25 September 2024
TRAFALGAR PROPERTY GROUP PLC
("Trafalgar", the "Company" or "Group")
Final Results for the year ended 31 March 2024
Trafalgar (AIM:TRAF), the AIM quoted residential and assisted living property developer, announces its final results for the twelve months ended 31 March 2024.
The Company's Annual Report has been posted to shareholders, a copy can also be found on the Company's website.
Enquires:
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Trafalgar Property Group Plc Paul Treadaway
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+44 (0) 1732 700 000 |
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Spark Advisory Partners Ltd - Nominated Adviser Matt Davis
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+44 (0) 20 3368 3550 |
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Peterhouse Capital Limited - Broker Duncan Vasey/Lucy Williams
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+44 (0) 20 7409 0930 |
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CHAIRMAN'S STATEMENT
On behalf of the Board, I present Trafalgar Property Group Plc (the Group), results for the year ended 31 March 2024 which includes one investment property sale completed in the year. The overall result continues to be disappointing, as can be seen in the attached Accounts and Strategic Report. However, we continue to seek property opportunities with one construction project being undertaken during the year at Speldhurst, Kent with the property being available for sale at the year end and currently on the market for
Orchard House in Hildenborough was sold in September 2023 for a consideration of
During the year the company issued 377,250,000 new ordinary shares during the year with the issuance of 125,000,000 at a price of 0.1p per share, raising
Financials
The year under review saw the Group turnover at £nil (2023:
Management have performed a review of the assets and liabilities of the underlying subsidiaries which form the value of the anticipated profits on ongoing developments.
Due to the uncertainties and timing of the construction of new developments and the potential sale of those properties, it has been agreed by management not to include any future anticipated profits of developments in their assessment.
The cash on the balance sheet at the end of the year was
Business Environment and Outlook
No new directors were appointed to the Group in the year.
The effects of market forces and the property market in general together with the
Paul Treadaway
Paul Treadaway
Chairman
24 September 2024
CHIEF EXECUTIVE OFFICER 'S REPORT
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 (Selmat)
Combe Bank Homes (Oakhurst) Limited (Oakhurst) Combe Homes (Borough Green) Limited (Borough Green)
Life Hydroponic Assets Ltd
TNH continues to be the main trading subsidiary but given the lack of activity in Selmat, Life Hydroponic Assets Ltd and TR+ it was decided that an impairment provision be made against these inter company accounts with TPG together with provision against the associated management charges issued by TPG. The effects on the company balance sheet can be seen in note 9 to the company accounts.
Mortgages of £nil (2023: £675,698 ) exist on the properties held by Selmat and a mortgage of
As notified in an RNS dated 29 May 2024, the company is in preliminary discussions regarding the possible acquisition of Ecap Esport Ltd, these discussions remain ongoing. Should such a transaction proceed on the currently envisaged terms, it would be classified as a reverse takeover in accordance with Rule 14 of the AIM Rules for Companies. Accordingly, the Company's shares were suspended from trading on AIM and will remain so until either the publication of an admission document setting out, inter alia, details of the proposed transaction or until confirmation is given that these discussions have ceased.
The principal activity of the Group continues to be that of a regional property developer focused upon
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. Direct costs may escalate and eat into gross profit margins due to unexpected interest rate movements and high inflation rates putting pressure on material costs.
2. There may be uncertainty in obtaining adequate finance thus putting pressure on the going concern of the Group.
3. Heavy overheads may be incurred especially when projects have been completed and before others have been commenced.
4. The Group could commit too much to future capital projects.
5. The Group's reliance on key members of staff.
6. The market may deteriorate, damaging liquidity of the Group and future revenues.
7. The potential reverse takeover, announced by the Group on 29 May 2024, may not complete.
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 for the initial purchase of potential development sites. The Plc also has access to shareholder funding via placing of shares in the market. A full statement regarding going concern is shown in the accounting policies on page 23.
2. Direct costs are outsourced on a fixed price contract basis, thereby passing on to the contractor all risk of 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. Buying decisions for capital projects are taken at Board level, after careful research by the Directors personally, who have substantial experience in various business sectors and markets.
The Group has focused 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. 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 corporate governance policy appropriate for a small publicly listed Company with ambitions substantially to raise its profile within the wider investor community.
7. The directors will consider alternative reverse takeover opportunities and have underpinned any cash flow implications of the current target by taking a loan from them to be used for any abort fees.
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Operations review
A summary of the results for the year is as follows:- |
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2024 |
2023 |
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£ |
£ |
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Revenue for the year |
- |
18,183 |
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Gross (loss)/profit |
78 |
(12,717) |
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Administration expenses |
(379,627) |
(571,928) |
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Loss on disposal of property (including cost) |
- |
(12,382) |
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|
|
|
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(Loss) Profit on revaluation |
- |
(122,751) |
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Other Income |
17,158 |
- |
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Impairment of asset |
(25,000) |
- |
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Interest payable and similar charges |
(129,333) |
(123,848) |
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Loss after taxation |
(516,723) |
(843,626) |
Group turnover for the year amounted to £nil (2023:
.
After taking into account the overheads of the Group, there was a loss recorded for the year of
There will be no tax charge and the Company now has tax losses being carried forward of
The loss per share during the year was (0.15p), (2023: loss per share 0.34p).
Directors' duties under S172
The Directors believe that, individually and together, they have acted in a way that they have consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, having regard, amongst other things, to:
a. the likely consequences of any decision in the long term,
b. the interests of the Company's employees,
c. the need to foster the Company's business relationship with suppliers, customers and others,
d. the impact of the Company's operations on the community and environment,
e. the desirability of the Company maintaining a reputation for high standards of business conduct, and
f. the need to act fairly between members of the Company.
The Board of Directors is collectively responsible for formulating the Company's strategy, which is to invest in property development but will also consider other opportunities where those prospects will better deliver growth to its shareholders as indicated by the RNS issued 29 May 2024 where the directors are in early stage discussions with Ecap Esport Ltd for a potential reverse takeover. Of course, the Board cannot predict the future but aims to make decisions that it considers are in the best interest of all shareholders at the time.
The Board engages with its stakeholders in a number of pre-planned ways, these include; review meetings with our brokers and advisors, shareholders have the ability to email the Company directly and the Board will reply to questions within the regulatory limits, the Company issues RNS communications on a regular basis and the Company's web site is continuously updated to inform our stakeholders. The Company's annual report is also an opportunity to update our stakeholders.
Our employees are one of the primary assets of our business and will be critical to the future success of the Company. First and foremost, the Directors strive to ensure a safe working environment for all its staff and contractors, and we are proud of our safety achievements in 2023/24. We also seek to reward employees with remuneration packages which align the interests of the Company and its shareholders with those of the employees. Employees are also provided with challenging work and external training opportunities to ensure their continual development.
The Directors believe they have acted in the way they consider most likely to promote the success of the Company for the benefit of its members as a whole, as required by Section 172 (1) of the Companies Act 2006.
Key performance indicators (KPIs)
Management are closely involved in the day to day operations of the Group and constantly monitor cashflows and expenditure. However, Management believe the key indicators of performance for the Group are the revenue and profitability achieved during the period together with the net liability position. These measures are disclosed above in the operations review.
Development Pipeline & outlook
Shortly after the year end we acquired a new site in
Paul Treadaway
Paul Treadaway
CEO
24 September 2024
DIRECTORS' REPORT
The Directors present their Report and Audited Financial Statements for the year ended 31 March 2024.
Results and dividends
The results for the year are set out on page 20.
The Directors do not recommend the payment of a final dividend for the year (2023: nil).
Directors
The following Directors have held office since 1 April 2023 and have all served for the entire accounting year: N A C Lott
P A Treadaway
G Thorneycroft
Dr P Challinor
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 2024, the Directors have authorised no such conflicts or potential conflicts.
Directors' interests in the shares of the Company, including family interests, at 31 March 2024 were as follows: -
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Directors' interests in shares |
31.03.2024 |
31.03.2023 |
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Ordinary shares - 0.1p each |
Ordinary shares - 0.1p each |
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N Lott |
50,000 |
50,000 |
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P Treadaway |
133,409,829 |
19,733,466 |
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G Thorneycroft |
23,327,273 |
600,000 |
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31.03.2024 |
31.03.2023 |
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Deferred shares - 0.9p each |
Deferred shares - 0.9p each |
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No. held |
No. held |
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|
|
|
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N Lott |
550,000 |
550,000 |
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P Treadaway |
10,648,466 |
10,648,466 |
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|
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Other substantial shareholdings
As at 23 September 2024, 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.
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Ordinary Shares |
Shareholdings |
|
|
No. 0.1p |
% |
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Paul Arthur Treadaway |
133,409,829 |
20.43 |
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Forum Energy Services Limited |
75,000,000 |
11.48 |
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Peter Wylde |
56,818,182 |
8.70 |
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Gary Thorneycroft |
23,327,273 |
3.57 |
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 International Financial Reporting Standards adopted in the
· 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 implemented corporate governance procedures during the previous year and continued to use these during the financial year to 31 March 2024. These procedures are 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"). The Company has decided to apply the QCA Corporate Governance Code ("QCA Code") issued by the QCA in 2023 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. The Board has considered the Streamlined Energy and Carbon Reporting requirements and conclude that the Group has not consumed more than 40,000 kWh of energy and therefore qualifies as a low energy user and is exempt from reporting under these regulations.
Board Structure
The Board consists of four Directors (2023: four) of which three are executive and one non-executive, two executive and one non-executive directors 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 quarter 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 and also addressed in note 18.
Future Developments
Information relating to future developments is included in the Strategic Report on pages 4-7.
Post Balance Sheet Events
As stated in the announcement by the Group on 29 May 2024 we are in discussions with parties relating to a potential reverse takeover, non-binding heads of terms have been signed. These discussions continue and further announcements will be made in due course. A further announcement on 03 June 2024 stated that Ecap Esports Ltd had agreed to loan the Company the sum of
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 needed 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, will be proposed for re-appointment in accordance with Section 489 of the Companies Act 2006.
This report was approved by the Board and signed on its behalf.
Paul Treadaway
Paul Treadaway
Director
24 September 2024
Trafalgar Property Group Plc
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TRAFALGAR PROPERTY GROUP PLC
for the year ended 31 March 2024
To the Members of Trafalgar Property Group plc
For the purpose of this report, the terms "we" and "our" denote MHA in relation to
Opinion
We have audited the financial statements of Trafalgar Property Group plc for the year ended 31 March 2024.
