TIDMSYG
RNS Number : 6959K
Speymill PLC
27 June 2014
For Immediate Release 27 June 2014
Speymill plc
("Speymill" or the "Company")
Annual Report and Accounts
The Company is pleased to announce its audited annual report and
accounts for the year ended 31 December 2013 (the "Accounts"). The
Accounts containing an unqualified audit opinion will be sent to
Shareholders shortly and will also shortly be available at the
Company's website, www.speymill.com.
For further information:
Speymill PLC
Denham Eke
Tel +44 (0)1624 640860
Beaumont Cornish Limited (Nominated Adviser and Broker)
Roland Cornish
Tel +44 (0)207 628 3396
Chairman's statement
I am pleased to have this opportunity to be able to provide all
shareholders with an update on the activities of the Group for the
year ended 31 December 2013.
Results
During the year ended 31 December 2013, the Group returned a
Total Comprehensive Loss before tax of GBP0.46million (2012: loss
of GBP6.12 million). This figure represents a combination of
continuing and discontinued operations, with continuing operations
returning a loss before tax of GBP0.61 million for 2013 (2012: loss
of GBP1.09 million).
The Group's turnover for continuing operations for the year was
GBP56,000, (2012: nil) being income generated from services
provided to related parties.
During the course of the year, following approval at a General
Meeting, the Group divested its German property investment
activities and I will comment further on the German property
investment activities later in this report.
Financial position
The Group's financial position showed net liabilities of GBP3.23
million at 31 December 2013 (2012: net liabilities of GBP3.09
million).
Following the divestment of the German property investment
activities, the previous shareholder loan facility was repaid
through a combination of the proceeds from the disposal transaction
and the provision of a new loan from Galloway Limited ("Galloway",
a company related to both myself and Burnbrae Limited). This
facility was due to expire on 30 July 2014 but has been extended on
a reduced limit until 30 June 2015.
As at 31 December 2013, the balance of the facility provided by
Galloway was GBP2.78 million (2012: balance on the previous
facility GBP5.72 million).
Speymill Contracts
As I commented in the previous Annual Report, following
deterioration in the financial position of Speymill Contracts
Limited, this company entered Administration on 19 December 2012.
The Group accounts include a provision of GBP1.13 million in
respect of liabilities which may arise from Speymill Contracts
although there is uncertainty as to the extent of any liability
ultimately to be borne by the Group in this respect.
At the time of writing, the administration process remains
on-going and the Board continues to monitor the development of this
process with a view to protecting the Group's interests.
German Property Investment
Following approval at a General Meeting of Shareholders held on
30 July 2013, the Group divested its interests in two German
property investment companies, Horsfield Limited and Wyatt
Limited.
Before the accounting effect of interest rate swaps, up to the
date of disposal the operations generated a loss of GBP0.22 million
(2012: GBP3.76 million). After taking into account the accounting
required in relation to the interest rate swaps under International
Financial Reporting Standards ("IFRS"), the operations generated a
profit of GBP0.17 million to the date of disposal (2012: a loss of
GBP3.71 million).
After the release of all relevant reserves, the Group recognised
a loss of GBP0.10 million on the disposal of the German property
investment operations.
Investment Opportunities and Future Developments
Following the General Meeting of shareholders on 30 July 2013,
the Group became an Investing Company under the AIM Rules. The
Company continues to seek and consider prospects with the view of
identifying a suitable opportunity. Should the Company not be able
to announce such a transaction by 30 July 2014, then dealings in
the Company's shares on AIM will be suspended with effect from
7.30am on 31 July 2014.
Jim Mellon
Chairman
27 June 2014
Directors' report
The Directors present their annual report together with the
Group and the Parent Company's audited financial statements for the
year ended 31 December 2013.
Date of incorporation
Following the Scheme of Arrangement approved by shareholders in
August 2007, the holding company was re-incorporated on the Isle of
Man on 19 September 2007. The new Isle of Man company created for
this purpose was incorporated on 6 July 2007.
Principal activities and business review
The principal activity of the Group during the year was
initially real estate property investment and subsequently that of
being an investment company. During the year the Group's property
investment operation was divested. A review of the Group's trading
activities during the year, its financial results and its prospects
are given in the Chairman's statement.
Results and dividends
The consolidated income statement is set out below and shows the
loss for the year.
The Directors do not recommend the payment of a final ordinary
dividend (2012: nil).
Principal risks and uncertainties
The Group acknowledges that the greatest risks to its
profitability and as a going concern emanate from the
identification of suitable investment activities and the continued
availability of funding for the Group.
Risks to the going concern assumption are addressed in note 1 to
the financial statements.
Details on financial risk management are shown in note 22 to the
financial statements.
Third party indemnity insurance for Directors
The Company holds a Directors and Officers insurance policy
which provides cover for Directors and senior managers of the
holding company and subsidiaries.
Directors and their interests
The present membership of the Board is set out below.
The beneficial interests of Directors in the share capital and
share options of the Company as at the year-end were:
31 Dec 2013 31 Dec 2012
Ordinary shares Ordinary shares
of 1 pence of 1 pence
No. No.
Jim Mellon (1) 26,148,490 26,148,490
Lincoln Forrest 16,800 16,800
(1) --Jim Mellon's holding includes 2,727,273 held directly and
23,421,217 held by Burnbrae Limited which is indirectly and wholly
owned by the trustees of a settlement under which Jim Mellon has a
life interest.
Denham Eke is Managing Director of Burnbrae Limited.
Substantial shareholdings
As at 20 June 2014, the notifications received in respect of
shareholdings, other than Directors, which exceed 3% of the issued
ordinary shares of the Company are as follows:
ASB Capital Management 5.1%
Stoneycroft Limited 3.9%
Mr Robert MacDonald 3.5%
Share capital
There were no changes to the share capital during the financial
year ending 31 December 2013.
Parent and ultimate controlling party
The Directors consider the Company to be controlled by Burnbrae
Limited by virtue of its shareholding of 40.1%. Burnbrae Limited is
incorporated in the Isle of Man and is indirectly wholly owned by
the trustees of a settlement under which Jim Mellon has a life
interest. Jim Mellon also has a direct shareholding in the Company
of 4.7%.
Corporate Governance Statement
Although the Company is not obliged by the AIM rules to do so,
the Board intends, where appropriate for a Company of its size to
comply with the main provisions of the principles of good
governance and code of best practice set out in the UK Corporate
Governance Code 2012. The Directors aim to exercise effective
control over the Group and its activities while recognising their
responsibility to shareholders and other interested parties.
The Directors believe that the current composition of the Board
of Directors provides effective control at the time and ensures
compliance with all appropriate laws and regulations, however this
position is regularly assessed.
Given the current size and composition of the Board of
Directors, the Directors do not believe that it is effective or
appropriate to maintain a formal structure of Board Committees. The
Board shall deal with all issues directly but may appoint sub
committees as appropriate to deal with specific issues.
Audit and Internal Control
The Board believes that given the Group's current size, where
close control over operations will be exercised by the executive
Directors, the benefits likely to be gained from an internal audit
function would be outweighed by the costs of establishing such a
function. The Board will keep this requirement under review in
relation to the ongoing size and complexity of the business.
In the absence of a formal audit committee, the non-executive
Director has the opportunity to speak directly to the independent
auditors on any issue.
Shareholder relations
The Directors have periodic meetings with the main shareholder.
Meetings with institutional shareholders are arranged by request
and at these meetings the Group's strategy and most recently
reported performance are explained. The Company's Annual General
Meeting is also used as an opportunity to communicate with private
investors. In addition, a period for questions will be made
available for shareholders at the Annual General Meeting.
Executive Incentive Scheme
With effect from the 2007 financial year the Board introduced a
performance related scheme under which annual awards were
previously made by the Remuneration Committee. The awards comprised
a combination of cash and deferred Speymill shares. An employee
benefit trust was created to acquire and hold shares for employees,
with the shares being bought in the market. The deferred share
awards normally vest 50% after 2 years and 50% after 3 years. All
awards granted under this scheme have now either vested or lapsed
and the Board is considering whether the future use of this scheme
is appropriate.
Non-executive Directors
Remuneration for the non-executive Director is paid as fees for
their services in attending Board and Board committee meetings and
actioning matters arising therein. They do not participate in any
bonus scheme and are not entitled to any other benefits.
Details of the Directors' remuneration for the year are provided
in note 6 to the accounts. No directors have any share option
entitlements, either in terms of current options or a current
entitlement to future options.
Business standards
The Company does not condone any form of corrupt behaviour in
business dealings and has disciplinary procedures in place to deal
with any illegal or inappropriate activities by employees.
Auditors
Our auditors, KPMG Audit LLC, being eligible have expressed
their willingness to continue in office in accordance with Section
12(2) of the Companies Act 1982. A resolution to reappoint KPMG
Audit LLC as auditors and to authorise the Directors to fix their
remuneration will be proposed at the Annual General Meeting.
Annual General Meeting
The notice of the Annual General Meeting of the Company will be
circulated to shareholders in due course.
By order of the Board
N Holmes
Secretary
27 June 2014
Statement of Directors' Responsibilities in Respect of the
Directors' Report and the Financial Statements
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year, which meet the requirements of
Isle of Man company law. In addition, the Directors have elected to
prepare the financial statements in accordance with International
Financial Reporting Standards as adopted by the EU.
