TIDMNTA
RNS Number : 3010L
Northacre PLC
29 July 2011
NORTHACRE PLC (the "Company" or "Group")
Results for the year ended 28(th) February 2011
29(th) July 2011
Northacre PLC today announces its results for the year ended
28(th) February 2011.
Northacre is the brand behind many of London's landmark
addresses. Over the last twenty years Northacre has revived
significant areas of Westminster, Kensington and Chelsea,
developing in the most sought after locations in the capital for
both local and international purchasers.
Northacre's reputation for creating prestigious, award-winning
residences from existing properties is unrivalled.
Chairman's Statement
This past year has seen the Group focus on the delivery of The
Lancasters Development, in our joint venture with Minerva PLC. The
Group has cemented its profile as one of London's most experienced
prime residential developers through this landmark scheme, which
has seen the revival of a prominent building in a hitherto
undervalued area of central London. The Lancasters has transformed
the north side of Hyde Park and will have a lasting impact on the
area. The development, which nears completion this summer, is
testament to our Group's continuing focus on quality, steadfast
development management, and individuality in the conceptualisation
and marketing of each development.
Following the completion of the first phases of The Lancasters
in early 2011, we look forward to full completion in late summer
2011. At the same time we are also working to bring forward The
Vicarage, a 42,000 Sq ft prime residential development in
Kensington, which will see us deliver, as development managers, 14
duplex and lateral apartments. This development, led by Northacre,
is due to commence in 2012.
We are engaged in discussions on a number of central London
opportunities in which Northacre would act either as a full joint
venture partner or take the role of development manager.
There continues to be a relative shortage in the supply of
development opportunities and more entrants into the market chasing
fewer sites. That said, equity investors are keen to finance prime
residential developments undertaken by experienced developers such
as Northacre, given the history of strong returns in the sector and
the undoubted continuation of London's appeal as one of the top
locations for international buyers looking for a principal or
second home.
We have reviewed our cost base and made some efficiencies to
suit the changing market conditions. I am gratified by the support
and focus of the Board, management and staff within the Group and I
am proud to work with one of the top teams in the sector.
Outlook
Our Group's core skills are in the design, development
management, branding and marketing of prime residential
developments in central London. As such, we are in an unrivalled
position to offer our skills in an advisory capacity with limited
equity participation. We look to the future with renewed confidence
and focus and are well placed to capitalise on the product success
and financial returns as we complete The Lancasters
Development.
Klas Nilsson
Chairman and Chief Executive
Copies of the Annual Report and Accounts will be available at
the office of Northacre PLC at 8 Albion Riverside, 8 Hester Road,
London SW11 4AX and are available on our website www.northacre.com
and are being posted to shareholders.
Enquiries:
Northacre PLC
Klas Nilsson (Chairman and Chief Executive)
Ken MacRae (Finance Director)
020 7349 8000
Hudson Sandler Limited
Michael Sandler
020 7796 4133
Peel Hunt LLP (Nominated Adviser and Broker)
Capel Irwin
Harry Florry
020 7418 8900
Financial Review
In the year under review, The Lancasters has been the main
feature for each of the divisions within the Group. The Intarya
designed show apartment (5,385 Sq ft), which opened in summer 2010,
helped to attract an excellent level of sales and since the year
end has sold for the full asking price. Since the end of February
2011 there has been a good volume of sales such that the
Development is now c.70% sold.
The Group's funding has historically consisted of a mix of
project financing for individual developments and working capital
facilities for the Group's operational needs. These have been
augmented in the past year with Directors loans, underwritten by Mr
Klas Nilsson and Mr Mohamed AlRafi, and a related party loan from
Mr Abdulsalam AlRafi. The aggregate of all Director and related
party loans at the year end was GBP2,877,163 (including interest)
of which GBP1,200,000 was undrawn at the year end (see the detailed
notes on these loans in the financial statements attached). Since
the year end, additional facilities of GBP500,000 from Mr Mohamed
AlRafi and GBP2,000,000 from Mr Abdulsalam AlRafi have been
secured. The Group has called on these loans to cover a period of
lower recurring fee income and settlement of one of two loans from
the Northacre PLC Directors Retirement and Death Benefit Scheme.
These loans are due to be fully repaid out of the proceeds of The
Lancasters profit share.
Our overheads are being reviewed and as a consequence we have
made some headcount reduction and other cost savings. The review of
costs is an on-going process. We have renewed our efforts to secure
more fee income in the Intarya interior design practice and
Northacre Development Management Services with a view to delivering
a higher sustainable fee income in future years.
Review of Results
Headlines
Net assets per share is 92.90 pence (2010: 38.32 pence). Net
comprehensive profit for the year is GBP14,584,963 (2010: Loss of
GBP1,635,169). The loss per share attributable to equity holders is
16.17 pence (2010: 14.72 pence).
Consolidated Statement of Comprehensive Income
Turnover for the year increased by 10% to GBP5,664,484 (2010:
GBP5,151,225). The majority share continues to be fee income rather
than development profit. The Group's interior design subsidiary,
Intarya, reported revenue growth of 11% to GBP4,249,606 (2010:
GBP3,815,427). The Development Management subsidiary saw an
increase in revenue of 24% to GBP969,652 (2010: GBP780,710) whereas
the architectural subsidiary, Nilsson Architects, has experienced
the impact of the economic downturn with the absence of new
architectural projects, reporting a decrease in fee income of 20%
to GBP445,226 (2010: GBP555,088).
Administrative expenses remained at the level of GBP5.2m (2010:
GBP5.2m) as a result of measures undertaken by the Board at the
beginning of last year. Measures taken after the year end have
significantly reduced these expenses on an annual basis.
In accordance with International Accounting Standards we have
made a fair valuation of our investment at The Lancasters with
reference to secured sales as at 28(th) February 2011. This has
also been reflected in the results for the year.
Consolidated Statement of Financial Position
In accordance with International Accounting Standards, the
investments in joint ventures (classified as available for sale
financial assets in the Consolidated Statement of Financial
Position) represent, where appropriate, the cash equity invested in
each of our secured development schemes and any fair value
adjustments. As mentioned above, we have calculated the fair value
of our investment at The Lancasters and including this fair value
adjustment the available for sale financial assets amounted to
GBP21.2m (2010: GBP3.5m).
Financing
The Group's project funding generally consists of equity, cash
and bank borrowings with the aim of maximising its return from the
equity invested into the various development opportunities which
satisfy the investment criteria.
We are actively seeking development opportunities and we are
committed to increasing the Northacre portfolio within prime
central London. Increasing fee income from new developments is a
priority for the Board.
