SECURED PROPERTY DEVELOPMENTS PLC - Final Results
Announcement provided by
Secured Property Developments plc · SPD10/06/2014 11:30
Secured Property Developments plc
Directors' report and financial statements
Registered number 2055395
For the Year ended 31 December 2013
Notice of meeting
NOTICE IS HEREBY GIVEN that the Twenty third Annual General Meeting of Secured
Property Developments plc will be held at The Small Mall Room , The Royal
Automobile Club , 89 Pall Mall , London , SW1Y 5HS on Friday 11th July 2014 at 10
a.m. for the following purposes:
1. To receive and adopt the financial statements for the year ended 31
December 2013 together with the reports of the Directors and the Auditor
thereon.
2. To re-elect R E France as a director (retires by rotation)
3. To re-elect G W Green as a director (retires by rotation)
4. To authorise, by special resolution in accordance with s95 of the Companies
Act 2006, the Board to purchase up to 5% of the Company's own shares in the
open market at a minimum price of 20p per share and a maximum price of 60p
per share: such powers to expire at the AGM to be held in 2015, or on 11th
July 2015 if earlier.
5. To appoint as Auditors KPMG LLP , and to authorise the Directors to agree
their remuneration, such powers to expire at the AGM held in 2015
6. To transact any other ordinary business of the Company.
By order of the board
I H Cobden Date: 6 June 2014
Secretary
Notes:
* A member entitled to attend and vote at this meeting is entitled to appoint
a proxy to attend and vote in his stead. A proxy need not be a member of
the Company. Proxy forms must be lodged at the Registered Office not later
than forty-eight hours before the time fixed for the meeting.
* We would draw the attention of members proposing to attend the meeting to
the RAC Club dress code, which requires men to wear a tailored jacket and
trousers, collared shirt and tie at all times and women to dress with
commensurate formality.
Company information
Directors R E France
G W Green
R A Shane
P R Stansfield
D Duffield
Secretary I H Cobden
Registered office Unit 6 Orchard Mews
42 Orchard Road
London
N6 5TR
Auditor KPMG Audit plc
8 Princes Parade
Liverpool
L3 1QH
Bankers The Royal Bank of Scotland Plc
Piccadilly Circus Branch
48 Haymarket
London
SW17 4SE
Solicitors Summers
22 Welbeck Street
London
W1G 8EF
Share Dealing The Company's Ordinary shares are
quoted on the ICAP Security and
Derivative Exchange (ISDX) and
persons can buy or sell shares
through their stockbroker.
Share Price The middle market price of the
Ordinary shares were quoted at 31
December 2013 on the ISDX (previously
the PLUS Market) at 12.5p pence per
share (2012: 12.5 pence per share)
Chairman's statement
As the UK economic recovery takes hold the prospects for the retail property
market are now better than they have been for a number of years. Growth in
consumer spending has led to increased sales and a boost to retailers. However
to what extent this will benefit landlords invested in the retail sector is
uncertain.
The Company's portfolio remains fully let and the Company continues to service
the interest on the loan facility/hedging instrument with Royal Bank of
Scotland Plc ("RBS") pending any renewal/financial restructuring.
Turnover has reduced to £131,003 compared with £175,118 in 2012 (which was
higher last year due to the recovery of a dilapidations claim). The figure is
similar to 2011 and previous years. The loss before and after taxation was £
78,011 compared with £67, 851 in 2012.
Despite potential opportunities to do so the Company's ability to grow turnover
has been severely prejudiced by the delay and uncertainty of the outcome of the
Financial Conduct Authority (FCA) review of interest rate hedging products.
However I am now very pleased to report a favourable outcome to the FCA review
and the receipt of a provisional determination basic redress offer from Royal
Bank of Scotland PLC (see details below).
RBS Loan Facility/Swap
Background
You will be aware that in June 2008 the Company entered into a 5 year loan
facility with RBS to repay its bank borrowings and provide additional debt
finance.
As a precondition of the loan RBS required the Company to hedge the interest
rate exposure through an interest rate hedging instrument (`Swap') switching
the variable rate of the loan to a fixed interest rate.
In 2012 the Company made a complaint to RBS about the mis-selling of the Swap.
This was followed by an announcement from the FCA in June 2012 that its
preliminary review into the sale of interest rate hedging products to small and
medium sized businesses had found serious failings by certain leading banks
including RBS. The FCA also announced that agreement had been reached with RBS
and the other major banks to participate in an independent past business review
(`FCA Review') and a redress exercise.