The financial statements are required by law to give a true and
fair view of the state of affairs of the Group and Parent Company
and of the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
International Financial Reporting Standards as adopted by the EU;
and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Parent
Company will continue in business.
The Directors are responsible for keeping proper 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 to enable
them to ensure that its financial statements comply with the
Companies Acts 1931 to 2004. 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.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation governing the preparation and
dissemination of financial statements may differ from one
jurisdiction to another.
Report of the Independent Auditors, KPMG Audit LLC, to the
members of Speymill plc
We have audited the financial statements of Speymill plc for the
year ended 31 December 2013 which comprise the Consolidated Income
Statement, the Consolidated Statement of Comprehensive Income, the
Consolidated and Parent Company Statements of Financial Position,
the Consolidated Statement of Changes in Equity and the
Consolidated Statement of Cash Flows and the related notes. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the EU.
This report is made solely to the Company's members, as a body,
in accordance with Section 15 of the Companies Act 1982. 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 7, the Directors are responsible for the
preparation of financial statements that 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
(APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Group's circumstances and have been consistently
applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the Directors; and the overall
presentation of the financial statements.
Opinion on the financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Group's and
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 IFRSs as adopted by the EU; and
-- have been properly prepared in accordance with the provisions of Companies Acts 1931 to 2004.
Emphasis of matter
We draw attention to Note 1.1 to the consolidated financial
statements. As of 31 December 2013, the Group had net liabilities
of GBP3.2 million and the Company had net liabilities of GBP4.1
million. The Group incurred a comprehensive loss for the year of
GBP462k and the Company incurred a comprehensive loss for the year
of GBP4.3m. Further, the Group and Company had net current
liabilities of GBP450,000 and GBP1.337 million respectively as at
31 December 2013. As stated in note 1.1, the Group is dependent
upon the continuing financial support of its largest shareholder,
Galloway Limited ("Galloway"). The loan from Galloway is due to
expire on 31 July 2014. Galloway has agreed to an extension of this
facility at a reduced level to expiry on 30 June 2015. Galloway has
indicated to the Group's Directors that it will consider further
funding as and when the need arises, but that it will not commit to
providing additional funding beyond the facility agreed. These
conditions indicate the existence of a material uncertainty that
may cast significant doubt about the Group's ability to continue as
a going concern (see note 1.1(a)).
Also, as stated in note 26, the Group is exposed to claims
arising in respect of performance bonds and parental company
guarantees provided. The outcome of such claims is subject to a
number of uncertainties and depends on several factors, for which
assumptions are required. As a result, it is more difficult to
accurately predict the outcome than it would be in the absence of
such factors and any liability ultimately borne by the Group may
significantly differ from that provided within the financial
statements. Further, the outcome of claims arising is considered to
be a key factor in the Group's ability to obtain continued funding
and remain a going concern.
Our audit opinion is not qualified in respect of the above
matters.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Acts 1931 to 2004 require us to report to you
if, in our opinion:
-- proper books of account have not been kept by the Parent
Company and proper returns adequate for our audit have not been
received from branches not visited by us; or
-- the Parent Company's statement of financial position and
statement of comprehensive income are not in agreement with the
books of account 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.
KPMG Audit LLC
Chartered Accountants, Heritage Court, 41 Athol Street, Douglas,
Isle of Man IM99 1HN
27 June 2014
Consolidated income statement
For the year ended 31 December 2013
2013 2012
Notes GBP'000 GBP'000
------------------------------------- ------ -------- --------
Turnover 2 56 -
Cost of sales - -
------------------------------------- ------ -------- --------
Gross profit 56 -
------------------------------------- ------ -------- --------
General administrative expenses (531) (574)
Share-based payments 18 - 5
Total operating costs (531) (569)
------------------------------------- ------ -------- --------
Loss from operations (475) (569)
Net finance costs 5 (383) (347)
-------- --------
Loss on ordinary activities before
taxation (858) (916)
Taxation 7 - -
------------------------------------- ------ -------- --------
Loss after taxation from continuing
operations (858) (916)
------------------------------------- ------ -------- --------
Profit/(loss) after taxation
from discontinued operations 3 248 (6,386)
(Loss)/profit on disposal of
operations 3 (97) 1,311
------------------------------------- ------ -------- --------
Loss after taxation (707) (5,991)
Attributable to:
Owners of the Company (711) (5,802)
Non-controlling interest 4 (189)
------------------------------------- ------ -------- --------
(707) (5,991)
------------------------------------- ------ -------- --------
Loss per share for continuing
operations (pence)
------------------------------------- ------ -------- --------
Basic 8 (1.47) (1.57)
------------------------------------- ------ -------- --------
Diluted 8 (1.47) (1.57)
------------------------------------- ------ -------- --------
Loss per share for total operations
(pence)
------------------------------------- ------ -------- --------
Basic 3,8 (1.22) (9.94)
------------------------------------- ------ -------- --------
Diluted 3,8 (1.22) (9.94)
------------------------------------- ------ -------- --------
Consolidated statement of comprehensive income
For the year ended 31 December 2013
2013 2012
GBP'000 GBP'000
--------------------------------------------------------- --- ------- -------- ------ -------- ---------
Loss for the year (707) (5,991)
------------------------------------------------------------------------------------------------- -------- ---------
Other comprehensive income:
Currency translation differences on foreign operations 245 (174)
Revaluations realised on disposal of foreign operations - 50
-------------------------------------------------------------------------------------------------
Total comprehensive loss for the year (462) (6,115)
------------------------------------------------------------------------------------------------- -------- ---------
Statements of financial position
As at 31 December 2013
31-Dec 31-Dec 31-Dec 31-Dec
2013 2013 2012 2012
Group Company Group Company
Notes GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------ -------- -------- -------- --------
Non-current assets
Property, plant and equipment 9 3 - 4 -
Investments in subsidiaries
and joint ventures 11 - 22 - 22
Financial assets at fair
value 1 - 1 -
Total non-current assets 4 22 5 22
-------------------------------- ------ -------- -------- -------- --------
Current assets
Investment property 10 - - 17,885 -
Trade and other receivables 12 904 57 984 8,091
Cash and cash equivalents 14 15 - 1,152 5
Total current assets 919 57 20,021 8,096
Total assets 923 79 20,026 8,118
-------------------------------- ------ -------- -------- -------- --------
Equity
Capital and reserves
Ordinary share capital 20 584 584 584 584
Share premium 20 34 34 34 34
Share-based payments
reserve - - 123 123
Other income reserve 275 (7) (108) (835)
Retained income (4,122) (4,731) (3,223) 347
-------------------------------- ------ -------- -------- -------- --------
Equity attributable to
owners of the Company (3,229) (4,120) (2,590) 253
Non-controlling interest - - (497) -
Total equity (3,229) (4,120) (3,087) 253
-------------------------------- ------ -------- -------- -------- --------
Non-current liabilities
Interest Bearing Loans 15 - - 13,887 -
Derivative Financial
Instruments 24 - - 971 -
Shareholders' loan 16 2,783 2,783 5,722 5,722
-------------------------------- ------ -------- -------- -------- --------
Total non-current liabilities 2,783 2,783 20,580 5,722
-------------------------------- ------ -------- -------- -------- --------
Current liabilities
Bank overdraft 14 43 43 - -
Trade and other payables 13 1,326 1,373 2,342 2,143
Interest Bearing Loans 15 - - 187 -
Current tax liabilities - - 4 -
Total current liabilities 1,369 1,416 2,533 2,143
-------------------------------- ------ -------- -------- -------- --------
Total liabilities 4,152 4,199 23,113 7,865
Total equities and liabilities 923 79 20,026 8,118
-------------------------------- ------ -------- -------- -------- --------
The Company made a loss of GBP5,200,835 (2012: loss of
GBP15,265,181) for the year ended 31 December 2013.
These financial statements were approved by the Board of
Directors on 27 June 2014 and were signed on their behalf by
D H N Eke L S Forrest
Director Director
Consolidated statement of changes in equity
For the year ended 31 December 2013
Ordinary Share Share-based Other Retained Attributable Non-Controlling Total
share premium payment income income/ to owners equity
capital reserve (loss) of the
parent
(1) (3) (4) (5) Interest
(2) (6)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ --------- -------- ------------ -------- --------- ------------- ---------------- ---------
Balance at 31
December
2011 584 34 146 (920) 3,494 3,338 (308) 3,030
Loss for the year - - - - (5,802) (5,802) (189) (5,991)
Other
comprehensive
income for the
year:
Revaluation of
financial
assets at fair
value - - - 633 (633) - - -
Currency
translation
differences on
foreign
operations - - - (174) - (174) - (174)
Revaluations
realised
on disposal of
Financial assets
at
fair value - - - 50 - 50 - 50
Transactions with
owners, recorded
directly
in equity:
Share based
payments:
- share options
charge - - (5) - - (5) - (5)
Lapsed/forfeited
share
options - - (18) (45) 63 - - -
Own shares
disposed - - - 3 - 3 - 3
Lapsed/forfeited
deferred
share awards - - - 345 (345) - - -
Balance at 31
December
2012 584 34 123 (108) (3,223) (2,590) (497) (3,087)
------------------ --------- -------- ------------ -------- --------- ------------- ---------------- ---------
Loss for the year - - - - (711) (711) 4 (707)
Other
comprehensive
income for the
year:
Currency
translation
differences on
foreign
operations - - - 245 - 245 - 245
Revaluations
realised
on disposal of
subsidiaries - - - 320 (493) (173) 493 320
Transactions with
owners, recorded
directly
in equity:
Transfer prior
year
reserve - - - (182) 182 - - -
Lapsed/forfeited
share
options - - (123) - 123 - - -
Balance at 31
December
2013 584 34 - 275 (4,122) (3,229) - (3,229)
------------------ --------- -------- ------------ -------- --------- ------------- ---------------- ---------
(1) Ordinary Share Capital represents the nominal value of shares allotted and issued.
