29th Jan 2010 07:00
For release at 0700hrs on 29 January 2010
Wren Extra Care Group Plc (AIM: WREN)
("Wren" or "the Group"),
Final results
For Year Ended 31 July 2009
Wren Extra Care Group Plc, the AIM listed provider of retirement living, through a range of Extra Care and other services for the independent elderly, announces Final results for
the year ended 31 July 2009.
Enquiries:
|
Wren Homes Group plc |
|
|
Paul Treadaway CEO |
Tel: 01372 742 244 www.wrenhomesplc.co.uk |
|
Shore Capital |
|
|
Pascal Keane |
Tel: 020 7408 4090 |
|
Peckwater PR |
|
|
Tarquin Edwards |
Tel: 07879 458 364 |
Chairman's Statement
Trading Results
Whereas the period under review is the full year to 31 July 2009 the last six months have been a very difficult trading period for all commercial enterprises as shareholders will be aware. The fact remains that Wren has successfully weathered the economic storm and has continued to sell most of the remaining stock of the retirement scheme at Warlingham 1 such that at this time, three of those units are under contract and your Board is confident that the remaining four will be sold in the early part of 2010.
Against this background, it is unsurprising that I have to report another loss before tax for the year of £1,076,093 (2008: loss before tax £1,123,051) on a turnover of £90,740 (2008: £84,000).
Dividend
No dividend is due in respect of 2009, the directors have paid a final dividend of £52,420 (0.1 per share) in the year for 2008.
Measures to Strengthen the Company
The company adopted a dual strategy to address the difficult economic environment: taking buyer's homes in a part exchange for units sold, which has continued to be successful in enabling us to continue making the sales of units at Warlingham 1, thereby creating a steady cash flow, together with the cost cutting measures I outlined in the announcement of the company results to 31 January 2009. This latter measure has led to a reduction in overheads including, unfortunately, some redundancies. As a result the Group has weathered the current difficult trading conditions and is well set for any upturn.
Extra Care
We have now completed repositioning the company to focus on the Extra Care element of the retirement housing market and the change of the Company name to Wren Extra Care Group Plc reflects this new focus.
Wren believes its Extra Care Schemes will provide second generation retirement housing. This move will position Wren between traditional retirement homes and full residential care and nursing homes and will offer residents the best of both models, with independent living, but also the opportunity to receive care based on individual needs. We have already received planning consent for three significant projects at Warlingham, Crowborough and Wallington, Surrey and we are now ready to start building Extra Care Schemes on these sites as soon as the required finance is in place. We are in discussion with a number of potentially interested parties in this respect and are confident that these projects will be progressed as 2010 unfolds.
Land Bank
The Group continues to develop and expand its "virtual land bank" for Extra Care Schemes (where sites are held under minimum cost options until acceptable planning consent is granted) and several important planning consents have been achieved during the last six months. Once again, I set out a summary of the current situation of the number of units under the flowing headings:
Under Option and/or Planning Applied for 178
Planning Consent Granted and under Option/Owned 156
Planning expected imminently 53
Capital Investment
In October 2008, we were delighted when the property investor, Dominic Wainford, confirmed the inherent potential of Wren by investing £4m in the company (£3m in the form of loan notes and £1m in new ordinary shares), in accordance with the terms of an agreement ratified by shareholders at an EGM held on 31 October 2008. It gave me great pleasure to welcome Mr Wainford to our Board and his experience has and will continue to be of considerable value to Wren, as it expands its activities in the coming months and years.
Additionally, as announced on 1 December 2009 the Company has secured an equity draw-down facility of up to £3m, which is intended to be utilised as a standby facility to provide for additional working capital and to enable the Group to be able to take advantage of potential opportunities, as and when they arise.
Bank support
The Group's Bank, Royal Bank of Scotland Plc, has confirmed that it intends to continue its banking and financing relationship with Wren Extra Care Group Plc and at the time of writing sees no reason why existing loans cannot be renegotiated and extended, with sufficient facilities made available to support the company. As per the normal course of business, the Banking facilities will be subject to approval by the Bank's Credit Committee.
Going Concern
As set out in the notes to the consolidated financial statements, the group's working capital facility and loan agreements are currently being renegotiated with the bankers. The Directors, after making appropriate enquiries, as described in note 2 to the consolidated financial statements, believe that the Group, with the renegotiated loans and facilities, has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in the preparation of the financial statements.
Staff
Our small and excellent team of staff has had to work under considerable pressure during the economic climate and I thank them for their efficiency and continued dedication and loyalty.
Outlook and Prospects
Our experience during the last six months confirms the clear indications many commentators are seeing, in that the UK economy despite improving, is nevertheless recovering more slowly than those of other advanced economies and that a fear of lending still remains the prevalent attitude in the City.
We are confident though of securing the necessary finance to start building in 2010 and, as soon as this programme commences, the Board expects to generate shareholder value.
B Nathan
Chairman
28 January 2010
Wren Extra Care Group Plc
(formerly Wren Homes Group Plc)
Directors' Report
For the year ended 31 July 2009
The directors present their report, together with the audited financial statements of the Company and the Group, for the year ended 31 July 2009.
Principal activities and review of the business
The principal activity of the Group is that of residential developers, specialising in the retirement sector. It operates primarily in the Home Counties. The Group sources its land by way of option agreements and obtains planning permission for the most commercially viable development prior to purchasing the land.
The Group's revenue for the year ended 31 July 2009 was £90,740 compared with £84,000 for 2008 and loss before tax was £1,076,093 compared with a loss before tax of £1,123,051 for the previous year. The results reflect the adverse conditions encountered in the housing market during the year and increased administrative costs incurred as a result of the Group putting adequate resources and systems in place to manage and control future growth, further details of which are set out in the Chairman's statement on pages 1 to 2
Goodwill has remained at £3,135,203 and the directors do not consider that there has been any impairment to the value of goodwill, (please see note 11 for further details). At 31 July 2009 net assets had increased by £281,169 to £8,192,222.
The Company is required by the Companies Act to set out in this report a fair review of the business of the group during the financial year ended 31 July 2009 and the position of the group at the end of the year and a description of the principal risk and uncertainties facing the Group. The information that fulfils these requirements can be found below and also in the Chairman's Statement.
Change of name
The Company changed its name from Wren Homes Group Plc to Wren Extra Care Group Plc on 17 November 2009.
Future Developments
The Group continues to seek out and expand the number of development sites and it is expected that planning permission will be achieved on a number of larger sites. Further details are set out in the Chairman's statement on pages 1 to 2.
Risk management
The risks facing the business are assessed on an ongoing basis. The executive directors have direct responsibility for a number of key risk areas. They evaluate the likelihood and potential impact of risks and ensure appropriate action is taken to mitigate them.
The principal risks and mitigating factors are set out below:
Liquidity/cashflow risk
The Group manages its cash and borrowing requirements to maximise interest income and minimise interest expense, whilst ensuring that the Group has sufficient resources to meet the operating needs of its business.
Interest rate risk
The principal financial market risk faced by the Group is the risk of interest rate movements. All borrowings are arranged at floating rates, thus exposing the Group to cash flow interest rate risk. The Company does not have any bank loans arranged at fixed interest rates and therefore the Group is not exposed to fair value interest rate risk. Further details are given in the notes to the financial statements.
The Group does not enter into interest rate swaps as management believes that the costs associated in entering into such funding instruments outweighs the benefits achieved when the risk of interest rate movement is at an acceptable level.
Credit risk
The Group's credit risk is primarily attributable to trade receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The amounts presented in the balance sheets are net of these allowances for doubtful receivables.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
The Group has a significant concentration of credit risk as the majority of the trade receivables balance is due from Warlingham Two Developments Limited.
Market risk
The economic climate is one of significant uncertainty, and this coupled with the "credit crunch" has left the property market in turmoil. Even though Wren's purchasers tend to be mortgage free, they are reliant on selling their properties before being in a position to complete a purchase with Wren.
Therefore until there is an upturn in the general economic climate and the financial institutions start to lend, the Group faces significant uncertainty. Management continue to closely monitor market conditions.
Supplier payment policy
The company's current policy concerning the payment of trade suppliers is to:
Settle the terms of payment with suppliers when agreeing the terms of each transaction;
Ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
Pay in accordance with the Company's contractual and other legal obligations.
On average, trade suppliers at the year end represented 110 (2008: 100) days' purchases.