Ken MacRae
Finance Director
Consolidated Statement of Comprehensive Income
For the year ended 28(th) February 2011
Note 2011 2010
Restated
Group GBP GBP
Group Revenue 3 5,664,484 5,151,225
Cost of sales (3,268,795) (2,483,201)
------------ ------------
Gross Profit 2,395,689 2,668,024
Administrative expenses (5,199,700) (5,161,630)
Other operating income 4 - 3,117
------------ ------------
Group Loss from Operations (2,804,011) (2,490,489)
Investment revenue 5 66,192 (26,517)
Other losses 6 (1,355,248) (1,310,760)
Finance costs 7 (217,995) (120,880)
Share of (loss)/profit of associate 14(a) (8,971) 6,918
------------ ------------
Loss before Taxation 8 (4,320,033) (3,941,728)
------------ ------------
Taxation 10 - 7,120
------------ ------------
Loss for the period attributable
to equity holders of the Company (4,320,033) (3,934,608)
============ ============
Other comprehensive income:
Changes in fair value of available
for sale financial assets 14(b) 18,904,996 2,299,439
------------ ------------
Total comprehensive profit/(loss)
for the period 14,584,963 (1,635,169)
============ ============
Loss per ordinary share
Basic - Continuing and total operations 24 (16.17)p (14.72)p
Diluted - Continuing and total
operations 24 (16.17)p (14.72)p
Company
Loss for the period attributable
to equity holders of the Company (2,341,603) (1,396,556)
============ ============
Other comprehensive income - -
------------ ------------
Total comprehensive loss for the
period 11 (2,341,603) (1,396,556)
============ ============
Consolidated Statement of Financial Position
As at 28(th) February 2011
Note 2011 2010
GBP GBP
Non-Current Assets
Goodwill 12 8,828,460 8,828,460
Property, plant and equipment 13 1,250,948 322,159
Investments in associates 14(a) 42,168 51,139
Available for sale financial
assets 14(b) 21,205,344 3,456,473
----------- ------------
31,326,920 12,658,231
----------- ------------
Current Assets
Inventories 15 336,008 48,628
Trade and other receivables 16 863,589 2,597,670
Cash and cash equivalents - 268,407
----------- ------------
1,199,597 2,914,705
----------- ------------
Total Assets 32,526,517 15,572,936
Current Liabilities
Trade and other payables 17 2,683,054 2,567,406
Corporation tax 18 - -
Borrowings, including
lease finance 19 377,251 433,567
----------- ------------
3,060,305 3,000,973
----------- ------------
Non-Current Liabilities
Borrowings, including
lease finance 20 2,290,555 1,231,269
Provisions for other liabilities 21 2,350,000 1,100,000
----------- ------------
4,640,555 2,331,269
----------- ------------
Total Liabilities 7,700,860 5,332,242
=========== ============
Equity
Share capital 25 668,091 668,091
Share premium account 18,552,361 18,552,361
Retained earnings 5,605,205 (8,979,758)
----------- ------------
Total Equity 24,825,657 10,240,694
----------- ------------
Total Equity and Liabilities 32,526,517 15,572,936
Company Statement of Financial Position
As at 28(th) February 2011
Note 2011 2010
GBP GBP
Non-Current Assets
Property, plant and equipment 13 1,238,914 256,217
Investments 14(c) 10,090,079 10,089,981
------------- ------------
11,328,993 10,346,198
------------- ------------
Current Assets
Trade and other receivables 16 15,037,990 15,076,319
Cash and cash equivalents - 93,672
------------- ------------
15,037,990 15,169,991
------------- ------------
Total Assets 26,366,983 25,516,189
Current Liabilities
Trade and other payables 17 13,718,813 12,809,371
Corporation tax 18 - -
Borrowings, including
lease finance 19 351,759 405,828
------------- ------------
14,070,572 13,215,199
------------- ------------
Non-Current Liabilities
Borrowings, including
lease finance 20 2,283,620 1,196,596
Provisions for other liabilities 21 2,020,000 770,000
------------- ------------
4,303,620 1,966,596
------------- ------------
Total Liabilities 18,374,192 15,181,795
============= ============
Equity
Share capital 25 668,091 668,091
Share premium account 18,552,361 18,552,361
Retained earnings (11,227,661) (8,886,058)
------------- ------------
Total Equity 7,992,791 10,334,394
------------- ------------
Total Equity and Liabilities 26,366,983 25,516,189
Consolidated and Company Statements of Cash Flows
For the year ended 28(th) February 2011
Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Cash flows from
operating activities
Loss for the period
before tax (4,320,033) (3,941,728) (2,341,603) (1,403,676)
Adjustments for:
Investment revenue (66,192) 26,517 (53,945) (32,711)
Finance costs 217,995 120,880 196,127 102,599
Loss on disposal of
investment 105,248 723,260 - -
Share of
loss/(profit) in
associate 8,971 (6,918) - -
Depreciation and
amortisation 102,382 111,836 60,000 55,000
Increase in
inventories (287,380) (19,984) - -
Increase in trade and
other receivables 1,734,181 803,149 38,329 (1,280,853)
Increase in trade and
other payables 1,365,548 348,869 2,159,442 2,559,408
------------ ------------ ------------ ------------
Cash used in
operations (1,139,280) (1,834,119) 58,350 (233)
Interest paid (217,995) (120,880) (196,127) (102,599)
Tax refunded - 7,120 - 7,120
------------ ------------ ------------ ------------
Net cash used in
operating
activities (1,357,275) (1,947,879) (137,777) (95,712)
------------ ------------ ------------ ------------
Cash flows from
investing activities
Acquisition of
interest in available
for sale financial
assets - (11,100) - -
Increase in
investments - - (98) -
Purchase of plant,
property &
equipment (1,031,171) (327,722) (1,042,697) (311,217)
Proceeds of sale of
available for sale
financial assets 1,050,977 1,853,344 - -
Interest received 13,692 (56,517) 1,445 2,711
Dividends received 52,500 30,000 52,500 30,000
------------ ------------ ------------ ------------
Net cash generated
from/(used in)
investing
activities 85,898 1,488,005 (988,850) (278,506)
------------ ------------ ------------ ------------
Cash flows from
financing activities
Proceeds from
borrowings 1,217,849 300,000 1,217,849 300,000
Proceeds from finance
leases - 482,877 - 397,350
Repayment of
borrowings (275,000) (275,000) (275,000) (275,000)
Repayment of finance
leases (158,564) (143,041) (130,825) (119,926)
------------ ------------ ------------ ------------
Net cash from
financing
activities 784,285 364,836 812,024 302,424
------------ ------------ ------------ ------------
Decrease in cash and
cash equivalents (487,092) (95,038) (314,603) (71,794)
Cash and cash
equivalents at the
beginning of the
year 268,407 363,445 93,672 165,466
------------ ------------ ------------ ------------
Cash and cash
equivalents at the
end of the year (218,685) 268,407 (220,931) 93,672
============ ============ ============ ============
Consolidated and Company Statements of Changes in Equity
For the year ended 28(th) February 2011
Called
Up Share
Share Premium Retained
Group Capital Account Earnings Total
GBP GBP GBP GBP
As at 1(st) March 2009 668,091 18,552,361 (7,344,589) 11,875,863
Comprehensive Loss for
the period - - (3,934,608) (3,934,608)
Other Comprehensive
Profit for the period:
Changes in fair value of
available for sale
financial assets - - 2,299,439 2,299,439
As at 28( th) February
2010 668,091 18,552,361 (8,979,758) 10,240,694
======== =========== ============= ============
As at 1(st) March 2010 668,091 18,552,361 (8,979,758) 10,240,694
Comprehensive Loss for
the period - - (4,320,033) (4,320,033)
Other Comprehensive
Profit for the period:
Changes in fair value of
available for sale
financial assets - - 18,904,996 18,904,996
As at 28(th) February
2011 668,091 18,552,361 5,605,205 24,825,657
======== =========== ============= ============
Called
Up Share
Share Premium Retained
Company Capital Account Earnings Total
GBP GBP GBP GBP
As at 1(st) March 2009 668,091 18,552,361 (7,489,502) 11,730,950
Total Comprehensive Loss
for the period - - (1,396,556) (1,396,556)
As at 28(th) February
2010 668,091 18,552,361 (8,886,058) 10,334,394
======== =========== ============= ============
As at 1(st) March 2010 668,091 18,552,361 (8,886,058) 10,334,394
Total Comprehensive Loss
for the period - - (2,341,603) (2,341,603)
As at 28(th) February
2011 668,091 18,552,361 (11,227,661) 7,992,791
======== =========== ============= ============
Notes to the Consolidated Financial Statements
For the year ended 28(th) February 2011
1. Principal Accounting Policies
The principal accounting policies are as follows:
Accounting basis and standards
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union.
The following standards, amendments and interpretations to
published standards are mandatory for accounting periods beginning
on or after 1(st) March 2010 and have been applied to and impacted
the financial information presented:
-- Improvements to IFRSs 2009 - This is the second set of
amendments published under the IASBs annual improvements process
and incorporates minor amendments to twelve standards and
interpretations. The amendments are effective for annual periods
beginning on or after 1(st) January 2010.
-- IFRS 3 (revised), 'Business combinations' and consequential
amendments to IAS 27, 'Consolidated and separate financial
statements', IAS 28, 'Investments in associates' and IAS 31,
'Interests in joint ventures', are effective prospectively to
business combinations for which the acquisition date is on or after
the beginning of the first annual reporting period beginning on or
after 1(st) July 2009.
-- IAS 36 (amendment) "Impairment of assets", effective from
1(st) January 2010 clarifies that the largest cash generating unit
(or group of units) to which goodwill should be allocated for the
purposes of impairment testing is an operating segment, as defined
by paragraph 5 of IFRS 8, "Operating segments".