(2) Share Premium represents the premium paid, where appropriate, on shares allotted and issued.
(3) Share Based Payments represents the current carrying value
of remuneration issued in the form of shares which have not yet
been issued, for example the value of share options issued but not
yet exercised.
(4) Other Income Reserve represents reserves arising from
foreign exchange differences and any other reserves not
attributable to Share Capital, Share Premium, Share Based Payments
or Retained Income.
(5) Retained Income represents the retained income of the company and its subsidiaries.
(6) Non-controlling interests represent the retained income
attributable to minority shareholders in subsidiaries.
Consolidated statement of cash flows
For the year ended 31 December 2013
31-Dec 31-Dec
------
2013 2012
Notes GBP'000 GBP'000
----------------------------------------------- ------ --------- ---------
Cash flows from operating activities
Net cash (outflow) from operations (855) (2,788)
Taxation paid 15 8
----------------------------------------------- ------ --------- ---------
Net cash (outflow) from operating activities (840) (2,780)
Cash flows from investing activities
Cash held by subsidiary on disposal (1,020) (164)
Proceeds received on disposal of subsidiaries 300 -
Settlements in relation to financial
instruments - 1,326
Net purchase and disposal of property,
plant and equipment - (8)
----------------------------------------------- ------ --------- ---------
Net cash (outflow) / inflow from investing
activities (720) 1,154
Cash flows from financing activities
Sale of own shares - 3
Shareholders' loan drawdown 16 1,233 6,421
Shareholders' loans repayments, including
interest and fees 16 (340) (3,800)
Repayment of interest bearing loans (144) (173)
Interest paid (435) (743)
----------------------------------------------- ------ --------- ---------
Net cash inflow from financing activities 314 1,708
----------------------------------------------- ------ --------- ---------
Net (decrease) / increase in cash and
cash equivalents (1,246) 82
----------------------------------------------- ------ --------- ---------
Translation 66 4
Cash and cash equivalents at beginning
of year 1,152 1,066
----------------------------------------------- ------ --------- ---------
Net cash and cash equivalents at end
of year (28) 1,152
----------------------------------------------- ------ --------- ---------
Cash and cash equivalents comprise
Bank balances 14 15 1,152
Bank overdraft used for cash management
purposes 14 (43) -
----------------------------------------------- ------ --------- ---------
Cash and cash equivalents in the statement
of cash flows (28) 1,152
----------------------------------------------- ------ --------- ---------
Cash (used by) / generated from operations
Profit from operations (96) (4,261)
Adjusted for:
Depreciation of tangible assets 9 1 24
Share-based payments charge - (5)
Revaluation of available-for-sale financial - -
assets
(Increase) / decrease in receivables (8) 1,025
(Decrease) / increase in payables (752) 429
----------------------------------------------- ------ --------- ---------
Net cash (outflow) from operations (855) (2,788)
----------------------------------------------- ------ --------- ---------
Notes to the consolidated financial statements
1 Reporting entity
Speymill plc is a public limited company incorporated and
domiciled in the Isle of Man (referred to as the Company). The
address of the Company's registered office is 1st Floor, Regent
House, 16-18 Ridgeway Street, Douglas, Isle of Man, IM1 1EN.
The consolidated financial statements of the Company as at and
for the year ended 31 December 2013 comprise the Company and its
subsidiaries (together referred to as the "Group" and individually
as "Group entities") and the Group's interest in jointly controlled
entities. The Group is primarily involved in real estate investment
management, construction operations, property management and
property investment.
1.1 Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
("IFRSs") as adopted by the EU.
Going concern
The Board is of the opinion that it has secured sufficient
finance in order to enable the Group to continue trading and that
it is appropriate to prepare these accounts on a going concern
basis. In support of this opinion, the Board has undertaken a
budgeting process for its business units for the period to 30 June
2015.
The Group has in place a shareholder loan facility (the
"Facility") entered into with Galloway Limited (the "Lender", a
company related to both Jim Mellon and Burnbrae Limited) on 25 June
2013 that was due to expire on 31 July 2014. This Facility replaced
a previous loan facility provided by Jim Mellon and Burnbrae on the
disposal of the property investment subsidiaries, Horsfield Limited
and Wyatt Limited to Jim Mellon and Burnbrae following approval at
a general meeting on 30 July 2013.
The Facility has a limit of GBP4,000,000, interest is charged at
8% per annum and an underwriting fee of 3% is charged on amounts
drawn down under the facility. There is an option to convert the
facility to Ordinary Shares at a conversion price based on the
average closing price of the Ordinary Shares as traded on the AIM
exchange for the five (5) working days prior to the date of
conversion, subject to a maximum price of GBP0.01 (1 pence) per
Ordinary Share. As at 27 June 2014 the amount drawn down under the
Facility was GBP3,006,444. In order to ensure the continued
availability of working capital to the Group, the Facility has been
extended until 30 June 2015 at a reduced limit of GBP3,500,000.
The Directors acknowledge that the group's going concern status
is dependent upon the continuation of funding from Galloway Limited
("Galloway"). Galloway has indicated to the Group's Directors that
it will consider further funding as and when the need arises, but
that it will not commit to providing additional funding.
Speymill has also has an overdraft facility with its bank,
LloydsTSB Offshore, until 30 November 2014. The overdraft limit is
GBP50,000. The Board is currently in discussion with the bank to
extend the facility further.
Presentation of financial statements
The Group applies revised IAS 1 presentation of financial
statements (2007), which became effective as of 1 January 2009. As
a result, the Group presents in the consolidated statement of
changes in equity, all owner changes in equity, whereas all
non-owner changes in equity are presented in the consolidated
statement of comprehensive income. This presentation has been
applied in these financial statements from the year ended 31
December 2009.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and
interpretations are not yet effective for the year ended 31
December 2013, and have not been applied in preparing these
consolidated financial statements, these are listed below:
New/Revised International Accounting Standards Effective date
/ International Financial Reporting Standards (IAS/IFRS) (accounting periods
commencing on or
after)
---------------------------------------------------------- ---------------------
Transition guidance: Amendments to IFRS10, IFR11 1 January 2014
and IFRS12
IFRS 9 - Financial Instruments 1 January 2015
IFRS 10 - Consolidated Financial Statements 1 January 2014
IFRS 11 - Joint Arrangements 1 January 2014
IFRS 12 - Disclosure of Interests in Other Entities 1 January 2014
IFRS 14 - Regulatory Deferral Accounts 1 January 2016
IAS 27 Separate Financial Statements (2011) 1 January 2014
IAS 28 Investments in Associates and Joint Ventures 1 January 2014
(2011)
Investment entities - Amendments to IFRS 10, IFRS 1 January 2014
12 and IAS 27
Amendments to IFRS 7 - Disclosures - Offsetting 1 January 2014
Financial Assets and Financial Liabilities
IFRS 9 Financial Instruments 2013 To be confirmed
Recoverable amount disclosures for non-financial 1 January 2014
assets - Amendments to IAS 32
Continuous hedge accounting after derivative novations 1 January 2014
- Amendments to IAS 39
Defined Benefit Plans: Employee Contributions - 1 July 2014
Amendments to IAS19
IFRIC Interpretation
IFRIC 21 Levies 1 January 2014
The Directors do not expect the adoption of the other standards
and interpretations to have a material impact on the Group's
financial statements in the period of initial application.
(b) Basis of measurement and functional currency
The Group consolidated financial statements are presented in
pounds sterling, rounded to the nearest thousand. They have been
prepared on the historical cost basis except where assets and
liabilities are required to be stated at their fair value.
(c) Use of estimates and judgement
The preparation of Group consolidated financial statements in
conformity with IFRS requires management to make judgments,
estimates and assumptions that affect the application of policies
and reported amounts of assets, liabilities, income and expenses.
The estimates and associated assumptions are based on historical
experience, current and expected economic conditions, and in some
cases actuarial techniques and various other factors that are
believed to be reasonable under the circumstances, the results of
which form the basis of making the judgments about carrying values
of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised and in future periods,
if applicable.
The more significant areas requiring the use of management
estimates and assumptions are discussed below.
Speymill Contracts Limited - subsidiary in administration
On 19 December 2012 the Group's wholly owned subsidiary,
Speymill Contracts Limited ("Speymill Contracts"), was placed into
administration and as a result the Group lost control of Speymill
Contracts.
Income taxes
Significant judgment is required in determining provisions for
income taxes and in determining deferred tax assets based on an
assessment of the probability that taxable profits will be
available against which such deferred tax assets can be
recovered.