Directors
The following directors have held office since 1 August 2008 unless otherwise stated:
P Treadaway
J Butterfield (appointed 31 October 2008)
B Nathan
M O'Donnell (appointed 7 October 2009)
P Self
D Slade (resigned 14 July 2009)
D Wainford (appointed 31 October 2008)
Directors' interests
The interests of the directors holding office on 31 July 2009 in the shares of the company were as shown:-
|
|
Ordinary shares of 10p each
|
|
|
|
31 July 2009
|
31 July 2008
|
|
|
|
|
|
B Nathan
|
94,364
|
94,364
|
|
P Self
|
-
|
-
|
|
D Slade
|
-
|
5,456,680
|
|
P Treadaway
|
10,490,012
|
9,990,013
|
|
J Butterfield
|
-
|
-
|
|
D Wainford*
|
10,117,520
|
-
|
* Held through Wainford Holdings Limited
Statement of directors' responsibilities
The directors are responsible for preparing the Annual Report, the Directors' Report and the Group and the parent company financial statements. The directors are required to prepare financial statements for the Group in accordance with International Financial Reporting Standards ("IFRS") as adopted for use in the European Union and have also elected to prepare financial statements for the Company in accordance with United Kingdom Generally Accepted Accounting Practice ("UK GAAP"). Company law requires the directors to prepare such financial statements in accordance with IFRS, the Companies Act 2006 and Article 4 of the IAS Regulation. The directors are also required to prepare financial statements in accordance with the London Stock Exchange rules applicable for companies trading securities on AIM.
Group financial statements
International Accounting Standard 1 requires that financial statements present fairly for each financial year the Group's and Company's financial position, financial performance and cash flows. This requires the fair presentation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board's "Framework for the Preparation and Presentation of Financial Statements". In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable International Financial Reporting Standards. Directors are also required to:
Parent Company financial statements
Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:
Financial statements are published on the Group's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Group's website is the responsibility of the directors. The directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
Responsibility statement
Each of the directors, the names of whom are set out in Directors' Report section of the Annual Report, confirms that to the best of his or her knowledge:
The responsibility statement was approved by the Board of Directors on 26 January 2010.
Directors' statement as to the disclosure of information to auditors
As required by section 418 of the Companies Act 2006, each director serving at the date of approval of the financial statements confirms that:
Words and phrases used in this confirmation should be interpreted in accordance with section 418 of the Companies Act 2006.
Dividends
The directors do not propose a final dividend for the year ended 31 July 2009.The directors have paid a dividend of £52,420 (0.1p per share), (2007, £121,267 0.3p per share) in the year in relation to the final dividend for the year ended 31 July 2008.
Environmental and social responsibilities
The Group pays particular attention to environmental and social issues. It takes great care to ensure that each development fits with the local environment and strives to ensure best practice in a commercially acceptable way and compliance with regulatory obligations.
Auditors
In accordance with section 485 of the Companies Act 2006, a resolution proposing that Mazars LLP be reappointed as auditors of the Company will be put to the Annual General Meeting.
Approved by the board on 28 January 2010 and signed on its behalf by
----------------------------------
P Treadaway, Director
Independent Auditor's Report to the Members of Wren Extra Care Group Plc (formerly Wren Homes Group Plc)
We have audited the Group financial statements of Wren Extra Care Group plc (formerly Wren Homes Group Plc) for the year ended 31 July 2009 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Group Statement of Changes in Equity, the Group Cash Flow Statement 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 European Union.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on pages 5 and 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit 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. This report, including our opinion, has been prepared for and only for the company's members as a body in accordance with Sections 495 and 496 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body for our audit work, for this report, or for the opinions we have formed.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB's web-site at www.frc.org.uk/apb/scope/UKNP.
Opinion on the financial statements
In our opinion:
the financial statements give a true and fair view of the state of the Group's affairs as at 31 July 2009 and of the Group's loss for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Emphasis of matter: going concern and goodwill impairment
Without qualifying our opinion, we draw attention to note 2 in the consolidated financial statements which indicates that in order to meet its financing requirement and mange its working capital position, the group requires continued bank funding. As indicated in note 2 the group is currently renegotiating the working capital facility and loans with the bankers and there is current uncertainty on the outcomes, though the groups' bankers have indicated they expect to continue their banking and financing relationship with Wren Extra Care Group Plc and currently sees no reason why existing loans cannot be renegotiated and extended, with sufficient facilities made available to support Wren Extra Care Group Plc, subject to approval by the Bank's Credit Committee. In forming our opinion, which is not qualified, we have considered the adequacy of the disclosures in note 2 concerning this uncertainty. For the reasons explained in the note, the financial statements do not include any adjustments that would arise if the financial statement were not drawn up on a going concern basis.
Without qualifying our opinion, we draw attention to note 11 to the consolidated financial statements concerning goodwill and its impairment. The Company has prepared forecasts for the next three years and then extrapolated. The cash flow key assumptions are those regarding discount rates, growth rates and expected changes to selling prices and direct costs. There are uncertainties on the forecasts and the assumption, particularly due to the current economic climate. In forming our opinion, which is not qualified, we have considered the adequacy of the disclosures in note 11 concerning these uncertainties. For the reasons explained in the note, the financial statements do not include any impairment on the goodwill.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:
adequate accounting records have not been kept;
the financial statements are not in agreement with the accounting records;
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.
Mazars LLP, Chartered Accountants (Statutory auditor)
Samantha Russell (Senior statutory auditor)
Tower Bridge House, St Katharine's Way, London, E1W 1DD
28 January 2010
The maintenance and integrity of the Wren Extra Care Group plc website is the responsibility of the directors. The work carried out by the auditors does not involve consideration of these matters and accordingly the auditors accept no responsibility for any changes that may have occurred to the financial statements since there were originally presented on the website.
Wren Extra Care Plc
(formerly Wren Homes Group Plc)
Consolidated Income Statement
For the year ended 31 July 2009
|
Year ended 31 July 2009 |
Year ended 31 July 2008 |
||
|
Note |
£ |
£ |
|
|
Revenue |
3 |
90,740 |
84,000 |
|
Cost of sales |
(70,129) |
(141,255) |
|
|
Gross profit/ (loss) |
20,611 |
(57,255) |
|
|
Administrative expenses |
(1,094,215) |
(1,178,471) |
|
|
Loss from operations |
4 |
(1,073,604) |
(1,235,726) |
|
Losses arising from fair value movements |
13 |
- |
(10,000) |
|
Finance income |
5 |
225,974 |
161,253 |
|
Finance cost |
6 |
(228,463) |
(38,578) |
|
Loss before tax |
(1,076,093) |
(1,123,051) |
|
|
Income tax credit |
8 |
- |
212,914 |
|
Loss for the year from continuing operations |
(1,076,093) |
(910,137) |
|
|
All attributable to equity holders of the parent |
|||
|
Loss per share |
|||
|
Basic and dilutive |
10 |
(2.17)p |
(2.25)p |
Wren Extra Care Group Plc
(formerly Wren Homes Group Plc)
Consolidated Balance Sheet as at 31 July 2009
|
|
|
|
31 July 2009
|
31 July 2008
|
|
|
Note
|
|
£
|
£
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
11
|
|
3,135,203
|
3,135,203
|
|
Investment property
|
13
|
|
230,000
|
230,000
|
|
Property, plant & equipment
|
12
|
|
23,217
|
194,214
|
|
Trade & other receivables
|
15
|
|
2,675,000
|
2,675,000
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
6,063,420
|
6,234,417
|
|
Current assets
|
|
|
|
|
|
Inventories
|
14
|
|
6,993,585
|
6,932,160
|
|
Trade & other receivables
|
15
|
|
1,798,861
|
1,035,384
|
|
Cash & cash equivalents
|
16
|
|
1,438,825
|
80
|
|
|
|
|
|
|
|
Total current assets
|
|
|
10,231,271
|
7,967,624
|
|
|
|
|
|
|
|
Total assets
|
|
|
16,294,691
|
14,202,041
|
|
Current liabilities
|
|
|
|
|
|
Trade payables
|
17
|
|
224,734
|
365,474
|
|
Tax liabilities
|
17
|
|
131,356
|
122,327
|
|
Obligations under finance leases
|
17
|
|
7,809
|
35,497
|
|
Other payables
|
17
|
|
69,141
|
286,639
|
|
Bank overdrafts and loans
|
17
|
|
4,887,907
|
5,352,340
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
5,320,947
|
6,162,277
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Obligations under finance leases Other creditors
|
19
20
|
|
-
2,781,522
|
128,741
-
|
|
Total liabilities
|
|
|
8,102,469
|
6,291,018
|
|
|
|
|
|
|
|
|
|
|
8,192,222
|
7,911,023
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Issued share capital
|
21
|
|
5,242,238
|
4,042,238
|
|
Share premium account