-- IAS 38 (amendment) "Intangible assets", effective from 1(st)
January 2010. The amendment clarifies guidance in measuring the
fair value of an intangible asset in a business combination and
permits the grouping of intangible assets as a single asset if each
asset has similar economic lives.
The following new standards, amendments to standards or
interpretations are mandatory for the first time for the financial
year beginning 1(st) March 2010, but are not currently considered
to be relevant to the Group (although they may affect the
accounting for future transactions and events):
-- IFRIC 16 'Hedges of a net investment in a foreign operation',
effective for annual periods beginning on or after 1(st) July
2009.
-- IFRIC 17, 'Distributions of non-cash assets to owners',
effective for annual periods beginning on or after 1(st) July
2009.
-- IFRIC 18, 'Transfers of assets from customers', effective for
transfer of assets received on or after 1(st) July 2009.
-- IAS 1 (amendment), 'Presentation of financial statements'.
The amendment clarifies that the potential settlement of a
liability by the issue of equity is not relevant to its
classification as current or non-current.
-- IFRS 2 (amendments), 'Group cash-settled share based payment
transactions', was effective from 1(st) January 2010 and expands
the guidance contained in IFRIC 11 to address the classification of
group arrangements that were not covered by that
interpretation.
-- IAS 32 (amended) 'Classification of rights issues', issued in
October 2009. The amendment addresses the accounting for rights
issues that are denominated in a currency other than the functional
currency of the issuer.
-- IFRS 5 (amendment) "Non-current assets held for sale and
discontinued operations". The amendment clarifies that IFRS 5
specifies the disclosures required in respect of non-current assets
classified as held for sale or discontinued operations.
The following new standards, amendments to standards and
interpretations have been issued, but are not effective for the
financial year beginning 1(st) March 2010 and have not been early
adopted:
-- Improvements to IFRSs 2010 - This is the third set of
amendments published under the IASBs annual improvements process
and incorporates minor amendments to seven standards and
interpretations. The amendments are effective for annual periods
beginning on or after 1(st) January 2011.
-- Amendments to IFRS 1 'First-time Adoption of International
Financial Reporting Standards - These amendments provide limited
exemption for comparative IFRS 7 disclosures for first-time
adopters. The amendments are effective for annual periods beginning
on or after 1(st) July 2010.
-- Amendments to IFRS 7 'Financial Instruments:
Disclosures'-These amendments are intended to provide greater
transparency around risk exposures when a financial asset is
transferred but the transferor retains some level of continuing
exposure in the asset. The amendments also require disclosures
where transfers of financial assets are not evenly distributed
throughout the period. The amendments are effective for annual
periods beginning on or after 1(st) July 2011.
-- IFRS 9, 'Financial instruments', issued in November 2009 and
effective from 1(st) January 2013. IFRS 9 represents the first
phase of the IASB's project to replace IAS 39 'Financial
Instruments: Recognition and Measurement'. It sets out the
classification and measurement criteria for financial assets and
liabilities and requires all financial assets, including assets
currently classified under IAS 39 as available for sale, to be
measured at fair value through profit and loss unless the assets
can be classified as held at amortised cost. Qualifying equity
investments held at fair value may have their fair value changes
taken through other comprehensive income by election.
-- IAS 24 (revised), 'Related party disclosures', issued in
November 2009. It supersedes IAS 24 (revised), 'Related party
disclosures', issued in 2003. The revised IAS 24 is required to be
applied from 1(st) January 2011 and clarifies and simplifies the
definition of a related party. The Group will apply the revised
standard from 1(st) March 2011 and when applied the Group and the
Parent Company will need to disclose any transactions between its
subsidiaries.
-- IFRIC 19, 'Extinguishing financial liabilities with equity
instruments'. This clarifies the requirements of IFRSs when an
entity renegotiates the terms of a financial liability with its
creditor and the creditor agrees to accept the entity's shares or
other equity instruments to settle the financial liability fully or
partially. The interpretation is effective for annual periods
beginning on or after 1(st) July 2010. The Group will apply the
interpretation from 1(st) March 2011.
-- Amendment to IFRIC 14, 'Prepayments of a minimum funding
requirement' issued in November 2009. The amendment permits a
voluntary prepayment of a minimum funding requirement to be
recognised as an asset. The amendment is effective for annual
periods beginning 1(st) January 2011.
Business Combinations and Goodwill
Goodwill relating to acquisitions prior to 1(st) March 2006 is
carried at the net book value on that date and is no longer
amortised but is subject to annual impairment review. On
acquisition, the assets, liabilities and contingent liabilities of
a subsidiary are measured at their fair values at the date of
acquisition. Any excess of the cost of acquisition over the fair
values of the identifiable net assets acquired is recognised as
goodwill. Any deficiency of the cost of acquisition below the fair
values of the identifiable net assets acquired (i.e. discount on
acquisition) is credited to the income statement in the period of
acquisition. Goodwill is tested annually for impairment.
Going Concern
The Company and Group currently meet their day-to-day working
capital requirements partly through monies loaned from the
Northacre PLC Directors Retirement and Death Benefit Scheme, partly
from the Group's bankers and partly from other loans. The Directors
expect the facilities currently agreed to remain in place for the
foreseeable future and to be renewed on equally favourable terms in
due course. In particular:
(i) The loan due to Northacre PLC Directors Retirement and Death
Benefit Scheme of GBP750,000 is not repayable until July 2013.
(ii) The Group's bankers have agreed revised facilities with a
review on 30(th) September 2011. An extension to this facility is
currently being discussed with the bank.
(iii) A Director loan of GBP300,000 was made available by MTAF
Group (Mohamed AlRafi) on 16(th) October 2009. The loan is not
repayable until dividends from The Lancasters Development are
received.
(iv) An additional Director loan of GBP300,000 was made
available by MTAF Group (Mohamed AlRafi) on 4(th) August 2010. A
fixed premium of GBP50,000 was due on 3(rd) February 2011 as per
the loan agreement. The increased loan of GBP350,000 is not
repayable until dividends from The Lancasters Development are
received.
(v) A loan facility of GBP114,000 was made available by Director
Klas Nilsson in September 2009. The loan has no fixed date of
repayment.
(vi) An additional loan of GBP80,000 was made available by
Director Klas Nilsson in July 2010. The Group repaid GBP52,890 of
the balance in the period September 2010 to November 2010. The loan
has no fixed date of repayment.
(vii) A loan facility of GBP2,000,000 was made available by
Abdulsalam AlRafi (father of Director Mohamed AlRafi) on 28(th)
January 2011. The loan is available on a drawdown basis and as at
28(th) February 2011 the Group had used GBP800,000 of the total
funds available. The loan is not repayable until dividends from The
Lancasters Development are received.
(viii) A Director loan of GBP500,000 was made available by MTAF
Group (Mohamed AlRafi) on 26(th) May 2011. The loan has no fixed
date of repayment.
(ix) An additional loan facility of GBP2,000,000 was made
available by Abdulsalam AlRafi (father of Director Mohamed AlRafi)
on 24(th) June 2011. The loan is available on a drawdown basis and
is not repayable until dividends from The Lancasters Development
are received.
The Directors have prepared detailed cash flow projections for
the period ended 31(st) July 2012 making reasonable assumptions
about the levels and timings of income and expenditure, and in
particular the timing of receipt of certain fees due from major
developments. These projections show that the Group can operate
within the current available facilities. On this basis the
Directors consider it appropriate to prepare the financial
statements on a going concern basis.