Debtors
Judgement is applied in respect of debtors which are subject to
on-going legal proceedings (refer to note 12). This judgement is in
respect of the likely recoverability of any debtor subject to such
proceedings, as there will be uncertainty as to the actual outcome.
Any judgement is made on the basis of the information available at
the time of preparing the financial statements and will involve
discussions with professional advisors.
Provisions
Judgement is applied in the case of all provisions where the
Group believes that it has a liability but there is uncertainty as
to the specific obligations of the Group at the time of preparing
the financial statements (please refer to note 13). Accordingly,
judgement has been applied in respect of provisions for liabilities
that are not yet certain and, where appropriate, professional
advice has been sought.
Going concern
The Group's ability to continue as a going concern is dependent
upon the continuation of funding from Galloway (please refer to
note 1.1(a)).
1.2 Summary of significant accounting policies
The principle accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented
unless otherwise stated.
Bases of consolidation
a) Subsidiaries
Subsidiaries are entities controlled by the Group. Control
exists when the Group has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control,
potential voting rights that are presently exercisable or
convertible are taken into account. The financial statements of
subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control
ceases. The accounting policies of subsidiaries have been changed
when necessary to align them with the policies adopted by the
Group.
The acquisition method of accounting is used to account for the
acquisition of a subsidiary by the Group. The cost of an
acquisition is measured as the fair value of the assets and
liabilities acquired, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date,
irrespective of the extent of any minority interest. The excess of
the cost of acquisition over the fair value of the Group's share of
the identifiable net assets acquired is recorded as goodwill. If
the cost of acquisition is less than the fair value of the net
assets of the subsidiary acquired, the difference is recognised
directly in the income statement.
b) Transactions eliminated on consolidation
Intra-group balances and any unrealised income and expenses
arising from intra-group transactions, are eliminated in preparing
the consolidated financial statements. Unrealised gains arising
from transactions with jointly controlled entities are eliminated
to the extent of the Group's interest in the entity. Unrealised
losses are eliminated in the same way as unrealised gains, but only
to the extent that there is no evidence of impairment.
c) Consolidation of employee benefit trust (EBT)
In 2008 the Group created an EBT to acquire and hold shares to
be awarded to employees. Based on an evaluation of its relationship
within the Group and the EBT risks and rewards, the Group concluded
that it controls the EBT and therefore has consolidated the EBT
within its results. The EBT was closed during the previous year and
will not exist going forward.
Foreign currency translation
a) Functional and presentation currency
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates (the "functional
currency"). The consolidated financial statements are presented in
pounds sterling, which is the Company's functional and the Group's
presentation currency.
b) Translation and balances
Foreign currency transactions are translated into the functional
currency using the approximate exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of foreign currency transactions and
from the translation at the year-end exchange rate of monetary
assets and liabilities denominated in foreign currencies are
recognised in the income statement, with the exception of
available-for-sale financial assets and intercompany balances with
foreign currency denominated subsidiaries which are both revalued
through reserves. Non-monetary assets and liabilities that are
measured in terms of historical costs in a foreign currency are
translated using the exchange rate at the date of the transaction.
Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated into the
functional currency using the exchange rates ruling at the date the
fair value was determined.
c) Financial statements of foreign operations
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on consolidation,
generally are translated into pounds sterling at foreign exchange
rates ruling at the end of the reporting period.
The revenues and expenses of foreign operations excluding
foreign operations in hyper inflationary economies generally are
translated to pounds sterling at the foreign exchange rates ruling
at the dates of the transactions. Foreign exchange differences
arising on retranslation are recognised in the foreign currency
translation reserve, within the other income reserve. When a
foreign operation is disposed of in part or in full, the relevant
amount in the foreign currency reserve is transferred to profit and
loss.
Revenue
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable for goods
and services provided to customers outside the Group in the normal
course of business net of Value Added Tax.
The Group revenue comprises the following:-
-- Rental income from the investment properties leased out under
operating leases is recognised in the income statement on a
straight-line basis over the term of the lease. Related direct
costs are accounted for on an accrual basis. Lease incentives
granted are recognised as an integral part of the total rental
income, over the term of the lease.
-- Revenue from services provided to related parties.
Determination and presentation of operating segments
As of 1 January 2009 the Group determined and presented
operating segments based on the information that internally is
provided to the CEO, who is the Group's chief operating decision
maker.
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Group's other components. An operating
segment's operating results are reviewed regularly by the CEO to
make decisions about resources to be allocated to the segment and
assess its performance, and for which discrete financial
information is available.
Segment results that are reported to the CEO include items
directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items comprise mainly
corporate and head office expenses as well as corporate and head
office assets and liabilities.
Segment capital expenditure is the total cost incurred during
the period to acquire property, plant and equipment, and intangible
assets other than goodwill.
Financing costs
Interest payable on borrowings is calculated using the effective
interest rate method. Other charges include bank charges and
commission costs. The interest expense component of finance lease
payments is recognised in the income statement using the effective
interest rate method.
Investment Property
Investment properties are those which are held either to earn
rental income or for capital appreciation or both.
Investment properties are stated at the fair value as per the
latest available valuation (refer to note 10). Any gain or loss
arising from a change in fair value is recognised in profit or
loss. Costs of acquisition and further capital expenditure are
capitalised.
Gains or losses on disposal are recognised in the period in
which they arise and represent the difference between the carrying
amount of an investment property at the beginning of the period and
its sale price less selling costs.
The Directors review the carrying value of investment properties
periodically taking into account factors such as the current
economic environment. If it is felt appropriate an independent,
external valuation will be sought to assist with this review.
Taxation
The tax charge can be composed of current tax and deferred tax.
This is calculated using tax rates that have been enacted or
subsequently enacted by the end of the reporting period and any
adjustment to tax payable in respect of previous years.
Current tax and deferred tax are charged or credited to the
income statement except where it relates directly to equity in
which case the relevant tax is also dealt with in equity.
Current tax is based on the profit for the year. Deferred tax is
provided, using the liability method on temporary differences
arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements.
Deferred tax on assets and liabilities is not recognised if the
temporary difference arises from goodwill not deductible for tax
purposes, or from the initial recognition of other assets or
liabilities in a transaction that affect neither accounting nor
taxable profits and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
future.
Deferred tax assets are recognised only to the extent that it is
probable that future taxable profits will be available against
which temporary differences can be utilised. The carrying amount of
deferred tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that the
related tax benefit will be realised.
Earnings per share
The Group presents basic and diluted earnings per share (EPS)
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the year. Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding for the
effects of the dilutive potential of share options granted to
employees.
Property, plant and equipment
Property, plant and equipment are stated at costs less
accumulated depreciation and any recognised impairment losses.
Costs include purchase costs together with any incidental expenses
associated with bringing the asset to its operating location and
condition. Property, plant and equipment are depreciated over their
expected useful lives as follows:
Short leasehold improvements - over the period of the lease
Fixtures and equipment - 3-5 years
Motor vehicles - 4 years
Gains and losses on disposals of any item of property, plant and
equipment are determined by comparing the proceeds from the
disposal with the carrying amount of property, plant and equipment
and are recognised with "other income" in the income statement.
When revalued assets are sold, the amounts included in the
revaluation surplus reserve are transferred to retained
earnings.
The carrying value of property, plant and equipment is reviewed
for impairment when events and circumstances indicate that it is
not recoverable. Any impairment is charged to the income statement
immediately.
Impairment of assets
At the end of each reporting period, the Group reviews the
carrying amounts of its tangible fixed assets to determine whether
there is any indication that these assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset, which is the higher of its fair value less
costs to sell and its value in use, is estimated in order to
determine the extent of the impairment loss. Where the asset does
not generate cash flows that are independent from other assets, the
Group estimates the recoverable amount of the cash generating unit
to which the asset belongs. For tangible and intangible assets
excluding goodwill, the cash-generating unit is considered to be a
business segment.
For goodwill, the cash-generating unit is considered to be the
business on which the goodwill arose.
An impairment charge is recognised in the income statement in
the year in which it occurs. Where an impairment loss, other than
an impairment loss on goodwill, subsequently reverses due to a
change in its original estimate, the carrying amount of the asset
is increased to the revised estimate of its recoverable amount. The
increased amount cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity net of any tax
effects.
Where any Group company purchases the Company's equity share
capital (treasury shares) the consideration paid including any
directly attributable incremental costs (net of income tax) is
deducted from equity attributable to the Company's equity holders
until the shares are cancelled or reissued. Where such shares are
subsequently reissued any consideration received, net of any
directly attributable incremental transaction costs and related tax
effect is included in equity attributable to the Company's equity
holders.
Retirement benefit costs
The Group previously operated a defined contribution scheme.
Contributions to the scheme are charged to the income statement as
they become payable according to the scheme rules. This scheme is
now closed and no contributions are currently made.
Share-based payments
Employee services received in exchange for the grant of share
options, performance share plan awards and deferred bonus plan
awards are charged in the income statement over the vesting period
based on the fair values of the options or awards at the date of
grant. The amount recognised as an expense is adjusted to reflect
the actual number of share options that vest.
For share options the fair value is calculated using the
Black-Scholes model and the vesting period is between 0-3 years.
For share issues, the fair value is the market value of the shares
issued. The corresponding credits in respect of amounts charged to
the income statement are included in a separate reserve in equity
until such time that the option or awards are exercised or
lapsed.