FCA Review outcome
On 19 May 2014 the Company's legal representatives received a letter from RBS
informing them of the outcome of the FCA review and making a provisional
determination basic redress offer, of which the principal terms are:-
* The provisional basic redress payment including interest will be
£457,136.59
* The existing swap contract will be cancelled at nil cost to the Company
* The Company will have the opportunity to submit a claim for the recovery of
any consequential loss and any additional tax liability which may arise as
a result of receiving the basic redress payment
After taking specialist legal advice the Company has accepted the redress offer
subject to any potential claims for consequential loss and additional tax
liability
The Company remains in negotiation with RBS to renew the loan facility. However
it is clear that due to the present value of the properties the loan will not
be renewed at the current level. As a consequence the Company is looking at
alternative sources of finance including the possibility of a rights or loan
note issue. I shall report to the shareholders on this as soon as the Board has
sufficient information to make a recommendation.
Chairman's statement (continued)
We continue to maintain a tight control of the Company's cash resources, which
we consider adequate to support current levels of expenditure, although we keep
them under constant review.
In current circumstances the Board is unable to recommend the payment of a
dividend for the year ended 31 December 2013 .
The annual general meeting will take place at the Royal Automobile Club , 89
Pall Mall , London , SW1Y 5HS on Friday 11 July 2014 at 10 a.m. , and the
directors look forward to meeting those shareholders who can attend.
David Duffield
Chairman
Strategic report
Principal Activities
The principal activity of Secured Property Developments plc is investment in
commercial property. The group comprises the holding company, a finance company
and a second property company.
Business Model
At Secured Property Developments , we focus on maximising the return from our
portfolio of properties whilst looking for new acquisitions where we can by
development increase value and thereby create value for shareholders.
We create value by :-
Acquiring Properties.
We seek to acquire properties and unlock value.
Optimise Income.
Optimising income by development and carrying out improvements and good estate
management.
Employ our knowledge of occupiers' needs to let to high quality tenants from a
wide range of businesses and to minimise the level of voids in our portfolio.
Collecting our rental income on due date.
Recycle Capital .
Identify properties for disposal where value has been optimised and dispose of
those which do not fit the Group's long-term plans.
Maintain robust and flexible financing.
Negotiate flexible financing and retain a healthy level of interest cover and
gearing
Business Review
The results for the year are set out on page 12 of these consolidated financial
statements.
The group's investment properties are let at rents commensurate with local
market conditions and on terms that include periodic upwards adjustment,
financed by bank borrowings. A review of the business is included in the
Chairman's Statement set out on page 3 and 4.
Principal Risks and Uncertainties
Going Concern
The directors have prepared the financial statements on a going concern basis
for the reasons set out in note 1 to the financial statements.
Derivatives and other financial instruments
The group's financial instruments comprise borrowings, some cash and liquid
resources, convertible unsecured loan stock and various items, such as trade
debtors and trade creditors, that arise directly from its operations. The main
purpose of these financial instruments is to raise finance for the group's
operations.
The main risks arising from the group's financial instruments are interest rate
risk and liquidity risk. The Board reviews and agrees policies for managing
each of these risks and they are summarised below.
Strategic report (continued)
Interest rate risk
The group finances its operations through bank borrowings. Currently the group
borrows at a rate of interest fixed by a swap agreement on all its borrowings.
The group's policy is to borrow at the lowest rates for periods that do not
carry excessive time premiums.
Liquidity risk
As regards liquidity, the group's policy has throughout the year been to ensure
that the group is able at all times to meet its financial commitments as and
when they fall due. The maturity date of the loan to the group are set out in
note 14 of these financial statements. The current status of the negotiations
in respect of the Group's financing facilities is set out in the Chairman'
Statement and note 1 to the financial statements.
Future Developments
With the impending settlement of the "swap" situation, the Directors will now
be able to actively consider opportunities that may arise including alternative
sources of financing.
Signed on behalf of the Board
R A Shane Dated: 6 June 2014
Director
Directors' report
Proposed dividend and transfer to reserves
The directors cannot recommend the payment of a dividend.
The loss for the year retained in the group is £78,011 (2012:£67,851).
Directors and directors' interests
The directors who held office during the year were as follows:
D Duffield
R E France
G W Green
R A Shane
P R Stansfield
The directors who held office at the end of the financial year had the
following interests in the shares and loan stock of the group companies as
recorded in the register of directors' share and debenture interests.
Director Company Class Interest Interest
at at
at 31 at 1
December January
2013 2013
Number Number
D Duffield SPD plc* Ordinary shares - -
R E France SPD plc* Ordinary shares 88,888 88,888
G W Green SPD plc* Ordinary shares 90,000 90,000
Deferred shares 30,000 30,000
R A Shane SPD plc* Ordinary shares 574,456 574,456
Deferred shares 154,666 154,666
P R Stansfield SPD plc* Ordinary shares 6,250 6,250
* SPD plc is used above as an abbreviation for Secured Property Developments plc .