The financial statements that we have audited comprise:
· the Consolidated Statement of Comprehensive Income
· the Consolidated Statement of Financial Position
· the Consolidated Statement of Changes in Equity
· the Consolidated Statement of Cash Flows
· Notes 1 to 20 to the consolidated financial statements, including significant accounting policies
· the Company Balance Sheet
· the Company Statement of Changes in Equity and
· Notes 1 to 15 to the Company financial statements, including significant accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International Financial Reporting Standards adopted in the
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 2024 and of the Group's loss for the year then ended;
· the Group financial statements have been properly prepared in accordance
· 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (
Material uncertainty related to going concern
We draw your attention to Note 3a Going Concern section in the financial statements which states that the Group incurred substantial losses during the year and there was continued requirement for successful future equity or debt fund raising. The impact of this together with other matters set out in the note, indicate a material uncertainty 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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the Directors' assessment of the Group's and the Parent Company's ability to continue to adopt the going concern basis of accounting included:
· The consideration of inherent risks to the Group's and Parent company's operations and specifically their business model.
· The evaluation of how those risks might impact on the Group's and Parent company's available financial resources.
· Review of the mathematical accuracy of the cashflow forecast model prepared by management and corroboration of key data inputs to supporting documentation for consistency of assumptions used with our knowledge obtained during the audit.
· Challenging management for reasonableness of assumptions in respect of the timing and quantum of cash receipts and payments included in the cash flow model.
· Where additional resources may be required, the reasonableness and practicality of the assumptions made by the Directors when assessing the probability and likelihood of those resources becoming available.
· Holding discussions with management regarding future financing plans, corroborating these where necessary and assessing the impact on the cash flow forecast.
· Evaluating the accuracy of historical forecasts against actual results to ascertain the accuracy of management's forecasts.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Overview of our audit approach
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Scope |
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group's system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the directors that may have represented a risk of material misstatement.
The Group consists of seven reporting components, of which two were considered to be significant components: Trafalgar Property Group plc and Trafalgar New Homes Limited. The significant components were subjected to full scope audits for the purposes of our audit report on the Group financial statements.
Significant components were determined based on: 1) financial significance of the component to the Group as a whole, and 2) assessment of the risk of material misstatements applicable to each component.
We undertook specified audit procedures on the material balances and transactions in the year on a further 3 of the components: Trafalgar Retirement+ Limited, Selmat Limited and Combe House (Borough Green) Ltd. Analytical procedures were undertaken on the two remaining components: Life Hydroponics Limited and Combe Bank (Oakhurst) Ltd.
Our audit scope results in all major operations of the Group being subject to audit work.
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Overall Materiality |
2024 |
2023 |
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Group |
£28,000 |
£26,400 |
1% of net liabilities (2023: 2% of gross assets) |
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Parent Company |
£4,900 |
£19,600 |
2% of gross liabilities (2023: 2% of gross liabilities)
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Key audit matters |
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Recurring |
· Undisclosed related party transactions
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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. 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. In addition to the matter described in the Material Uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.
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Undisclosed related party transactions |
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Key audit matter description |
The Group enters into a significant number of transactions with related parties, both intra-group transactions and with individuals related to the Group.
There is a risk that transactions (particularly any transactions which are not at arm's length) and balances with related parties are undisclosed or misclassified. |
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How the scope of our audit responded to the key audit matter |
Our audit work in this area included the following procedures:
· Identifying the susceptibility of the financial statements to material misstatements from related party transactions and relationships.
· Obtaining management's record of related parties - who they are, the nature of these relationships, whether any related party transactions have been entered into in the year and the nature of those transactions.
· We performed independent searches of the Board of Directors' other appointments and shareholdings and to identify any counterparties on the list which were not included in the related party disclosures.
· We reviewed the movement on these balances during the year and vouched items to supporting evidence.
· We reviewed the minutes of meetings of the board of directors to identify any undisclosed related party relationships.
· We discussed with management the nature and purpose of these items and considered whether disclosure sufficiently addressed these matters.
· In addition, we obtained written confirmation of the balances from all disclosed parties and confirmed key terms to agreements. |
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Key observations
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Nothing has come to our attention which indicates that related party transactions and balances are incomplete.
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Our application of materiality
Our definition of materiality considers the value of error or omission on the financial statements that, individually or in aggregate, would change or influence the economic decision of a reasonably knowledgeable user of those financial statements. Misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Materiality is used in planning the scope of our work, executing that work and evaluating the results.
Performance materiality is the application of materiality at the individual account or balance level, set at an amount to reduce, to an appropriately low level, the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.
The determination of performance materiality reflects our assessment of the risk of undetected errors existing, the nature of the systems and controls and the level of misstatements arising in previous audits.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
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Group financial statements |
Parent Company financial statements |
|
Overall materiality |
£28,000 (2023: £26,400) |
£4,900 (2023: £19,600) |
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How we determined it |
1% of net liabilities (2023: 2% of gross assets) |
2% of gross liabilities (2023: 2% of gross liabilities) |
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Rationale for the benchmark applied |
Given the Group have liquidated the majority of its cash generating assets and the Parent Company actively pursuing a potential future Reverse Takeover, we now deem the net liability position of the Group to be the main measure by which the users of the financial statements assess the prospects and success of the Group. Therefore, we consider this to be the most appropriate benchmark for Group materiality. |
The Parent Company is largely a holding company incurring limited costs and financing the group. As a result of historic losses and the impairment of investments, we have considered gross liabilities as the most appropriate benchmark for materiality.
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Performance materiality |
£16,800 (2023: £15,840) which represents 60% (2023: 60%) of overall materiality. |
£2,940 (2023: £11,760) which represents 60% (2023: 60%) of overall materiality. |
We agreed to report any corrected or uncorrected adjustments exceeding £1,400 (2023: £1,320) for the Group and £245 (2023: £980) for the Parent Company respectively to the Board of Directors as well as differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Overview of the scope of the Group and Parent Company audits
Our assessment of audit risk, evaluation of materiality and our determination of performance materiality sets our audit scope for each company within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements. This assessment takes into account the size, risk profile, changes in the business environment and other factors when assessing the level of work to be performed at each component.
The Group consists of 7 components, all of which are based in the
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|
Number of components |
Revenue
|
Total assets
|
Total liabilities |
Loss before tax |
|
Full scope audit |
2 |
N/A |
96% |
79% |
85% |
|
Specified Procedures |
3 |
N/A |
4% |
21% |
15% |
|
Analytical Review |
2 |
N/A |
0% |
0% |
0% |
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Total |
7 |
N/A |
100% |
100% |
100% |
The control environment
We evaluated the design and implementation of those internal controls of the Group, including the Parent Company, which are relevant to our audit, such as those relating to the financial reporting cycle.
Reporting on other information
The other information comprises the information included in the annual report other than the financial
statements and our auditor's report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
We have nothing to report in this regard.
Strategic report and directors' report
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.
In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Parent company, or returns adequate 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.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, as set out on page x, 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 Group's and the Parent 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 Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor 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 (
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 financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it.
Identifying and assessing potential risks arising from irregularities, including fraud
The extent of the procedures undertaken to identify and assess the risks of material misstatement in respect of irregularities, including fraud, included the following:
· We considered the nature of the industry and sector, the control environment, business performance including remuneration policies and the Group's, including the Parent Company's, own risk assessment that irregularities might occur as a result of fraud or error. From our sector experience and through discussion with the directors, we obtained an understanding of the legal and regulatory frameworks applicable to the Group focusing on laws and regulations that could reasonably be expected to have a direct material effect on the financial statements, such as provisions of the Companies Act 2006,
· We enquired of the directors and management concerning the Group's and the Parent Company's policies and procedures relating to:
- identifying, evaluating and complying with the laws and regulations and whether they were aware of any instances of non-compliance;
- detecting and responding to the risks of fraud and whether they had any knowledge of actual or suspected fraud; and
- the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
· We discussed among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
· We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur by evaluating management's incentives and opportunities for manipulation of the financial statements. This included utilising the spectrum of inherent risk and an evaluation of the risk of management override of controls. We determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce costs, creating fictitious transactions to hide losses or to improve financial performance, and management bias in any accounting estimates.
Audit response to risks identified
In respect of the above procedures:
· we corroborated the results of our enquiries through our review of the minutes of the Group's and the Parent Company's board meetings and enquiries of management regarding any ongoing legal cases;
· audit procedures performed by the engagement team in connection with the risks identified included:
- We have undertaken a review of minutes of meetings of those charged with governance.
- Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business, and reviewing accounting estimates for bias.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Challenging assumptions and judgements made by management in their significant accounting estimates.
· the Senior Statutory Auditor considered the experience and expertise of the engagement team to ensure that the team had the appropriate competence and capabilities; and
· we communicated relevant laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Simon Knibbs MA FCA (Senior Statutory Auditor)
for and on behalf of MHA, Statutory Auditor
24 September 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in
|
|
|
Year ended 31 March 2024 |
|
Year ended 31 March 2023 |
|
|
Note |
£ |
|
£ |
|
|
|
|
|
|
|
Revenue |
1 |
- - |
|
18,183 |
|
Cost of sales |
2 |
78 |
|
(30,900) |
|
Gross profit/(loss) |
|
78 |
|
(12,717) |
|
Administrative expenses |
2 |
(379,626) |
|
(571,928) |
|
Fair value movement on investment property |
8 |
- |
|
(122,751) |
|
(Loss) on disposal of investment property |
8 |
- |
|
(12,382) |
|
Impairment of assets |
7 |
(25,000) |
|
- |
|
Operating loss before interest |
2 |
(404,548) |
|
(719,778) |
|
|
|
|
|
|
|
Other income |
|
17,158 |
|
- |
|
Interest payable and similar charges |
4 |
(129,333) |
|
(123,848) |
|
Loss before taxation |
|
(516,723) |
|
(843,626) |
|
Income tax |
5 |
- |
|
- |
|
Loss after taxation for the year attributable to equity holders of the parent |
|
(516,723) |
|
(843,626) |
|
Other comprehensive income attributable to equity holders of the parent |
|
- |
|
- |
|
Total comprehensive loss for the year |
|
(516,723) |
|
(843,626) |
|
Loss attributable to: |
|
|
|
|
|
Equity holders of the Parent |
|
(516,723) |
|
(843,626) |
|
Total comprehensive loss for the year attributable to: |
|
|
|
|
|
Equity holders of the Parent |
|
(516,723) |
|
(843,626) |
|
(LOSS) PER ORDINARY SHARE: Basic/diluted |
6 |
(0.15)p |
|
(0.34) p |
All results in the current and preceding financial year derive from continuing operations.