Leasing
Leases which transfer substantially all of the risks and rewards
of ownership to the lessee are classified as finance leases. All
other leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the
Group at their fair value or if lower, at the present value of the
minimum lease payments, each determined at the inception of the
lease, and depreciation is provided accordingly.
The corresponding liability to the lessor is included in the
statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance charges and the
reduction of the lease obligation so as to achieve a constant rate
of interest on the remaining balance of the liability.
Rentals payable under operating leases are charged to income on
a straight-line basis over the term of the relevant lease.
Benefits received and receivable as an incentive to enter into
an operating lease are also spread on a straight-line basis.
Provisions
Provisions are recognised when the Group has a present
obligation, whether legal or constructive, as a result of a past
event for which it is probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation.
Provisions are measured at the present value of management's
best estimate of the expenditure required to settle the present
obligation at the balance sheet date. The discount rate used to
determine the present value reflects current market assessments of
the time value of money and the risks specific to the
liability.
A contingent liability is not recognised on the statements of
financial position except in a business combination. A contingent
liability is disclosed when the possibility of an outflow of
resources embodying economic benefits is not remote.
Dividend distribution
Dividend distribution to shareholders is recognised as a
liability in the financial statements in the period in which the
dividends are declared and authorised, i.e. no longer at the
discretion of the entity.
Financial instruments
IFRS 13 establishes a single source of guidance for measuring
fair value and requires disclosures about fair value measurements.
The scope of IFRS 13 is broad; the fair value measurement
requirements of IFRS 13 apply to both financial instrument items
and non-financial instrument items for which other IFRSs require or
permit fair value measurements and disclosure about fair value
measurements. Fair value under IFRS 13 is an exit price regardless
of whether that price is directly observable or estimated using
another valuation technique. Also IFRS 13 includes extensive
disclosure requirements. IFRS 13 requires prospective application
from 1 January 2013. Other than the additional disclosures, the
application of IFRS 13 has not had any material impact on the
amounts recognised in the consolidated financial statements.
Non-derivative financial instruments include investments in
equity, trade and other receivables, cash and cash equivalents,
loans and borrowings and trade and other payables.
Non-derivative financial instruments are initially measured at
fair value when the Group becomes a party to their contractual
arrangements. Transaction costs are included in the initial
measurement of financial instruments, except financial instruments
classified as at fair value through profit and loss. The subsequent
measurement of financial instruments is dealt with below.
Financial assets are valued at fair value with any movement
being recognised through the income statement, under early adoption
of IFRS 9.
Derivative financial instruments
The Group enters into interest rate swap contracts, in order to
fix the interest rate payable on bank borrowings.
Swap contracts are recorded at fair value, which represents the
unrealised gains and losses on revaluation. Fair value gains and
losses are recorded in profit or loss. Net payments or receipts
under the swap contracts are posted to interest expense in the
profit or loss.
Financial assets at fair value through profit or loss
The Group's investments in equity securities are classified as
financial assets at fair value through profit or loss in accordance
with IFRS9, which has been adopted early. Subsequent to initial
recognition, they are measured at fair value and changes therein
are recognised in profit and loss.
Derecognition of financial assets and liabilities
A financial asset is derecognised when the right to receive cash
flows from the asset has expired or the Company has transferred its
rights to receive cash and either (a) has transferred substantially
all the risks and rewards of the asset, or
(b) has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the
assets.
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires.
On derecognition of a financial asset, the difference between
the proceeds received or receivable and the carrying amount of the
asset is included in profit or loss.
On derecognition of a financial liability, the difference
between the carrying amount of the liability extinguished or
transferred to another party and the amount paid is included in
profit or loss.
Investments in subsidiary undertakings
Investments in subsidiaries are shown in the Company statement
of financial position at costs less any provision for
impairment.
Trade and other receivables
Trade and other receivables are stated at their fair value on
initial recognition and subsequently at costs less impairment
losses.
Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand, demand
deposits and short-term, highly liquid investments readily
convertible to known amounts of cash and subject to insignificant
risk of changes in value and are subsequently measured at cost as
they have a short-term maturity.
Cash which is subject to legal or contractual restrictions on
use is classified separately. Interest on cash and cash equivalents
is recognised on a time proportion basis, taking account of the
principal outstanding and the effective rate over the period to
maturity, when it is determined that such income will accrue to the
Group.
Bank overdraft is shown within borrowings in current liabilities
on the statements of financial position.
Financial liabilities
Financial liabilities, other than derivatives, are subsequently
measured at amortised cost, using the effective interest rate
method.
Trade payables
Trade payables are non-interest bearing and are stated at
nominal value.
Bank borrowings
Interest bearing bank loans and overdrafts are recorded at the
proceeds received net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct
issue costs are charged to profit or loss on an accrual basis using
the effective interest method and are added to the carrying amount
of the instrument to the extent they are not settled in the period
in which they arise.
2 Segmental information
The Group has one continuing reportable segment, as described
below, which is the Group's strategic business unit; these being
the central group management and administration. The following
summary describes the operation in the Group's reportable
segment:
-- Other - head office, group and administration costs
31 December 2013
Other Elimination Total
GBP'000 GBP'000 GBP'000
----------------------------------- ------- --------- ------------ ----------
External revenue 56 - 56
Inter-segment revenue 8 (8) -
----------------------------------- ---------------- --------- ------------ ----------
Total segment revenue 64 (8) 56
----------------------------------- ---------------- --------- ------------ ----------
Reportable segment (loss) /
profit from operations before
share-based payments (475) - (475)
Finance income 270 (270) -
Finance costs (383) - (383)
----------------------------------- ---------------- --------- ------------ ----------
Reportable segment (loss) /
profit before tax (588) (270) (858)
----------------------------------- ---------------- --------- ------------ ----------
Depreciation - - -
Reportable segment assets 88 (31) 57
Reportable segment liabilities (4,205) 104 (4,101)
Segment capital expenditure - - -
----------------------------------- ------- --------- ------------ ----------
31 December
2012
Other Elimination Total
GBP'000 GBP'000 GBP'000
----------------------------------- ------- --------- ------------ ----------
External revenue - - -
Inter-segment revenue 308 (308) -
----------------------------------- ---------------- --------- ------------ ----------
Total segment revenue 308 (308) -
----------------------------------- ---------------- --------- ------------ ----------
Reportable segment (loss) /
profit from operations before
share-based payments (15,344) 14,770 (574)
Share-based payments 5 - 5
Finance income 417 (417) -
Finance costs (347) - (347)
----------------------------------- ---------------- --------- ------------ ----------
Reportable segment (loss) /
profit before tax (15,269) 14,353 (916)
----------------------------------- ---------------- --------- ------------ ----------
Depreciation - - -
Reportable segment assets 13,514 (13,438) 76
Reportable segment liabilities (6,041) 182 (5,859)
Segment capital expenditure (1) - (1)
----------------------------------- ---------------- --------- ------------ ----------
3 Discontinued operations information
The Group has determined that four lines of business met the
criteria to be treated under IFRS 5 as Non-current assets held for
sale or discontinued operations. The four lines of business treated
as discontinued operations are as follows:
-- The Group's United Kingdom construction and refurbishment
business following the appointment of an Administrator on 19
December 2012
-- The Group's property services business
-- The Group's property fund management business, following the
termination of the contractual arrangement with Speymill Macau
Property Company plc on 28 June 2011
-- The Group's property investment business which was disposed
of following a general meeting on 30 July 2013
The profit after taxation for the business lines deemed to be
discontinued is shown on the face of the Consolidated Income
Statement and the analysis of this business is shown within this
note. The comparative results have been re-presented
accordingly.
2013 2012
GBP'000 GBP'000
------------------------------------------- -------- ---------
Discontinued operations
Turnover 906 22,159
Expenses (677) (28,531)
------------------------------------------- -------- ---------
Profit/ (loss) before tax of discontinued
operations 326 (6,372)
(Loss)/gain on disposal of discontinued
activities (97) 1,311
Taxation 19 (14)
------------------------------------------- -------- ---------
Profit/ (loss) after tax from
discontinued operations 151 (5,075)
------------------------------------------- -------- ---------
Earnings per share (pence) (in accordance with note 8)
Basic earnings per ordinary share (pence) 0.25 (8.37)
Diluted earnings per share (pence) 0.25 (8.37)
------------------------------------------- ----- -------
The cash flows arising from discontinued or discontinuing
operations are as follows:
2013 2012
Cash flow of discontinued operations GBP'000 GBP'000
-------------------------------------- --------- ---------
Operating cash flows 735 (1,698)
Investing cash flows (1,164) 1,152
Financing cash flows (703) (31)
-------------------------------------- --------- ---------
Total cash flows (1,132) (577)
-------------------------------------- --------- ---------
Tax charge in respect
of discontinued operations
2013 2012
Total Total
GBP'000 GBP'000
---------------------------- ----------- ---------------- ---------- ------- ---------- ----------
Foreign income tax on
subsidiary - -
Previous year's under
/ (over) provision (19) 14
Total current tax (19) 14
-------------------------------------------------------------------------------- ---------- ----------
Deferred tax
Original and reversing
of timing differences - -
----------- ---------------- ---------- ------- ---------- ----------
Total tax charge (19) 14
-------------------------------------------------------------------------------- ---------- ----------
All of the taxation in respect of discontinued operations
related to overseas operations.