According to the register of directors' interests, no rights to subscribe for
shares in or debentures of the company or any other group company was granted
to any of the directors or their immediate families, or exercised by them,
during the financial year.
Substantial shareholding of ordinary shares of 20p each as at 31 December 2013
R E France 4.51%
G W Green 4.57%
R A Shane 29.15%
Disclosure of information to the auditor
The directors who held office at the date of approval of this directors' report
confirm that, so far as they are each aware, there is no relevant audit
information of which the Company's auditor is unaware; and each director has
taken all the steps that he ought to have taken as a director to make himself
aware of any relevant audit information and to establish that the Company's
auditor is aware of that information.
Directors' report (continued)
Auditor
KPMG Audit Plc have notified the Company that they are not seeking
reappointment due to the wind up of KPMG Audit Plc and the transfer of audit
services to KPMG LLP . It is therefore proposed that KPMG LLP be appointed
auditor of the Group to hold office from the conclusion of the Annual General
Meeting to be held on 11 July 2014 until the conclusion of the next General
Meeting at which accounts laid before the Group.
By order of the board
I H Cobden Unit 6 Orchard Mews
Secretary 42 Orchard Road
Date : 6 June 2014 London
Registered number: 2055395 N6 5TR
Statement of directors' responsibilities in respect of the Strategic Report,
the Directors' Report and the financial statements
The directors are responsible for preparing the Strategic Report and the
Directors' Report and the group and parent company financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare group and parent company
financial statements for each financial year. Under that law they have elected
to prepare the group and parent company financial statements in accordance with
UK Accounting Standards and applicable law (UK Generally Accepted Accounting
Practice).
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the group and parent company and of their profit or loss for that
period. In preparing each of the group and parent company financial statements,
the directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgments and estimates that are reasonable and prudent;
* state whether applicable UK Accounting Standards have been followed,
subject to any material departures disclosed and explained in the financial
statements;
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the group and the parent company will
continue in business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the parent company's transactions and disclose
with reasonable accuracy at any time the financial position of the parent
company and enable them to ensure that its financial statements comply with the
Companies Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the group and to prevent
and detect fraud and other irregularities.
ABCD
Independent auditor's report to the members of Secured Property Developments Plc
We have audited the financial statements of Secured Property Developments plc
for the year ended 31 December 2013 set out on pages 12 to 27. The financial
reporting framework that has been applied in their preparation is applicable
law and UK Accounting Standards (UK Generally Accepted Accounting Practice).
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we are
required to state to them in an auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members, as a body, for our
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities Statement set out on
page 9, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements
in accordance with applicable law and International Standards on Auditing (UK
and Ireland ). Those standards require us to comply with the Auditing Practices
Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on
the Financial Reporting Council's web-site at www.frc.org.uk/
auditscopeukprivate.
Opinion on financial statements
In our opinion the financial statements:
* give a true and fair view of the state of the group's and the parent
company's affairs as at 31 December 2013 and of the group's loss for the
year then ended;
* have been properly prepared in accordance with UK Generally Accepted
Accounting Practice; and
* have been prepared in accordance with the requirements of the Companies Act
2006.
Emphasis of matter - going concern
In forming our opinion on the financial statements, which is not modified, we
have considered the adequacy of the disclosure made in note 1 to the financial
statements concerning the Group's and the Parent Company's ability to continue
as a going concern. The Group and Company are dependent on the successful
refinancing of a bank debt of £1.5m which expired on 3 June 2013 . The lender
has indicated that it may not refinance the entire principal amount of the
loan. The Company may need to seek further capital investment from existing
investors or alternative financing to cover the shortfall between any proposed
facility and the existing debt. These conditions, along with the other matters
explained in note 1 to the financial statements, indicate the existence of
material uncertainties which may cast significant doubt on the Group's and the
Parent Company's ability to continue as a going concern. The financial
statements do not include the adjustments that would result if the Group and
the Parent Company were unable to continue as a going concern.
Independent auditor's report to the members of Secured Property Developments
plc (continued)
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial
year for which the financial statements are prepared is consistent with the
financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
* adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
* the parent company financial statements are not in agreement with the
accounting records and returns; or
* certain disclosures of directors' remuneration specified by law are not
made; or
* we have not received all the information and explanations we require for
our audit.
Hywel Jones (Senior Statutory Auditor)
For and on behalf of KPMG Audit Plc , Statutory Auditor
Chartered Accountants
8 Princes Parade
Liverpool
L3 1QH
9 June 2014
Consolidated profit and loss account
for the year ended 31 December 2013
Note 2013 2012
£ £
Turnover 2 131,003 175,118
Cost of sales (3,439) (10,226)
Gross profit 127,564 164,892
Administrative expenses (104,476) (132,228)
Operating profit 23,088 32,664
Other interest receivable 6 2,701 3,229
and similar income
Interest payable and 7 (103,800) (103,744)
similar charges
Loss on ordinary 2-7 (78,011) (67,851)
activities before taxation
Taxation 8 - -
Loss for the financial 18 (78,011) (67,851)
year
Loss per share 10 (3.9)p (3.4)p
All income is from continuing operations.
