REGISTERED NUMBER:
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Strategic Report, Directors' Report and |
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Financial Statements for the Year Ended 31 December 2019 |
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Property Recycling Group plc |
REGISTERED NUMBER:
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Strategic Report, Directors' Report and |
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Financial Statements for the Year Ended 31 December 2019 |
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for |
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Property Recycling Group plc |
Property Recycling Group plc (Registered number: 05409619) |
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Contents of the Financial Statements |
for the Year Ended 31 December 2019 |
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Page |
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Company Information | 1 |
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Chairman's Report | 2 |
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Strategic Report | 3 |
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Directors' Report | 5 |
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Statement of Directors' Responsibilities | 7 |
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Report of the Independent Auditors | 8 |
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Statement of Comprehensive Income | 10 |
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Balance Sheet | 11 |
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Statement of Changes in Equity | 12 |
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Cash Flow Statement | 13 |
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Notes to the Cash Flow Statement | 14 |
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Notes to the Financial Statements | 15 |
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Property Recycling Group plc |
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Company Information |
for the Year Ended 31 December 2019 |
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DIRECTORS: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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INDEPENDENT AUDITORS : |
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Chartered Accountants |
and Statutory Auditors |
Eldo House, Kempson Way |
Suffolk Business Park |
Bury St Edmunds |
Suffolk |
IP32 7AR |
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BANKERS: |
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35 King Street |
Thetford |
Norfolk |
IP24 2AX |
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SOLICITORS: |
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Trafalgar House |
Meridian Way |
Norwich |
Norfolk |
NR7 0TA |
Property Recycling Group plc (Registered number: 05409619) |
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Chairman's Report |
for the Year Ended 31 December 2019 |
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INTRODUCTION |
A satisfactory result for the year under review. |
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FINANCIAL RESULTS |
In the year ended 31 December 2019 the Company achieved revenue of £3.05 million (2018: £8.82 million) comprising |
income from the sale of one trading property for £2.68 million (2018: £7.76 million), income from trading assets of £0.37 |
million (2018: £0.90 million), there was no income from an investment property in the year (2018: £0.16 million). There |
were no investment property sales in the year (2018 profit on disposal: £0.47 million). |
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Cost of sales of £1.13 million (2018: £4.89 million) comprise the value of opening stocks plus purchases less closing |
stocks. Administrative costs were £0.57 million (2018: £0.47 million). |
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Profit before tax was £1.30 million (2018: £3.40 million). At 31 December 2019 the Company had net assets of £18.66 |
million (2018: £17.97 million). |
PROSPECTS |
Without doubt 2020 will prove to be a difficult year. |
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Any shareholder with queries or seeking further information should contact the acting company secretary Stephen |
Stuteley at the Company's registered office. |
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P A Rackham |
Executive Chairman |
Property Recycling Group plc (Registered number: 05409619) |
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Strategic Report |
for the Year Ended 31 December 2019 |
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The directors present their strategic report for the year ended 31 December 2019. |
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PRINCIPAL ACTIVITIES AND REVIEW OF BUSINESS |
ACTIVITIES |
The principal activities of the company continue to be to identify and acquire previously developed land where there is an |
opportunity to improve the valuation significantly through remediation and planning gain. Once improved, such land is |
sold to developers or end users. |
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A review of the Company's financial performance is shown under the heading Financial Results in the Executive |
Chairman's Report. The Directors confirm that progress on planning matters and site remediation within the portfolio is |
reviewed on a monthly basis and will be reflected in future sales. |
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KEY PERFORMANCE INDICATORS |
The key short-term financial performance indicator is the comparison of short term letting and other income to operating |
costs in years where there were no sales. The Board considers this indicator was met during the year. |
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The key non-financial performance indicator is the area of land and buildings held by the Company. The Company owned |
626 hectares (2018: 701 hectares) of land and buildings with varying planning consents at the year end. |
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FINANCIAL RISK MANAGEMENT |