Segmental information - discontinued operations
Discontinued Discontinued Discontinued
Property property property
fund
For the twelve months Investment services management Elimination Total
ended
31 December 2013 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ------------- ------------- ------------- ------------ --------
External revenue 886 20 - - 906
Inter-segment revenue - - - - -
---------------------------------- ------------- ------------- ------------- ------------ --------
Total segment revenue 886 20 - - 906
---------------------------------- ------------- ------------- ------------- ------------ --------
Reportable segment (loss)/profit
from operations before
share-based payments 588 (112) - - 476
Share-based payments - - - - -
Finance income 290 - - - 290
Finance costs (711) 1 - 270 (440)
---------------------------------- ------------- ------------- ------------- ------------ --------
Reportable segment (loss)/profit
before tax 167 (111) - 270 326
---------------------------------- ------------- ------------- ------------- ------------ --------
Depreciation - (1) - - (1)
Reportable segment assets - 960 1 (95) 866
Reportable segment liabilities - (51) - - (51)
Segment capital expenditure - - - - -
---------------------------------- ------------- ------------- ------------- ------------ --------
Discontinued Discontinued Discontinued Discontinued
Property UK construction Property property
fund
For the twelve investment & refurbishment services management Other Elimination Total
months ended
31 December 2012 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------------- ---------------- ------------- ------------- -------- ------------ ---------
External revenue 1,519 19,803 836 - - - 22,159
Inter-segment - - - - - - -
revenue
------------------ ------------- ---------------- ------------- ------------- -------- ------------ ---------
Total segment
revenue 1,519 19,803 836 - - - 22,159
------------------ ------------- ---------------- ------------- ------------- -------- ------------ ---------
Reportable
segment
(loss)/profit
from operations
before
share-based
payments (2,589) (3,977) 790 349 (3,073) 4,169 (4,331)
Share-based payments - - - - - -
Finance income 50 - - - - - 50
Finance costs (1,166) (31) - - - 417 (780)
------------------ ------------- ---------------- ------------- ------------- -------- ------------ ---------
Reportable
segment
(loss)/profit
before
tax (3,705) (4,008) 790 349 (3,073) 4,586 (5,061)
------------------ ------------- ---------------- ------------- ------------- -------- ------------ ---------
Depreciation - (22) (2) - - - (24)
Reportable
segment
assets 19,104 - 1,015 1 - (170) 19,950
Reportable
segment
liabilities (28,789) - (36) - (1,833) - (17,254)
Segment capital
expenditure - (8) - - - - (8)
------------------ ------------- ---------------- ------------- ------------- -------- ------------ ---------
Loss on disposal of operations
Loss on disposal of operations is comprised as follows:
2013
GBP'000
Loss on disposal of Horsfield Limited and Wyatt Limited (97)
Loss on disposal recognised in the Income Statement (97)
--------------------------------------------------------- --------
The carrying amount of the assets and liabilities of Horsfield
Limited and Wyatt Limited at the date of disposal were as
follows:
Net liabilities
disposed of
GBP'000
Total non-current assets 18,962
Trade and other receivables 89
Cash and cash equivalents 1,020
Trade and other payables (14,750)
Total non-current liabilities (15,518)
------------------------------------------------- ----------------
Aggregate net liabilities disposed of (10,197)
Less: Intercompany loan write-off 14,487
Consideration received (4,513)
Foreign exchange reserve realised on disposal 320
------------------------------------------------- ----------------
Loss on disposal of subsidiaries (97)
------------------------------------------------- ----------------
The consideration received was applied to the repayment of the
shareholder loan facility (note 16).
4 Loss from continuing operations
2013 2012
Total Total
GBP'000 GBP'000
----------------------------- -------- --------
Operating loss is stated
after charging:
Auditors' remuneration:
Audit of parent company
and consolidated financial
statements 21 37
Audit of subsidiary company
financial statements 3 11
Tax services (1) 8
23 56
----------------------------- -------- --------
All the above costs have been charged to the income
statement.
5 Net finance costs
2013 2012
Total Total
GBP'000 GBP'000
--------------------------- -------- --------
Bank charges and interest
payable (2) -
Shareholder loan interest
and facility fees (381) (347)
Net finance costs (383) (347)
--------------------------- -------- --------
6 Information regarding Directors and employees
Staff costs during the year including Directors amounted to:
2013 2012
Total Total
Directors' remuneration GBP'000 GBP'000
Salaries and benefits - -
Pension - defined contribution
schemes - -
Directors' fees 65 65
-------------------------------- --------- ---------
65 65
-------------------------------- --------- ---------
2013 2012
Total Total
GBP'000 GBP'000
Wages and salaries
(including Directors'
remuneration) 106 104
Social security costs 4 4
Share-based payments 3 3
-------------------------------- --------- ---------
113 111
-------------------------------- --------- ---------
The salary and benefits of Directors who served during the year
ended 31 December 2013 are as follows;
There are no share options or deferred bonus awards outstanding
as at 31 December 2013.
Basic salary/
Directors fees Total Total
2013 2012
Director GBP'000 GBP'000 GBP'000
---------------------- --------------- -------- --------
Executive
Jim Mellon 25 25 25
Denham Eke 20 20 20
Non-Executive
Lincoln Forrest 20 20 20
Aggregate emoluments 65 65 65
---------------------- --------------- -------- --------
7 Taxation
Tax charge 2013 2012
Total Total
GBP'000 GBP'000
--------------------------------- -------- --------
Foreign income tax on subsidiary - -
Previous year's (over) /
under provision - -
Total current tax - -
--------------------------------- -------- --------
Deferred tax
--------
Original and reversing of
timing differences - -
-------- --------
Total tax charge - -
--------------------------------- -------- --------
Factors affecting the tax charge
for the year
2013 2012
Total Total
GBP'000 GBP'000
Loss on ordinary activities
before taxation (858) (916)
--------------------------------------------------------- ---------- ---------------
Isle of Man income tax @
0% (2012: 0%) - -
Higher rates on overseas
earnings - -
Adjustments in respect of
prior periods - -
Tax expense per the income
statement - -
--------------------------------------------------------- ---------- ---------------
8 Loss per share on continuing operations
Total Total
2013 2012
GBP'000 GBP'000
----------- ------------
Loss for the year on continuing operations (858) (916)
---------------------------------------------------------- ----------- ------------
Basic weighted average
number of shares in issue 58,389,555 58,389,555
Employee share options and provisions for share issue - -
Loss per ordinary share on continuing operations (pence) (1.47) (1.57)
Dilutive effect of employee
share options - -
----------- ------------
Diluted loss per share on continuing operations (pence) (1.47) (1.57)
---------------------------------------------------------- ----------- ------------
Reconciliation of continuing operations loss to total loss for
the calculation of loss per share
Total Total
2013 2012
GBP'000 GBP'000
------------------------------------------------------------------------------- -------- ----------
Loss for the year on continuing operations (858) (916)
------------------------------------------------------------------------------- -------- ----------
Profit/(loss) for the year on discontinued operations 147 (4,886)
------------------------------------------------------------------------------- -------- ----------
Loss for the year on all operations attributable to the owners of the Company (711) (5,802)
------------------------------------------------------------------------------- -------- ----------
9 Property, plant and equipment
Leasehold property improvements Fixtures and equipment Motor vehicles Total
Group GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ------------------------------- ---------------------------- --------------- --------
Cost
At 1 January 2013 8 50 - 58
Additions - - -
Exchange adjustments - - - -
At 31 December 2013 8 50 - 58
---------------------------- ------------------------------- ---------------------------- --------------- --------
Depreciation
At 1 January 2013 7 47 - 54
Charge for the year 1 - - 1
Exchange adjustments - - - -
At 31 December 2013 8 47 - 55
---------------------------- ------------------------------- ---------------------------- --------------- --------
Net book value at 31
December 2013 - 3 - 3
---------------------------- ------------------------------- ---------------------------- --------------- --------
Leasehold Fixtures and equipment Motor Total
property improvements vehicles
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2012 160 140 - 300
Additions - 8 - 8
Disposals - (29) - (29)
Derecognised on disposal of subsidiary (152) (69) - (221)
Exchange adjustments - - - -
At 31 December 2012 8 50 - 58
---------------------------------------- ----------------------- ----------------------- ---------- ----------
Depreciation
At 1 January 2012 149 100 - 249
Charge for the year 10 14 - 24
Disposals - (29) - (29)
Derecognised on disposal of subsidiary (152) (38) - (190)
Exchange adjustments - - - -
At 31 December 2012 7 47 - 54
---------------------------------------- ----------------------- ----------------------- ---------- ----------
Net book value at 31 December 2012 1 3 - 4
---------------------------------------- ----------------------- ----------------------- ---------- ----------
Leasehold
property Fixtures
improvements and equipment Total
Company GBP'000 GBP'000 GBP'000
------------------------------------ -------------- --------------- --------
Cost
At 1 January 2013 1 39 40
Additions - - -
Disposals - - -
At 31 December 2013 1 39 40
------------------------------------ -------------- --------------- --------
Depreciation
At 1 January 2013 1 39 40
Charge for the year - - -
Disposals - - -
At 31 December 2013 1 39 40
------------------------------------ -------------- --------------- --------
Net book value at 31 December 2013 - - -
------------------------------------ -------------- --------------- --------
Leasehold
property Fixtures
improvements and equipment Total
Company GBP'000 GBP'000 GBP'000
------------------------------------ -------------- --------------- -----------
Cost
At 1 January 2012 1 67 68
Additions - 1 1
Disposals - (29) (29)
At 31 December 2012 1 39 40
------------------------------------ -------------- --------------- -----------
Depreciation
At 1 January 2012 1 67 68
Charge for the year - 1 1
Disposals - (29) (29)
At 31 December 2012 1 39 40
------------------------------------ -------------- --------------- -----------
Net book value at 31 December 2012 - - -
------------------------------------ -------------- --------------- -----------
10 Investment Property
2013 2012
GBP'000 GBP'000
------------------------------------------------ --------- --------
Brought forward 17,885 22,131
Disposals
- Disposal on sale of subsidiaries (18,962) -
Revaluation of investment properties - (3,685)
Effect of translation to presentation currency 1,077 (561)
------------------------------------------------ --------- --------
Value of investment property at end of year - 17,885
------------------------------------------------ --------- --------
The fair value of the Group's investment properties at 31
December 2012 was arrived at on the basis of a valuation carried
out as at 31 December 2012, by CBRE GmbH, independent valuers that
are not related to the Group.