The notes on pages 18 to 27 form part of these financial statements.
Consolidated balance sheet
at 31 December 2013
Note 2013 2013 2012 2012
£ £ £ £
Fixed assets
Tangible assets 11 1,550,000 1,550,000
Current assets
Debtors 13 69,807 88,185
Cash at bank and in hand 379,697 416,269
449,504 504,454
Creditors: amounts 14 (1,624,849) (1,601,788)
falling due within one
year
Net current (1,175,345) (1,097,334)
(liabilities)/assets
Total assets less 374,655 452,666
current liabilities
Creditors: amounts 15 - -
falling due after more
than one year
Net assets 374,655 452,666
Capital and reserves
Called up share capital 17 418,861 418,861
Share premium account 18 3,473 3,473
Revaluation reserve 18 101,861 101,861
Profit and loss account 18 (149,540) (71,529)
Shareholders' funds 374,655 452,666
The notes on pages 18 to 27 form part of these financial statements.
These financial statements were approved by the board of directors on 6 June
2014 and were signed on its behalf by:
D Duffield R A Shane
Director Director
Registered number: 2055395
Company balance sheet
at 31 December 2013
Note 2013 2013 2012 2012
£ £ £ £
Fixed assets
Tangible assets 11 500,000 500,000
Investments 12 947,263 947,263
1,447,263 1,447,263
Current assets
Debtors 13 125,889 122,598
Cash at bank and in hand 365,571 402,143
491,460 524,741
Creditors: amounts 14 (1,607,651) (1,567,124)
falling due within one
year
Net current (1,116,191) (1,042,383)
(liabilities)/assets
Total assets less 331,072 404,880
current liabilities
Creditors: amounts 15 - -
falling due after more
than one year
Net assets 331,072 404,880
Capital and reserves
Called up share capital 17 418,861 418,861
Share premium account 18 3,473 3,473
Revaluation reserve 18 88,763 88,763
Profit and loss account 18 (180,025) (106,217)
Shareholders' funds 331,072 404,880
The notes on pages 18 to 27 form part of these financial statements.
These financial statements were approved by the board of directors on 6 June
2014 and were signed on its behalf by:
D Duffield R A Shane
Director Director
Registered number: 2055395
Consolidated cash flow statement
for the year ended 31 December 2013
Note 2013 2012
£ £
Cash inflow from operating 64,527 33,776
activities
Returns on investments and 20 (101,099) (100,515)
servicing of finance
Taxation - -
Dividends - -
Cash inflow before (36,572) (66,739)
financing
Financing - -
Decrease in cash in the 21 (36,572) (66,739)
year
Reconciliation of operating profit to operating cash flows
for the year ended 31 December 2013
2013 2012
£ £
Operating profit 23,088 32,664
Decrease / (increase) in 18,378 (9,443)
debtors
Increase in creditors 23,061 10,555
Net cash inflow from 64,527 33,776
operating activities
Reconciliation of net cash flow to movement in net debt
for the year ended 31 December 2013
Note 2013 2012
£ £
Decrease in cash in the year 21 (36,572) (66,739)
Movement in net debt in the (36,572) (66,739)
year
Net debt at beginning of the 21 (1,083,731) (1,016,992)
year
Net debt at end of the year 21 (1,120,303) (1,083,731)
Consolidated Statement of Total Recognised Gains and Losses
for the year ended 31 December 2013
2013 2012
£ £
Loss for the financial year (78,011) (67,851)
Unrealised deficit on revaluation of investment - (560,000)
properties
Total recognised gains and losses relating to the (78,011) (627,851)
financial year
Reconciliation of movements in shareholders' funds
for the year ended 31 December 2013
Group Company
2013 2012 2013 2012
£ £ £ £
Loss for the financial year (78,011) (67,851) (73,808) (97,246)
Dividends on shares - - - -
classified in shareholders'
funds
Retained loss (78,011) (67,851) (73,808) (97,246)
Revaluation of investment - (560,000) - (110,000)
properties
Net reduction in (78,011) (627,851) (73,808) (207,246)
shareholders' funds
Opening shareholders' funds 452,666 1,080,517 404,880 612,126
Closing shareholders' funds 374,655 452,666 331,072 404,880
Notes to the financial statements
(forming part of the financial statements)
1 Accounting policies
The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the financial
statements, except as noted below.