The financial instruments of the Company principally comprise short-term debtors and creditors, short-term bank |
deposits and cash. All of the Company's assets and liabilities are denominated in sterling. The main risks arising from the |
Company's financial instruments are interest rate risk and liquidity. |
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Financial assets comprise short term bank deposits and cash, |
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INTEREST RATE RISK AND LIQUIDITY RISK MANAGEMENT |
The Company's policy has been to minimise risk by having a drawdown facility and only drawing down what the Directors |
consider necessary to maintain an operational cash balance. |
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CAPITAL RISK MANAGEMENT |
The Company manages its capital to ensure that the Company will be able to continue as a going concern while |
maximising the return to shareholders through optimisation of the debt and equity balance. |
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The capital structure of the Company consists of debt, which includes borrowings disclosed in note 18, cash at bank and |
in hand and equity attributable to equity holders, comprising issued capital, reserves and retained earnings. |
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CREDIT RISK MANAGEMENT |
Management monitors the amount of the Company's net funds in assessing the level of credit risk. The Directors do not |
believe the level of credit risk to be material. |
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CASH FLOW RISK MANAGEMENT |
Management believes that the Company has obtained sufficient access to cash to continue its business activities for the |
foreseeable future. The Directors do not believe the level of cash flow risk to be material. |
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Property Recycling Group plc (Registered number: 05409619) |
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Strategic Report |
for the Year Ended 31 December 2019 |
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PRINCIPAL RISKS AND UNCERTAINTIES |
There are a number of potential risks and uncertainties which have been identified within the business which could have a |
material impact on the Company's long term performance. |
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- Competitive pressure on property purchase in times of buoyant market conditions has to be kept under review and |
strategy adjusted according to the long term view. |
- During a less buoyant market, property sales may be more difficult. The Company seeks to generate income from |
tenants to cover site overheads and offset holding costs. |
- Environmental risks are assessed on property acquisition; it is unlikely that warranties will be given by a vendor. |
Consultants are engaged where necessary and offers reflect their findings. |
- Planning risk is offset in part as previously developed land will already have a value related to its existing planning |
consent. Care is taken at acquisition that enquiries are made into the possibility of enhancing the planning status with a |
view to future sale. |
- The Company is dependent upon a small management team. |
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SECTION 172(1) STATEMENT |
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ENVIRONMENT |
The Company recognises the importance of its environmental responsibilities, and designs and implements policies to |
reduce any damage that might be caused by its activities. It specifically encourages reuse or recycling of materials or, if |
this is not possible, safe disposal using licenced contractors. Much of the Company's work involves improving the |
environmental status of its sites. |
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FUTURE DEVELOPMENTS |
A review of the Company's operations during the year and its plans for the future is given in the Executive Chairman's |
Report. The Company continues to enhance the value of its properties through planning improvements and remediation. |
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The directors have reviewed cash flow requirements for the Company for the immediate future and are satisfied that |
adequate funding is available to the Company to meet its current requirements. Consequently, the financial statements |
are prepared on the going concern basis. |
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ON BEHALF OF THE BOARD: |
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26 March 2020 |
Property Recycling Group plc (Registered number: 05409619) |
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Directors' Report |
for the Year Ended 31 December 2019 |
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The directors present their report with the financial statements of the company for the year ended 31 December 2019. |
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DIVIDENDS |
A dividend of 1p per share was paid on 23 September 2019. The directors do not recommend that a final dividend is paid. |
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The total distribution of dividends for the year ended 31 December 2019 will be £362,000. |
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Dividends declared in 2018 amounting to £255 have not been encashed by shareholders and are unlikely to be so. Those |
dividends have been written back to reserves. |
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DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this report. |
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The appointment and replacement of directors is governed by the Company's Articles of Association, the Companies Act |
2006 and related legislation. The Articles themselves may be amended by special resolution of the shareholders. |
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POLITICAL DONATIONS AND EXPENDITURE |
There were no political or charitable contributions during the year (2018: £nil). |
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DIRECTORS AND OFFICERS LIABILITY INSURANCE |
The Company has purchased and maintained Directors and officers liability insurance under the terms of section 232 |
Companies Act 2006. |