11 Investments in subsidiaries
Company 2013 2012
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Shares in Group undertakings
At 1 January 22 1,134
Write off investments in subsidiaries - (580)
Write off share based payments invested in subsidiaries - (439)
Disposal of subsidiary - share-based payments - (93)
--------------------------------------------------------- -------- --------
At 31 December 22 22
--------------------------------------------------------- -------- --------
Details of the Company's principal direct and indirect
subsidiaries are as follows:
Percentage
of issued
ordinary Country
shares held of incorporation Nature of business
Subsidiary undertakings:
Speymill Property Group (UK) 100% UK Dormant
Limited
Speymill Property Group Limited 100% IOM Dormant
Speymill (Cyprus) Limited 100% Cyprus Dormant
GOAL construction GmbH 100% Germany Property refurbishment
services
12 Trade and other receivables
2013 2013 2012 2012
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- -------- --------
Trade receivables (1) 841 - 898 -
Amount owed by Group undertakings (2) - - - 8,020
Other receivables and prepayments 63 57 86 71
--------------------------------------- -------- -------- -------- --------
904 57 984 8,091
--------------------------------------- -------- -------- -------- --------
(1) Trade receivables include an amount of GBP834k in relation
to an ongoing legal dispute between GOAL construction GmbH and a
former client. This amount was previously fully provisioned and
although it remains in dispute, the legal process has developed to
a point where the directors feel that it is appropriate to
re-recognise part of the original debtor.
(2) Amounts receivable from Group undertakings were unsecured,
non-interest bearing and have no fixed date of repayment.
13 Trade and other payables
2013 2013 2012 2012
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- -------- --------
Trade payables 94 77 294 28
Amount owed to Group undertakings (1) - 104 - 182
Other taxation and social security - - 1 1
Other payables - - - 99
Accruals and deferred income (2) 1,232 1,192 2,047 1,833
--------------------------------------- -------- -------- -------- --------
1,326 1,373 2,342 2,143
--------------------------------------- -------- -------- -------- --------
(1) Amounts owed to Group undertakings are unsecured, subject to
interest at market rate and have no fixed date of repayment.
(2) Included within accruals and deferred income is a provision
of GBP1,131k specifically in relation to potential liabilities
which may arise from Speymill Contracts liabilities guaranteed by
Speymill plc (refer to note 26).
14 Cash and cash equivalents and overdraft
2013 2013 2012 2012
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- -------- -------- --------
Cash and cash equivalents 15 - 1,152 5
--------------------------- -------- -------- -------- --------
Bank overdraft 43 43 - -
--------------------------- -------- -------- -------- --------
Speymill plc has an overdraft facility with Lloyds TSB in the
Isle of Man. The limit of the new facility is GBP50,000 and is
currently available until 30 November 2014.
15 Interest-bearing loans
Group 2013 2012
GBP'000 GBP'000
------------------------------------------------------------ --------- --------
Under the terms of the loan agreement the interest bearing
loans are repayable as follows:
On demand or within one year - 187
In the second year - 13,887
In the third to fifth years inclusive - -
After 5 years - -
------------------------------------------------------------ --------- --------
- 14,074
---------------------------------------------------------------------- --------
The Group had pledged investment properties (and the rental
income of the properties) to secure related interest bearing
facilities granted to the Group for the purchase of such
properties. The Group's interest-bearing loans were transferred
with the properties when the subsidiaries owning those properties
were disposed of.
16 Shareholders' loan
2013 2013 2012 2012
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- -------- -------- -------- --------
Opening balance as at 1 January 5,722 5,722 2,754 2,754
Shareholders' loan drawdowns 1,233 1,233 6,421 6,421
Facility fees charged 30 30 54 54
Interest charged 352 352 293 293
Shareholders' loan repayments (4,112) (4,112) (3,800) (3,800)
Facility fees paid (174) (174) - -
Interest paid (268) (268) - -
----------------------------------- -------- -------- -------- --------
Closing balance as at 31 December 2,783 2,783 5,722 5,722
----------------------------------- -------- -------- -------- --------
Additional information regarding the shareholders' loan is set
out in note 1. On disposal of Horsfield Limited and Wyatt Limited
GBP4,513k of principal, interest and fees was repaid.
The balance outstanding on the shareholders' loan at the year
end comprising principal, accrued interest and facility fee is
attributable to the following:
2013 2013 2012 2012
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- -------- -------- -------- --------
Galloway Limited 2,783 2,783 - -
Jim Mellon - - 3,582 3,582
Burnbrae Limited - - 2,140 2,140
----------------------------------- -------- -------- -------- --------
Closing balance as at 31 December 2,783 2,783 5,722 5,722
----------------------------------- -------- -------- -------- --------
Full details of terms of shareholder loan facility are given in
note 1.1.
17 Deferred tax
Potential deferred tax assets, primarily relating to trading
losses not recognised was GBPnil (2012: GBPnil). In addition
potential deferred tax assets relating to capital losses amount to
GBPnil (2012: GBPnil).
18 Share-based payments
The Group has previously issued options over the ordinary shares
of the Company. As at 31 December 2013 all such options had lapsed
or been forfeited and none remain outstanding as at 31 December
2013.
A reconciliation of the share option movements over the year to
31 December 2013 is shown below:
2013 Weighted 2012 Weighted
average average
exercise price exercise price
Options (in pence) Options (in pence)
Outstanding at 1 January 1,290,642 23.68 1,644,850 22.64
Forfeited/lapsed during the year (1,290,642) (23.68) (354,208) (18.83)
Outstanding at 31 December - - 1,290,642 23.68
----------------------------------- ------------ --------------- ---------- ---------------
Exercisable at 31 December - - 1,290,642 23.68
----------------------------------- ------------ --------------- ---------- ---------------
There were no options outstanding as at 31 December 2013.
The options outstanding at 31 December 2012 had a weighted
average exercise price of 23.68 pence and a weighted average
remaining contractual life of 0.47 years.
The charges to the income statement in respect of share-based
payments are as follows.
Total Total
2013 2012
GBP'000 GBP'000
--------------- --------- --------
Share options - (5)
--------------- --------- --------
19 Operating lease commitments
At 31 December 2013 the Group was committed to making the
following minimum payments in respect of non cancellable operating
leases:
Land and buildings Other
2013 2012 2013 2012
GBP'000 GBP'000 GBP'000 GBP'000
Within one year 113 113 - -
Within two to five years 343 432 - -
After five years - 5 - -
456 550 - -
-------------------------- ------------------ ----------------- ----------- -----------
Following the Administration of Speymill Contracts Limited, the
Group became responsible for a lease entered into for a property
used by Speymill Contracts Limited. The lease can be terminated in
2017. The Group are actively seeking to find an alternative tenant
for the premises and have provided for the expense that is expected
to incurred accordingly.
20 Called up share capital
2013 2012
GBP'000 GBP'000
Authorised
500,000,000 ordinary shares of 1p each 5,000 5,000
--------------------------------------------------------------- -------------- --------
Number Ordinary
of Ordinary shares Share Premium Total
Group and Company shares GBP'000 GBP'000 GBP'000
-------------------------------- --------------- ------------ -------------- -----------
At 1 January 2013 58,389,555 583,896 34,306 618,202
Share Options exercised - - - -
-------------------------------- --------------- ------------ -------------- -----------
At 31 December 2013 58,389,555 583,896 34,306 618,202
-------------------------------- --------------- ------------ -------------- -----------
Capital Management
The Company is not subject to externally imposed capital
requirements.
21 Related party transactions
Parent and ultimate controlling party
The Directors consider the Company to be controlled by Burnbrae
Limited by virtue of its shareholding of 40.1%. Burnbrae Limited is
incorporated in the Isle of Man and is indirectly and wholly owned
by the trustees of a settlement under which Jim Mellon has a life
interest. Jim Mellon also has a direct shareholding in the Company
of 4.7%.
Transactions with related parties
The Group considers Burnbrae Limited and Galloway Limited to be
related parties. Denham Eke is the managing director of Burnbrae
Limited and is a director of Galloway Limited.