Basis of preparation
The financial statements have been prepared under the historical cost
accounting rules as modified by the revaluation of investment properties and in
accordance with applicable accounting standards. The financial statements are
in compliance with the Companies Act 2006 except that, as noted below,
investment properties are not depreciated.
Basis of consolidation
The group financial statements consolidate the financial statements of Secured
Property Developments plc and its subsidiary undertakings. These financial
statements are made up to 31 December 2013 .
Unless otherwise stated, the acquisition method of accounting has been adopted.
Under this method, the results of subsidiary and associated undertakings
acquired or disposed of in the year are included in the consolidated profit and
loss account from the date of acquisition or up to the date of disposal.
In accordance with s408 of the Companies Act 2006 Secured Property Developments
plc is exempt from the requirement to present its own profit and loss account.
The result for the financial year dealt with in the financial statements of
Secured Property Developments plc is disclosed in note 18 to these financial
statements.
Going concern
These financial statements have been prepared on the going concern basis of
accounting notwithstanding that the Group and Parent Company had net current
liabilities of £1,175,345 and £1,116,191 as at 31 December 2013 respectively,
and the Group recorded a loss of £78,011 and had a cash outflow of £36,572 for
the year then ended.
The Company has a bank loan of £1,500,000 with the Royal Bank of Scotland
("RBS"), which had an original repayment date of 3 June 2013 . The RBS banking
facility includes cross guarantees and security over all the assets of the
Group. The facility also includes an out of the money pay-variable
receive-fixed interest rate swap, which was due to mature in 2018. The swap
included a mandatory break clause exercisable on expiry of the loan (see
below).
In 2012 the Company lodged a formal complaint to RBS in respect of the interest
rate swap. The complaint alleged that RBS had mis-sold this instrument to the
Company, and as such the Company should not be liable to pay any breakage costs
to RBS on termination of the instrument. Around the same time the Financial
Conduct Authority (formerly Financial Services Authority ) announced that an
independent past business review and a redress exercise of the sale of interest
rate hedging products to small and medium sized businesses (`the FCA Review')
has been agreed with major banks. In August 2012 , the Company received a letter
from RBS confirming that RBS would be taking part in the FCA Review. As set out
in note 23, subsequent to the year end, the Company has accepted an offer from
RBS which includes the termination of the interest rate swap at £nil cost to
the Company and a compensation payment of £457,136.
RBS has indicated that the loan would not become repayable until after the FCA
review is completed. As the FCA review is reaching conclusion the loan will
become repayable and so the Directors are progressing with the refinancing
negotiations with RBS and/or alternative sources of refinance.
Notes (continued)
1 Accounting policies (continued)
Presently, RBS has indicated that it may not refinance the entire principal
amount of the loan. The Company may need to seek further capital investment
from existing investors or alternative financing to cover any substantial
shortfall between any proposed facility and the existing debt. The directors
are working with the bank to identify all viable options, as any shortfall
financing will be dependent on the specifics of the proposed refinancing
facility.
The directors acknowledge that there can be no certainty that the replacement
facility will be agreed on satisfactory terms and that sufficient funding
necessary to cover the shortfall will be secured.
The directors have prepared cash flow forecasts for a period of 12 months
following the approval of these financial statements. Taking into account the
amounts currently held in cash reserve funds and the future receipt of the
compensation payment of £457,136 from the FCA review, the directors consider
that the Company will be able to meet its financial obligations (excluding the
substantial repayment of the bank loan) for at least the next 12 months, based
on these cash flow forecasts.
The directors have concluded that the conditions set out above indicate the
existence of material uncertainties which may cast significant doubt on the
Group's and Company's ability to continue as a going concern and that they may,
therefore, be unable to realise their assets and discharge their liabilities in
the normal course of business. Nevertheless, after making enquiries and
considering the uncertainties described above, the directors have a reasonable
expectation that the Group and Company will have adequate resources to continue
in operational existence for the foreseeable future. For these reasons, they
continue to adopt the going concern basis in preparing the annual financial
statements. Accordingly, the financial statements do not include the
adjustments that would result if the Group and Company were unable to continue
as a going concern.
Investment properties
In accordance with SSAP 19, depreciation is not charged on investment
properties held by the group. This is a departure from the requirements of the
Companies Act 2006 which requires all properties to be depreciated. Such
properties are not held for consumption but for investment and the directors
consider that to depreciate them would not give a true and fair view.
Investment properties are revalued annually by the directors and periodic
external valuations are completed when considered necessary, usually over a
five year period. The aggregate surplus or deficit is transferred to a
revaluation reserve. The directors consider that this policy results in the
accounts giving a true and fair view.