|
|
|
3,650,480
|
3,751,365
|
|
Capital redemption reserve
|
|
|
98,028
|
98,028
|
|
Equity component
|
|
|
218,478
|
-
|
|
Retained earnings
Total equity attributable to equity holders of the parent
|
|
|
(1,017,002)
8,192,222
|
19,392
7,911,023
|
The financial statements were approved by the board of directors and authorised for issue on 28 January 2010. They were signed on its behalf by:
----------------------------------- -------------------------
P Treadaway - Director M O'Donnell - Director
Wren Extra Care Group Plc
(formerly Wren Homes Group Plc)
Consolidated Statement of Changes in Equity
For the year ended 31 July 2009
|
|
|
|
|
|
|
|
|
|
Share Capital
|
Share Premium
|
Capital Redemption Reserve
|
Equity Component
|
Retained Reserves
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
|
|
|
|
|
|
|
|
|
Balance at 1 August 2007
|
4,042,238
|
3,751,365
|
98,028
|
-
|
1,050,796
|
8,942,427
|
|
Loss for the year
|
-
|
-
|
-
|
-
|
(910,137)
|
(910,137)
|
|
Payment of dividends
|
-
|
-
|
-
|
-
|
(121,267)
|
(121,267)
|
|
|
──────
|
──────
|
───────
|
────────
|
──────
|
──────
|
|
Balance at 1 August 2008
|
4,042,238
|
3,751,365
|
98,028
|
-
|
19,392
|
7,911,023
|
|
Loss for the year
|
-
|
-
|
-
|
-
|
(1,076,093)
|
(1,076,093)
|
|
Issue of ordinary
shares
Rental income
Issue of loan notes
|
1,200,000
-
-
|
5,000
-
-
|
-
-
-
|
-
-
303,441
|
-
9,765
-
|
1,205,000
9,765
303,441
|
|
Share issue costs
Share options
Deferred tax on loan notes
|
-
-
-
|
(105,885)
-
-
|
-
-
-
|
-
- (84,963)
|
-
82,354
-
|
(105,885)
82,354
(84,963)
|
|
Payment of dividends
|
-
|
-
|
-
|
-
|
(52,420)
|
(52,420)
|
|
Balance at 31 July 2009
|
5,242,238
|
3,650,480
|
98,028
|
218,478
|
(1,017,002)
|
8,192,222
|
|
|
|
|
|
|
|
|
Wren Extra Care Group Plc
(formerly Wren Homes Group Plc)
Consolidated Cash Flow Statement
For the year ended 31 July 2009
|
|
|
31 July 2009
|
|
31 July 2008
|
|
|
|
|
|
|
|
|
Note
|
£
|
|
£
|
|
Cash flows from operating activities
|
|
|
|
|
|
Cash generated from operations
|
26
|
(2,088,509)
|
|
(4,134,696)
|
|
Interest paid on loans and bank overdrafts
|
|
(228,463)
|
|
(42,362)
|
|
Interest paid on development loans
|
|
-
|
|
(8,606)
|
|
Income tax paid
|
|
-
|
|
(525,029)
|
|
|
|
|
|
|
|
Net cash generated from operating activities
|
(2,316,972)
|
|
(4,710,693)
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
Interest received
|
|
225,974
|
|
161,255
|
|
Other interest received
|
|
-
|
|
12,390
|
|
Purchase of property, plant and equipment
|
12
|
-
|
|
(16,578)
|
|
Proceeds from sale of motor vehicles
|
12
|
103,909
|
|
-
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
329,883
|
|
157,067
|
|
|
|
|
|
|
|
Financing activities
New loan notes
|
|
3,000,000
|
|
-
|
|
New bank loans
|
|
-
|
|
3,209,364
|
|
Director’s loan
|
|
-
|
|
23,360
|
|
Other loans repaid
|
|
(94,624)
|
|
-
|
|
Bank loans repaid
|
|
-
|
|
(235,974)
|
|
Hire purchase repayments
|
|
(156,829)
|
|
(25,976)
|
|
Share issue
|
|
1,099,116
|
|
-
|
|
Dividends paid
|
|
(52,420)
|
|
(121,267)
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
3,795,243
|
|
2,849,507
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
1,808,154
|
|
(1,704,120)
|
|
Cash and cash equivalents brought forward
|
|
(963,076)
|
|
741,044
|
|
|
|
|
|
|
|
Cash and cash equivalents carried forward
|
16
|
845,078
|
|
(963,076)
|
|
|
|
|
|
|
Wren Extra Care Group Plc
(formerly Wren Homes Group Plc)
Notes to the Consolidated Financial Statements
For the year ended 31 July 2009
1. General Information
Wren Extra Care Group Plc is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the Alternative Investments Market (AIM). The registered address of the company is Suite 4, Oaks House, 12-22 West Street, Epsom Surrey, KT18 7RG.
The company acts as the holding company for Wren Estates Limited, Wren Homes Limited and Crowborough SPV Limited, the principal activities of which are property development. The other companies in the Group are dormant. All companies within the Group are located within the United Kingdom. (a) Standards and interpretations in issue not yet adopted
At the date of authorisation of these financial statements, the following Standards and Interpretations were in issue, but not yet effective;
|
IFRIC 12
|
Service Concession Arrangements
|
|
IFRIC 13
|
Customers Loyalty Programmes
|
|
IFRIC 14
|
IAS 19: The limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
|
|
IFRIC 15
|
Agreement for the Construction of Real Estate
|
|
IFRIC 16
|
Hedges of net foreign investment in a foreign operation
|
|
IFRIC 17
|
Distribution of non-cash assets to owners
|
|
IFRIC 18
|
Transfer of assets from customers
|
|
IAS1 (Amendment)
|
Presentation of financial statements
|
|
IFRS 2 (Amendment)
|
Share based payments
|
|
IFRS 3 (Amendment)
|
Business combinations
|
|
IFRS 7 (Amendment)
|
Financial Instruments Disclosures
|
|
IFRS 8
|
Operating segments
|
|
IAS 27 (Amendment)
|
Consolidated and separate financial statements
|
The directors anticipate that all of the above Standards and Interpretations will be adopted (if applicable) in the Group's financial statements for the period commencing 1 August 2009 and that the adoption of these Standards and Interpretations will have no material impact on the financial statements of the Group in the period of initial application.
2. Significant accounting policies
The following principal accounting policies have been used consistently in the preparation of the consolidated financial information of the company. The consolidated financial information comprises the group and its subsidiaries (together referred to as "the Group").
(a) Basis of accounting
The consolidated financial information of Wren Extra Care Group Plc has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS).
The financial information has been prepared under the historical cost convention, except for the valuation of investment properties. The principal accounting policies adopted are set out below.
The Directors have projected cash flow information for the period to July 2012. In preparing these cash flows, the Directors are assessing on a regular basis the sales activity and costs of the business. On the basis of this cash flow information, the Directors are of the opinion that a working capital facility and development bank loans are required to fund new developments and running costs. In addition, there are loans and overdraft facilities of £4,887,907 which are due for renewal during the ensuing year. The group is currently renegotiating the facility and loans with the bank and has correspondence from the bank indicating that the bank is expecting to continue its banking and financing relationship with the Group and that at the time of writing, saw no reason why existing loans could not be renegotiated and extended, with sufficient facilities made available to support the company, subject to approval by the Bank's Credit Committee.
On 1 December 2009 the Company has secured an equity draw-down facility of up to £3m, which is intended to be utilised as a standby facility to provide for additional working capital and to enable the Group to be able to take advantage of potential opportunities, as and when they arise.
The financial statements have been prepared on the going concern basis. This basis of preparation relies on the successful outcome of the renewal of the working capital facility and loans. The directors are confident of a successful outcome. Accordingly the directors consider that the going concern basis for the preparation of the consolidated financial statements is appropriate. Should the group be unable to continue trading, adjustments would have to be made to reduce the value of assets to their recoverable amount and to provide for any further liabilities which might arise.
The financial information comprises the consolidated income statement, consolidated balance sheet, consolidated statements of changes in equity, consolidated statement of cash flow and related notes.
(b) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the company and its subsidiary undertakings, made up to 31 July each year. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
(c) Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquire, plus any costs directly attributable to the business combination.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds the cost of business combination, the excess is recognised immediately in the income statement.
(d) Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the group's interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss and is not subsequently reversed.
Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.
(e) Revenue recognition
Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for developments sold, net of value added tax.
Sale of properties are recognised when contracts for sales are exchanged within the financial year and the sale is completed within two months of the end of the financial year.
Sale of options over land are recognised when contracts for sale are exchanged within the financial year and the title of the option over the land has passed.
Share of profit on development contracts are recognised when contracts are exchanged on the sale of the units that are subject to the development contract, providing that completion of the sale takes place within two months of the financial year end.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.
(f) Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The group as lessor
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
The group as lessee
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. The corresponding liability to the lessor is included on the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group's general policy on borrowing costs (see note (g)).
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 over the lease term.
(g) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Interest is written off to the profit and loss account on schemes on sites where development has ceased.
All other borrowing costs are recognised in the income statement in the period in which they are incurred.
