material difference between the fair value and the book value of the group's financial assets and liabilities. 17 Called up share capital 2008 2007 Â£ Â£ Authorised 18,863,846 ordinary shares of 20p each 3,772,769 3,772,769 1,236,154 deferred shares of 2p each 24,723 24,723 ____ ____ 3,797,492 3,797,492 ____ ____ Allotted, called up and fully paid 1,970,688 ordinary shares of 20p each 394,138 394,138 1,236,154 deferred shares of 2p each 24,723 24,723 ____ ____ 418,861 418,861 ____ ____ Notes (continued) 17 Called up share capital (continued) The respective rights of the shareholders are as follows: Ordinary shares The ordinary shares have the right to all available capital and distributable profits subject only to any right available to the deferred shares on winding up. Deferred shares The deferred shares have no rights to vote, receive notices, or attend general meetings, nor to any income. On the return of capital on a winding-up or otherwise the deferred shares have no entitlement until the sum of Â£100,000 per ordinary share shall have been distributed. 18 Reserves Group Share Revaluation Profit and premium loss reserve account account Â£ Â£ Â£ At beginning of year 3,473 661,861 222,415 Loss for the financial year - - (18,422) ____ ____ ____ 3,476 661,861 203,993 Dividend paid during the year - - (19,707) ____ ____ ____ At end of year 3,473 661,861 184,286 ____ ____ ____ Company Share Revaluation Profit and premium loss reserve account account Â£ Â£ Â£ At beginning of year 3,473 198,763 196,955 Loss for the financial year - - (12,316) ____ ____ ____ 3,473 198,763 184,639 Dividend paid during the year - - (19,707) ____ ____ ____ At end of year 3,473 198,763 164,932 ____ ____ ____ The proposed dividend payable on 22 June 2009 has not been charged to the profit and loss account as it is subject to approval in Annual General Meeting. 19 Commitments Neither the group nor the company had any contractual commitments at the year end (2007: Â£nil). Notes (continued) 20 Analysis of items netted in the cash flow statement 2008 2007 Â£ Â£ Return on investments and servicing of finance Interest paid (81,564) (70,189) Interest received 26,776 2,995 ____ ____ Net cash outflow from returns on investments and (54,788) (67,194) servicing of finance ____ ____ Financing Loan repayments (969,537) (17,728) Loan receipts 1,500,000 - ____ ____ Net cash inflow/(outflow) from financing 530,463 (17,728) ____ ____ 21 Analysis of changes in net debt 31 December 31 December 2007 Cash flows 2008 Â£ Â£ Â£ Cash in hand and at bank 234,514 463,638 698,152 Debt due within one year (969,537) 969,537 - Debt due after one year - (1,500,000) (1,500,000) ____ ____ ____ (735,023) (66,825) (801,848) ____ ____ ____ 22 Related party transactions St James's Property Services Limited of which R A Shane is a director and shareholder has received Â£29,982 (2007: Â£21,943) from the holding company in respect of management services, including directors' fees of Â£24,972 (2007: Â£19,350). The amount outstanding at the year end is Â£nil (2007: Â£nil). P Cottam has received fees amounting to Â£10,192 (2007:Â£9,648) from the holding company in respect of professional fees. The amount outstanding at the year end is Â£nil (2007: Â£nil). Form of proxy for use at the annual general meeting on 19th May 2009 I/We ______________________________________________________________________________ (Please insert full name in BLOCK CAPITALS) of ______________________________________________________________________________ (Please insert address in BLOCK CAPITALS) being (a) member(s) of the above named Company HEREBY APPOINT the Chairman of the meeting (see note 6) ______________________________________________________________________________ to act as my/our proxy at the Annual General Meeting of the Company to be held on Tuesday 19th May 2009 and at any adjournment thereof, and to vote on my/our behalf as indicated below: Resolution No. For Against 1 To adopt the directors' report and financial statements for the year ended 31 December 2008 2 To re-elect R E France as a director 3 To re-elect G W Green as a director 4 To approve a dividend of Â½ penny per ordinary share, recommended by the directors for payment to shareholders on the register at the close of business on 15th May 2009 5 To authorise the Board to purchase up to 5% of the company's own shares in the open market at a minimum price of 20p per share and a maximum price of 60p per share, such powers to expire at the AGM to be held in 2010 or on19th May 2010, if earlier 6 To appoint KPMG Audit Plc as auditors and to authorise the Board to agree their remuneration Please indicate with an "X" in the space provided how you wish your votes to be cast on a poll. Should this form be returned duly completed and signed, but without a specific direction, the proxy will vote or abstain at his discretion. Dated ______________________________ 2009 Signature Notes 1 A proxy need not be a Member of the Company. 2 In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders. For this purpose seniority is determined by the order in which the names stand in the Register of Members. 3 In the case of a corporation this proxy must be given under its Common Seal or be signed on its behalf by an officer, attorney or other person duly authorised. 4 To be valid this proxy must be deposited at the Company's Registered Office not later than 48 hours before the time appointed for holding the Meeting together, if appropriate, with the power of attorney or other authority under which is a signed or a potentially certified copy of such power or authority. 5 Any alterations made on this form should be initialled. 6 If it is desired to appoint as a proxy any person other than the Chairman of the Meeting, his/her name and address should be inserted in the relevant place, reference to the Chairman deleted and the alteration initialled. Second fold along this line _______________________________________________________________________________ Affix stamp here Secured Property Developments plc. Rowlandson House 289/293 Ballards Lane London N12 8NP First fold along this line _______________________________________________________________________________ Finally fold along this line and tuck in

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