Taxation
The charge for taxation is based on the profit for the year and takes into
account taxation deferred because of timing differences between the treatment
of certain items for taxation and accounting purposes. Deferred tax is
recognised without discounting, in respect of all timing differences between
the treatment of certain items for taxation and accounting purposes which have
arisen but not reversed by the balance sheet date, except as otherwise required
by Financial Reporting Standard 19.
Classification of financial instruments issued by the Group
Following the adoption of FRS 25, financial instruments issued by the Group are
treated as equity (i.e. forming part of shareholders' funds) only to the extent
that they meet the following two conditions:
* they include no contractual obligations upon the Company (or Group as the
case may be) to deliver cash or other financial assets or to exchange
financial assets or financial liabilities with another party under
conditions that are potentially unfavourable to the Company (or Group); and
* where the instrument will or may be settled in the Company's own equity
instruments, it is either a non-derivative that includes no obligation to
deliver a variable number of the Company's own equity instruments or is a
derivative that will be settled by the Company's exchanging a fixed amount
of cash or other financial assets for a fixed number of its own equity
instruments.
Notes (continued)
1 Accounting policies (continued)
To the extent that this definition is not met, the proceeds of issue are
classified as a financial liability. Where the instrument so classified takes
the legal form of the Company's own shares, the amounts presented in these
financial statements for called up share capital and share premium account
exclude amounts in relation to those shares.
Finance payments associated with financial liabilities are dealt with as part
of interest payable and similar charges. Finance payments associated with
financial instruments that are classified as part of shareholders' funds, are
dealt with as appropriations in the reconciliation of movements in
shareholders' funds.
Cash and liquid resources
Cash, for the purpose of the cash flow statement, comprises cash in hand and
deposits repayable on demand, less overdrafts payable on demand.
Turnover
Turnover represents the amounts (excluding value added tax) derived from rental
income from investment properties.
2 Turnover
Turnover and profit on ordinary activities before taxation are attributable to
the principal activities of the group.
Turnover was derived from the activities of the group as follows:
2013 2012
£ £
Rental income from investment properties 131,003 175,118
131,003 175,118
All turnover and pre-tax profit on ordinary activities before taxation was
earned in the UK .
3 Profit on ordinary activities before taxation
2013 2012
£ £
Loss on ordinary activities before taxation is
stated after charging:
Auditor's remuneration
Audit services 11,000 11,000
Other services - compliance tax work 2,000 -
The audit fee of the group of £11,000 includes £5,500 (2012: £5,500) in
relation to the company.
4 Remuneration of directors
The chairman received fees of £16,482 (2012: £22,367) and one other director
received fees of £32,000 (2012: £17,528) which was paid to his employer in
respect of his services (see note 22).
Notes (continued)
5 Staff numbers and costs
There are no other staff costs other than those disclosed in note 4. The
average number of persons employed by the Group (including directors) during
the year, analysed by category, was as follows:
Number of employees
2013 2012
Directors 5 5
6 Other interest receivable and similar income
2013 2012
£ £
Bank interest receivable 2,701 3,229
7 Interest payable and similar charges
2013 2012
£ £
On bank loans 103,800 103,744
8 Taxation
Analysis of charge in year
2013 2012
£ £
UK corporation tax
Current tax on income for the year - -
Total current tax - -
Tax on profit on ordinary activities - -
Factors affecting the tax charge for the current period
The current tax charge for the year is higher (2012: higher) than the standard
rate of corporation tax in the UK . The differences are explained below.
2013 2012
£ £
Current tax reconciliation
Loss on ordinary activities before tax (78,011) (67,851)
Current tax at 23.25% (2012: 24.5%) (18,138) (16,623)
Effects of:
Movement in tax losses 18,138 16,623
Total current tax charge (see above) - -
Notes (continued)
9 Deferred tax
An analysis of the unrecognised deferred taxation asset is set out below.
Group Company
2013 2012 2013 2012
£ £ £ £
Tax Losses (33,305) (73,442) (32,465) (72,991)
The deferred tax asset has not been recognised on the basis that the timing
differences and tax losses may not be recovered in the foreseeable future. Tax
losses for which a deferred tax asset has not been recognised as at 31 December
2013 are £nil.