The notes on pages 31 to 42 are an integral part of these consolidated financial statements.
|
|
|
As at |
|
As at |
|
|
Note |
31 March 2024 |
|
31 March 2023 |
|
|
|
£ |
|
£ |
|
TOTAL ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Plant and equipment |
7 |
640 |
|
25,853 |
|
|
|
640 |
|
25,853 |
|
Current assets |
|
|
|
|
|
Inventory |
11 |
775,374 |
|
317,796 |
|
Investment Properties |
8 |
- |
|
927,249 |
|
Trade and other receivables |
9 |
79,576 |
|
34,033 |
|
Cash and cash equivalents |
10 |
8,906 |
|
17,148 |
|
|
|
863,856 |
|
1,296,226 |
|
|
|
|
|
|
|
Total assets |
|
864,496 |
|
1,322,079 |
|
|
|
|
|
|
|
EQUITIES & LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
12 |
285,614 |
|
222,863 |
|
Borrowings |
13 |
- |
|
874,697 |
|
|
|
285,614 |
|
1,097,560 |
|
Non-current liabilities |
|
|
|
|
|
Deferred tax |
5 |
- |
|
- |
|
Borrowings |
13 |
3,415,728 |
|
3,573,217 |
|
|
|
3,415,728 |
|
3,573,217 |
|
|
|
|
|
|
|
Total liabilities |
|
3,701,342 |
|
4,670,777 |
|
|
|
|
|
|
|
Net liabilities |
|
(2,836,846) |
|
(3,348,698) |
|
|
|
|
|
|
|
Called up share capital |
14 |
3,237,400 |
|
2,860,150 |
|
Share premium |
|
4,136,240 |
|
3,484,915 |
|
Reverse acquisition reserve |
|
(2,817,633) |
|
(2,817,633) |
|
Loan note equity reserve |
14 & 16 |
- |
|
107,204 |
|
Capital contribution reserve |
17 |
400,147 |
|
400,147 |
|
Profit & loss account |
|
(7,793,000) |
|
(7,383,481) |
|
Total Equity |
|
(2,836,846) |
|
(3,348,698) |
|
|
|
|
|
|
|
Total Equity & Liabilities |
|
864,496 |
|
1,322,079 |
|
|
|
|
|
|
These financial statements were approved by the Board of Directors and authorised for issue on 24 September 2024 and are signed on its behalf by:
P Treadaway: … Paul Treadaway.………… G Thorneycroft: … Gary Thorneycroft………………
|
|
Share |
Share |
Loan Note |
Reverse |
Profit |
Capital |
Total |
|
|
Capital |
Premium |
Equity |
acquisition |
& loss |
Contribution |
Equity |
|
|
|
|
Reserve |
reserve |
account |
Reserve |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
|
At 1 April 2022 |
2,726,817 |
3,250,249 |
30,303 |
(2,817,633) |
(6,620,120) |
157,777 |
(3,272,607) |
|
Loss for the year |
- |
- |
- |
- |
(843,626) |
- |
(843,626) |
|
Total comprehensive income for the year |
- |
- |
- |
- |
(843,626) |
- |
(843,626) |
|
Loan note equity reserve |
- |
- |
76,901 |
- |
80,165 |
- |
157,066 |
|
Capital Contribution during the period |
- |
- |
- |
- |
- |
242,370 |
242,370 |
|
Shares issued during the year net of costs |
133,333 |
234,666 |
- |
- |
100 |
- |
368,099 |
|
|
|
|
|
|
|
|
|
|
At 31 March 2023 |
2,860,150 |
3,484,915 |
107,204 |
(2,817,633) |
(7,383,481) |
400,147 |
(3,348,698) |
|
|
|
|
|
|
|
|
|
|
At 1 April 2023 |
2,860,150 |
3,484,915 |
107,204 |
(2,817,633) |
(7,383,481) |
400,147 |
(3,348,698) |
|
Loss for the year |
- |
- |
- |
- |
(516,723) |
- |
(516,723) |
|
Total comprehensive income for the year |
- |
- |
- |
- |
(516,723) |
- |
(516,723) |
|
Loan Note Equity Reserve |
|
|
(107,204) |
|
107,204 |
|
- |
|
Shares issued during the year on conversion of loan notes |
226,250 |
678,750 |
|
|
|
|
905,000 |
|
|
|
|
|
|
|
|
|
|
Shares issued during the year net of costs |
151,000 |
(27,425) |
|
- |
- |
- |
123,575 |
|
|
|
|
|
|
|
|
|
|
At 31 March 2024 |
3,237,400 |
4,136,240 |
- |
(2,817,633) |
(7,793,000) |
400,147 |
(2,836,846) |
|
|
|
|
|
|
|
|
|
The reverse acquisition reserve was created in accordance with IFRS3 'Business Combinations'. The reserve relates to a reverse acquisition between the Company and Combe Bank Homes Ltd (CBH) on 11/11/2011 via a share for share exchange. This reserve arises as a result of the elimination of the Plc's investment in CBH resulting in the shareholders of PLC becoming majority shareholders in the enlarged group.
Retained profit/(losses) are the cumulative net gains and losses less distributions made and items of other comprehensive income not accumulated in another separate reserve.
Loan note equity reserve relates to the equity portion of the convertible loan notes and is the amount that has been provided for in respect of the difference between the cash value and the liability element of the loan notes. The remaining balance has been reversed following the conversion of the Loan Note during the year (2023: adjustment of £76,901)
Capital contribution reserve arises due to amounts waived in respect of previously accrued interest on shareholders or related party loan accounts. Capital contribution reserves are shown in note 17.
Further details of shares issues in the year are shown in note 14.
The notes on pages 31 to 42 are an integral part of these consolidated financial statements.
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Cash flow from operating activities |
|
|
|
|
(Loss) after taxation |
(516,723) |
|
(843,626) |
|
Depreciation |
213 |
|
284 |
|
(Increase) in inventory |
(457,578) |
|
(321,889) |
|
Decrease/(Increase) in receivables |
(45,543) |
|
6,467 |
|
Increase in payables |
62,751 |
|
95,001 |
|
Loss on disposal |
- |
|
12,382 |
|
Inventory written-off |
- |
|
29,750 |
|
Property revaluation |
- |
|
122,751 |
|
Loan note equity movement |
(107,204) |
|
157,066 |
|
Impairment of plant and equipment |
25,000 |
|
- |
|
Interest payable and similar charges |
129,333 |
|
123,848 |
|
Net cash outflow from operating activities |
(909,751) |
|
(617,966) |
|
|
|
|
|
|
Investing activities: |
|
|
|
|
Disposal of investment property |
927,249 |
|
649,618 |
|
Purchase of equipment |
- |
|
(25,000) |
|
|
927,249 |
|
624,618 |
|
Financing activities: |
|
|
|
|
Issue of shares (net of costs) |
1,028,575 |
|
368,100 |
|
New loan borrowings |
741,975 |
|
105,116 |
|
Repaid loan borrowings |
(1,066,530) |
|
(270,191) |
|
Related party new loan borrowing |
264,100 |
|
188,153 |
|
Related party loan repayment |
(971,731) |
|
(259,752) |
|
Repayment of other borrowings |
- |
|
(90,000) |
|
Interest paid |
(22,129) |
|
(43,683) |
|
|
|
|
|
|
Net cash (outflow) from financing |
(25,740) |
|
(2,257) |
|
|
|
|
|
|
(Decrease)/increase in cash and cash equivalents in the year |
(8,242) |
|
4,395 |
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the year |
17,148 |
|
12,753 |
|
|
|
|
|
|
Cash and cash equivalents at the end of the year |
8,906 |
|
17,148 |
|
|
|
|
|
The notes on pages 31 to 42 are an integral part of these consolidated financial statements.
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 domiciled and incorporated in England and Wales. (Company number is 04340125). The Company's registered office is Chequers Barn, Chequers Hill, 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 4-7.
BASIS OF PREPARATION
The Group financial statements have been prepared in accordance with International Financial Reporting Standards as adopted in the
The financial statements have been prepared under the historical cost convention and on an accrual method of accounting, except for certain financial assets and liabilities which are measured at fair value as explained in the accounting policies below.
AUDIT EXEMPTION OF SUBSIDIARIES
The following subsidiaries are exempt from the requirements of the
Company name Registered number
Trafalgar New Homes Ltd 06003791
Trafalgar Retirement+ Ltd 10431083
Selmat Ltd 09428992
Combe Homes (Borough Green) Ltd 08965850
Combe Bank Homes (Oakhurst) Ltd 07532693
Life Hydroponic Assets Ltd 14437592
The outstanding liabilities at 31 March 2024 of the above named subsidiaries have been guaranteed by the Company pursuant to s479AC of the Act. In the opinion of the directors, the possibility of the guarantees being called upon is remote.
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.
During the year the Company raised £125,000 before costs for working capital purposes by way of an issue of 125,000,000 shares at 0.1p per share, issued 26,000,000 shares at 0.1p to settle outstanding creditor balances and crystalised the 2022 CLN with Mr C Johnson by way of an issue of 226,250,000 shares at 0.4p per share.
The total amount of loans remaining in the Group following the sale of the investment property during the year amounts to £3,415,728 (2023 - £4,447,914) as shown in note 13. Of the balance of the loans remaining outstanding of £3,415,728, a sum of £2,219,818 relates to loans owed to Mr C Johnson, plus connected parties, a director of subsidiary companies. The balance of amounts owed were to independent third parties.
The Group continues to utilise banking and other financial institution sources for the financing of its developments, together with significant loans from third party investors as stated in note 13, which is after the disposal of its investment properties, to ensure that there is sufficient money available for the Group to undertake and complete its various developments.
The Group does not operate an overdraft facility but borrow on a site specific basis from various bankers or financial institutions, 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. Mr C Johnson has confirmed that he will provide necessary funding to the subsidiary companies as and when required over the next twelve months, should it be required.
The Board is comfortable with the structure of its finances, which usually involves borrowing a modest sum towards the land purchase for the modest sized residential development schemes, with Mr C Johnson or 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 or financial institution to provide 100% of the build finance.
We have submitted an application to demolish the existing bungalow and build a scheme of detached houses at the Talbot Park site, acquired shortly after the year end, which should achieve in the region of £950,000 each. We have no build costings as yet but expect to have a decision on the planning by the end of September. It is Officer recommended for approval. Once we have consent we will either be able to seek funding for the build or dispose of the consented development. This project is expected to make additional funds available to the group.
The board are also continuing to consider a reverse takeover as stated in note 20 and have taken a loan from the target company to cover any abort fees should the deal not complete.
However, given that a degree of uncertainty exists in the timing of future sales, the Company's ability to raise further funds through share placements and the potential reliance on further funding been provided by the directors, there exists a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.
REVENUE RECOGNITION
Revenue represents the amounts receivable from the investment in residential property during the year and other income directly associated with property development. This will take the form of rental income and sales of investment property.
Rental income is recognized at the point of receipt being the contractual date in accordance with the tenancy agreements.
Revenue from customers arising from the sales of development property are recognized at the transaction price which reflects the amount of consideration that is expected to be received and is recognized at a point in time when ownership passes to the customer, which in the majority of cases is the point of legal completion of the property sale
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 following new standards or amendments to existing standards were applicable for the first time and have not had an impact on the financial statements.