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CAPITAL STRUCTURE |
Details of the issued share capital are shown in note 22. The company has one class of ordinary shares which carries no |
right to fixed income. Each share carries the right to one vote at general meetings of the Company. All shares are issued |
fully paid. No person has special rights of control over the Company's share capital. |
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There are no specific restrictions on the size of a holding nor on the transfer of shares which are both governed by the |
general provisions of the Articles of Association and prevailing legislation. The directors are not aware of any agreements |
between holders of the Company's shares that may result in restrictions on the transfer of securities or on voting rights. |
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At the date of this report, 36,200,000 ordinary shares were in issue. |
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ENGAGEMENT WITH EMPLOYEES |
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ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS |
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STATEMENT OF CORPORATE GOVERNANCE ARRANGEMENTS |
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STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act |
2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken |
as a director in order to make himself aware of any relevant audit information and to establish that the company's |
auditors are aware of that information. |
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This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act |
2006. |
Property Recycling Group plc (Registered number: 05409619) |
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Directors' Report |
for the Year Ended 31 December 2019 |
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AUDITORS |
A resolution to re-appoint Knights Lowe Limited as the Company's auditors and to authorise the Directors to determine |
the auditors' remuneration will be proposed at the forthcoming Annual General Meeting. |
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ON BEHALF OF THE BOARD: |
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Property Recycling Group plc (Registered number: 05409619) |
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Statement of Directors' Responsibilities |
for the Year Ended 31 December 2019 |
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The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable |
law and regulations. |
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Company law requires the directors to prepare financial statements for each financial year. Under that law the directors |
have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting |
Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The |
Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not |
approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the |
company and of the profit or loss of the company for that period. In preparing these financial statements, the directors |
are required to: |
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- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements; |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company
will continue in business. |
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The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the |
company's transactions and disclose with reasonable accuracy at any time the financial position of the company and |
enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for |
safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud |
and other irregularities. |
Report of the Independent Auditors to the Members of |
Property Recycling Group plc |
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Opinion |
We have audited the financial statements of Property Recycling Group plc (the 'company') for the year ended |
31 December 2019 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in |
Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a |
summary of significant accounting policies. The financial reporting framework that has been applied in their preparation |
is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial |
Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting |
Practice). |
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In our opinion the financial statements: |
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give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then
ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
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Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our |
responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial |
statements section of our report. We are independent of the company in accordance with the ethical requirements that |
are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled |
our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have |
obtained is sufficient and appropriate to provide a basis for our opinion. |
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Conclusions relating to going concern |
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to |
you where: |
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the directors' use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or |
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the directors have not disclosed in the financial statements any identified material uncertainties that may cast
significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
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Other information |
The directors are responsible for the other information. The other information comprises the information in the Annual |
Report, but does not include the financial statements and our Report of the Auditors thereon. |
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Our opinion on the financial statements does not cover the other information and, except to the extent otherwise |
explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