Significant judgements and estimates of areas of uncertainty
In preparing these financial statements the Directors are
required to make judgements and best estimates of the outcome of
and in particular, the timing of revenues, expenses, assets and
liabilities based on assumptions. These assumptions are based on
historical experience and various other factors that are considered
reasonable under the various circumstances. The estimates and
assumptions are reviewed on a regular basis with any revisions
being applied in the relevant period. The material areas where
estimates and assumptions are made are:
- The valuation of goodwill
- The carrying value of property, plant and equipment and
depreciation
- The value of investments
- The status and progress of the developments and projects
Basis of Consolidation
The Group financial statements include the financial statements
of the Company and its subsidiary undertakings, together with the
Group's share of the results of associates. The Group's proportion
of the voting rights of Lancaster Gate (Hyde Park) Limited
increased from to 5% to 25.1% on 30(th) June 2010. Lancaster Gate
(Hyde Park) Limited continues to be treated as an available for
sale financial asset. The Directors do not regard Lancaster Gate
(Hyde Park) Limited as an associate because the Directors consider
that the Group does not exercise significant influence over its
operating and financial activities, despite the fact that the Group
holds in excess of 20% of the voting rights in Lancaster Gate (Hyde
Park) Limited, because the control of the Board by Minerva PLC, the
controlling shareholding they hold and their power to exercise, and
actual exercise of, the commercial decision making for Lancaster
Gate (Hyde Park) Limited preclude the Group from exercising such
influence.
Depreciation
Depreciation on property, plant and equipment is provided at
rates estimated to write off the cost or revalued amounts, less
estimated residual value, of each asset over its expected useful
life as follows:
Leasehold improvements over the period of the lease
Fittings and office equipment 25% straight line
Computer equipment 33 1/3% straight line
Impairment of Assets
Assets that have an indefinite useful life are not subject to
amortisation but are instead tested annually for impairment and are
subject to additional impairment testing if events or changes in
circumstances indicate that the carrying amount of an asset may not
be recoverable.
Assets that are subject to depreciation and amortisation are
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
Indicators of impairment are reviewed annually.
An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. Any impairment charge is recognised
in profit or loss in the year in which it occurs. When an
impairment loss, other than an impairment loss on goodwill,
subsequently reverses due to a change in the original estimate, the
carrying amount of the asset is increased to the revised estimate
of its recoverable amount, up to the carrying amount that would
have resulted, net of depreciation, had no impairment loss been
recognised for the asset in prior years.
Inventories
Work in progress is valued at the lower of cost and net
realisable value. Cost of work in progress includes overheads
appropriate to the stage of development. Net realisable value is
based upon estimated selling price less further costs expected to
be incurred to completion and disposal.
Revenue
Revenue represents amounts earned by the Group in respect of
services rendered during the period net of value added tax. Shares
in development profits and bonus fees are recognised when the
amounts involved have been finally determined. Fees in respect of
project management and interior and architectural design are
recognised in accordance with the stage of completion of the
contract.
Current Taxation
The tax expense for the year represents the total of current
taxation and deferred taxation. The charge in respect of current
taxation is based on the estimated taxable profit for the year.
Taxable profit for the year is based on the profits as shown in
profit or loss, as adjusted for items or expenditure, which are not
deductible for tax purposes.
The current tax liability for the year is calculated using tax
rates, which have either been enacted or substantially enacted at
the reporting date.
Deferred Taxation
Deferred tax is provided in full on all temporary differences
arising between the tax base of assets and liabilities and their
carrying values in the financial statements. The deferred tax is
not accounted for if it arises from initial recognition of an asset
or liability in a transaction other than a business combination
that at the time of transaction affects neither accounting nor
taxable profit or loss.
Deferred tax is determined using tax rates which have been
enacted or substantially enacted at the reporting date and are
expected to apply when the related deferred tax asset is realised
or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary differences can be utilised. Deferred tax is
provided on temporary differences arising on investments in
subsidiaries and associates, except where the timing of the
reversal of the temporary difference is controlled by the Group and
it is probable that the temporary difference will not reverse in
the foreseeable future.
Leased Assets
Assets held under finance leases and hire purchase contracts are
capitalised in the statement of financial position and depreciated
over their expected useful lives. The interest element of the
rental obligations is charged to profit or loss over the period of
the lease on a straight-line basis.
Rentals under operating leases are charged to profit or loss on
a straight-line basis over the lease term.
Investments
Fixed asset investments are stated at cost less amounts written
off.
Associates
Associates are all entities over which the Group exercise
significant influence but does not exercises control. Investments
in associates are accounted for using the equity method of
accounting and are initially recognised at cost, which includes
goodwill identified on acquisition, net of any accumulated
impairment loss. The Group's share of its associate's profits or
losses after acquisition of its interest is recognised in profit or
loss and cumulative post-acquisition movements are adjusted against
the carrying amount of the investment. Where the Group's share of
losses of an associate equals or exceeds the carrying amount of the
investment, the Group only recognises further losses where it has
incurred obligations or made payments on behalf of the
associate.
Financial Assets
Available for sale financial assets consist of equity
investments in other companies where the Group does not exercise
either control or significant influence. The investments reflect
loans and capital contributions made in respect of projects
undertaken with other partners in which the Group will be entitled
to an eventual profit share.
Available for sale financial assets are shown at fair value at
each reporting date with changes in fair value being shown in Other
Comprehensive Income, or at cost less any necessary provision for
impairment where a reliable estimate of fair value is not able to
be determined.
Pension Scheme Arrangements
The Group operates a money purchase scheme on behalf of one of
its Directors (2010: two Directors). It also contributes to certain
Directors' and employees' personal pension schemes. Pension costs
charged represent the amounts payable to the schemes in respect of
the period.
Foreign currency translation
Transactions in foreign currencies are translated into sterling
at the rate of exchange ruling at the date of the transaction.
Assets and liabilities are translated at the rate of exchange
ruling at the reporting date. Exchange differences are taken into
account in arriving at Group operating profit.
Financial Assets
Loans and Receivables
Trade receivable, loans and other receivables are classified as
'trade and other receivables' and are measured at cost less any
provisions. Interest income is recognised by applying the
appropriate interest rate of the contractual arrangement.
Financial Liabilities
Loans and Payables and Borrowings
Trade payables, other payables and borrowings are classified as
'trade and other payables' and 'borrowings'. These are measured at
amortised cost and the interest expense is recognised by applying
the appropriate interest rate of the contractual arrangement.
Borrowings
Interest-bearing borrowings are recognised initially at fair
value, net of any transaction costs incurred. Borrowings are
subsequently stated at amortised cost using the effective interest
method with any differences between the proceeds (net of
transaction costs) and the redemption value being recognised over
the period of borrowings.
All borrowings are classified as current unless the Group has an
unconditional right to defer payment of the borrowings until at
least twelve months from the reporting date.
2. Capital and Financial Risk Management
The Group manages its capital to ensure that the Group will be
able to continue as a going concern, while maximising the return to
shareholders through the optimisation of its debt and equity
balance.
The capital structure of the Group consists of debt, which
includes the borrowings disclosed in notes 19 and 20, cash and cash
equivalents and equity attributable to equity holders of the Parent
Company, comprising issued capital, share premium account and
retained earnings.
The Group manages the capital structure and makes adjustments to
it in the light of changes in economic conditions. In order to
maintain or adjust the capital structure, the Group may adjust the
amount of dividends payable to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt or
increase capital. During the current period the Group sold its
interest in Vicarage Gate Holdings Limited for a consideration of
GBP2,250,000. This allowed the Group to strengthen its working
capital position.
The Board regularly reviews the capital structure, with an
objective to reduce net debt over time whilst investing in the
business.
The Group's activities expose it to a variety of financial risks
and those activities involve the analysis, evaluation, acceptance
and management of some degree of risk or combination of risks.
Taking risk is core to the property business and the operational
risks are an inevitable consequence of being in business. The
Group's aim is to achieve an appropriate balance between risk and
return and minimise potential adverse effects on the Group's
performance.
The Group's risk management policies are designed to identify
and analyse these risks, to set appropriate risk limits and
controls, and to monitor the risks by means of a reliable
up-to-date information system. The Group regularly reviews its risk
management policies and systems to reflect changes in markets,
products and emerging best practice.
Risk management is carried out by the Board of Directors. In
addition, the internal financial control board is responsible for
the identification of the major business risks faced by the Group
and for determining the appropriate course of action to manage
those risks. The most important types of risk are credit risk,
liquidity and market risk. Market risk includes currency, interest
rate and other price risks.