New standards, interpretations and amendments:
Amendments to IAS 21 - Lack of Exchangeability
(issued August 2023)
The amendment is effective for financial years beginning on or after 1 January 2025.
Amendment to IFRS 9 and IFRS 7 - Classification and Measurement of Financial Instruments
(issued May 2024)
The amendment is effective for financial years beginning on or after 1 January 2026.
IFRS 18 Presentation and Disclosure in Financial Statements
(issued April 2024)
This is the new standard on presentation and disclosure in financial statements, with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to:
· the structure of the statement of profit or loss;
· required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity's financial statements (that is, management-defined performance measures); and
· enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.
The amendment is effective for financial years beginning on or after 1 January 2027.
IFRS 19 Subsidiaries without Public Accountability: Disclosures
(issued May 2024)
The amendment is effective for financial years beginning on or after 1 January 2027.
The Group does not expect a material impact on its consolidated financial statements form these standards.
Adoption of the following standards does not have an impact on the consolidated financial statement of the Group:
Amendment to IAS 7 and IFRS 7 - Supplier finance
(issued May 2023)
The amendment is effective for financial years beginning on or after 1 January 2024
The Group considers there will be no material impact on its consolidated financial statements from these amendments.
Amendments to IFRS 16, Lease liability in a Sale and Leaseback
The amendment is effective for financial years beginning on or after 1 January 2024
The Group considers there will be no impact on its consolidated financial statements from these amendments.
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (issued January 2020)
The amendment is effective for financial years beginning on or after 1 January 2024 and has not yet been adopted for use in the United Kingdom.
The Group does not expect a material impact on its consolidated financial statements from these amendments.
Amendments to IAS 1 and IFRS Practice Statement - Disclosure of Accounting policies (issued in February 2021)
The amendments enhance the disclosure requirements relating to an entity's accounting policies and clarify that the notes to a complete set of financial statements are required to include material accounting policy information. Material accounting policy information, when considered with other information included in the financial statements, can reasonably be expected to influence decisions that the primary users of financial statements make on the basis of the financial statements. The amendments help preparers determine what constitutes material accounting policy information and notes that accounting policy information which focuses on how IFRS has been applied to its own circumstances is more useful for users of financial statements than standardised information or information duplicating the requirements of IFRS.
The amendment also states that immaterial accounting policy information need not be disclosed but when it is disclosed it shall not obscure material accounting policy information. Further, if accounting policy information is not deemed material this does not affect the materiality of related disclosure requirements of IFRS.
The disclosure of judgements made in applying accounting policies should reflect those that have had the most significant effect on items recognised in the financial statements.
The amendment is effective for financial years beginning on or after 1 January 2023 and has not yet been adopted for use in the United Kingdom.
The Group does not expect a material impact on its consolidated financial statements from these amendments.
Amendments to IAS 8 - Definition of Accounting Estimates (issued in February 2021)
The amendments introduce a new definition of accounting estimates and also clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors.
The amendment is effective for financial years beginning on or after 1 January 2023 and has not yet been adopted for use in the United Kingdom.
The Group does not expect a material impact on its consolidated financial statements from these amendments.
Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction (issued 7 May 2021)
The amendments specify how companies should account for deferred tax on transactions such as leases and decommissioning obligations.
In specified circumstances, companies are exempt from recognising deferred tax when they recognise assets or liabilities for the first time. Previously, there had been some uncertainty about whether the exemption applied to transactions such as leases and decommissioning obligations-transactions for which companies recognise both an asset and a liability.
The amendments clarify that the exemption does not apply and that companies are required to recognise deferred tax on such transactions. The aim of the amendments is to reduce diversity in the reporting of deferred tax on leases and decommissioning obligations.
The amendments are effective for financial years beginning on or after 1 January 2023 and have not yet been adopted for use in the United Kingdom.
The Group does not expect a material impact on its consolidated financial statements from these amendments.
Business Combination
On the acquisition of a subsidiary, the business combination is accounted for using the acquisition method. The cost of an acquisition is measured as the aggregated amount of the fair value of the consideration transferred, measured at the date of acquisition. The consideration paid is allocated to the assets acquired and liabilities (including contingent liabilities) assumed on the basis of fair values at the date of acquisition. Acquisition costs are expensed when incurred and included in general and administrative expenses.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of the company 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.
When the Group ceases to have control or significant influence, any retained interest in the entity is re measured 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 Company:
· 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.
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 profit or loss 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, including trade and other receivables, are initially recognized at the transaction price and subsequently measured at amortised cost using the effective interest rate method.
Trade payables
Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method.
Convertible loan notes
Convertible loan notes are regarded as compound instruments, consisting of a liability component and an equity component. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible debt. The difference between the proceeds of issue of the convertible loan notes and the fair value assigned to the liability component, representing the embedded option to convert the liability into equity of the Group, is included in equity. Issue costs are apportioned between the liability and equity components of the convertible loan notes based on their relative carrying amounts at the date of issue. The portion relating to the equity component is charged directly against equity. The interest expense on the liability component is calculated by applying the prevailing market interest rate for similar non-convertible debt to the liability component of the instrument. The difference between this amount and the interest paid is added to the carrying amount of the convertible loan note.
Share capital
Ordinary share capital is classified as equity. Interim ordinary dividends are recognised when paid and final ordinary dividends are recognised when they are authorized and are no longer at the discretion of the entity and as a liability in the year in which they are approved.
Deferred shares were created as part of a subdivision of shares but carry no voting rights and no right to participate in the profits of the company.
Impairment of financial assets
IFRS 9 offers two approaches for measuring and recognizing the loss allowance: General and Simplified. The general approach should be applied for all financial assets subject to impairment, except for trade receivables or contract assets (IFRS 15) without significant financing component, for these assets simplified approach should be applied. The Group's financial instruments measured at amortised cost falling within the scope of the standard are (i) trade and other receivables and (ii) cash and cash equivalents. While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial.
Financial liabilities:
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 de-recognise 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 the original acquisition of land for development, including costs associated with planning, and properties under construction and are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Interest on sums borrowed that finance specific projects is added to cost. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
PROPERTY PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated 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
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
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."
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 inventory at the year end. All other borrowing costs are recognised in the profit or loss 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 and tax laws that have been enacted or substantively enacted at 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 and tax laws that have been enacted or substantively enacted at the reporting date 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.
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 law & United Kingdom adopted International Financial Reporting Standards (UK adopted IFRS) and IFRS in conformity with the requirements of the Companies Act 2006 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 written down amount is recognised immediately in profit or loss. The assessment requires the use of judgment and estimates. The carrying amount of inventory is disclosed in note 11 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 assets recoverable amount is estimated in order to determine the extent of the impairment loss (if any). The recoverable amount is the higher of (a) fair value less costs to sell and (b) value in use.
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.
At the year end there were no intangible assets held by the company.
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.
1. SEGMENTAL REPORTING
For the purpose of IFRS 8, the chief operating decision maker ("CODM") takes the form of the Board of Directors. The Directors' opinion of the business of the Group is as follows.
The principal activity of the Group is that of a regional property developer focused upon Kent, Surrey, Sussex and the M25 ring south of London together with investment in residential property.
Based on the above considerations, the Directors' consider there to be one reportable geographical segment which is in the UK The internal and external reporting is on a consolidated basis with transactions between Group companies eliminated on consolidation. Therefore, the financial information of the single segment is the same as that set out in the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of financial position and cashflows. Therefore, no segmental reporting is required.
Revenue
|
An analysis of revenue is as follows: |
|
|
|
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
The Group's revenue, which is all attributable to their principal activity, can be shown as follows:
|
|
|
|
|
|
|
|
|
|
Rental Income |
- |
|
18,183 |
|
|
|
|
18,183 |
|
|
|
|
|
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Timing of Revenue are as follows: |
|
|
|
|
|
|
|
|
|
Rental income transferred over time |
- |
|
18,183 |
|
|
|
|
18,183 |
|
|
|
|
|
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Revenues analysed by geographic location are as follows: |
|
|
|
|
|
|
|
|
|
United Kingdom |
- |
|
18,183 |
|
|
|
|
|
2. LOSS FOR THE YEAR
|
Operating loss is stated after charging/(crediting) the following: |
2023 |
|
2022 |
|
|
£ |
|
£ |
|
Subcontractor costs and cost of inventories recognised as an expense |
(78) |
|
1,150 |
|
Write-off of Inventory |
- |
|
29,750 |
|
|
(78) |
|
30,900 |
|
Impairment of assets |
25,000 |
|
- |
|
Depreciation of property, plant and equipment |
213 |
|
284 |
|
|
|
|
|
|
Auditor's remuneration - audit services - Group |
50,000 |
|
31,750 |
|
Auditor's remuneration - other assurance services - Group |
- |
|
4,750 |
|
|
50,000 |
|
36,500 |
|
|
|
|
|
|
Operating expenses by nature: |
|
|
|
|
Employee expenses |
104,433 |
|
228,184 |
|
Depreciation |
213 |
|
284 |
|
Legal and professional fees |
205,635 |
|
217,886 |
|
Management Fees |
- |
|
78,591 |
|
Office rent and associated costs |
19,705 |
|
19,740 |
|
Insurance |
11,299 |
|
9,835 |
|
Mortgage redemption costs |
20,511 |
|
10,187 |
|
Other expenses |
17,830 |
|
7,221 |
|
|
379,626 |
|
571,928 |
The Group incurred direct operating expenses totalling £3,637 (2023: £8,033) which did not generate any rental income in the year
3. EMPLOYEES AND DIRECTORS' REMUNERATION
Staff costs during the year were as follows:
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Wages and salaries |
78,000 |
|
185,567 |
|
Social security costs |
8,943 |
|
20,627 |
|
Other pension costs |
17,490 |
|
21,990 |
|
|
104,433 |
|
228,184 |
The average number of employees of the Group during the year was:
|
|
2024 |
|
2023 |
|
|
Number |
|
Number |
|
Directors |
4 |
|
6 |
|
Mr C Johnson and Mr A Johnson are directors of subsidiary entities |
|
|
|
|
Management
|
1 |
|
1 |
Directors Remuneration was as follows:
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
- Emoluments for qualifying services J Dubois |
- |
|
8,333 |
|
- Emoluments for qualifying services A Johnson (director of subsidiary entity) |
60,000 |
|
60,000 |
|
- Emoluments for qualifying services P Treadaway |
- |
|
50,000 |
|
- Emoluments for qualifying services P Challinor |
- |
|
6,731 |
|
- Emoluments for qualifying services N Lott |
- |
|
3,333 |
|
- Emoluments for qualifying services G Thorneycroft |
- |
|
39,169 |
|
|
60,000 |
|
167,566 |
Highest paid director - gross salary including company pension contributions was £60,000 (2023 - £61,800)
There are retirement benefits accruing to Mr C Johnson (director of subsidiary entities) for whom a Company contribution was paid during the year of £16,800 (2023: £18,000), Mr A Johnson (director of subsidiary entities) £1,800(2023: £1,800) and Mr G Thorneycroft £Nil (2023: £1,500).