10 Earnings per share
The calculation of the earnings per share figure is based on the following:
2013 2012
Loss after tax 78,011 67,851
Weighted average number of ordinary shares 1,970,688 1,970,688
Loss per share (3.9)p (3.4)p
Notes (continued)
11 Tangible fixed assets
Group Investment
properties
£
Cost or valuation
At beginning of year 1,550,000
Revaluation -
Net book value
At 31 December 2013 1,550,000
At 31 December 2012 1,550,000
2013 2012
£ £
Historical cost of revalued assets 1,448,139 1,448,139
Historical cost net book value of revalued assets 1,448,139 1,448,139
Company Investment
Properties
£
Cost or valuation
At beginning and end of year 500,000
Revaluation -
Net book value
At 31 December 2013 500,000
At 31 December 2012 500,000
2013 2012
£ £
Historical cost of revalued assets 411,237 411,237
Historical cost net book value of revalued assets 411,237 411,237
Group and company
The investment properties were valued in July 2013 by Jones Lang LaSalle. The
external valuation was completed in accordance with the current edition of the
Practice Statements and Guidance Notes of the Appraisal and Valuation Standards
prepared by the Royal Institution of Chartered Surveyors . The Directors believe
this valuation still to be appropriate as at 31 December 2013 .
Notes (continued)
12 Investments
Company
Loans to Shares in
subsidiaries Subsidiaries Total
£ £ £
Cost
At beginning of year 947,259 4 947,263
Net book value
At 31 December 2013 947,259 4 947,263
At 31 December 2012 947,259 4 947,263
Shares in group undertakings represent the company's investment in SPD Discount
Limited and Secured Property Developments (Scarborough) Limited . At 31 December
2013 and 2012 the company held 100% of the ordinary share capital of each of
the subsidiary undertakings. Both subsidiary undertakings are registered in
England and Wales . SPD Discount Limited was trading as a finance company but
has not traded in the current or prior year, and the principal activity of
Secured Property Developments (Scarborough) Limited is property investment.
13 Debtors
Group Company
2013 2012 2013 2012
£ £ £ £
Amounts owed - - 111,569 106,297
by
subsidiary
undertakings
Prepayments 69,807 88,185 14,320 16,301
and accrued
income
69,807 88,185 125,889 122,598
All amounts fall due within one year.
14 Creditors: amounts falling due within one year
Group Company
2013 2012 2013 2012
£ £ £ £
Bank loans 1,500,000 1,500,000 1,500,000 1,500,000
and
overdrafts
Taxes and 8,594 1,875 2,634 1,924
social
security
Amounts due - - 13,259 -
to group
undertakings
Other 25,242 29,009 25,242 31,557
creditors
Accruals and 91,013 70,904 66,516 33,643
deferred
income
1,624,849 1,601,788 1,607,651 1,567,124
The bank loan is secured by a fixed charge on the properties of Secured
Property Developments (Scarborough) Limited and of the Company. It was
due for repayment on 3 June 2013 (see note 1). As at 31 December 2013
there was an open interest rate swap (see note 23). The fair value of
the interest rate swap has not been recognised in the financial
statements as the group has not adopted FRS 26.
Notes (continued)
15 Creditors: amounts falling due after more than one year
Group Company
2013 2012 2013 2012
£ £ £ £
Bank loan - - - -
Analysis of bank loan
Group Company
2013 2012 2013 2012
£ £ £ £
Amounts falling due:
Less than one year 1,500,000 1,500,000 1,500,000 1,500,000
Between one and two years - -
16 Derivatives and other financial instruments
The group's policies with regard to financial instruments are set in note 1.
Short term debtors and creditors have been omitted from all disclosures.
Financial assets
The group has £379,697 (2012: £416,269) held in cash as financial assets as
well as short term debtors.
Financial liabilities
The interest rate profile of the group's financial liabilities as at 31
December 2013 was:
Total Fixed rate Fixed rate Weighted Financial
financial weighted average liabilities
liabilities average period for on which no
interest which rate interest is
rate is fixed charged
£ £ % Years £
31 December 2013 1,500,000 1,500,000 6.92 - -
Maturity of financial liabilities
The maturity profile at 31 December 2013 of the group's financial liabilities,
other than short term creditors such as trade creditors and accruals is set out
in note 15.
Fair values of the group's financial asset and liabilities
There is no material difference between the fair value and the book value of
the group's financial assets and liabilities which have been recognised. The
interest rate swap which is due to expire in 2018 has not been recognised as
the Group does not apply FRS 26 (see note 23).
Notes (continued)
17 Called up share capital
2013 2012
£ £
Allotted, called up and fully paid
1,970,688 ordinary shares of 20p each 394,138 394,138
1,236,154 deferred shares of 2p each 24,723 24,723
418,861 418,861
The respective rights of the shareholders are as follows:
Ordinary shares
The ordinary shares have the right to all available capital and distributable
profits subject only to any right available to the deferred shares on winding
up.
Deferred shares
The deferred shares have no rights to vote, receive notices, or attend general
meetings, nor to any income. On the return of capital on a winding-up or
otherwise the deferred shares have no entitlement until the sum of £100,000 per
ordinary share shall have been distributed.