3. Segmental Information
The Group's primary segments are business segments. The segmental
analysis of the Group's business was derived from its principal
activities and are as reported internally to management as follows:
2010 -
Revenue 2011 restated
GBP GBP
Principal activities:
Development management 969,652 780,710
Interior design 4,249,606 3,815,427
Architectural design 445,226 555,088
------------ ------------
5,664,484 5,151,225
============ ============
Loss before Taxation 2011 2010
GBP GBP GBP
Development management (3,048,535) (3,261,447)
Interior
design (475,875) 194,590
Architectural
design (786,652) (881,789)
------------ ------------
Share of (loss)/profit
of associate (8,971) 6,918
------------ ------------
(4,320,033) (3,941,728)
============ ============
Assets 2011 2010
GBP GBP
Development management 27,482,303 9,495,356
Interior design 2,794,332 3,645,466
Architectural design 2,207,714 2,380,975
------------ ------------
32,484,349 15,521,797
Share of investment
in associate 42,168 51,139
------------ ------------
Total Assets 32,526,517 15,572,936
============ ============
Liabilities 2011 2010
GBP GBP
Development management 3,288,677 1,099,710
Interior design 2,272,268 2,647,525
Architectural design 2,139,915 1,585,007
------------ ------------
Total Liabilities 7,700,860 5,332,242
============ ============
A geographical analysis of the Group's revenue,
assets and liabilities is given below:
2010 -
Revenue 2011 restated
GBP GBP
United Kingdom 2,595,769 2,451,379
Ireland 818,478 31,125
Russia 76,930 57,113
Saudi Arabia 1,240,672 1,453,390
United Arab Emirates 532,664 465,622
British Virgin Islands (59,673) 641,650
Thailand 444,644 -
Hong Kong 15,000 -
Switzerland - 50,946
5,664,484 5,151,225
============ ============
Assets 2011 2010
GBP GBP
United Kingdom 31,716,419 14,176,389
Ireland 14,065 1,864
United Arab Emirates 591,417 22,114
Saudi Arabia 83,022 1,279,151
Switzerland 83,402 13,857
Thailand 38,192 -
British Virgin Islands - 79,561
------------ ------------
32,526,517 15,572,936
============ ============
Liabilities 2011 2010
GBP GBP
United Kingdom 6,141,113 5,029,197
United Arab Emirates 1,517,849 300,000
Hong Kong 2,365 2,365
USA 19,505 -
Thailand 20,028 -
Canada - 680
7,700,860 5,332,242
========== ==========
4. Other Operating Income 2011 2010
GBP GBP
Rental income - 2,467
Other income - 650
----- ------
- 3,117
===== ======
5. Investment Revenue 2011 2010
GBP GBP
Interest
received 13,692 21,386
Dividends received 52,500 30,000
Provision against interest receivable
from Empress Partnership LLP - (77,903)
------- ---------
66,192 (26,517)
======= =========
6. Other Losses 2011 2010
GBP GBP
Net loss from disposal of interest
in Vicarage Gate Holdings Limited 105,248 -
Net surplus from disposal of interest
in The Abingdons Partnership - (526,740)
Provision for diminuition in value
of investment - 587,500
Provision for acquisition of Templeco
643 Limited in lieu of settlement - 1,250,000
Provision for Northacre PLC Directors Retirement
and Death Benefit Scheme profit share 1,250,000 -
---------- ----------
1,355,248 1,310,760
========== ==========
7. Finance Costs 2011 2010
GBP GBP
Interest on:
Bank loans and
overdrafts 8,643 11,526
Overdue tax 1,474 546
Other loans 207,878 108,808
-------- --------
217,995 120,880
======== ========
8. Loss Before Taxation 2011 2010
GBP GBP
Loss on ordinary activities before taxation
is stated after charging/(crediting):
Depreciation and amounts written
off property, plant and equipment:
Owned assets 102,382 111,836
Operating lease rentals:
Land and buildings 331,462 135,410
Auditors' remuneration 120,761 88,803
Auditors' remuneration
in non-audit capacity:
Other services relating
to taxation 18,675 9,226
All other services 4,871 17,125
Foreign exchange loss 4,037 4,304
======== ========
9. Employees 2011 2010
Number Number
The average weekly number of
employees (including Directors)
during the year was:
Office and management 15 16
Design and management 29 32
---------- ----------
44 48
========== ==========
2011 2010
Staff costs for
the above employees: GBP GBP
Wages and salaries 2,797,222 2,808,630
Social security
costs 336,591 353,832
Other pension costs -
money purchase schemes 69,850 114,439
---------- ----------
3,203,663 3,276,901
========== ==========
Remuneration in respect of Directors
was as follows: 2011 2010
GBP GBP
Aggregate emoluments (including
benefits in kind) 496,731 542,869
Fees 55,833 40,000
---------- ----------
552,564 582,869
========== ==========
Company contribution to money
purchase pension schemes 51,300 69,874
========== ==========
Remuneration for each Director
(including benefits in kind) 2011 2010
GBP GBP
K.B. Nilsson 255,265 203,421
J.R.G. Hunter - 201,940
M.K. Santilale 211,466 122,508
M.A. AlRafi 30,000 15,000
M.F. Williams 28,333 20,000
E.B. Harris 27,500 20,000
---------- ----------
552,564 582,869
========== ==========
The amounts above include remuneration
in respect of the highest paid Director
as follows: 2011 2010
GBP GBP
Aggregate emoluments (including
benefits in kind) 255,265 203,421
Company contribution to money
purchase pension scheme 40,860 33,905
---------- ----------
296,125 237,326
========== ==========
10. Taxation 2011 2010
GBP GBP
(a) Analysis of
charge in year
Current tax:
Corporation tax at the
rate of 28% (2010 - 28%) - -
Overprovision in
prior year - (7,120)
Total current tax - (7,120)
============= ============
(b) Factors affecting
the tax charge for the
year
The tax assessed for the year is lower than the standard
rate of corporation tax in the UK of 28%. The
differences
are explained below:
2011 2010
GBP GBP
Loss on ordinary
activities before
tax (4,320,033) (3,941,728)
============= ============
Loss on ordinary activities multiplied
by the standard rate of
corporation tax of 28% (2010:
28%) (1,209,609) (1,103,684)
Effects of:
Expenses not deductible
for tax purposes 49,587 182,022
Depreciation for the period in
excess of capital allowances (17,004) 115
Dividends and distributions
received (14,700) (8,400)
Utilisation of tax
losses - 215,261
Share of loss/(profit)
of associates 2,512 (1,937)
Loss carried forward 1,189,214 716,623
Current tax charge for - -
the year
(c) Factors that may
affect future tax charges
No deferred tax asset has been recognised on losses carried forward
nor on the origination and reversal of timing differences due
to the uncertainty of the timing of taxable profits. The total
amount of the unprovided asset is GBP2,251,143 (2010 - GBP1,114,364).
At the reporting date there are unrelieved capital losses of
GBPnil (2010 - GBPnil).
The standard rate of corporation tax in the UK changed to 26%
from 1(st) April 2011.
11. Profit of the Parent Company
As permitted by section 408 of the Companies Act 2006, the profit
or loss element of the Parent Company Statement of Comprehensive
Income is not presented as part of these financial statements.
The Group loss for the financial year of GBP4,320,033 (2010:
GBP3,934,608) includes a loss of GBP2,341,603 (2010: GBP1,396,556),
which was dealt with in the financial statements of the Company.
12. Goodwill
2011 2010
GBP GBP
Cost 14,940,474 14,940,474
------------------ -----------------
Amortisation
At the beginning
of the year 6,112,014 6,112,014
Charge for
the year - -
------------------ -----------------
At the end
of the year 6,112,014 6,112,014
------------------ -----------------
Net carrying amount 8,828,460 8,828,460
================== =================
In accordance with IAS 36 'Impairment of assets' the Directors
have assessed the carrying value of goodwill at the reporting
date, and having assessed the fair value less costs to sell of
the relevant cash-generating units that carry out the Group's
on-going projects, are of the opinion that this is in excess
of their carrying value in the financial statements, and that
the value in use of the cash-generating units does not materially
exceed this amount.
Accordingly, the Directors have used fair value less costs to
sell as the recoverable amount in their assessment of potential
impairment and as at the reporting date are of the opinion that
there has been no impairment to the carrying value of goodwill.