(h) Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on the taxable profit for the year. Taxable profit differed from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary difference and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
(i) Property, plant and equipment
Property, plant and equipment is stated at cost less depreciation and any recognised impairment losses. Provision is made for depreciation on all property, plant and equipment at rates calculated to write off the cost or valuation less estimated residual value, of each asset over its expected useful life, as follows:
Fixtures, fittings and equipment 20% per annum on cost
Motor vehicles 33% per annum on cost
Assets held under finance leases are depreciated over their useful economic lives on the same basis as owned assets or, where shorter, over the term of the relevant lease.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in income.
(j) Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is stated at its fair value at the balance sheet date. Gains or losses arising from changes in the fair value of the investment property are included in profit or loss for the period in which they arise. No tax charge is expected to arise in the event that the property is sold.
(k) Impairment of tangible assets
At each balance sheet date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset 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.
Recoverable amount is the higher of fair value less costs to sell and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. The reversal of an impairment loss is recognised as income immediately.
(l) Inventories and work in progress
Work in progress is stated at the lower of cost and net realisable value. Work in progress includes all direct expenditure on unsold developments. For speculative schemes (unless satisfactory planning permission has been obtained) costs are recognised immediately in the income statement.
Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. Interest is written off to the profit and loss account on schemes on sites where development has ceased.
(m) Financial instruments
Financial assets and financial liabilities are recognised on the Group's balance sheet when the group becomes a party to the contractual provisions of the instrument.
Trade and other receivables
Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in the income statement when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.
Investments
Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at cost, including transaction costs.
Investments are classified as either held-for-trading or available-for-sale, and are measured at subsequent reporting dates at fair value. Where securities are held-for-trading purposes, gains and losses arising from changes in fair value are included in the net profit or loss for the period. For available-for-sale investments, gains and losses arising from changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period. Impairment losses recognised in profit or loss for equity investments classified as available-for-sale are not subsequently reversed through the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
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 accounted for on an accruals basis in the income statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
(m) Financial instruments (cont'd)
Convertible loan notes
Convertible loan notes are regarded as compound instruments, consisting of a liability component and an equity component. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate of similar non-convertible debt. The difference between the proceeds of issue of convertible loan notes and the fair value assigned to the liability component, representing the embedded option to convert the liability into equity of the group, is included in equity.
The liability component is measured on an amortised basis using the effective interest rate method until extinguished upon conversion or until its maturity date and is classified between current and non-current liabilities based upon the amounts that are expected to be repaid over the remaining expected life of the financial instrument. The equity component is recognised and included in equity, net of income tax affects, and is not subsequently remeasured. Issue costs are apportioned between the liability and equity component bases on the relative carrying values at the date of issue. The position relating to the equity component is charged directly against reserves.
Trade and other payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.
(n) Segmental Reporting
The directors consider that all revenue is derived in the UK and from one business segment accordingly no segmental information has been presented.
(o) Critical accounting judgements and key sources of estimation uncertainty
Critical judgements in applying the Group's accounting policies
In the process of applying the Group's accounting policies, which are described above, management has made the following judgements that have the most significant effect on the amounts recognised in the financial statements (apart from those involving estimations, which are dealt with below).
Revenue recognition
The Group generally recognises revenue when contracts for sales are exchanged within the financial year and the sale is completed within two months of the end of the financial year. However should management consider that the criteria for revenue recognition is not met for a transaction, revenue recognition would be delayed until such time as the transaction becomes fully earned. Payments received in advance of revenue recognition are recorded as deferred income.
Capitalisation of borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to get ready for their intended sale, are added to the cost of those assets. However should management consider the criteria for capitalising borrowing costs is not met for a transaction, the interest charge would be expensed directly to income statement.
Goodwill
The Group recognises all assets and liabilities acquired in purchase acquisitions, including goodwill, at fair value. Goodwill is not amortised but is subject to annual tests for impairment. The initial goodwill and subsequent impairment analyses require management to make subjective judgements concerning the fair value of cash-generating units. Estimates of fair value are consistent with the group's plans and forecasts. As at 31 July 2009 the net carrying value of goodwill was £3,135,203.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill at the balance sheet date was £3,135,203 and an impairment loss of £nil was recognised in the period relating to the financial information.
Recoverability of trade receivables
Certain trade receivables are past due and not provided against as management expect these to be fully recoverable based upon the information available.
(p) Share-based payments
The Group issues equity-settled share-based payments to certain employees. Equity-settled share based-payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expended on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest.
Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioral considerations.
|
|
|
|
|
|
3
|
Revenue
|
2009
|
2008
|
|
|
|
£
|
£
|
|
|
Share of profit on development contracts
|
90,470
|
84,000
|
|
|
|
|
|
|
4 |
Loss from operations |
2009 |
2008 |
|
£ |
£ |
||
|
Loss from operations has been arrived at after charging: |
|||
|
Depreciation of property, plant and equipment |
|||
|
- Owned |
6,120 |
6,000 |
|
|
- Leased |
24,079 |
28,465 |
|
|
Loss on sale of tangible assets |
36,889 |
- |
|
|
Rents and rates |
56,000 |
56,003 |
|
|
Auditors' remuneration for audit services |
|||
|
- Fees payable to company auditors for the audit of the parent company and consolidated accounts |
12,000 |
12,000 |
|
|
- Fees payable to the company's auditors for other services |
|||
|
Audit of company's subsidiaries pursuant to legislation |
8,300 |
8,300 |
|
|
Other services pursuant to legislation |
7,000 |
6,000 |
|
5 |
Finance Income |
2009 |
2008 |
|
£ |
£ |
||
|
Interest income from deposits |
28,510 |
11,231 |
|
|
Rental income from investment property |
63,714 |
10,992 |
|
|
Interest earned from trade receivables (Development) |
133,750 225,974 |
139,030 161,253 |
|
|
The rental income recognised relates to the property held by the Group. The costs incurred by the group in maintaining the property in the year were £9,500, (2008: £10,392) |
|||
|
6 |
Finance costs |
2009 |
2008 |
|
£ |
£ |
||
|
Included in interest payable are the following amounts: |
|||
|
Interest expense for borrowings at amortised cost |
228,463 |
42,362 |
|
|
Interest expense for finance lease arrangements |
- |
8,606 |
|
|
Interest received on corporation tax and PAYE |
- |
(12,390) |
|
|
228,463 |
38,578 |
||
|
Included in cost of sales |
|||
|
Development loan interest |
- |
- |
|
|
7
|
Employees
|
|
|
|
|
|
2009
|
2008
|
|
|
The average monthly number of employees (including directors) during the period was:
|
|
|
|
|
|
|
|
|
|
Office and management
|
3
|
3
|
|
|
Property development
|
4
|
5
|
|
|
|
|
|
|
|
|
7
|
8
|
|
|
|
|
|
|
|
Employment cost (excluding directors)
|
2009
£
|
2008
£
|
|
|
Wages and salaries
|
207,054
|
239,170
|
|
|
Social security cost
|
42,009
|
31,031
|
|
|
|
249,063
|
270,201
|
|
|
The Group does not operate a pension scheme for the employees and does not make any contributions on behalf of employees into personal pension schemes. See note 24 for details of the directors’ remuneration.
|
||
|
|
|
||
|
8
|
Tax
|
2009
|
2008
|
|
|
Recognised in the Income Statement
|
£
|
£
|
|
|
Current tax credit
|
|
|
|
|
-UK corporation tax
|
-
|
(198,746)
|
|
|
-Adjustments in respect of previous periods
|
-
|
(14,168)
|
|
|
|
|
|
|
|
Total tax credit
|
-
|
(212,914)
|
|
|
Deferred tax liability
|
(84,963)
|
-
|
|
|
Factors affecting the tax credit for the year
|
|
|
|
|
Loss before tax
|
(1,076,093)
|
(1,123,051)
|
|
|
Loss before income tax at standard rate of 28% (2008:30%)
|
(301,306)
|
(336,915)
|
|
|
|
|
|
|
|
Effects of:
|
|
|
|
|
Losses brought forward
Non deductible expenses
|
(98,726)
4,158
|
4,692
|
|
|
Depreciation in excess of capital allowances not recognised as deferred tax assets
|
3,496
|
5,109
|
|
|
Revaluation of investment property
|
-
|
3,000
|
|
|
Rate of tax
|
-
|
19,610
|
|
|
Loss carried back
|
-
|
105,758
|
|
|
Adjustments in respect of previous periods
Losses carried forward
|
-
392,378
|
(14,168)
|
|
|
|
301,306
|
124,001
|
|
|
|
|
|
|
|
Current tax charge – effective rate Nil% (2008:18.9%)
|
-
|
(212,914)
|
|
|
|
|
|
|
|
|
2009
|
2008
|
|
|
|
£
|
£
|
|
9
|
Dividends paid
|
|
|
|
|
|
|
|
|
|
Amounts recognised as distributions to equity holders
|
|
|
|
|
|
|
|
|
|
2008 final dividend – 0.1p per share (2007 final 0.3p per share)
|
52,419
|
121,267
|
|
10
|
Loss per Share
|
|
|
|
|||||
|
|
|
|
|
|
|||||
|
|
Basic loss per share
|
|
|
|
|||||
|
|
|
|
|
|
|||||
|
|
The calculation of basic loss per share for the years ended 31 July 2009 and 31 July 2008 have been determined as the net profit after tax divided by the weighted average number of equity shares in issue in the year.