18 Reserves
Group Share premium Revaluation Profit and loss
account Reserve Account
£ £ £
At beginning of year 3,473 101,861 (71,529)
Loss for the financial - - (78,011)
year
Revaluation of investment - - -
properties
At end of year 3,473 101,861 (149,540)
Company
Share premium Revaluation Profit and loss
account Reserve Account
£ £ £
At beginning of year 3,473 88,763 (106,217)
Loss for the financial year - - (73,808)
Revaluation of investment - - -
properties
At end of year 3,473 88,763 (180,025)
Notes (continued)
19 Commitments
Neither the group nor the company had any contractual commitments at the year
end (2012: £nil).
20 Analysis of items netted in the cash flow statement
2013 2012
£ £
Return on investments and servicing of finance
Interest paid (103,800) (103,744)
Interest received 2,701 3,229
Net cash outflow from returns on investments and (101,099) (100,515)
servicing of finance
21 Analysis of changes in net debt
31 December 31 December
2012 Cash flow 2013
£ £ £
Cash in hand and at bank 416,269 (36,572) 379,697
Debt due (1,500,000) - (1,500,000)
(1,083,731) (36,572) (1,120,303)
22 Related party transactions
St James's Property Services Limited of which R A Shane is a director and
shareholder has received £32,000 (2012: £17,258) from the holding company in
respect of management services, including directors' fees of £32,000 (2012: £
17,258). The amount outstanding at the year end is £32,000 (2012: £2,000).
Guildhall Brokers and Consultants Limited of which R A Shane is a director and
shareholder has received £3,439 (2012: £6,866) for insurance premiums. The
amount outstanding at the year end is £ nil (2012: nil). D. Duffield has
received fees amounting to £16,482 (2012:£ 22,367) from the holding company in
respect of professional fees. The amount outstanding at the year end is £16,482
(2012: £22,367)
23 Post Balance Sheet events
Subsequent to the year end, the Directors have been offered and have accepted a
settlement in respect of the "swap" agreement referred to in note 1. The terms
of the agreement are that the company will receive £457,136 by way of
compensation, the existing swap contract will be terminated at nil cost to the
company and that the company is enabled to claim for consequential loss
(including further tax liabilities) which has yet to be quantified. This is a
non-adjusting post balance sheet event.
Form of proxy for use at the annual general meeting on 11 July 2014
I/We
_______________________________________________________________________________
(Please insert full name in BLOCK CAPITALS)
of
_________________________________________________________________________________
(Please insert address in BLOCK CAPITALS)
being (a) member(s) of the above named Company HEREBY APPOINT the Chairman of
the meeting (see note 6)
___________________________________________________________________________________
to act as my/our proxy at the Annual General Meeting of the Company to be held
on 11 July 2014 and at any adjournment thereof, and to vote on my/our behalf as
indicated below:
Resolution No. For Against
1 To adopt the directors' report and financial
statements for the year ended 31 December 2013
2 To re-elect R E France as a director
3 To re-elect G E Green as a director
4 To authorise the Board to purchase up to 5% of the
company's own shares in the open market at a minimum
price of 20p per share and a maximum price of 60p per
share, such powers to expire at the AGM to be held in
2014 or on 11th July 2015 , if earlier
5 KPMG Audit Plc have notified the company that they
are not seeking reappointment. It is proposed that KPMG
LLP be and are hereby appointed auditors of the company
and will hold office from the conclusion of this
meeting until the conclusion of the next general
meeting at which accounts are laid before the company,
and that their remuneration be fixed by the Directors.
Please indicate with an "X" in the space provided how you wish your votes to be
cast on a poll. Should this form be returned duly completed and signed, but
without a specific direction, the proxy will vote or abstain at his discretion.
Dated ______________________________ 2014 Signature __________________________________
Notes
7. A proxy need not be a Member of the Company.
8. In the case of joint holders the vote of the senior who tenders a vote,
whether in person or by proxy, will be accepted to the exclusion of the
votes of the other joint holders. For this purpose seniority is determined
by the order in which the names stand in the Register of Members.
9. In the case of a corporation this proxy must be given under its Common Seal
or be signed on its behalf by an officer, attorney or other person duly
authorised.
10. To be valid this proxy must be deposited at the Company's Registered Office
not later than 48 hours before the time appointed for holding the Meeting
together, if appropriate, with the power of attorney or other authority
under which is a signed or a potentially certified copy of such power or
authority.
11. Any alterations made on this form should be initialled.
12. If it is desired to appoint as a proxy any person other than the Chairman
of the Meeting, his/her name and address should be inserted in the relevant
place, reference to the Chairman deleted and the alteration initialled.
Second fold along this line
Secured Property Developments plc .
Unit 6 Orchard Mews
42 Orchard Road
London
N6 5TR
First fold along
this line
Finally fold along this line and tuck in
Affix stamp here
View more ...