Property, plant
13. and equipment
Fittings
Group Leasehold and Office Computer
Improvements Equipment Equipment Total
Cost GBP GBP GBP GBP
At 1(st) March
2009 - 267,889 300,951 568,840
Additions - 135,251 192,471 327,722
Disposals - (41,166) (28,390) (69,556)
-------------
At 28(th) February
2010 - 361,974 465,032 827,006
Additions 984,217 22,105 24,849 1,031,171
Transfers 131,217 (131,217) - -
------------- ----------- ---------- ----------
At 28(th) February
2011 1,115,434 252,862 489,881 1,858,177
============= =========== ========== ==========
Depreciation
At 1(st) March
2009 - 233,658 228,909 462,567
Charge for
the year - 9,788 102,048 111,836
Released on
disposal - (41,166) (28,390) (69,556)
------------- ----------- ---------- ----------
At 28(th) February
2010 - 202,280 302,567 504,847
Charge for
the year - 10,105 92,277 102,382
------------- ----------- ---------- ----------
At 28(th) February
2011 - 212,385 394,844 607,229
Net Book Value
At 28(th) February
2011 1,115,434 40,477 95,037 1,250,948
============= =========== ========== ==========
At 28(th) February
2010 - 159,694 162,465 322,159
============= =========== ========== ==========
At 28(th) February
2009 - 34,231 72,042 106,273
============= =========== ========== ==========
Fittings
Company Leasehold and Office Computer
Improvements Equipment Equipment Total
Cost GBP GBP GBP GBP
At 1(st) March
2009 - - - -
Additions - 131,217 180,000 311,217
-------------
At 28(th) February
2010 - 131,217 180,000 311,217
Additions 1,042,697 - - 1,042,697
Transfers 131,217 (131,217) - -
------------- ----------- ---------- ----------
At 28(th) February
2011 1,173,914 - 180,000 1,353,914
Depreciation
At 1(st) March
2009 - - - -
Charge for
the year - - 55,000 55,000
-------------
At 28(th) February
2010 - - 55,000 55,000
Charge for
the year - - 60,000 60,000
------------- ----------- ---------- ----------
At 28(th) February
2011 - - 115,000 115,000
Net Book Value
At 28(th) February
2011 1,173,914 - 65,000 1,238,914
============= =========== ========== ==========
At 28(th) February
2010 - 131,217 125,000 256,217
============= =========== ========== ==========
At 28(th) February - - - -
2009
============= =========== ========== ==========
14. Investments 2011
Interest
in
Group Associated
Undertaking
Interest in Associated
(a) Undertaking GBP GBP
Cost
At 1(st) March 2010 and
at 28(th) February 2011 300
------------
Group's Share of Undistributed Post
Acquisition
Results of Associated Undertaking
At 1(st) March
2010 50,839
Share of undistributed
profit 2,482
Taxation (11,453)
---------
(8,971)
------------
At 28(th) February
2011 41,868
------------
Net Book Value
At 28(th) February
2011 42,168
============
At 28(th) February
2010 51,139
============
Revenue of Associated Undertaking for the year
to 31(st) December 2010 743,298
============
Net Profit of Associated Undertaking for the
year to 31(st) December 2010 219,931
============
Net Assets of Associated Undertaking
as at 31(st) December 2010 73,264
============
2010
Interest
in
Associated
Undertaking
GBP GBP
Cost
At 1(st) March 2009 and
at 28(th) February 2010 300
------------
Group's Share of Undistributed Post
Acquisition
Results of Associated Undertaking
At 1(st) March
2009 43,921
Share of undistributed
profit 17,773
Taxation (10,855)
---------
6,918
------------
At 28(th) February
2010 50,839
------------
Net Book Value
At 28(th) February
2010 51,139
============
At 28(th) February
2009 44,221
============
Revenue of Associated Undertaking for the year
to 31(st) December 2009 704,499
============
Net Profit of Associated Undertaking for the
year to 31(st) December 2009 150,964
============
Net Assets of Associated Undertaking
as at 31(st) December 2009 63,333
============
Available for Sale Financial
(b) Assets
Group 2011 2010
GBP GBP
At 1(st) March 2010 3,456,473 2,472,538
Additions - 11,100
Disposals (1,156,125) (739,104)
Provision for diminution
in value - (587,500)
Increase in fair value
transferred to equity 18,904,996 2,299,439
At 28(th) February 2011 21,205,344 3,456,473
Group's Share of Results
Group's share of loss
for the year - -
---------------- -------------
Net Book Value
At 28(th) February 2011 21,205,344 3,456,473
================ =============
The disposal relates to the sale of our interest in Vicarage Gate
Holdings Limited to Kokomo Beach Pte Ltd.
A fair valuation exercise has been undertaken based predominantly
on the Group's expected profit from secured sales on The Lancasters
Development as at 28(th) February 2011.
(c) Other Investments
Subsidiary Associated Total
Company Undertakings Undertaking Investments
GBP GBP GBP
Cost
At 1(st) March 2010 14,492,583 300 14,492,883
Additions 98 - 98
As at 28(th) February
2011 14,492,681 300 14,492,981
============= ============ ============
Impairment
At 1(st) March 2010 4,402,902 - 4,402,902
Impairment in the year - - -
As at 28(th) February
2011 4,402,902 - 4,402,902
============= ============ ============
Net book value as at
28(th) February 2011 10,089,779 300 10,090,079
============= ============ ============
Net book value as at
28(th) February 2010 10,089,681 300 10,089,981
============= ============ ============
Company Subsidiary Associated Total
Undertakings Undertaking Investments
GBP GBP GBP
Cost
At 1(st) March 2009 14,492,583 300 14,492,883
Additions - - -
As at 28(th) February
2010 14,492,583 300 14,492,883
============= ============ ============
Impairment
At 1(st) March 2009 4,402,902 - 4,402,902
Impairment in the year - - -
As at 28(th) February
2010 4,402,902 - 4,402,902
============= ============ ============
Net book value as at
28(th) February 2010 10,089,681 300 10,089,981
============= ============ ============
Net book value as at
28(th) February 2009 10,089,681 300 10,089,981
============= ============ ============
(d) Group
Shareholdings
The Group has shareholdings in the following
companies, all incorporated in England and Wales:
Proportion
Subsidiary Holding held Nature of
undertakings Business
Waterloo Ordinary shares 100% Development
Investments management
Limited
services
Intarya Limited Ordinary shares 100% Interior design
Northacre Ordinary shares 100% Development
Development management
Management
Services Limited services
Nilsson Architects Ordinary shares 100% Design
Limited architects
Northacre Capital Ordinary shares 100% Property
(1) Limited development
Northacre Capital Ordinary shares 100% Property
(2) Limited development
Northacre Capital Ordinary shares 100% Property
(3) Limited development
Northacre Capital Ordinary shares 100% Property
(5) Limited development
Northacre Capital Ordinary shares 100% Property
(6) Limited development
Northacre Capital Ordinary shares 100% Property
(7) Limited development
Northacre Ordinary shares 100% Dormant
Residential
Limited
Nilsson Design Ordinary shares 100% Dormant
Limited
Northacre Land Ordinary shares 100% Dormant
Limited
Northacre Holdings Ordinary shares 100% Dormant
Limited
Northacre Design Ordinary shares 100% Dormant
Limited
Northacre Capital Ordinary shares 100% Dormant
Limited
Northcare Ordinary shares 100% Dormant
Management
Limited
Northcare Ordinary shares 100% Dormant
Management
Services Limited
Lifestyle Ordinary shares 100% Dormant
(Interiors)
Limited
Associated
undertaking
Campden Estates Ordinary shares 25% Residential
Limited property
(year ended 31(st) lettings and
December) management
Available for
sale financial
assets
44-46 Park Street Ordinary shares 45% Property
Limited development
Lancaster Gate Ordinary shares 25.1% Property
(Hyde Park) development
Limited
The Empress Limited Liability 5% Property
Partnership LLP Partnership development
15. Inventories Group
2011 2010
GBP GBP
Stock 11,845 7,919
Work in progress 324,163 40,709
-------- -------
336,008 48,628
======== =======
Trade and other
16. receivables Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Trade receivables 374,511 1,014,064 - -
Amounts owed by group
undertakings - - 6,146,872 6,986,808
Other receivables 168,339 185,961 185,659 160,652
Prepayments and accrued
income 320,739 1,397,645 8,705,459 7,928,859
-------- ---------- --------------- -------------
863,589 2,597,670 15,037,990 15,076,319
======== ========== =============== =============
At the year end there was a provision
for doubtful debts of GBP216,956 (2010:
GBPnil).