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In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing |
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge |
obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or |
apparent material misstatements, we are required to determine whether there is a material misstatement in the financial |
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude |
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to |
report in this regard. |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
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the information given in the Strategic Report and the Directors' Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Property Recycling Group plc |
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Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, |
we have not identified material misstatements in the Strategic Report or the Directors' Report. |
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We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you |
if, in our opinion: |
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adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
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Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page seven, the directors are |
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and |
for such internal control as the directors determine necessary to enable the preparation of financial statements that are |
free from material misstatement, whether due to fraud or error. |
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In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a |
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of |
accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic |
alternative but to do so. |
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Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from |
material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. |
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs |
(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are |
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic |
decisions of users taken on the basis of these financial statements. |
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A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting |
Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the |
Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those |
matters we are required to state to them in a Report of the Auditors 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. |
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for and on behalf of
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Chartered Accountants |
and Statutory Auditors |
Eldo House, Kempson Way |
Suffolk Business Park |
Bury St Edmunds |
Suffolk |
IP32 7AR |
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Property Recycling Group plc (Registered number: 05409619) |
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Statement of Comprehensive Income |
for the Year Ended 31 December 2019 |
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2019 | 2018 |
Notes | £ | £ |
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TURNOVER | 5 |
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Cost of sales |
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GROSS PROFIT |
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Administrative expenses |
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OPERATING PROFIT |
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Interest receivable and similar income | 8 |
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1,416,152 | 3,543,473 |
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Interest payable and similar expenses | 9 |
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PROFIT BEFORE TAXATION | 10 |
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Tax on profit | 11 |
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PROFIT FOR THE FINANCIAL YEAR |
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OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR |
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Property Recycling Group plc (Registered number: 05409619) |
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Balance Sheet |
31 December 2019 |
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2019 | 2018 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 13 |
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Investments | 14 |
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CURRENT ASSETS |
Stocks | 15 |
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Debtors | 16 |
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Cash at bank |
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CREDITORS |
Amounts falling due within one year | 17 |
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NET CURRENT ASSETS |
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TOTAL ASSETS LESS CURRENT LIABILITIES |
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PROVISIONS FOR LIABILITIES | 21 |
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NET ASSETS |
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CAPITAL AND RESERVES |
Called up share capital | 22 |
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Share premium | 23 |
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Retained earnings | 23 |
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SHAREHOLDERS' FUNDS |
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The financial statements were approved by the Board of Directors on
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Property Recycling Group plc (Registered number: 05409619) |
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Statement of Changes in Equity |
for the Year Ended 31 December 2019 |
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Called up | Fair |
share | Retained | Share | value | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
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Balance at 1 January 2018 |
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Changes in equity |
Dividends | - | ( |
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Total comprehensive income | - |