4. INTEREST PAYABLE AND SIMILAR CHARGES
For sites where the construction had been completed, the bank loan interest paid during the year on these sites of £nil (2023: £920) has been accounted for in the profit & loss within cost of sales. Total interest in the year of £129,333 (2023: £86,451) has been paid and accrued on general funding loans, loan notes and on rental property mortgage loan plus an adjustment for the loan note equity reserve due to the CLN being converted at the year end. Further details are provided in notes 13 and 15.
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Mr C Johnson |
|
|
- |
|
DFM Pension Scheme (pension scheme for J Dubois (former director)) |
- |
|
1,559 |
|
G Howard |
10,000 |
|
10,000 |
|
C Rowe |
- |
|
584 |
|
Mrs S Johnson |
- |
|
198 |
|
Loan notes - Mr C Johnson |
107,204 |
|
80,165 |
|
Paragon mortgage |
11,424 |
|
30,422 |
|
Bank loan |
705 |
|
920 |
|
|
129,333 |
|
123,848 |
5. TAXATION
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Current tax |
- |
|
- |
|
|
|
|
|
|
Tax charge |
- |
|
- |
|
|
|
|
|
|
UK corporation tax rate has been reviewed upward to 25% effective April 2023 |
|
|
|
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Loss on ordinary activities before tax |
(516,723) |
|
(843,626) |
|
|
|
|
|
|
Based on (loss) for the year: |
|
|
|
|
Tax at 19% (2022: 19%) |
(98,177) |
|
(160,289) |
|
Unrelieved tax losses |
|
|
- |
|
Impairment |
|
|
- |
|
Tax losses carried forward |
98,177 |
|
160,289 |
|
Tax charge for the year |
- |
|
- |
|
|
|
|
|
Deferred tax
No deferred tax assets have been provided in respect of property revaluation as there are historical losses upon which to offset. As at the 31 March 2024, the Group had cumulative tax losses of £6,704,650 (2022: £6,296,440) that are available to offset against future taxable profits of the same trade.
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Fair value movement on property revaluation |
- |
|
(122,751) |
|
Tax at 19% |
- |
|
(23,323) |
|
Tax losses available |
- |
|
23,323 |
|
Deferred tax for the year |
- |
|
- |
The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom will increase from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply
but with a marginal relief applying as profits. UK corporation tax rate has been reviewed by the Group as a result of this changes.
6. (LOSS) PER ORDINARY SHARE
The calculation of (loss)/profit per ordinary share is based on the following (losses) and the number of shares used should be that retrospectively adjusted for the effect of consolidation:
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
(Loss) for the year |
(516,723) |
|
(843,626) |
|
|
|
|
|
|
Weighted average number of shares for basic (loss) per share |
354,915,789 |
|
249,525,835 |
|
Weighted average number of shares for diluted (loss) per share |
354,915,789 |
|
249,525,835 |
|
|
|
|
|
|
(Loss) per Ordinary Share: |
|
|
|
|
Basic |
(0.15)p |
|
(0.34)p |
|
Diluted |
(0.15)p |
|
(0.34)p |
7. PROPERTY, PLANT AND EQUIPMENT
|
Plant and equipment |
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Cost |
|
|
|
|
At 1 April |
32,790 |
|
7,790 |
|
Additions |
- |
|
25,000 |
|
Impairment |
(25,000) |
|
- |
|
At 31 March |
7,790 |
|
32,790 |
|
|
|
|
|
|
Depreciation |
|
|
|
|
At 1 April |
6,937 |
|
6,653 |
|
Charge for the year |
213 |
|
284 |
|
At 31 March |
7,150 |
|
6,937 |
|
|
|
|
|
|
Net book value at 31 March |
640 |
|
25,853 |
The impaired asset related to the hydroponic equipment held in Life Hydroponic Assets Ltd. The directors considered that as the company had not commenced to trade and the technology in the hydroponic space was forever changing that the asset would now unlikely be able to attract any proceeds should it be necessary for it to be sold. The corresponding creditor balance of £18,333 that remained outstanding was also written off from trade creditors.
8. CURRENT ASSET: INVESTMENT PROPERTIES
|
|
2024 |
|
2023 |
|
FAIR VALUE |
£ |
|
£ |
|
As at 01 April |
927,249 |
|
1,712,000 |
|
Additions |
- |
|
- |
|
Disposals |
(927,249) |
|
(662,000) |
|
Fair Valuation Adjustment |
- |
|
(122,751) |
|
31 March |
- |
|
927,249 |
|
|
|
|
|
|
NET BOOK VALUE |
|
|
|
|
As at 31 March |
- |
|
927,249 |
|
Fair Value at 31 March is represented by:
|
|
|
|
|
Revaluation in 2024 (2023: at revalued amount) |
- |
|
927,249 |
|
|
|
|
|
|
Loss on Disposal: |
|
|
|
|
Fair value |
927,249 |
|
662,000 |
|
Disposal proceeds (net of costs) |
927,249 |
|
649,618 |
|
Loss on Disposal |
- |
|
12,382 |
In 2023, fair value has been assessed by using level 3 fair value hierarchy and using the selling price achieved following the sale of the remaining asset in September 2023.
9. TRADE AND OTHER RECEIVABLES
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Other receivables |
39,269 |
|
2,300 |
|
Other taxes |
13,467 |
|
9,457 |
|
Prepayments |
26,840 |
|
22,276 |
|
|
79,576 |
|
34,033 |
|
|
|
|
|
No IFRS9 provision has been recognized on the above financial instruments on the basis that this provision has been deemed to be immaterial.
10. CASH AND CASH EQUIVALENTS
All of the Group's cash and cash equivalents at year end are in Sterling and held at floating interest rates.
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Cash and cash equivalents |
8,906 |
|
17,148 |
|
|
|
|
|
|
The Directors consider that the carrying amount of cash and cash equivalents approximate to their fair value.
|
|||
11. INVENTORY
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Work in progress |
775,374 |
|
317,796 |
|
|
|
|
|
Inventories recognised as an expense during the period totalled £nil (2023: £nil). Borrowing costs capitalized in the year total £38,208 (2023: - £6,393 ).
Write-down of inventories recognised as an expense in the period totalled £nil (2023: £29,750). For 2023, it was due to the owners of the Leatherhead site taking an alternative offer for their project from an independent third party.
Inventories pledged as security for liabilities as at the year end totalled £275,000 (2023: £275,000 ).
A 10% fall in the estimated future value of the property would result in an impairment totalling £80,000.
12. TRADE AND OTHER PAYABLES
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Trade payables |
152,745 |
|
122,697 |
|
Taxation & social security |
12,130 |
|
14,211 |
|
Accruals |
120,739 |
|
85,955 |
|
|
285,614 |
|
222,863 |
13. BORROWINGS
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Directors' loans |
2,219,819 |
|
3,086,949 |
|
Other loans |
719,500 |
|
560,000 |
|
Bank loans - see under |
476,410 |
|
800,965 |
|
|
3,415,729 |
|
4,447,914 |
|
Being: |
|
|
|
|
Less than one year |
- |
|
874,697 |
|
More than one year |
3,415,729 |
|
3,573,217 |
|
|
3,415,729 |
|
4,447,914 |
Historic loan notes with a nominal value of £600,000 and £200,000 respectively were rolled up in to a new convertible loan note agreement in the year 2022 along with related party loans of £105,000 to create a new convertible loan note with a nominal value of £905,000. The liability in respect of this transaction is disclosed within directors loans above with a present value as at 31st March 2024 of £nil due to the conversion of the loan notes during the period (2023: £797,796 ). As a financial instrument with both debt and equity components, an amount had been recognised directly into a Loan Note Equity Reserve on issue, , with the debt element being unwound at an implied interest rate of 10% and the interest recognized through profit and loss. During the year, the Loan Note Equity Reserve was reversed following the conversion of the Loan Note. Refer to note 14 for further details.
The remaining directors loan balance is disclosed in note 15.
Included in other loans is £560,000 (2023: £560,000 ) advanced by Mr G Howard (son-in-law to Mr C Johnson) to the Company at rates of 10% & 5% per annum (2023: 10% & 5% pa) and loans provided during the year by Period Homes at £134,500 and Forum Energy Services Ltd at £25,000. Details of the negotiated loan interest reduction with Mr G Howard for accrued interest are given in note 17.
Selmat had also granted to Paragon Mortgages a legal charge over the freehold property at Hildenborough. The mortgage was interest only, for a term of seven years with a fixed interest rate for the first five years. The property had been rented out but was sold during the year.
|
The bank borrowings are repayable as follows:
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
On demand or within one year |
|
|
- |
|
In the second year |
|
|
- |
|
In the third to fifth years inclusive |
|
|
- |
|
After five years |
476,410 |
|
800,965 |
|
|
476,410 |
|
800,965 |
|
|
|
|
|
|
Less amount due for settlement within twelve months |
|
|
- |
|
(included in current liabilities) |
|
|
|
|
Amount due for settlement after twelve months |
476,410 |
|
800,965 |
The weighted average interest rates paid on the bank loans were as follows: Bank loans: 3.4 % (2023: 3.4%)
All of the Directors' loans are repayable after more than 1 year . All loans are interest bearing and charged accordingly. However, Mr C Johnson has waived his right to interest in the current year and the previous year. Interest of £nil (2023: £1,559) was paid to Mr J Dubois at the rate of 12% pa (2022: 12% pa).
14. SHARE CAPITAL
|
|
|
|
|
|
Issued allotted & paid share capital |
2024 |
|
2023 |
|
|
Number |
|
Number |
|
|
|
|
|
|
Ordinary shares |
|
|
|
|
Ordinary shares of 0.1p in issue |
275,852,371 |
|
142,519,038 |
|
Ordinary shares of 0.1p issued in year |
377,250,000 |
|
133,333,333 |
|
Total ordinary shares of 0.1p in issue |
653,102,371 |
|
275,852,371 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred shares |
|
|
|
|
Deferred shares of 0.9p in issue |
287,144,228 |
|
287,144,228 |
|
Deferred shares of 0.9p arising in year |
- |
|
- |
|
Total Deferred shares of 0.9p in issue |
287,144,228 |
|
287,144,228 |
|
|
|
|
|
Background and current year position - Ordinary shares, warrants and loan notes
Ordinary Shares:
On 18 August 2023, the company issued 125,000,000 new ordinary shares at 0.1p as a result of placing of shares that raised gross proceeds of £125,000. The funds raised provide the Company with additional working capital.
On 27 March 2024, 26,000,000 ordinary shares at 0.1p per ordinary share were issued in order to settle certain liabilities amounting to £26,000.