Trade and other
17. payables Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Trade payables 819,788 133,251 375,279 152,645
Amounts owed to group
undertakings - - 12,334,914 11,858,537
Social security and
other taxes 530,434 311,272 42,199 78,193
Other payables 228,150 323,831 169,924 227,874
Accruals and deferred
income 1,104,682 1,799,052 796,497 492,122
----------- ----------- ----------- -----------
2,683,054 2,567,406 13,718,813 12,809,371
=========== =========== =========== ===========
Included in other payables is a loan due to a Director Klas Nilsson.
The loan does not have a fixed date of repayment.
Interest is charged at 10% per annum. The total amount outstanding
at the year end was GBP159,314 (2010: GBP117,730) including interest.
18. Corporation Tax Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Corporation Tax - - - -
----- ----- ----- -----
- - - -
===== ===== ===== =====
Borrowings,
including lease
19. finance Group Company
Current Liabilities 2011 2010 2011 2010
GBP GBP GBP GBP
Loan from pension
scheme - 275,000 - 275,000
Finance leases 158,566 158,567 130,828 130,828
Bank overdraft 218,685 - 220,931 -
---------- -------- ---------- ----------
377,251 433,567 351,759 405,828
========== ======== ========== ==========
Finance leases are secured on the related assets.
The bank overdraft facility of GBP500,000 incurs interests at 3.75%
per annum over the base rate. The facility is secured by a personal
guarantee as detailed in note 27.
Borrowings,
including lease
20. finance Group Company
Non-Current Liabilities 2011 2010 2011 2010
GBP GBP GBP GBP
Loan from pension
scheme 750,000 750,000 750,000 750,000
Director loans 693,052 300,000 693,052 300,000
Other loans 824,797 - 824,797 -
Finance leases 22,706 181,269 15,771 146,596
----------- ----------- ----------- -----------
2,290,555 1,231,269 2,283,620 1,196,596
=========== =========== =========== ===========
The loan from the pension scheme of GBP750,000 is in respect of
the Northacre PLC Directors Retirement and Death Benefit Scheme.
The loan is due to be repaid on 31(st) July 2013 with interest
charged at 4% above the Clearing Bank's base rate.
A Director loan was provided by MTAF Group (Mohamed AlRafi) in
two instalments, GBP100,000 on 22(nd) October 2009 and GBP200,000
on 28(th) October 2009. Interest is charged at 10% per annum and
the lender is entitled to 1.125% of Northacre's dividends from
The Lancasters Development. The loan is not repayable until dividends
from The Lancasters Development are received.
An additional Director loan of GBP300,000 was provided by MTAF
Group (Mohamed AlRafi) on 3(rd) August 2010. No interest was charged
for the first 6 months with a fixed premium of GBP50,000 due after
the initial 6 month period. From 3(rd) February 2011 interest is
charged at 10% per annum and the lender is entitled to 0.75% of
Northacre's dividends from The Lancasters project. The loan is
not repayable until dividends from The Lancasters Development are
received.
A loan facility of GBP2,000,000 was made available by Abdulsalam
AlRafi (father of Director Mohamed AlRafi) on 28(th) January 2011.
The loan is available on a drawdown basis and as at 28(th) February
2011 the Group used GBP800,000 of the available funds. Interest
is charged at 3% per month. The loan is not repayable until dividends
from The Lancasters Development are received.
As at 28(th) February 2011 the Group and Parent Company had obligations
under finance leases that are secured on related assets as set out
below:
Group Company
2011 2010 2011 2010
Gross amounts payable: GBP GBP GBP GBP
Within one year 158,566 158,567 130,828 130,828
In two to five years 22,706 181,269 15,771 146,596
In over five years - - - -
181,272 339,836 146,599 277,424
---------- ---------- --------- ---------
Less: finance charges allocated
to future periods (44,751) (83,210) (29,324) (55,442)
136,521 256,626 117,275 221,982
========== ========== ========= =========
Provisions for
21. other liabilities Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Loan settlement
costs and profit
share payable 2,350,000 1,100,000 2,020,000 770,000
=========== =========== =========== ========
On 22(nd) June 2010, the Company entered into an agreement to acquire the
entire issued share capital of Templeco 643 Limited for a consideration
of GBP1,250,000. The Company acquired Templeco 643 Limited as settlement
in lieu of the loan arrangement agreement to share in the profits of The
Abingdons Partnership therefore the total consideration of GBP1,250,000
was reported within other losses in the year to 28(th) February 2010 (see
note 6). Of the consideration, GBP75,000 was paid on 22(nd) June 2010
with a further GBP75,000 paid on 16(th) August 2010. The balance of
GBP1,100,000 is due from the proceeds of the dividends from The
Lancasters Development. An additional provision of GBP1,250,000
represents the profit share payable to the Northacre PLC Directors
Retirement and Death Benefit Scheme in relation to sale of Group's
interest in The Abingdons Partnership. The amount will be paid from
dividends received from The Lancasters Development.
22. Future financial commitments
Operating Leases Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Land & Land & Land & Land &
Buildings Buildings Buildings Buildings
Net amount payable
on operating
leases which
expire:
Within one year 103,956 91,363 103,956 91,363
In two to five years 584,702 494,157 584,702 494,157
In over five years 774,740 857,241 774,740 857,241
----------- ----------- ----------- -----------
1,463,398 1,442,761 1,463,398 1,442,761
=========== =========== =========== ===========
Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Other Other Other Other
Net amount payable on operating
leases which expire:
Within one year 46,467 21,134 16,320 9,705
In two to five years 144,978 37,875 65,280 23,478
In over five years 8,160 - 8,160 -
199,605 59,009 89,760 33,183
======== ======= ======= =======
23. Capital Commitments
At the reporting date there were no outstanding commitments for
capital expenditure.
Earnings per
24. Share
Loss per share of 16.17p (2010: 14.72p) is calculated on the loss
attributable to ordinary shares of GBP4,320,033 (2010: GBP3,934,608)
divided by the weighted number of ordinary shares in issue during
the period.
Computation of basic
earnings per share: 2011 2010
Net loss (GBP4,320,033) (GBP3,934,608)
Weighted average number of shares
outstanding 26,723,643 26,723,643
Basic loss per share (16.17)p (14.72)p
Diluted loss per share (16.17)p (14.72)p
There were no potentially dilutive instruments in issue during the
current or preceding year. All amounts shown relate to continuing
and total operations.
There was no impact on loss per share arising from the prior period
restatement (see note 29).
25. Share Capital 2011 2010
GBP GBP
Called up, allotted and
fully paid:
26,723,643 Ordinary shares
of 2.5p each 668,091 668,091
Nil 'A' shares
of 2.5p each - -
-------- --------
668,091 668,091
======== ========
26. Contingent Liabilities
A third party has brought a claim against a subsidiary Company,
Waterloo Investments Limited, regarding payment of a profit share
of a completed development. Legal proceedings were commenced by the
third party in 2001. The amount claimed is GBP744,008. Waterloo
Investments Limited has counterclaimed against the third party for
GBP333,708 plus interest and costs. No provision has been made in
these financial statements for this liability as the Board is of
the opinion that there is no prospect that the claim against
Waterloo Investments Limited will be successful.
A former Director has made a claim against the Company for
wrongful and unfair dismissal. The dispute with the former Director
remains unresolved as at the date of approval of these financial
statements. Substantial claims are asserted including an unfair
dismissal claim but the Board remains of the view that the claims
are unlikely to succeed. Nonetheless, as is usual in any
litigation, without prejudice commercial settlement terms will be
further considered as may be appropriate. At present the Board are
of the opinion that the claims are unlikely to succeed and no
provision has therefore been made in the financial statements.