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- |
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Non-distributable transfer | - | 887,011 | - | (887,011 | ) | - |
Balance at 31 December 2018 |
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Changes in equity |
Dividends | - | ( |
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Total comprehensive income | - |
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- |
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Balance at 31 December 2019 |
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Property Recycling Group plc (Registered number: 05409619) |
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Cash Flow Statement |
for the Year Ended 31 December 2019 |
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2019 | 2018 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
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( |
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Interest paid | ( |
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Tax paid | ( |
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Net cash from operating activities |
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( |
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Cash flows from investing activities |
Purchase of tangible fixed assets |
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( |
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Sale of investment property |
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Loan to group company | ( |
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Interest received |
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Net cash from investing activities | ( |
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Cash flows from financing activities |
Loan repayments in year | ( |
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Equity dividends paid | ( |
) | ( |
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Net cash from financing activities | ( |
) | ( |
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(Decrease)/increase in cash and cash equivalents | ( |
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Cash and cash equivalents at beginning of
year |
2 |
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7,853,164 |
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Cash and cash equivalents at end of year | 2 | 275,297 | 8,722,623 |
Property Recycling Group plc (Registered number: 05409619) |
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Notes to the Cash Flow Statement |
for the Year Ended 31 December 2019 |
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1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2019 | 2018 |
£ | £ |
Profit before taxation |
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Depreciation charges |
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Profit on disposal of fixed assets |
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( |
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Finance costs | 122,357 | 141,660 |
Finance income | (67,617 | ) | (92,167 | ) |
1,352,488 | 2,988,124 |
Increase in stocks | ( |
) | ( |
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Decrease/(increase) in trade and other debtors |
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( |
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Decrease in trade and other creditors | ( |
) | ( |
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Cash generated from operations |
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( |
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2. | CASH AND CASH EQUIVALENTS |
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The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these |
Balance Sheet amounts: |
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Year ended 31 December 2019 |
31.12.19 | 1.1.19 |
£ | £ |
Cash and cash equivalents | 275,297 | 8,722,623 |
Year ended 31 December 2018 |
31.12.18 | 1.1.18 |
£ | £ |
Cash and cash equivalents | 8,722,623 | 7,853,164 |
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3. | ANALYSIS OF CHANGES IN NET FUNDS |
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At 1.1.19 | Cash flow | At 31.12.19 |
£ | £ | £ |
Net cash |
Cash at bank | 8,722,623 | (8,447,326 | ) | 275,297 |
8,722,623 | ( |
) | 275,297 |
Debt |
Debts falling due within 1 year | (7,000,000 | ) | 7,000,000 | - |
(7,000,000 | ) | 7,000,000 | - |
Total | 1,722,623 | (1,447,326 | ) | 275,297 |
Property Recycling Group plc (Registered number: 05409619) |
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Notes to the Financial Statements |
for the Year Ended 31 December 2019 |
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1. | STATUTORY INFORMATION |
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Property Recycling Group plc is a
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company's registered number and registered office address can be found on the Company Information page. |
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The presentation currency of the financial statements is the Pound Sterling (£). |
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The nature of the group's operations and its principal activities are set out in the strategic report on pages 3 to 4. |
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Level of rounding |
The accounts are rounded to the nearest pound. |
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2. | STATEMENT OF COMPLIANCE |
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3. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
The financial statements have been prepared under the historical cost convention, modified to include certain |
items at fair value, and in accordance with the Financial Reporting Standard 102 (FRS 102) issued by the Financial |
Reporting Council. |
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Preparation of consolidated financial statements |
The financial statements present information about the company as an individual undertaking and not about it's |
group. Group accounts are not required as the company's subsidiary undertaking is immaterial to the results of |