|
||||||||
|
|
|
|
2009
|
2008
|
|||||
|
|
Net loss attributable to ordinary shareholders
|
|
(1,076,093)
|
(910,137)
|
|||||
|
|
Number of ordinary shares
|
|
|
|
|||||
|
|
Issued ordinary shares at the beginning of the year
|
|
40,422,387
|
40,422,387
|
|||||
|
|
Issue of shares in the year
|
|
12,000,000
|
-
|
|||||
|
|
Issued ordinary shares at the end of the year
|
|
52,422,387
|
40,422,387
|
|||||
|
|
Weighted average number of ordinary shares
|
|
|
|
|||||
|
|
Issued ordinary shares at the beginning of the year
|
|
40,422,387
|
40,422,387
|
|||||
|
|
Issue of 12,000,000 shares part way through the year
|
|
9,672,387
|
-
|
|||||
|
|
Weighted average number of ordinary shares during the year
|
|
49,672,387
|
40,422,387
|
|||||
|
|
Basic loss earnings per share
|
|
(2.17)p
|
(2.25)p
|
|||||
|
|
Diluted loss per share
|
|
2009
|
2008
|
|
||||
|
|
|
|
|||||||
|
|
Diluted loss earnings per share
|
|
(2.17)p
|
(2.25p
|
|
||||
|
|
|
|
|
|
|
||||
|
|
Earnings per share requires presentation of diluted loss per share when a company could be called upon to issue shares that would decrease earnings per share or increase loss per share. For a loss making company with outstanding share options, loss per share would only be decreased by the exercise of out-of-the-money share options. No adjustment has been made to dilute loss per share for out-of-the-money share options and there are no other diluting future share issues, therefore the potential ordinary shares held by the group are considered to not be dilutive.
|
|
|||||||
|
11
|
Goodwill
|
£
|
|
|
Cost
|
|
|
|
At 1 August 2007, 2008 and at 31 July 2009
|
3,420,221
|
|
|
|
|
|
|
Accumulated impairment loss:
|
|
|
|
At 1 August 2007,2008 and at 31 July 2009
|
285,018
|
|
|
|
|
|
|
Net book values
|
|
|
|
At 31 July 2009, 31 July 2008 and 31 July 2007
|
3,135,203
|
|
|
The Group conducts annual impairment tests of the carrying value of goodwill, based on the recoverable amount of the cash generating unit (CGU), of which the Group only has one.
The recoverable amounts for the cash-generating units are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that reflect the current market assessments of the time value of money and the risks specific to the cash-generating unit. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next three years and extrapolates cash flows for the following three years based on the development of the company's property portfolio. This rate does not exceed the average long term growth rate for the relevant markets. The approved cash flow projections in the three financial years following this year reflect management’s expectation of the performance of the CGU and growth prospects in the Extra Care retirement sector. Whilst these cash flows do show the value in use is in excess of the carrying value of the goodwill, there are uncertainties as to the assumption used in the calculation and to the performance of the business and developments due to the current economic environment. The growth rate for net incomes are scheme specific, the discount rate applied is 9%.
Amortisation charge
In accordance with IFRS, the goodwill arising on consolidation has not been amortised since the opening balance sheet date for IFRS implementation of 1 August 2005.
|
|
|
12
|
Property, plant and equipment
|
|
|
|
|||
|
|
|
|
Fixtures, fittings and equipment
|
Motor
vehicles
|
Total
|
||
|
|
|
|
£
|
£
|
£
|
||
|
|
Cost or valuation
|
|
|
|
|
||
|
|
At 01 August 2007
|
|
33,334
|
92,146
|
125,480
|
||
|
|
Additions in period
|
|
3,258
|
150,173
|
153,431
|
||
|
|
|
|
|
|
|
||
|
|
At 01 August 2008
|
|
36,592
|
242,319
|
278,911
|
||
|
|
Disposals
|
|
-
|
(196,183)
|
(196,183)
|
||
|
|
At 31 July 2009
|
|
36,592
|
46,136
|
82,728
|
||
|
|
Depreciation
|
|
|
|
|
||
|
|
At 01 August 2007
|
|
16,276
|
33,956
|
50,232
|
||
|
|
Charge for the period
|
|
6,000
|
28,465
|
34,465
|
||
|
|
|
|
|
|
|
||
|
|
At 01 August 2008
Disposals
|
|
22,276
-
|
62,421
(55,385)
|
84,697
(55,385)
|
||
|
|
Charge for the period
|
|
6,120
|
24,079
|
30,199
|
||
|
|
At 31 July 2009
|
|
28,396
|
31,115
|
59,511
|
||
|
|
Net book values
|
|
|
|
|
||
|
|
At 31 July 2009
|
|
8,196
|
15,021
|
23,217
|
||
|
|
At 31 July 2008
|
|
14,316
|
179,898
|
194,214
|
||
|
|
At 31 July 2007
|
|
17,058
|
58,190
|
75,248
|
||
|
Included above are assets held under finance leases (secured on the assets concerned) with net book values at 31 July 2009 of £15,021 (2008: £179,898 and 2007: £58,190) with related depreciation charge for the year ended 31 July 2009 of £24,079 (2008: £28,465 and 2007: £14,040).
|
|||||||
|
|
|
|
|
|
|
|
|
|
13 |
Investment Property |
||
|
Fair value |
2009 |
2008 |
|
|
£ |
£ |
||
|
Balance at 1 August 2008 and 1 August 2007 |
230,000 |
240,000 |
|
|
Fair value decrease during the year |
- |
(10,000) |
|
|
Fair value at 31 July 2009 and 31 July 2008 |
230,000 |
230,000 |
|
|
Investment properties have been valued by the directors on 31 July 2009 at fair value at an open market value based upon information obtained of comparable properties. The property rental income earned by the Group from its investment property, which is leased out under an operating lease, amounted to £63,714 (2008: £10,992). Direct operating expenses arising on the investment property in the period amounted to £9,500 (2008: £10,392). |
|||
|
14 |
Inventories |
||
|
2009 |
2008 |
||
|
£ |
£ |
||
|
Work in progress |
6,993,585 |
6,932,160 |
|
|
Development loan interest capitalised included in work in progress is £219,599 (2008, £135,295) |
|||
|
£70,129 (2008: £141,255) of work in progress has been recognised in cost of sales during the year. |
|||
|
15 |
Trade and other receivables |
||
|
2009 |
2008 |
||
|
£ |
£ |
||
|
Trade receivables due within one year |
948,875 |
973,277 |
|
|
Other receivables |
832,521 |
49,775 |
|
|
Prepayments and accrued income |
17,465 |
12,332 |
|
|
1,798,861 |
1,035,384 |
||
|
Trade receivables due in greater than one year |
2,675,000 |
2,675,000 |
|
|
4,473,861 |
3,710,384 |
||
|
Trade receivables from sale of developments will typically be less than 60 days, as a sale is only recognised in the year if exchange takes place within the year, and completion within two months of the year end. Trade receivables due in greater than one year relates to amounts owed for the sale of options over land and are subject to a development contract requiring the amounts to be repaid by 31 December 2009 albeit directors expect these amounts to actually be recoverable on or after 31 July 2010. Interest is charged at 5% per annum on the outstanding balance. The receivable is secured by way of a second charge over the land. The directors consider that the carrying amount of trade and other receivables approximates their fair value. Amounts stated are gross and no provision has been made. |
|||
|
15 |
Trade and other receivables (cont'd) |
|||
|
Some of the trade receivables are past due as at the reporting date. The age of the trade receivables past due but not impaired is as follows |
||||
|
2009 £ |
2008 £ |
|||
|
More than 3 months but not more than 6 |
- |
84,000 |
||
|
More than 6 months but not more than 1 year |
725,000 725,000 |
570,500 654,500 |
||
|
16 |
Cash and cash equivalents |
|||
|
2009 |
2008 |
|||
|
£ |
£ |
|||
|
Cash and cash equivalents |
1,438,825 |
80 |
||
|
|
Cash and cash equivalents comprise cash held by the group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates to their fair value.
|
||
|
|
Cash, cash equivalents and bank overdrafts include the following for the purpose of the cash flow statement.
|
||
|
|
|
2009
|
2008
|
|
|
|
£
|
£
|
|
|
Cash and cash equivalents
|
1,438,825
|
80
|
|
|
Bank overdraft (note 18)
Interest rates are 0.1% actual and effective.
|
(593,747)
845,078
|
(963,156)
(963,076)
|
|
|
Credit Risk The Group’s principal financial assets are bank balances, cash and trade and other receivables.