The Company and Group trading subsidiaries have given an
unlimited guarantee and debenture secured on the assets of the
Group to its bankers in respect of a facility arrangement. At the
reporting date the net amount owed to the bank was GBP218,685
(2010: GBPnil).
27. Related Party Transactions
Group
The Group's related parties as defined by International
Accounting Standard 24, the nature of the relationship
and the
amount of transactions with them during
the period were as follows:
Nature
of 2011 2010
Related Nature of
Party Relationship GBP GBP GBP GBP Transactions
Balance Balance
Total at the Total at the
transactions year transactions year
in the year end in the year end
Amount owed by
J.R.G. Hunter 1 1,428 34,360 (28,296) 32,932 J.R.G. Hunter
to Northacre PLC
at 28(th) February
2011. The highest
amount owed
by J.R.G Hunter
in the year was
GBP34,360 (2010:
GBP86,574)
Amount included
J.R.G. Hunter 1 10,187 193,623 43,915 183,436 in accrued income
in respect of
services provided
at arm's length to
J.R.G Hunter
Provision against
J.R.G. Hunter 1 (193,623) (193,623) - - accrued income
in respect of
services provided
at arm's length to
J.R.G Hunter
Rent and services
Campden Estates 2 - - 3,117 - payable
by Campden Estates
Limited Limited
for use of office
space
Amount owed by
Campden Estates 2 - - (3,584) - Campden Estates
Limited to
Limited Northacre PLC
at 28(th ) February
2011
Northacre Management fee
PLC 3 - (3,000) - (3,000) receivable
Directors
Retirement
and from the Scheme
Death
Benefit
Scheme
Northacre Loan repayable
PLC 3 - (750,000) - (750,000) to the Scheme
Directors
Retirement
and by Northacre PLC
Death
Benefit
Scheme
Northacre Loan repayable
PLC 3 275,000 - - (275,000) to the Scheme by
Directors
Retirement Northacre PLC. The
and loan was repaid
Death
Benefit on 26(th) June
Scheme 2010
Northacre Interest payable
PLC 3 (19,517) (98,883) (11,372) (79,366) to the Scheme on
Directors
Retirement the loans to
and Northacre PLC
Death
Benefit
Scheme
Northacre Disbursements paid
PLC 3 18,680 108,465 51,680 89,785 by Northacre
Directors
Retirement PLC on behalf of
and the Scheme
Death
Benefit
Scheme
Provision in
Northacre respect of profit
PLC 3 (1,250,000) (1,250,000) - - share
Directors to the Scheme in
Retirement relation to the
and sale
Death
Benefit of Group's
Scheme interests in The
Abingdons
Partnership
Amount owed to
K.B. Nilsson 4 (27,110) (140,617) (106,748) (113,507) K.B. Nilsson from
Northacre PLC at
28(th) February
2011. The highest
amount owed
to K.B. Nilsson in
the year was
GBP(193,507)
(2010:GBP(106,748))
Interest payable
K.B. Nilsson 4 (14,474) (18,697) (4,223) (4,223) to K.B Nilsson
on the loan to
Northacre PLC
Nature
of 2011 2010
Related Nature of
Party Relationship GBP GBP GBP GBP Transactions
Balance Balance
Total at the Total at the
transactions year transactions year
in the year end in the year end
K.B. K.B. Nilsson
Nilsson 4 - - - - has provided
a personal
guarantee for
GBP570,000 to
the Group's
bankers as
security in
respect of
all
liabilities
of the Group
to the bank
Non-executive
E.B. Directors
Harris 5 (30,000) (50,000) (20,000) (20,000) fees for
March 2009 -
February 2011
invoiced from
E.C. Harris
LLP
Non-executive
M. Directors
Williams 6 (28,333) - (20,000) - fees for
March 2010 -
February
2011
Loan
M.A. repayable to
AlRafi 7 - (300,000) (300,000) (300,000) MTAF Group
(M.A. AlRafi)
by Northacre
PLC
Interest
M.A. payable to
AlRafi 7 (30,230) (40,559) (10,329) (10,329) MTAF Group
(M.A.
AlRafi)on the
GBP300,000
loan
To Northacre
PLC
Executive
M.A. Directors
AlRafi 7 1,350 (13,650) (15,000) (15,000) fees for
March 2010 -
February
2011
Loan
M.A. repayable to
AlRafi 7 (350,000) (350,000) - - MTAF (M.A.
AlRafi) by
Northacre PLC
including
a GBP50,000
fixed
premium
Interest
M.A. payable to
AlRafi 7 (2,493) (2,493) - - MTAF Group
(M.A. AlRafi)
on the
GBP300,000
loan
to Northacre
PLC
Loan
M.A. repayable to
AlRafi 7 (1,973) - - - MTAF Group
(M.A. AlRafi)
by Northacre
PLC. Amount
received in
the year was
GBP200,000
and amount
repaid
GBP201,973
including
interest
GBP1,973
Loan
repayable to
A. AlRafi 8 (800,000) (800,000) - - A. AlRafi
by Northacre
PLC
Interest
payable to A.
AlRafi on
A. AlRafi 8 (24,797) (24,797) - - the
GBP800,000
loan to
Northacre
PLC
Loan
arrangement
A. AlRafi 8 (100,000) - - - fee paid to
A. AlRafi for
GBP2m loan
facility
Nature of Relationships
1 J.R.G. Hunter was a Director until 11(th)
February 2010.
2 Campden Estates Limited is an associated
undertaking of Northacre PLC.
3 J.R.G. Hunter and K.B. Nilsson are trustees and potential beneficiaries
of the Northacre PLC Directors Retirement and Death Benefit Scheme.
4 K.B. Nilsson is a Director
of the Company.
5 E.B. Harris is a Director of the Company,
and a member of E.C. Harris LLP.
6 M. Williams is a Director
of the Company.
7 M.A. AlRafi is a Director
of the Company.
8 A. AlRafi is the father
of M.A. AlRafi.
Company
The Directors', associated company and pension fund transactions in the
Company are included in the Group disclosure above. In addition to these,
the Company has the following related party transactions as defined by
International Accounting Standard 24.
Nature
of 2011 2010
Nature of
Related Party Relationship GBP GBP GBP GBP Transactions
Balance Balance
Total at the Total at the
transactions year transactions year
in the year end in the year end
Management
Fees
Group entities 1 791,061 - 885,281 - receivable
in year from
Group
subsidiaries
provided at
arm's
length
Management
Fees payable
Group entities 1 (69,998) - (67,498) - in
year to
Group
subsidiaries
provided at
arm's
length
Nature of
Relationships
1 The Group entities are wholly
owned subsidiaries of the Company.
The balances at the reporting date are shown under notes 16 and 17 of
the financial statements.
28. Events after the Reporting Date
On 24(th) June 2011 the Company secured an additional loan
facility of GBP2,000,000 that was made available by Abdulsalam
AlRafi (father of Director and shareholder Mohamed AlRafi). The
loan is available on a drawdown basis and as at 21(st) July 2011
the Group had used GBP1,100,000 of the funds available. Interest is
charged at 3% per month. The loan is due to be repaid within 18
months of the date of the first drawdown.
An additional loan of GBP500,000 was provided by Director
Mohamed AlRafi. The loan was provided in four instalments:
GBP100,000 on 26(th) May 2011, GBP130,000 on 9(th ) June 2011,
GBP150,000 on 13(th) June 2011 and GBP120,000 on 20(th) June 2011.
Interest is charged at 3% per month. The loan does not have a fixed
date of repayment but it is the Directors' intention to repay the
loan as soon as additional funding is secured.
Since the end of the year there were changes to the Board of
Directors. Jayne McGivern was appointed as Chief Executive Officer
of the Group on 11(th ) March 2011 and resigned from the position
on 17(th) May 2011. Klas Nilsson has taken on the role of Interim
Chief Executive Officer. On 24(th) June 2011 Manish Santilale
resigned as Finance Director. His resignation was followed by the
appointment of Ken MacRae as Finance Director.
29. Prior year restatement
Group revenue and administrative expenses for the year ended
28(th) February 2010 have been restated to remove management fees
receivable and payable of GBP991,057. There is no impact on the
total comprehensive loss for the period or net assets at 28(th)
February 2010.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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