the group, having been dormant since 31st December 2012. The subsidiary was dissolved on 19 February 2019. |
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Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, |
value added tax and other sales taxes. |
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Income from the sale of land and buildings is recognised at the date of unconditional exchange of contract. |
Option fees are recognised in the period to which the Company is unconditionally entitled to that income. |
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Rental income and other income are accrued on a time basis in the period to which they relate. |
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Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest |
rate applicable. |
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Tangible fixed assets |
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Plant and machinery - 15% to 20% straight line |
Computing equipment - 20% straight line |
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No depreciation is charged on freehold land. |
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The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale |
proceeds and carrying amount of the asset and is recognised in the profit and loss account. |
Property Recycling Group plc (Registered number: 05409619) |
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Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
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3. | ACCOUNTING POLICIES - continued |
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Stocks |
Stock is stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to the net |
realisable value. Cost comprises the cost of acquisition of property, professional and planning fees and |
construction and infrastructure costs, but excludes overheads. Net realisable value represents the estimate selling |
price less all estimated costs of completion and costs to be incurred in marketing and selling the properties. |
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Financial instruments |
Financial assets and financial liabilities are recognised when the company becomes a party to the contractual |
provisions of the instrument. |
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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 company after deducting all of its liabilities. |
|
(i) Financial assets and liabilities |
|
All financial assets and liabilities are initially measured at transactions price (including transaction costs), except for |
those financial assets classified at fair value through profit or loss, which are initially measured at fair value (which |
is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing |
transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is |
measured at the present value of future payments discounted at a market rate of interest for a similar debt |
instrument. |
|
Financial assets and liabilities are only offset in the statement of financial position when, and only when there |
exists a legally enforceable right to set off the recognised amounts and the company intends to either settle on a |
net basis, or to realise the asset and settle the liability simultaneously. |
|
(ii) Derivative financial instruments |
|
The company uses derivative financial instruments to reduce exposure to interest rate movements. The company |
does not hold or issue derivative financial instruments for speculative purposes. |
|
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are |
subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in the |
profit and loss immediately unless the derivative is designated and effective as the hedging instrument, in which |
event the timing of the recognition in the profit or loss depends on the nature of the hedge relationship. |
|
(iii) Fair value measurement |
|
The best evidence of fair value is quoted price for an identical asset in an active market. When quoted prices are |
unavailable, the price of a recent transaction for an identical asset provides evidence of fair value as long as there |
has not been a significant change in economic circumstances or a significant lapse of time since the transaction |
took place. If the market is not active and recent transactions of an identical asset on their own are not a good |
estimate of fair value, the fair value is estimated by using a valuation technique. |
|
Property Recycling Group plc (Registered number: 05409619) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
3. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive |
Income, except to the extent that it relates to items recognised in other comprehensive income or directly in |
equity. |
|
Current or deferred taxation assets and liabilities are not discounted. |
|
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or |
substantively enacted by the balance sheet date |
|
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance |
sheet date. |
|
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from |
those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that |
have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the |
timing difference. |
|
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they |
will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
|
The company as a lessor |
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. |
Amounts due from lessees under finance leases are recorded as debtors at the company's net investment in the |
lease. Finance lease income is allocated to the profit and loss account so as to produce a constant periodic rate |
of return on the remaining balance of the debtor. |
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 usually immaterial and are |
recognised in the profit and loss account in the period incurred. |
|
Provisions |
A provision is recognised when the Company has a present obligation as a result of a past event and it is probable |
the company will be required to settle that obligation and amounts can be estimated reliably. Provisions are |
measured at the Directors best estimate of the expenditure required to settle the respective obligations at the |