On 27 March 2024, a convertible loan note with an aggregate amount of £905,000 was fully converted into 226,250,000 ordinary shares at 0.4p per ordinary shares. Previously, in year 2022, the Company agreed with Mr C Johnson a consolidation and variation of terms of the two unsecured convertible loan notes and direct debt held by him. As a result of the consolidation and variation agreement, the total amount owed to Mr C. Johnson was converted into an unsecured convertible loan note with an aggregate amount of £905,000, which was set to expire on 31 July 2024 but was fully converted into equity during the year. Further to the conversion, Mr C Johnson has instructed the Company's Broker, Peterhouse Capital Limited ("Peterhouse") to immediately place the entirety of the 2022 Conversion Shares, at a price of £0.00044 per share (a 12% discount to the mid-market closing price of £0.0005 on 20 March 2024, the last practical date prior to this announcement), raising £99,550. Of the £99,550 total cash consideration received by Mr C Johnson for the 2022 Conversion Shares, £50,000 is to be subscribed for by Paul Treadaway, Trafalgar's Chief Executive Officer, and £10,000 by Gary Thorneycroft, the Company's Group Financial Director.
Deferred Shares:
On 13 July 2020 the Company undertook a sub-division of its ordinary shares, which sub divided the 487,690,380 0.1p ordinary shares of 0.1p each into 487,690,380 ordinary shares of 0.01p each and 487,690,380 0.09p deferred shares of 0.09p each. The 0.09p deferred shares of 0.09p each were consolidated into deferred shares of 0.9p each ranking pari passu as one class with the existing deferred shares of 0.9p each.
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
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
|
|
|
|
|
Ordinary shares b/fwd |
275,852 |
|
142,519 |
|
Deferred shares b/fwd |
2,584,298 |
|
2,584,298 |
|
Issued in year - ordinary shares |
377,250 |
|
133,333 |
|
Issued in year - deferred shares |
- |
|
- |
|
|
3,237,400 |
|
2,860,150 |
|
|
|
|
|
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 (2023: 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.
15. RELATED PARTY TRANSACTIONS
Mr C Johnson, a subsidiary Director who served during the year, held 18,681,580 ordinary 0.1p shares in the Group as at 31 March 2024 (2023 18,681,580 ordinary 0.1p).
Mr N Lott, who served as a Director during the year, held 50,000 ordinary 0.1p shares in the Group as at 31 March 2024 (2023: 50,000 ordinary 0.1p).
Mr P Treadaway who served as a Director during the year, held 133,409,829 ordinary 0.1p shares in the Group as at 31 March 2024 (2023: 19,733,466 ordinary 0.1p).
Mr G Thorneycroft who served as a Director during the year, held 23,327,273 ordinary 0.1p shares in the Group as at 31 March 2024 (2023: 600,000 ordinary 0.1p).
Further details relating to warrants can be found under note 16.
|
The following working capital loans have been provided by the following Directors: |
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Mr C Johnson |
|
|
|
|
Opening balances |
3,123,798 |
|
2,938,382 |
|
Loan repayments |
(993,297) |
|
(63,255)
|
|
Personal drawings |
(15,283) |
|
(19,587) |
|
Capital injected |
104,600 |
|
268,258 |
|
Balance carried forward
|
2,219,818 |
|
3,123,798 |
|
|
|
|
|
|
J Dubois |
|
|
|
|
Opening balances |
- |
|
100,000 |
|
Loan repayments |
- |
|
(100,000) |
|
Balance carried forward
|
- |
|
- |
|
|
|
|
|
|
P Treadaway |
|
|
|
|
Opening balance |
(36,849) |
|
- |
|
Drawn in year |
(120) |
|
(36,849) |
|
Closing balance |
(36,969) |
|
(36,849) |
|
|
|
|
|
Mr C Johnson's Loan bore interest during the year at 5% (2023: 5% pa), but he has chosen to forego the interest as he did in 2023. Mr C Johnson was due interest of £nil in the year (2023: £nil). Mr C Johnson is no longer a Director of Trafalgar Property Group Plc, but remains a director of other entities to the Group and remains a shareholder. Mr Dubois's Loan, which is from his Pension Fund of which he is the sole beneficiary, was paid interest of £nil (2023: £1,559) at 12% pa interest (2022: 12% pa). This loan was fully repaid on 16th May 2022.
Mr. G. Howard (son-in-law to Mr. C Johnson) had previously advanced loans of £560,000 (2023: £560,000) to the Company at rates of 10% & 5% per annum (2023: 10% & 5% pa)
During the year rents were paid of £9,142 (2023: £10,000) to the Combe Bank Homes Pension Scheme which owns the freehold offices at Chequers Barn. Mr C Johnson is a Trustee and Beneficiary of that Pension Scheme.
During the year payments amounting to £1,938 (2023: £15,900 ) were made to Real Time Accounting Ltd for bookkeeping services. Gary Thorneycroft is a majority shareholder and director of Real Time Accounting Ltd.
During the year payments amounting to £nil (2023: £12,000) were made to May Barn Horticultural Consultancy Ltd, for hydroponic consultancy services, a company that Dr P Challinor was a director and major shareholder During the year it was agreed to write-off the balance due to May Barn of £18,333 for the hydroponic assets owned by Dr P Challinor on the basis that both parties have agreed to waive the amount payable.
16. SHARE WARRANTS
Following the conversion of the 2022 CLN with Mr C Johnson the warrants attaching to that CLN have now expired and there are no warrants remaining.
17. CAPITAL CONTRIBUTION RESERVE
The capital contribution reserve of £400,147 (2023: £400,147 ) related to the renegotiation of interest accruing on loans from Mr G Howard to below market rate terms. Interest was reduced from 10% pa to 5% pa for the entire term of the loans and is now non compound.
As Mr. G Howard is related to Mr. C Johnson, a related party, a Capital Reserve was created. In the current year, a further provision of £nil (2023:242,370) was recognized as a result of Mr. Howard waiving all interest due on the loan outstanding.
18. CATEGORIES OF FINANCIAL INSTRUMENTS
All financial instruments are measured under IFRS 9 at amortised cost.
Financial Risk Management
The Group and Company's financial instruments comprise investments designated at fair value through profit or loss, cash and various items such as trade and other receivables, and trade and other payables, all of which arise directly from its normal operations. The carrying values of all of the Group and Company's financial instruments approximate their fair values at 31 March 2024 and 31 March 2023. The Accounting Policies described on pages 29 - 30 outlines how the financial instruments are measured.
Through its normal operations the Group is exposed to a number of financial risks. The Board reviews and agrees policies for managing each of these risks as summarised below:
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 convertible debt are disclosed on pages 23 to 31 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 where interest is charged on a variable rate basis. This risk has been minimized by:
· the original bank loan with Lloyds Bank has been replaced by a loan with CPF One Ltd after the year end, following completion of the construction work, changing from a variable rate basis on to a fixed rate facility.,
· renegotiation of interest rates on some of the other loans from 10% to 5% (all fixed rates) all then being forgone by the lender,
· partial repayments made in the year on other loans and,
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. There is limited exposure due to no trade receivables and that the primary exposure relates to cash and cash equivalents, which are all deposited with reputable banks.
Liquidity risk management
This is the risk of the Group not being able to continue to operate as a going concern. The sale of the completed Speldhurst property, that is on the balance sheet at cost, will provide cash flow to the business. The new project at Talbot Park, once planning permission is granted, is expected to provide a good profit as it will allow two properties to be built and sold. Current financing is provided by external financial institutions supported by Mr C Johnson.
The Directors have, after careful consideration of the risks 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 |
31 March 2024 |
Due within |
Due within |
|
|
|
Total |
Due within One year |
Due within one to five years |
Due over Five years |
|
|
£ |
£ |
£ |
£ |
|
Trade payables |
273,484 |
273,484 |
- |
|
|
Borrowings - Directors' loan |
2,219,819 |
- |
2,219,819 |
|
|
Borrowings - Bank loan |
476,410 |
- |
- |
476,410 |
|
Borrowings - Other loans |
719,500 |
159,500 |
560,000 |
- |
|
|
|
|
|
|
|
Total |
3,689,213 |
432,984 |
2,779,819 |
476,410 |
|
|
|
|
|
|
|
Financial liabilities |
31 March 2023 |
Due within |
Due within |
Due over |
|
|
Total |
Due within One year |
Due within one to five years |
Due over Five years |
|
|
£ |
£ |
£ |
£ |
|
Trade payables |
208,652 |
208,652 |
|
|
|
Borrowings - Directors' loan |
3,086,949 |
874,697 |
2,212,252 |
|
|
Borrowings - Bank loan |
800,965 |
|
|
800,965 |
|
Borrowings - Other loans |
560,000 |
|
560,000 |
|
|
|
|
|
|
|
|
Total |
4,656,566 |
1,083,349 |
2,772,252 |
800,965 |
19. NET DEBT RECONCILIATION
|
|
|
2024 |
2023 |
|
|
£ |
£ |
|
|
Cash at bank |
|
8,906 |
17,148 |
|
Cash and cash equivalents |
|
8,906 |
17,148 |
|
|
|
|
|
|
Borrowing repayable (including overdrafts) |
|
(3,415,728) |
(4,447,914) |
|
|
|
|
|
|
Net Debt |
|
(3,406,822) |
(4,430,766) |
|
|
|
|
|
|
|
Cash and liquid investment |
Gross borrowings with a fixed interest rate |
Total cash and liquid investments |
|
|
£ |
£ |
£ |
|
Net debt as at 31 March 2022 |
12,753 |
(3,924,724) |
(3,911,971) |
|
Cash flows |
4,395 |
(523,190) |
(518,795) |
|
Net debt as at 31 March 2023 |
17,148 |
(4,447,914) |
(4,430,766) |
|
Cash flows |
(8,242) |
1,032,186 |
1,023,944 |
|
Net debt as at 31 March 2024 |
8,906 |
(3,415,728) |
(3,406,822) |
|
|
|
|
|
|
|
|
|
|
20. SUBSEQUENT EVENTS
Events following 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.
As stated in the announcement by the Group on 29 May 2024 we are in discussions with parties relating to a potential reverse takeover, non-binding heads of terms have been signed. These discussions continue and further announcements will be made in due course. A further announcement on 03 June 2024 stated that Ecap Esports Ltd had agreed to loan the Company the sum of £250,000, the proceeds of which will be ring fenced to cover costs associated with the proposed reverse takeover, should the transaction not occur. As announced in March 2024 Mr C Johnson introduced £99,550 into Trafalgar by way of a loan being the consideration he received for the 2022 Conversion Shares. In return, Trafalgar will issue Mr C Johnson with a new, nil coupon, unsecured convertible loan note (the "2024 CLN"). The 2024 CLN will be convertible in full into 226,250,000 Ordinary Shares at £0.00044 per ordinary share ("2024 CLN Exercise Price") and can be converted at any time by Mr C Johnson, subject inter alia to his entire holding being less than 29.99 per cent of the voting rights in issue in the Company. At the date of these financial statements this CLN has not yet been signed.