The Group’s credit risk is primarily attributable to its trade receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The amounts presented in the balance sheets are net of these allowances for doubtful receivables.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
The Group has a significant concentration of credit risk as the majority of the trade receivables balance is due from a single counterparty, Warlingham Two Developments Limited. Due to delays at the site in Warlingham the directors consider the current balances will not be repaid by the due date of 31 December 2009, but should be repaid by 31 July 2010.
The maximum exposure to credit risk is £5,912,686 (2008: £3,710,464).
|
||||
|
|
|
|
|
|
|
|
16
|
Cash and cash equivalents (cont’d)
|
|
|||
|
|
Liquidity risk
The Group manages its cash and borrowing requirements to maximise interest income and minimise interest expense, whilst ensuring that the Group has sufficient resources to meet the operating needs of its business.
|
|
|||
|
|
|
||
|
17
|
Trade and other payables: Amounts falling due within one year
|
||
|
|
|
|
|
|
|
|
2009
|
2008
|
|
|
|
£
|
£
|
|
|
Bank loans and overdrafts
|
4,887,907
|
5,352,340
|
|
|
Net obligations under finance lease (note 19)
|
7,809
|
35,497
|
|
|
Trade payables
|
224,734
|
365,474
|
|
|
Other taxes and social security cost
|
131,356
|
122,327
|
|
|
Directors’ current accounts
|
-
|
23,650
|
|
|
Other payables
|
-
|
27,990
|
|
|
Accruals and deferred income
|
69,141
|
234,999
|
|
|
|
5,320,947
|
6,162,277
|
|
|
The bank overdraft of £458,769 is payable on demand and £4,429,138 in bank loans are payable upon sale of properties. Trade creditors principally comprise of trade purchase and ongoing cost.
The average credit period taken for trade purchases is 110 days (2008: 100 days),
The directors consider that the carrying amount of trade and other payables approximates their fair value.
|
|
18 |
Bank overdrafts and loans |
|||
|
2009 |
2008 |
|||
|
£ |
£ |
|||
|
Current liabilities |
||||
|
Bank overdrafts |
458,769 |
963,156 |
||
|
Bank loans |
4,429,138 |
4,389,184 |
||
|
4,887,907 |
5,352,340 |
|||
|
The borrowings are repayable as follows: |
2009 |
2008 |
||
|
£ |
£ |
|||
|
On demand or within one year |
4,887,907 |
5,352,340 |
||
|
4,887,907 |
5,352,340 |
|||
|
Less: amount due for settlement within 12 months (shown under liabilities) |
(4,887,907) - |
(5,352,340) - |
||
|
18
|
Bank loans and overdrafts (cont’d)
|
|
|
|
|
|
The weighted average interest rates paid were as follows:
|
|
|
|
|
|
|
2009
|
2008
|
|
|
|
|
%
|
%
|
|
|
|
Bank overdraft
|
2.20
|
6.89
|
|
|
|
Bank loans
|
2.20
|
6.89
|
|
|
|
|
|
|
|
|
|
All borrowings are arranged at floating rates, thus exposing the group to cash flow interest rate risk. The company does not have any bank loans arranged at fixed interest rates and therefore the Group is not exposed to fair value interest rate risk.
|
|||
|
|
The directors estimate the fair value of the group’s borrowings as follows:
|
|||
|
2009 |
2008 |
||
|
£ |
£ |
||
|
Bank overdrafts |
593,747 |
963,156 |
|
|
Bank loans |
4,294,160 |
4,389,184 |
|
The other principal features of the Group's borrowings are as follows: The bank overdraft is repayable on demand and is reviewed annually. The total overdraft has been secured by a fixed and floating charge over the group's assets. The average effective interest rate on bank overdrafts approximates 2.20% (2008: 6.89%) per annum and are determined based on 1.5 % plus base rate. The Group has bank loans for each of the major developments, being 4 at 31 July 2009 (2008: 4). The loans are secured on the freehold of the specific site and are repayable out of the sale proceeds. The loans carry interest rate at 1.5% over the Royal Bank of Scotland base rate. The exposure of the borrowings of the Group to interest rate changes is restricted to changes in the Royal Bank of Scotland base rate, as all borrowings carry floating interest rates of 1.5 % above the base rate. |
||
|
If interest were to increase by 100 basis points then interest payments would increase by £48,000 and interest income would increase by £14,000 having a net effect of £34,000 on the income statement. |
||
|
18 |
Bank loans and overdrafts (cont'd) |
|
Financial risk management objectives and policies
The principal financial market risk faced by the Group is the risk of interest rate movements.
The Group manages interest rate exposure by seeking to match financing costs as closely as possible with the revenues generated by its assets.
The Group does not enter into interest rate swaps as management believes that the costs associated in entering into such funding instruments outweighs the benefits achieved when the risk of interest rate movement is at an acceptable level.
|
19 |
Obligations under finance leases |
||||||
|
The Group obligation under finance leases are as follows |
|||||||
|
Minimum lease payments |
Present value of minimum lease payments |
||||||
|
2009 |
2008 |
2009 |
2008 |
||||
|
£ |
£ |
£ |
£ |
||||
|
Amounts payable under finance leases: Within one year |
8,809 |
52,862 |
7,809 |
35,497 |
|||
|
In the second to fifth years inclusive |
- 8,809 |
140,461 193,323 |
- 7,809 |
128,741 164,238 |
|||
|
Less: future finance charges Present value of lease obligations |
(1,000) 7,809 |
(29,085) 164,238 |
|||||
|
Less: Amount due for settlement within 12 months (shown under current liabilities) |
(7,809) - |
(35,497) 128,741 |
|||||
|
It is the Group's policy to lease all motor vehicles under finance leases. The average lease term is 4 years. For the year ended 31 July 2009, the average effective borrowing rate was 7.45% (2008:7.99%). Interest rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. All lease obligations are denominated in sterling. The fair value of the Group's lease obligations approximates to their carrying amount. The Group's obligations under finance leases are secured by the lessors' rights over the leased assets. |
|||||||
|
20 Other creditors
|
2009
|
2008
|
|
|
£
|
£
|
|
Loan notes issued
|
2,696,559
|
-
|
|
Deferred tax thereon
|
84,963
|
-
|
|
|
2,781,522
|
-
|
On 31 October 2008 a £3,000,000 convertible loan note was issued. The loan is for five years and bears interest at 5 % and can be converted at any time prior to repayment by the holder. £303,441 has been credited to equity component within reserves. The loan is from Wainford Holdings Limited, a company whom D Wainford a director of Wren Extra Care Group Plc,has a controlling interest.
|
21 |
Share capital |
2009 |
2008 |
||
|
£ |
£ |
||||
|
Authorised |
|||||
|
100,000,000 Ordinary shares of 10p each |
10,000,000 |
10,000,000 |
|||
|
Allotted, issued and fully paid |
|||||
|
52,422,387 Ordinary shares of 10p each (2008 40,422,387 ordinary shares of 10p each) |
5,242,239 |
4,042,238 |
|||
22 Share capital
The following ordinary shares were issued during the year:
|
Date |
Number |
Issue price |
Proceeds |
|
31 August 2008 |
1,500,000 |
10p |
150,000 |
|
31 October 2008 |
10,000,000 |
10p |
1,000,000 |
|
03 November 2008 |
500,000 |
11p |
55,000 |
At 1 August 2008 the group owed P Treadaway £23,650. This amount was converted into 10p ordinary shares as part of the issue of shares on 3 November 2008 at 11p per share.