Details of transactions with Burnbrae Limited and the Directors
of the Company other than those detailed in notes 1 and 16, are as
follows:
2013 2012
GBP'000 GBP'000
----------------- -------- --------
Income:
Burnbrae Limited 56 -
-------- --------
At 31 December 56 -
----------------- -------- --------
2013 2012
GBP'000 GBP'000
------------------ -------- --------
Expenses:
Burnbrae Limited 166 169
-------- --------
At 31 December 166 169
------------------ -------- --------
Amounts owed to Burnbrae Limited at 31 December 2013 were GBPnil
(2012: GBPnil).
Key management personnel compensation
2013 2012
GBP'000 GBP'000
----------------- -------- --------
Directors' fees 65 65
----------------- -------- --------
22 Financial instruments
The Group uses a number of financial instruments comprising cash
and cash equivalents, bank overdrafts, available for sale financial
instruments, derivative financial instruments and trade and other
receivables and payables which arise directly from its operations,
the main purpose of which is to finance the Group's operations.
The principal risks that the Group is exposed to arise from the
use of these financial instruments and are as follows:
-- Liquidity risks
-- Credit risks
-- Market risks
Liquidity risks
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset.
The Group's exposure to contractual maturities of financial
liabilities relates mainly to shareholder borrowing, bank
overdrafts and trade and other payables.
Management controls and monitors the Group's cashflow on a
regular basis, including forecasting future cash flow under both
normal and stressed conditions and ensuring the Group has, as far
as is possible, access to adequate funds to enable it to continue
to operate. Banking facilities are kept under review and
renegotiated where necessary to meet Group requirements. Surplus
funds are placed on call deposits.
The Group has access to additional working capital financing
through a shareholder loan, as detailed in notes 1 and 16.
Speymill Plc has an overdraft facility with Lloyds TSB in the
Isle of Man. The limit of the new facility is GBP50,000 and is
currently available until 30 November 2014.
The following are the contractual maturities of financial
liabilities:
2013 Carrying amount Contractual cash flows 6 months or less 6-12 months 2-5 years
Financial liabilities GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ---------------- ----------------------- ----------------- ------------ ----------
Trade and other payables 94 (94) (94) - -
Bank overdraft 43 (43) (43) - -
Shareholders' loan 2,783 (2,783) (2,783) - -
2,920 (2,920) (2,920) - -
------------------------------ ---------------- ----------------------- ----------------- ------------ ----------
6 months 6-12 2-5 years
2012 Carrying amount Contractual cash flows or less months
Financial liabilities GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ---------------- ----------------------- ----------------- ------------ ----------
Trade and other payables 294 (294) (292) - (2)
Other taxes and social
security 1 (1) (1) - -
Corporation tax payable 4 (4) (4) - -
Shareholders' loan 5,722 (5,722) (5,722) - -
Derivative financial
instruments 971 (971) - - (971)
Interest bearing loans 14,074 (15,251) (311) (423) (14,517)
21,066 (22,243) (6,330) (423) (15,490)
------------------------------ ---------------- ----------------------- ----------------- ------------ ----------
Credit risks
Credit risk is the risk that one party to a financial instrument
will cause financial loss for the Company by failing to discharge
an obligation. The Group's exposure to credit risks arises from
cash and cash equivalents as well as credit exposure to clients and
customers. With respect to the investment property businesses the
majority of the Group's clients were mainly residential
tenants.
Cash and cash equivalents are held with major financial
institutions with high credit ratings.
The carrying amounts of financial assets represent the maximum
credit exposure and relates to financial assets carried at
amortised costs as they have short term maturity.
The maximum exposure to credit risks at 31 December amounted to
the following:
2013 2012
GBP'000 GBP'000
Financial assets at fair value 1 1
Trade receivables 841 898
Other receivables 63 86
Cash and cash equivalents 15 1,152
920 2,137
--------------------------------------- ------ ------------ ---- --------- -----------
2013 2013 2012 2012
Gross Impairment Gross Impairment
GBP'000 GBP'000 GBP'000 GBP'000
Not past due 28 - 86 -
Past due 0-30 - - 5 -
Past due 31-120 - - 13 -
Past due 121-365 - - 45 -
Due in more than 1 year 834 - 817 -
862 - 966 -
The ageing of trade receivables and VAT recoverable at the
reporting date was:
The maximum exposure to credit risks for trade receivables at
the reporting date by operating segments amounted to the
following:
2013 2012
GBP'000 GBP'000
Property services 847 838
Property investment - 75
Other 15 53
862 966
-------
Market risks
Market risk is the risk that changes in market prices such as
foreign exchange rates, interest rates and equity prices will
affect the Group's income or the value of its financial
instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters
while optimising returns.
Interest rate risk
Interest rate risk is the risk that the Group will sustain
losses through adverse movements in interest bearing assets or
liabilities. There is no risk to the interest rate on the
shareholder loan, pending any changes on renewal of the
facility.
At the reporting date the interest rate profile of the Group's
variable interest-bearing financial instruments were:
2013 2012
GBP'000 GBP'000
Financial assets 15 1,152
Financial liabilities (43) -
(28) 1,152
A 100 basis points increase in interest rates at the reporting
date would have decrease equity and profit or loss by GBP300 (2012:
increase of GBP11,500).
This assumes all other variables, in particular foreign currency
rates, remain constant. The analysis is performed on the same basis
for 2012.
Foreign currency risks
The Group operates internationally and is subject to
transactional foreign currency exposure primarily with respect to
the Euro when any of the Company's subsidiaries receives income,
pays for services or holds assets and liabilities denominated in
foreign currencies other than Sterling.
The Group does not actively manage the exposures but regularly
monitors the Group's currency position and exchange rate movements
and makes decisions as appropriate.
At the end of the reporting period the Group's exposure to
foreign currency risks is as follows:
GBP EUR Total
2013 GBP'000 GBP'000 GBP'000
Non-current assets - 4 4
Current assets 57 862 919
Current liabilities (1,313) (56) (1,369)
Non-current liabilities (2,783) - (2,783)
Net (liabilities)/assets (4,039) 810 (3,229)
GBP EUR Total
2012 GBP'000 GBP'000 GBP'000
Non-current assets - 5 5
Current assets 76 19,945 20,021
Current liabilities (1,962) (571) (2,533)
Non-current liabilities (5,722) (14,858) (20,580)
Net (liabilities)/assets (7,608) 4,521 (3,087)
A 5% strengthening of Sterling against the following currencies
at 31 December 2013 would have decreased equity and profit or loss
by the amounts shown below. This analysis assumes that all other
variables, in particular interest rates, remain constant. The
analysis is performed on the same basis for 2012.
2013 2013 2012 2012
Equity Profit or loss Equity Profit or loss
GBP'000 GBP'000 GBP'000 GBP'000
EUR (39) - (215) -
23 Fair value measurement
The Group measures fair values using the following fair value
hierarchy that reflects the significance of the inputs used in
making the measurements:
Level 1 - inputs are based upon unadjusted quoted prices for
identical instruments traded in active markets
Level 2 - inputs are based upon quoted prices for similar
instruments in active markets, quoted prices for identical or
similar instruments in markets that are not active, and model-based
valuation techniques for which all significant assumptions are
observable in the market or can be corroborated by observable
market data for substantially the full term of the assets or
liabilities
Level 3 - inputs are generally unobservable and typically
reflect management's estimates of assumptions that market
participants would use in pricing the asset or liability. The fair
values are therefore determined using model-based techniques that
include option pricing models, discounted cash flow models, and
similar techniques
Financial instruments measured at fair value - fair value
hierarchy
All financial assets and liabilities not stated at fair value in
the financial statements are categorised as level 2 in the fair
value hierarchy.
Financial instruments not measured at fair value
All financial assets and liabilities not stated at fair value in
the financial statements are categorised as level 2 in the fair
value hierarchy.
24 Derivative financial instruments
2013 2012
GBP'000 GBP'000
Fair value of interest rate
swap contracts - (971)
The fair value of the interest rate swap contracts comprised 2
contracts as follows:
Notional Fixed rate
amount Premium Maturity % Variable Rate 2013 2012
GBP'000 GBP'000 GBP'000 GBP'000
7,305,614 - 31/12/2014 4.615 (1) Euribor 3 month - (442)
8,745,280 - 31/12/2014 4.615 (1) Euribor 3 month - (529)
- (971)
(1) Fixed swap rate of 3.265% plus margin of 1.35%.
25 Dividends
The Group has not declared or paid any dividends during 2013
(2012: GBPnil).
26 Guarantees and other financial commitments
Group
The Group had given performance bonds with a value of GBP936,158
(2012: GBP936,158) and parental company guarantees on behalf of
Speymill Contracts. Where the Group believes that there is a
liability arising under these guarantees and financial commitments,
a provision has been recognised (refer to note 13).
Provisions are made based upon the best estimate of the Board,
having regard to the information available to them and any
professional advice provided. However, the ultimate amount and
timing of any settlement or costs related to any claim is subject
to uncertainty and depends upon a number of factors for which
assumptions are required. Any amounts ultimately incurred may
differ significantly from that provided as at 31 December 2013.
The Group had no capital commitments (2012: GBPnil).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BQLLLZQFBBBK
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