balance sheet date and are discounted to present value where the effect is material. |
Property Recycling Group plc (Registered number: 05409619) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
4. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
|
In the application of the Company's accounting policies, which are described below, the directors are required to |
make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not |
readily apparent from other sources. The estimates and associated assumptions are based on historical experience |
and other factors that are considered to be relevant. Actual results may differ from these estimates. |
|
The estimated and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates |
are recognised in the period in which the estimate is revised if revision affects only that period, or in the period of |
the revision and future periods if the revision affects both current and future periods. |
|
Critical judgements and key sources of estimation uncertainty in applying the Company's accounting |
policies |
The following are critical judgements including those involving estimations, that the directors have made in the |
process of applying the Company's accounting policies and that have the most significant effect on the amounts |
recognised in the financial statements. |
|
Assessment of net realisable value of stock properties |
Stocks are valued at the lower of cost and net realisable value. The cost of stock comprises net prices paid for |
land plus any work in progress to improve the site. Net realisable value (NRV) represents the estimated selling |
price less all costs to be incurred in marketing and selling. The NRV of properties are assessed by the directors |
based on all available information including formal and informal valuations provided by land agents, current |
negotiations and other interest expressed in the sites by third parties and generic information such as average |
values of farm land and indications of commercial and residential property values. |
|
5. | TURNOVER |
|
The turnover and profit before taxation are attributable to the principal activities of the company. |
|
An analysis of turnover by class of business is given below: |
|
2019 | 2018 |
£ | £ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The company's primary activities are the remediation, development and sale of previously developed land and |
property and its net assets are principally applied to those purposes. Letting of stock properties is a secondary |
activity. |
|
6. | EMPLOYEES AND DIRECTORS |
2019 | 2018 |
£ | £ |
Wages and salaries |
|
|
Social security costs |
|
|
|
|
Property Recycling Group plc (Registered number: 05409619) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
6. | EMPLOYEES AND DIRECTORS - continued |
|
The average number of employees during the year was as follows: |
2019 | 2018 |
|
Administration | 3 | 3 |
|
7. | DIRECTORS' EMOLUMENTS |
2019 | 2018 |
£ | £ |
Directors' remuneration |
|
|
|
Information regarding the highest paid director is as follows: |
2019 | 2018 |
£ | £ |
Emoluments etc |
|
|
|
8. | INTEREST RECEIVABLE AND SIMILAR INCOME |
2019 | 2018 |
£ | £ |
Deposit account interest |
|
|
Other interest receivable |
|
|
|
|
|
9. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2019 | 2018 |
£ | £ |
Bank interest |
|
|
SWAP interest and fair value movement |
|
( |
) |
Interest payable |
|
|
|
|
|
10. | PROFIT BEFORE TAXATION |
|
The profit is stated after charging/(crediting): |
|
2019 | 2018 |
£ | £ |
Operating lease income | ( |
) | ( |
) |
Depreciation - owned assets |
|
|
Profit on disposal of fixed assets |
|
( |
) |
Auditors' remuneration |
|
|
Property Recycling Group plc (Registered number: 05409619) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
11. | TAXATION |
|
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2019 | 2018 |
£ | £ |
Current tax: |
UK corporation tax |
|
|
Prior year tax adjustment | - | 20 |
Total current tax |
|
|
|
Deferred tax | ( |
) | ( |
) |
Tax on profit |
|
|
|
UK corporation tax has been charged at 19% (2018 - 19%). |
|
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is |
explained below: |
|
2019 | 2018 |
£ | £ |
Profit before tax |
|
|
Profit multiplied by the standard rate of corporation tax in the UK of
(2018 - |
|
|
|
Effects of: |
Expenses not deductible for tax purposes |
|
|
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Adjustments to tax charge in respect of previous periods |
|
|
|
Deferred taxation - timing differences | 1,056 | (382,673 | ) |
Profit on disposal of investment property | - | (88,561 | ) |
stock |
Total tax charge | 246,240 | 174,068 |
|
12. | DIVIDENDS |
|
The directors voted an interim dividend in respect of the year to 31 December 2019 on ordinary shares of 1p per |
share, a total distribution of £362,000 (2018: £362,000). |
|
The directors are recommending to the members at the Annual General Meeting that no final dividend is paid |
(2018: nil). |
|
Dividends declared in 2018 amounting to £255 have not been encashed by shareholders and are unlikely to be so. |
Those dividends have been written back to reserves. |
Property Recycling Group plc (Registered number: 05409619) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
13. | TANGIBLE FIXED ASSETS |
Plant and |
machinery |
£ |
COST |
At 1 January 2019 |
and 31 December 2019 |
|
DEPRECIATION |
At 1 January 2019 |
|
Charge for year |
|
At 31 December 2019 |
|
NET BOOK VALUE |
At 31 December 2019 |
|
At 31 December 2018 |
|
|
14. | FIXED ASSET INVESTMENTS |
|
The company's investment relates to a 100% holding in the ordinary shares of Hensby Composts Limited, a |
company not currently trading with a registered office of: Manor Farm, Bridgham, Norwich, Norfolk, NR16 2RX. |
|
Hensby Composts Limited was dissolved on 19 February 2019. |
|
15. | STOCKS |
2019 | 2018 |
£ | £ |
Stock properties |
|
|
|
Included in stock of properties is an asset with a book value of £2,526,815 (2018: £2,512,733) which is stated net of |
a capital grant of £106,800 (2018: £106,800). The directors have assessed the current market value of the site in |
the light of its likely planning limitations, condition and current agricultural land values and, as a result, they have |