2024 CLN Issue
Further to the conversion of 2022 CLN, in order to provide additional funds to the Company, Mr C Johnson has agreed to reinvest the entirety of the £99,550 consideration he will receive for the 2022 Conversion Shares back into the Company. In return, Trafalgar will issue Mr C Johnson with a new, nil coupon, unsecured convertible loan note (the "2024 CLN"). The 2024 CLN will be convertible in full into 226,250,000 Ordinary Shares at £0.00044 per ordinary share ("2024 CLN Exercise Price") and can be converted at any time by Mr C Johnson, subject inter alia to his entire holding being less than 29.99 per cent of the voting rights in issue in the Company.
As per Company Act 2006, the Company is required to convene a general meeting in order to undertake a share reorganisation (the "Reorganisation"). A circular ("Circular") containing further details of the Reorganisation and notice of the general meeting to approve the resolutions is required to implement the Reorganisation, and was expected to be published and dispatched to Trafalgar's shareholders last 31 May 2024, but a postponement was announced on 30 May 2024 following a disclosure dated 29 May 2024 regarding a discussion on a potential reverse takeover and that its shares is being suspended from trading on AIM, thereby postponing the posting of the said Circular for the required general meeting.
New Loan Agreement with Ecap Esports Ltd.
On 3 June 2024, the Group announced that it has entered into a loan agreement with Ecap Esports Ltd ("Ecap Esports"). Ecap Esports has agreed to loan the Company the sum of £250,000, the proceeds of which will be ringfenced to cover costs associated with the recently announced proposed reverse takeover, should the transaction not occur. In the event the proposed transaction does not complete, any funds remaining following payment of all accrued transaction fees shall be returned to the lender. The loan bears no interest.
|
|
Note |
|
|
|
|
|
|
2024 |
|
2023 |
|
|
|
£ |
|
£ |
|
Fixed Assets |
|
|
|
|
|
Investments |
7 |
- |
|
- |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Debtors |
8 |
32,140 |
|
54,220 |
|
Cash at bank and in hand |
|
3,406 |
|
3,842 |
|
|
|
35,546 |
|
58,062 |
|
|
|
|
|
|
|
TOTAL ASSET |
|
35,546 |
|
58,062 |
|
|
|
|
|
|
|
EQUITIES & LIABILITIES
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade & other payables
|
9 |
224,856 |
|
961,756 |
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Borrowings |
10 |
25,000 |
|
- |
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
249,856 |
|
961,756 |
|
NET (LIABILITIES) |
|
(214,310) |
|
(903,694) |
|
|
|
|
|
|
|
Called up share capital |
12 |
3,237,400 |
|
2,860,150 |
|
Share premium account |
|
4,136,240 |
|
3,484,915 |
|
Loan note equity reserve |
|
- |
|
107,204 |
|
Profit and loss account |
|
(7,587,950) |
|
(7,355,963) |
|
Equity - attributable to the owners of the Parent
|
|
(214,310) |
|
(903,694) |
|
|
|
|
|
|
|
TOTAL EQUITY AND LIABILITIES |
|
35,546 |
|
58,062 |
|
|
|
|
|
|
The loss for the financial year dealt with in the financial statements of the Parent Company was loss of £339,191 (2023: loss £408,699).
The financial statements were approved by the Board of Directors on 24 September 2024 and authorised for issue and are signed on its behalf by:
P Treadaway: … Paul Treadaway………. G Thorneycroft: … Gary Thorneycroft ………
Company Registration Number: 04340125
The notes on pages 45 to 52 form an integral part of these financial statements
|
|
Share |
Share |
Loan Note |
Profit |
Total |
|
|
Capital |
Premium |
Equity |
& loss |
Equity |
|
|
|
|
Reserve |
account |
|
|
|
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
At 1 April 2022 |
2,726,817 |
3,250,249 |
30,303 |
(6,947,264) |
(939,895) |
|
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(488,864) |
(488,864) |
|
|
|
|
|
|
|
|
Total comprehensive loss for the year |
- |
- |
- |
(488,864) |
(488,864) |
|
|
|
|
|
|
|
|
Movement in Loan note equity reserve |
|
|
76,901 |
80,165 |
157,066 |
|
Shares issued during the year net of costs |
133,333 |
234,666 |
- |
- |
367,999 |
|
|
|
|
|
|
|
|
At 31 March 2023 |
2,860,150 |
3,484,915 |
107,204 |
(7,355,963) |
(903,694) |
|
|
|
|
|
|
|
|
At 1 April 2023 |
2,860,150 |
3,484,915 |
107,204 |
(7,355,963) |
(903,694) |
|
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(339,191) |
(231,987) |
|
|
|
|
|
|
|
|
Total comprehensive loss for the year |
- |
- |
- |
(339,191 |
(231,987) |
|
|
|
|
|
|
|
|
Loan Note Equity Reserve |
|
|
(107,204) |
107,204 |
- |
|
Shares issued during the year on conversion of loan notes |
226,250 |
678,750 |
|
- |
905,000 |
|
Shares issued during the year net of costs |
151,000 |
(27,425) |
|
- |
123,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 March 2024 |
3,237,400 |
4,136,240 |
- |
(7,587,950) |
(214,310) |
Further details of share capital are shown in Note 12.
Loan note equity reserve is the amount that has been provided for in respect of the difference between the cash value and the liability element of the loan notes. The remaining balance has been reversed following the conversion of the loan note during the year (2023: adjustment of £76,901)
The notes on pages 45 to 52 form an integral part of these financial statements.
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 residential property development and charges an appropriate management fee for general costs incurred 2024 - £43,344 (2023 - £78,591). The Company is a private company limited by shares and is registered in England and Wales. Its registered office and principal place of business is Chequers Barn, Chequers Hill, 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 United Kingdom Accounting Standards, including Financial Reporting Standard 102, 'The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland ('FRS 102') and the Companies Act 2006. 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 board are also continuing to consider a reverse takeover and have taken a loan from the target company to cover any abort fees should the deal not complete, as stated in note 14 to the Company financial statements.
During the year the Company raised £125,000 before costs for working capital purposes by way of an issue of 125,000,000 shares at 0.1p per share, issued 26,000,000 shares at 0.1p to settle outstanding creditor balances and crystalised the 2022 CLN with Mr C Johnson by way of an issue of 226,250,000 shares at 0.4p per share.
As indicated in note 14, subsequent to the balance sheet date, the Company has raised £99,550 from a contribution by Mr C Johnson following the conversion of his 2022 CLN at the year end. This is to be used for working capital purposes. A new CLN is to be issued to Mr C Johnson as stated in note 14. 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 material uncertainty about the future events.
However, given that a degree of uncertainty exists in the timing of future sales, the Company's ability to raise further funds through share placements and the potential reliance on further funding been provided by the directors and management's ability to refinance all loans due in the next twelve months, there exists a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.
(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, 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) 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 convertible debt
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, 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.
Convertible debt
Convertible debt issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and convertible debt instrument. Convertible debt consists of new unsecured loan notes convertible totaling £nil (2023: £905,000) in full, into 226,250,000 ordinary shares at 0.4p per ordinary share and can be convertible at any time by Mr C Johnson for two years from July 2022, further details are provided within note 12.
As stated in note 12, the convertible debt was converted during the year.
The accounting policies adopted for specific financial liabilities and convertible debts are set out below.
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.
All balances with subsidiaries have been fully impaired during the year
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 £339,191 (2023: Loss £408,699).
6. EMPLOYEES AND DIRECTORS' REMUNERATION
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Directors' fees |
- |
|
107,567 |
|
Social security costs |
- |
|
11,211 |
|
Directors' pension contribution |
- |
|
1,500 |
|
Management fees |
- |
|
- |
|
|
- |
|
120,278 |
The average number of employees of the Company during the year was:
|
|
2024 |
|
2023 |
|
|
Number |
|
Number |
|
Directors and management |
4 |
|
5 |
There are no retirement benefits accruing to any of the Directors.
Additional directors remuneration of £60,000 (2023: £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.
|
Valuation |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Cost: |
|
|
|
|
|
At 1 April |
|
3,855,438 |
|
3,855,338 |
|
Additions |
|
- |
|
100 |
|
At 31 March |
|
3,855,438 |
|
3,855,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment: |
|
|
|
|
|
At 1 April |
|
(3,855,438) |
|
(3,855,338) |
|
Additions |
|
- |
|
(100) |
|
At 31 March |
|
(3,855,438) |
|
(3,855,438) |
|
|
|
|
|
|
|
Net Value at 31 March |
|
- |
|
- |
|
Held directly |
Class of shares held |
% Shareholding |
Principal Activity |
|
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 |
|
Life Hydroponic Assets Ltd |
Ordinary shares |
100% |
Holding of hydroponic assets |
|
Held indirectly through Trafalgar New Homes Limited |
|||
|
Combe Bank Homes (Oakhurst) Limited
|
Ordinary shares |
100% |
Residential property developers |
|
Controlled via Deed of Trust |
|||
|
Combe House (Borough Green) Limited
|
Ordinary shares |
100% |
Residential property developers |
8. DEBTORS
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Amounts owed by Group undertakings |
- |
|
36,298 |
|
Other debtors |
32,140 |
|
17,922 |
|
|
32,140 |
|
54,220 |
All amounts owed by Group undertakings £36,298 (2023 - nil) have been impaired during the year.
9. TRADE AND OTHER PAYABLES
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
|
|
|
|
|
Trade creditors |
143,457 |
|
95,754 |
|
Taxation and social security |
637 |
|
20,191 |
|
Accruals / Other creditors |
62,004 |
|
27,545 |
|
Directors' loan |
- |
|
789,947 |
|
Amounts owed to Group undertakings |
18,758 |
|
28,319 |
|
|
224,856 |
|
961,756 |
The loan with its subsidiary is interest free and repayable on demand.
10. BORROWINGS
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Other loans |
25,000 |
|
- |
|
|
25,000 |
|
- |
Other loans are related to loans provided by Forum Energy Services Ltd at £25,000 (2023: £nil), a shareholder of the Company. This loan is interest free and repayable on demand.