|
23 |
Operating lease arrangements |
||||||
|
The group as a lessee |
|||||||
|
The total of future minimum lease payments under non-cancellable operating leases are as follows: |
|||||||
|
Land and Building |
Other |
||||||
|
2009 |
2008 |
2009 |
2008 |
||||
|
£ |
£ |
£ |
£ |
||||
|
Payable |
|||||||
|
Less than one year |
33,120 |
- |
1,565 |
||||
|
In the second to fifth years inclusive |
102,310 |
102,338 |
2,380 |
2,380 |
|||
|
Operating lease payments in respect of land and building represent rentals payable by the group for its registered office. The lease expires on 15 October 2011. Other operating lease payments represent rentals payable by the Group for office equipment. Leases are negotiated for an average term of 5 years and rentals are fixed for an average of 5 years. |
|||||||
|
The group as a lessor |
|||||||
|
Property rental income earned during the year was £63,714 (2008 £10,992). The properties held by the Group are expected to generate rental yields of 4.02% on an ongoing basis. The group only held one investment property at the balance sheet date. |
|||||||
|
24 |
Related Party Transactions |
||||
|
Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Control At 31 July 2009 and 31 July 2008 there is no ultimate controlling party. Compensation of key management personnel The remuneration of the directors, who are the key management personnel of the group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. |
|||||
|
24 |
Related Party Transactions |
||||
|
Basic salary |
Pension Contribution |
Employee benefits |
Total |
||
|
£ |
£ |
£ |
£ |
||
|
Year ended 31 July 2009 D Wainford |
21,150 |
- |
- |
21,150 |
|
|
J Butterfield |
9,000 |
- |
- |
9,000 |
|
|
P Treadaway |
143,922 |
14,922 |
17,072 |
175,916 |
|
|
P Self |
- |
- |
- |
- |
|
|
B Nathan |
- |
- |
- |
- |
|
|
174,072 |
14,922 |
17,072 |
206,066 |
||
|
Basic salary |
Pension Contribution |
Employee benefits |
Total |
||
|
£ |
£ |
£ |
£ |
||
|
Year ended 31 July 2008 |
|||||
|
P West (resigned 4 February 2008) |
75,000 |
26,250 |
13,595 |
114,845 |
|
|
P Treadaway |
150,000 |
26,250 |
17,071 |
193,321 |
|
|
P Self |
- |
- |
- |
- |
|
|
B Nathan |
- |
- |
- |
- |
|
|
225,000
|
52,500 |
30,666 |
308,166 |
Directors' transactions
Directors' loans
At 1 August 2008 the group owed P Treadaway £23,650. This amount was converted into 10p ordinary shares on 3 November 2008 at 11p per share.
Directors' transactions
During the year ended 31 July 2009 £39,579 (2008: £30,000) was paid to Self & Co, of which P Self is the sole proprietor, for the provision of accounting services. These services are considered to have been arm's length transactions.
During the year ended 31 July 2009 £12,000 (2008: £12,000) was paid to B Nathan and £55,344 (2008: £Nil) to J Butterfield for their services as non-executive directors.
|
25 |
Share based payments |
||||
|
Equity-settled share option plans |
|||||
|
The Group offers vested share options, without payment, to senior employees. On 10 July 2008 the first such share options were granted to three employees, to subscribe for a total of 450,000 shares at a price of 16p. The options are exercisable between 10 July 2011 and 10July 2018. |
|||||
|
The fair values of the options granted on 10 July 2008 under the share option scheme and expected to vest have been calculated using the Black-Scholes option pricing model. The following inputs were used in the calculation: |
|||||
|
Share price at date of grant |
16p |
||||
|
Expected volatility |
53.54 % |
||||
|
Expected life |
3 years |
||||
|
Risk free rate |
4 % |
||||
|
Expected volatility was based on flotation on Plus Markets (formally OFEX) in November 2001 to the date of the grant. On 7 August 2008 share options were granted to the directors and certain key employees to subscribe for a total of 3,732,238 shares at a price of 15p.The share price at the date of the grant was 15p.The options are exercisable between 7 August 2009 and 7 August 2018. The fair values of the options granted on 7 August 2008 under the share option scheme and expected to vest have been calculated using the Black-Scholes option pricing model. The following inputs were used in the calculation: Share price at date of grant 11.75p Expected volatility 53.54% Expected life 10 years Risk free rate 4% The option outstanding at 31 July 2009 had a weighted average remaining contractual life of 9 years (time until options expire) The group recognised total expenses of £82,354 (2008 £Nil) in respect of the fair value of these options. |
|||||
|
26 |
Cash flow statement |
||||
|
Reconciliation of operating loss to cash flows from operating activities |
|||||
|
31 July 2009 |
31 July 2008 |
||||
|
£ |
£ |
||||
|
Loss from operations |
(1,073,604) |
(1,245,726) |
|||
|
Depreciation of property, plant and equipment Loss on disposal of property, plant and equipment Share option costs |
30,199 36,889 92,088 |
34,465 - - |
|||
|
Loss arising form fair value movements of investment property |
- |
10,000 |
|||
|
Increase in work in progress |
(61,425) |
(4,496,589) |
|||
|
(Increase)/ decrease in receivables |
(763,447) |
1,294,055 |
|||
|
(Decrease)/increase in payables |
(349,209) |
269,099 |
|||
|
Cash generated from operations |
(2,088,509) |
(4,134,696) |
|||
|
Note: Certain reclassifications have been made to cash flow comparatives for clearer presentation purposes. |
|||||
|
27 |
Financial assets and liabilities |
||||
|
Financial assets by category |
|||||
|
The IAS39 categories of financial asset included in the balance sheet and the headings in which they are included are as follows |
|||||
|
2009 |
2008 |
||||
|
£ |
£ |
||||
|
Current assets |
|||||
|
Trade and other receivables |
|||||
|
- Loans and receivables |
1,798,861 |
1,035,384 |
|||
|
Cash and cash equivalents Non current assets Trade and other receivables |
1,438,825 3,237,686 2,675,000 |
80 1,035,464 2,675,000 |
|||
|
Financial liabilities by category |
|||||
|
The IAS39 categories of financial liability included in the balance sheet and the headings in which they are included are as follows |
|||||
|
Borrowings |
|||||
|
- Financial liabilities measured at amortised cost |
4,887,907 |
5,352,340 |
|||
|
Trade payables |
|||||
|
- Financial liabilities measured at amortised cost Non current liabilities Loan notes measured at amortised cost
|
224,734 5,112,641 2,696,559 |
365,474 5,718,814 - |
|||
|
The directors consider that the carrying amounts of financial assets and liabilities approximate their fair values. |
|||||
|
28 |
Capital risk management |
|||
|
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through optimisation of the debt and equity balance. The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 18, cash and cash equivalent as disclosed in note 16 and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. |
||||
|
29 |
Capital events |
|||
|
The following events have taken place during the year |
||||
|
a) |
Issue of 10p ordinary share |
|||
|
Date |
Number |
Issue price |
Proceeds |
|
|
31 August 2008 |
1,500,000 |
10p |
150,000 |
|
|
31 October 2008 |
10,000,000 |
10p |
1,000,000 |
|
|
03 November 2008 |
500,000 |
11p |
55,000 |
|
|
b) |
Convertible loan note |
|||
|
On 31 October 2008 a £3,000,000 convertible loan note was issued. The loan is for five years and bears interest at 5 % and can be converted at any time prior to repayment by the holder. The loan note was issued to Wainford Holdings a company controlled by D Wainford a main board director. |
||||
On 1 December 2009 the Company has secured an equity draw-down facility of up to £3m, which is intended to be utilised as a standby facility to provide for additional working capital and to enable the Group to be able to take advantage of potential opportunities, as and when they arise.
Independent Auditor's Report to the Members of Wren Extra Care Group Plc (formerly Wren Homes Group Plc)
We have audited the financial statements of Wren Extra Care Group plc (formerly Wren Homes Group Plc) for the 31 July 2009 which comprise the Profit and Loss Account, the Balance Sheet and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit 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. This report, including our opinion, has been prepared for and only for the company's members as a body in accordance with Sections 495 and 496 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body for our audit work, for this report, or for the opinions we have formed.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB's web-site at www.frc.org.uk/apb/scope/UKNP.
Opinion on the financial statements
In our opinion the parent Company financial statements:
Emphasis of matter: going concern and carrying value of investment
Without qualifying our opinion, we draw attention to note 2 in the consolidated financial statements which indicates that in order to meet its financing requirement and mange its working capital position, the company requires continued bank funding. The Company is currently renegotiating the working capital facility and loans with the bankers and there is current uncertainty on the outcomes, though the groups' bankers have indicated they expect to continue their banking and financing relationship and currently sees no reason why existing loans cannot be renegotiated and extended, with sufficient facilities made available to support the company, subject to approval by the Bank's Credit Committee. In forming our opinion, which is not qualified, we have considered the adequacy of the disclosures in note 2 concerning this uncertainty. For the reasons explained in the note, the financial statements do not include any adjustments that would arise if the financial statement were not drawn up on a going concern basis.