maintained an impairment provision which reduced the holding value by £233,175 at the balance sheet date. |
|
Also included in stock of properties is an asset with a book value of £96,000 (2018: £96,000) which is stated net of |
impairment of £120,652 (2018: £120,652). The directors assessed the current market value of the site and have |
maintained this impairment provision for the current year. |
|
No impairment provisions have been charged to the profit and loss account this year (2018: £nil) and the directors |
consider that no further adjustment is required to impairment provisions made in prior years. The main provisions |
are described in more detail above. |
|
16. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2019 | 2018 |
£ | £ |
Trade debtors |
|
|
Amounts owed by group undertakings |
|
|
VAT |
|
|
Prepayments |
|
|
|
|
Property Recycling Group plc (Registered number: 05409619) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
17. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2019 | 2018 |
£ | £ |
Bank loans and overdrafts (see note 18) |
|
|
Trade creditors |
|
|
Amounts owed to group undertakings |
|
|
Corporation tax |
|
|
Social security and other taxes |
|
|
Other creditors | 9 | - |
Accruals and deferred income |
|
|
|
|
|
18. | SECURED LOANS |
|
An analysis of the maturity of secured loans is given below: |
|
2019 | 2018 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
|
|
|
19. | LEASING AGREEMENTS |
The future minimum lease payments receivable under non-cancellable operating leases are as follows: |
|
2019 | 2018 |
£ | £ |
Within one year | 255,775 | 337,840 |
Between one and five years | 318,890 | 716,492 |
In more than five years | 188,500 | 1,828,500 |
763,165 | 2,882,832 |
Property Recycling Group plc (Registered number: 05409619) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
20. | FINANCIAL INSTRUMENTS |
|
The carrying values of the Company's financial assets and liabilities are summarised by category below: |
|
2019 | 2018 |
Financial assets | £ | £ |
|
Measured at undiscounted amount receivable |
- Trade and other debtors (see note 16) | 2,254,032 | 754,908 |
|
Measured at amortised cost |
- Loans receivable | - | - |
|
|
2,254,032 | 754,908 |
|
Financial liabilities |
Measured at amortised cost |
- Loans payable (see note 18) | - | 7,000,000 |
|
Measured at undiscounted amount payable |
- Trade and other creditors (see note 17) | 344,874 | 386,241 |
344,874 | 7,386,241 |
|
|
The Company's income, expense, gains and losses in respect of financial instruments are summarised below: |
|
2019 | 2018 |
£ | £ |
Interest income and expense |
Total interest income for financial assets at amortised cost | 10,076 | - |
Total interest expense for financial liabilities at amortised cost | 122,357 | 148,476 |
|
Fair value gains and losses |
On derivative financial liabilities designated in a hedging relationship | - | (8,179 | ) |
|
|
21. | PROVISIONS FOR LIABILITIES |
2019 | 2018 |
£ | £ |
Deferred tax |
Timing differences (see below) | 1,869 | 2,620 |
Property Recycling Group plc (Registered number: 05409619) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
21. | PROVISIONS FOR LIABILITIES - continued |
|
Deferred |
tax |
£ |
Balance at 1 January 2019 |
|
Credit to Statement of Comprehensive Income during year | ( |
) |
Balance at 31 December 2019 |
|
|
22. | CALLED UP SHARE CAPITAL |
|
|
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2019 | 2018 |
value: | £ | £ |
|
Ordinary | 0.05 | 1,810,000 | 1,810,000 |
|
23. | RESERVES |
|
A brief explanation of the company's reserves as disclosed in the Statement of Changes in Equity is as follows: |
|
Share premium account |
This reserve records the amount above the nominal value received for shares sold, less transaction costs. |
|
Retained earnings |
Accumulated realised post tax profits comprising a distributable reserve. |
|
24. | IMMEDIATE PARENT COMPANY AND ULTIMATE CONTROLLING PARTY |
|
The Company's immediate parent company is Paul Rackham Limited and its ultimate parent company and |
controlling party is Rackham Group Limited. |
Group accounts are prepared by Rackham Group Ltd and these are publically available at Companies House, |
Crown Way, Cardiff CF14 3UZ. |
|
25. | RELATED PARTY DISCLOSURES |
|
|
2019 | 2018 |
£ | £ |
Rent receivable |
|
|
Director's remuneration recharged to Company | ( |
) | ( |
) |
Services contract and site maintenance payable | (272,942 | ) | (267,846 | ) |
Dividend paid to parent company | (338,375 | ) | (336,425 | ) |
Interest receivable | 10,076 | - |
Amount due from related party |
|
|
Amount due to related party | ( |
) | ( |
) |
Property Recycling Group plc (Registered number: 05409619) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
During the 2019 financial year Mr S Stuteley (Director) sold his 90,000 share holding in Property Recycling Group plc to Paul Rackham Limited at 17p per share. |
|
A service agreement was established between Paul Rackham Limited and the Company on 27 May 2005 in advance of flotation on AIM. Under the terms of the agreement, Paul Rackham Limited provides the Company with office accommodation, related services, administrative and management services in consideration for a service charge reviewed annually and increased by the Consumer Price Index. |
|
The agreement had an initial term of one year and will, unless either party gives two months notice of termination before an anniversary of the commencement date, be automatically renewed annually on the anniversary of commencement, being 16 June 2005. The agreement has been renewed in each subsequent year, including 16 June 2018. The scope of the agreement remained the same during the year. |
|
In June 2011 the Board awarded Paul Rackham Limited a contract of £60,000 per annum for work, materials and facilities provided for sites on an ongoing basis. Paul Rackham Limited paid a capital grant of £106,800 to the Company in a previous year which is carried forward (2018: £106,800). |
|
|
2019 | 2018 |
£ | £ |
Dividend paid to director |
|
|
|
26. | GUARANTEES |
|
There is a cross party guarantee secured against the assets and undertakings of all the companies in Rackham |
Group Limited in relation to a group banking credit facility. |