11. FINANCIAL INSTRUMENTS
|
Financial assets |
2024 |
|
2023 |
|
|
£
|
|
£
|
|
|
|
|
|
|
Financial assets:
|
|
|
|
|
Financial assets measured at amortised cost: |
|
|
|
|
Amounts owed by group undertakings and other debtors |
32,140 |
|
54,220 |
|
|
|
|
|
|
Financial liabilities: |
|
|
|
|
Financial liabilities measured at amortised cost |
170,369 |
|
914,020 |
|
|
|
|
|
|
Financial liabilities includes Trade creditors, Other creditors and Amount due to group undertakings. |
|
|
|
12. SHARE CAPITAL
|
Issued, allotted and paid share capital |
|
|
|
|
|
2024 |
|
2023 |
|
|
Number |
|
Number |
|
Ordinary shares: |
|
|
|
|
Ordinary shares of 0.1p in issue |
275,852,371 |
|
142,519,038 |
|
Ordinary shares of 0.1p issued in year |
377,250,000 |
|
133,333,333 |
|
|
|
|
|
|
Total Ordinary Shares of 0.1p in issue |
653,102,371 |
|
275,852,371 |
|
|
|
|
|
|
|
|
|
|
|
Deferred shares: |
|
|
|
|
Deferred shares of 0.9p in issue |
287,144,228 |
|
287,144,228 |
|
Deferred shares of 0.9p arising in year |
- |
|
- |
|
Total Deferred Shares of 0.9p in issue |
287,144,228 |
|
287,144,228 |
|
|
|
|
|
|
Issued, allotted and paid share capital |
|
|
|
|
|
2024 |
|
2023 |
|
|
£ |
|
£ |
|
Ordinary shares: |
|
|
|
|
Ordinary shares of 0.1p in issue |
275,852 |
|
142,519 |
|
Ordinary shares of 0.1p issued in year |
377,250 |
|
133,333 |
|
|
|
|
|
|
Total Ordinary Shares of 0.1p in issue |
653,102 |
|
275,852 |
|
|
|
|
|
|
Deferred shares: |
|
|
|
|
Deferred shares of 0.9p in issue |
2,584,298 |
|
2,584,298 |
|
Deferred shares of 0.9p arising in year |
- |
|
- |
|
Total Deferred Shares of 0.9p in issue |
2,584,298 |
|
2,584,298 |
|
|
|
|
|
|
Total Ordinary and Deferred Shares issued |
3,237,400 |
|
2,860,150 |
|
|
|
|
|
Background - ordinary shares, warrants and loan notes
Ordinary Shares:
On 18 August 2023, the company issued 125,000,000 new ordinary shares at 0.1p as a result of placing of shares that raised gross proceeds of £125,000. The funds raised provide the Company with additional working capital.
On 27 March 2024, 26,000,000 ordinary shares at 0.1p per ordinary share were issued in order to settle certain liabilities amounting to £26,000.
On 27 March 2024, a convertible loan note with an aggregate amount of £905,000 was fully converted into 226,250,000 ordinary shares at 0.4p per ordinary shares. Previously, in year 2022, the Company agreed with Mr C Johnson a consolidation and variation of terms of the two unsecured convertible loan notes and direct debt held by him. As a result of the consolidation and variation agreement, the total amount owed to Mr C Johnson was converted into an unsecured convertible loan note with an aggregate amount of £905,000, which was set to expire on 31 July 2024 but was fully converted into equity during the year. The conversion of the total amount owed to him by the Company has resulted in the issue to Mr C Johnson of an unsecured convertible loan note for an aggregate amount of £905,000, expiring 31 July 2024, which was converted during the year. Further to the conversion, Mr C Johnson has instructed the Company's Broker, Peterhouse Capital Limited ("Peterhouse") to immediately place the entirety of the 2022 Conversion Shares, at a price of £0.00044 per share (a 12% discount to the mid-market closing price of £0.0005 on 20 March 2024, the last practical date prior to this announcement), raising £99,550. Of the £99,550 total cash consideration received by Mr C Johnson for the 2022 Conversion Shares, £50,000 is to be subscribed for by Paul Treadaway, Trafalgar's Chief Executive Officer, and £10,000 by Gary Thorneycroft, the Company's Group Financial Director.
Deferred Shares:
On 13 July 2020 the Company undertook a sub-division of its ordinary shares, which sub divided the 487,690,380 0.1p ordinary shares of 0.1p each into 487,690,380 ordinary shares of 0.01p each and 487,690,380 0.09p deferred shares of 0.09p each. The 0.09p deferred shares of 0.09p each were consolidated into deferred shares of 0.9p each ranking pari passu as one class with the existing deferred shares of 0.9p each.
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.
13. INTERCOMPANY TRANSACTIONS
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. In addition, there were no transactions with Forum Energy Services Ltd, the provider of a shareholders loan, as per note 10.
14. SUBSEQUENT EVENTS
2024 CLN Issue
Further to the conversion of 2022 CLN, in order to provide additional funds to the Company, Mr C Johnson has agreed to reinvest the entirety of the £99,550 consideration he will receive for the 2022 Conversion Shares back into the Company. In return, Trafalgar will issue Mr C Johnson with a new, nil coupon, unsecured convertible loan note (the "2024 CLN"). The 2024 CLN will be convertible in full into 226,250,000 Ordinary Shares at £0.00044 per ordinary share ("2024 CLN Exercise Price") and can be converted at any time by Mr C Johnson, subject inter alia to his entire holding being less than 29.99 per cent of the voting rights in issue in the Company.
As per Company Act 2006, the Company is required to convene a general meeting in order to undertake a share reorganisation (the "Reorganisation"). A circular ("Circular") containing further details of the Reorganisation and notice of the general meeting to approve the resolutions is required to implement the Reorganisation, and was expected to be published and dispatched to Trafalgar's shareholders last 31 May 2024, but a postponement was announced on 30 May 2024 following a disclosure dated 29 May 2024 regarding a discussion on a potential reverse takeover and that its shares is being suspended from trading on AIM, thereby postponing the posting of the said Circular for the required general meeting.
New Loan Agreement with Ecap Esports Ltd.
On 3 June 2024, the Group announces that it has entered into a loan agreement with Ecap Esports Ltd ("Ecap Esports"). Ecap Esports has agreed to loan the Company the sum of £250,000, the proceeds of which will be ringfenced to cover costs associated with the recently announced proposed reverse takeover, should the transaction not occur. In the event the proposed transaction does not complete, any funds remaining following payment of all accrued transaction fees shall be returned to the lender. The loan bears no interest.
15. CONTROLLING PARTY
The company has no controlling party.
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 54.
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 2024, 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 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 Paul Treadaway as a Director; Paul is retiring by rotation and submitting himself for re-election.
Special business at the AGM
The following special business resolutions will be proposed at the AGM:
(a) Resolutions 5 and 6: to renew residual authorities (i) to allot securities under section 551 of the Companies Act 2006, in the amount of up to £250,000 (250,000,000 ordinary shares of 0.1p), representing approximately 38% of the existing issued ordinary share capital; and (ii) to disapply pre-emption rights on the allotment of securities for cash for the purposes of section 561 of the Companies Act 2006, in the amount of up to £250,000 (250,000,000 ordinary shares of 0.1p), representing approximately 38% of the existing issued ordinary share capital.
The authorities under these resolutions would subsist until the conclusion of the Annual General Meeting of the Company to be held in 2025 or, if earlier, 15 months after the date on which this resolution has been passed, provided that the Company may, before such expiry, make an offer, agreement or other arrangement which would or might require shares and/or rights to subscribe for or to convert any security into shares to be allotted after such expiry and the directors may allot such shares and/or rights to subscribe for or to convert any security into shares in pursuance of such offer, agreement or other arrangement as if the authority conferred hereby had not expired.
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 2024 Annual General Meeting of the Company will be held at the Company's offices at Chequers Barn, Bough Beech, Edenbridge, Kent TN8 7PD at 11am on 21 October 2024, for the following purposes:
RESOLUTIONS
Ordinary business
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 2024.
2. To re-appoint MHA 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 2025.
3. To authorise the Directors to determine the remuneration of the auditor.
4. To re-appoint Paul Treadaway as an executive director of the Company.
Special business
To consider and, if thought fit, to pass resolution 5 as an ordinary resolution and resolutions 6 as special resolution:
5. THAT, in addition to all existing authorities conferred on the directors to allot shares or to grant rights to subscribe for or to convert any securities into shares, the directors be authorised generally and unconditionally pursuant to Section 551 of the Companies Act 2006 as amended to exercise all the powers of the Company to allot shares and/or rights to subscribe for or to convert any security into shares, provided that the authority conferred by this resolution shall be limited to the allotment of equity securities and/or rights to subscribe or convert any security into shares of the Company up to an aggregate nominal value of £250,000 (250,000,000 ordinary shares of 0.1p), such authority (unless previously revoked, varied or renewed) to expire on the conclusion of the Annual General Meeting of the Company to be held in 2025 or, if earlier, 15 months after the date on which this resolution has been passed, provided that the Company may, before such expiry, make an offer, agreement or other arrangement which would or might require shares and/or rights to subscribe for or to convert any security into shares to be allotted after such expiry and the directors may allot such shares and/or rights to subscribe for or to convert any security into shares in pursuance of such offer, agreement or other arrangement as if the authority conferred hereby had not expired.
6. THAT, in addition to all existing authorities conferred on the directors to allot shares or to grant rights to subscribe for or to convert any securities into shares, the directors be and are hereby generally empowered to allot equity securities (within the meaning of Section 560 of the Companies Act 2006) pursuant to the general authority conferred by resolution 5 above for cash or by way of sale of treasury shares as if Section 561 of the Companies Act 2006 or any pre-emption provisions contained in the Company's articles of association did not apply to any such allotment, provided that the power conferred by this resolution shall be limited to:
(a) any allotment of equity securities where such securities have been offered (whether by way of rights issue, open offer or otherwise) to holders of equity securities in proportion (as nearly as may be practicable) to their then holdings of such securities, but subject to the directors having the right to make such exclusions or other arrangements in connection with such offer as they deem necessary or expedient to deal with fractional entitlements or legal or practical problems arising in, or pursuant to, the laws of any territory or the requirements of any regulatory body or stock exchange in any territory or otherwise howsoever;
(b) the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal value of £250,000 (250,000,000 ordinary shares of 0.1p), such authority (unless previously revoked, varied or renewed) to expire on the conclusion of the Annual General Meeting of the Company to be held in 2025 or, if earlier, 15 months after the date on which this resolution has been passed, provided that the Company may, before such expiry, make an offer, agreement or other arrangement which would or might require shares and/or rights to subscribe for or to convert any security into shares to be allotted after such expiry and the directors may allot such shares and/or rights to subscribe for or to convert any security into shares in pursuance of such offer, agreement or other arrangement as if the authority conferred hereby had not expired.
Dated: 24 September 2024
|
Registered Office: Chequers Barn Chequers Hill Bough Beech Edenbridge Kent TN8 7PD
|
By order of the Board Nicholas Narraway Secretary |
Notes:
1. Shareholders are strongly encouraged to participate in the meeting by returning forms of 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.
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 a.m. on 17 October 2024.
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 a.m. on 17 October 2024.
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 17 October 2024 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.
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