Without qualifying our opinion, we draw attention to note 6 to the financial statements concerning the carrying value of the investment in the trading subsidiaries. The company has prepared detailed forecasts for the next three years and then extrapolated them using growth assumptions and discounted to arrive at a value in use. The cashflow key assumptions are those regarding discount rates, growth rates and expected changes to selling prices and direct costs. There are uncertainties on the forecasts and the assumptions, particularly due to the current economic climate. In forming our opinion, which is not qualified, we have considered the adequacy of the disclosures in note 6 concerning these uncertainties. For the reasons explained in note 6, the financial statements do not include a provision against the carrying value of the investment.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:
Mazars LLP, Chartered Accountants (Statutory auditor)
Samantha Russell (Senior statutory auditor)
Tower Bridge House, St Katharine's Way, London, E1W 1DD
The maintenance and integrity of the Wren Extra Care Group plc website is the responsibility of the directors. The work carried out by the auditors does not involve consideration of these matters and accordingly the auditors accept no responsibility for any changes that may have occurred to the financial statements since there were originally presented on the website.
|
Note |
Year ended31 July 2009 |
Year ended31 July 2008 |
|
|
£ |
£ |
||
|
Continuing Operations |
|||
|
Operating income |
|||
|
- Management charges - Dividends from subsidiaries |
535,000 100,000 |
535,000 - |
|
|
635,000 |
535,000 |
||
|
Administrative expenses |
(596,521) |
(650,710) |
|
|
Profit/(Loss) from operations |
2 |
38,479 |
(115,710) |
|
Investment income |
3 |
28,457 |
- |
|
Finance cost |
4 |
(112,500) |
(1,181) |
|
Loss before tax |
(45,564) |
(116,891) |
|
|
Income tax |
5 |
- |
29,068 |
|
Loss for the year from continuing operations |
(45,564) |
(87,823) |
|
|
All attributable to equity holders of the parent |
|||
|
Note |
31 July 2009 |
31 July 2008 |
|
|
£ |
£ |
||
|
Fixed assets |
6 |
4,000,000 |
4,000,000 |
|
Current assets |
|||
|
Debtors |
7 |
8,288,826 |
4,378,795 |
|
Cash and cash equivalents |
7 |
9 |
24 |
|
Total current assets |
8,288,835 |
4,378,819 |
|
|
Total assets |
12,288,835 |
8,378,819 |
|
|
Creditors: amounts falling due within one year |
|||
|
Creditors |
8 |
82,485 |
119,948 |
|
Tax liabilities |
8 |
- |
- |
|
Other payables |
8 |
119,267 |
172,917 |
|
Creditors : amounts falling due after one year Loan notes issued |
9 |
2,696,559 |
- |
|
9,390,524 |
8,085,954 |
||
|
EQUITY |
|||
|
Share capital |
10 |
5,242,239 |
4,042,238 |
|
Share premium account Equity reserve |
11 11 |
3,603,480 303,441 |
3,704,365 - |
|
Capital redemption reserve |
11 |
98,028 |
98,028 |
|
Retained earnings |
11 |
143,336 |
241,323 |
|
Equity attributable to equity holders of the parent |
11 |
9,390,524 |
8,085,954 |
|
The Financial statements were approved by the board of directors and authorised for issue on 28 January 2010. They were signed on its behalf by: |
|||
|
------------------------------------ P Treadaway - Director |
----------------------- M O'Donnell - Director |
||
|
1 |
Significant Accounting Policies |
||
|
The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by the Act, the separate financial statements have been prepared in accordance with UK GAAP. The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are the same as those set out in note 2 to the consolidated financial statements except as noted below. Investments in subsidiaries are stated at cost less, where appropriate, provision for impairment. |
|||
|
2 |
Loss from operations |
2009 |
2008 |
|
£ |
£ |
||
|
Loss from operations has been arrived after charging: |
|||
|
Auditors' remuneration for audit services |
12,000 |
12,000 |
|
Amounts payable to Mazars LLP by the company in respect of non-audit services were as follows: |
|||
|
2009 |
2008 |
||
|
£ |
£ |
||
|
All other services |
2,000 |
2,000 |
|
|
3 |
Investment Income |
2009 |
2008 |
|
£ |
£ |
||
|
Bank Interest |
28,457 |
- |
|
4 |
Finance costs |
||
|
2009 |
2008 |
||
|
£ |
£ |
||
|
Bank Interest |
- |
523 |
|
|
Interest on bank loan |
- |
- |
|
|
Loan note interest |
112,500 |
658 |
|
|
112,500 |
1,181 |
||
|
5 |
TAX |
||
|
Recognised in the income statement |
2009 |
2008 |
|
|
£ |
£ |
||
|
Current tax (credit) |
|||
|
- UK corporation tax |
- |
(14,900) |
|
|
Overprovided in prior years |
- - |
(14,168) (29,068) |
|
|
Factors affecting the tax (credit)/expense for the year |
2009 |
2008 |
|
|
£ |
£ |
||
|
Loss before tax |
(45,564) |
(116,891) |
|
|
Loss before income tax at standard rate of 28% (2008:30%) |
(12,758) |
(35,067) |
|
|
Effects of: Losses carried forward |
26,079 |
- |
|
|
Non deductible expenses |
- |
3,014 |
|
|
Rate of tax |
- |
8,482 |
|
|
Loss carried back |
- |
8,671 |
|
|
Adjustment relating to previous years |
- |
(14,168) |
|
|
Dividends from subsidiaries |
(13,321) |
- |
|
|
12,758 |
5,999 |
||
|
Current Tax (credit)/charge |
- |
(29,068) |
|
|
6 |
Investment in subsidiaries |
||
|
Details of the company's subsidiaries at 31 July 2009 are as follows: |
|||
|
Subsidiary |
Principal activities |
Place of incorporation and operation |
Proportion of ordinary shares and voting power held by the company |
Proportion of ordinary shares and voting power held by subsidiaries |
|
% |
% |
|||
|
Wren Homes Plc |
Holding Company |
England |
100 |
- |
|
Wren Estates Limited |
Property development |
England |
- |
100 |
|
Crowborough SPV Limited |
Property development |
England |
- |
100 |
|
Wren Developments Limited |
Dormant |
England |
- |
100 |
|
Wren Land Developments Limited |
Dormant |
England |
- |
100 |
|
Wren Retirement Apartments Limited |
Dormant |
England |
- |
100 |
|
6 |
Investment in subsidiaries (cont'd) |
||
|
2009 |
2008 |
||
|
£ |
£ |
||
|
At 31 July 2009 and 2008 |
4,000,000 |
4,000,000 |
|
|
The Company has prepared detailed forecasts for the next three years and then extrapolated them using growth assumptions and discounted to arrive at a value in use. The cash flow key assumptions are those regarding discount rates, growth rates and expected changes to selling prices and direct costs Whilst these cash flows do show the value in use of the trading subsidiaries are in excess of the carrying value, there are uncertainties as to the assumptions used in the calculation, and to the performance of the business and developments due to the current economic climate. The directors have concluded that no provision is needed. |
|||
|
7 |
Debtors |
||
|
At the balance sheet date debtors comprise amounts receivable from fellow Group companies of £8,279,467 (2008: £4,372,955).Sundry debtors are £9,359 (2008:£5,800). |
|||
|
8 |
Creditors: amounts due within 1 year |
||
|
Trade creditors principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 124 days (2008,157 days). |
|||
9 Creditors: amounts due after more than 1 year
|
|
2009
£
|
2008
£
|
|
Loan notes issued
|
2,696,559
|
-
|
On 31 October 2008 a £3,000,000 convertible loan note was issued. The loan is for five years and bears interest at 5 % and can be converted at any time prior to repayment by the holder. £303,441 has been credited to reserves. The loan is from Wainford Holdings Limited, a company whom D Wainford a director of Wren Extra Care Group Plc,has a controlling interest
|
10
|
Share capital, share premium account and capital redemption reserve
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||
|
|
Share Capital
|
2009
|
2008
|
|
|||||||||||||||||
|
|
Authorised
|
£
|
£
|
|
|||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||
|
|
100,000,000 Ordinary shares of 10p each
|
10,000,000
|
10,000,000
|
|
|||||||||||||||||
|
|
Allotted, issued and fully paid
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||
|
|
52,422,387 Ordinary shares of 10p each
|
5,242,239
|
4,042,238
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
11 Share capital and reserves
|
|
||||||||||||||||||||
|
|
Share Capital
|
Share Premium
|
Capital Redemption Reserve
|
Equity Reserve
|
Retained Earnings
|
Total
|
|
||||||||||||||
|
|
£
|
£
|
£
|
£
|
£
|
£
|
|
||||||||||||||
|
Balance at 1 August 2008
|
4,042,238
|
3,704,365
|
98,028
|
-
|
241,323
|
8,085,954
|
|
||||||||||||||
|
Issue of shares
Equity element of loan note issue
|
1,200,000
|
5,000
|
|
303,441
|
|
1,205,000
303,441
|
|
||||||||||||||
|
Loss for the year
|
-
|
-
|
-
|
-
|
(45,564)
|
(45,564)
|
|
||||||||||||||
|
Cost of issue of shares
|
|
(105,885)
|
|
|
|
(105,885)
|
|
||||||||||||||
|
Dividends
|
5,242,239
|
3,603,480
|
98,028
|
303,441
|
(52,423)
143,336
|
(52,423)
9,390,524
|
|
||||||||||||||
|
|
|
|
|
||||||||||||||||||
Issue of 10p ordinary shares
Date Number Issue price Proceeds
31 August 2008 1,500,000 10p 150,000
31 October 2008 10,000,000 10p 1,000,000
3 November 2008 500,000 11p 55,000
|
12 |
Related party transactions |
||
|
For details of related party transactions see note 24 |
Related Shares:
Wt Rene Etf