TIDMIHGP
For immediate release 30 October 2009
IN HOUSE GROUP PLC
REPORT AND ACCOUNTS
FOR THE YEAR ENDED 30 APRIL 2009
The Company is pleased to announce the publication of its Annual Report for the
year ended 30 April 2009. The full report will be posted on the Company's
website (www.ihgroup.co.uk) today and the printed reports are being mailed to
shareholders today.
Extracts of the Annual Report are set out below:
CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT
FOR THE YEAR ENDED 30 APRIL 2009
Introduction
The following Group Annual Report and Accounts cover the fifth period of the
Group's operations being the year ended 30 April 2009.
The past year has been a period of further consolidation for the Group and
whilst the full force of the credit crunch has seen our main lending bank The
Dunfermline Building Society go into administration, we have assurances from
them that our facility is still available as per the original agreement and we
have not been notified of anything to the contrary. The Board worked on making
further acquisitions and raising new finance. Private placing arrangements were
carried out after the year end.
Current Trading
Berrymount Developments Limited was acquired at the end of the previous period
with another property owning company, Avanti Properties Limited, being acquired
in November 2008.
Under International Financial Reporting Standards (IFRS) the accounting
treatment of properties acquired in an existing limited company differs from
the treatment of properties acquired directly (which are accounted for at cost
to the Group). The requirements of IFRS 3 are that assets acquired in an
existing company are accounted for at fair value which for these purposes would
be a third party valuation. Therefore the properties acquired in Avanti are
accounted in the balance sheet at their fair value of GBP1.365m (pre provision).
After making provision for deferred tax on future gains, the excess of GBP118,000
has been taken to the Income Statement as required by IFRS 3.
Clearly the current economic climate has brought uncertainty to the property
sector. Three particular implications result from the current conditions.
First, it is a very difficult market in which to sell properties; this means
the Group has been unable to sell its existing stock. Second, it has been
difficult to complete any further acquisitions of property portfolios. Third,
interest rates have been declining, which, as the Group's interest charges are
linked to base rate, has been helping its margins.
The Group is, therefore, currently concentrating on managing its existing stock
of residential properties. A good proportion of the properties are let to
asylum seekers or benefits claimants with the rents paid directly by either
local authorities or other agencies which therefore provide a high quality of
income to the Group. This revised strategy is reflected in the results for the
period.
A strategic increase in rents and reduction in related property management
costs is a clear indication of positive current trading activities.
The Board undertook a review of the property market to assess the current value
of the Group's stock. The data was obtained by local visits to the area by some
or all of the directors and liaising with local agents supported by on line
research.
It was concluded that a fair valuation based on the review undertaken was GBP
12,789,000.
The results for the year largely reflect the impact of the revised valuation in
the Financial Statements.
On 27 May 2008 the Company's Share Capital was reorganised with 645,589,628
0.249p Deferred Shares being created and 839,248,182 0.001p Ordinary Shares
being authorised of which 645,589,628 were in issue at that time.
Prospects
The Group had expected to make further property acquisitions and is still
looking for appropriate opportunities but the current economic uncertainty is
impacting on the ability to complete such deals. The Group retains its existing
funding facility with Dunfermline Building Society but expects to replace this
with new facilities as each tranche of the facility falls due for repayment
(first tranche is in August 2010).
There are currently around 25 properties that require some refurbishment before
they can be re-let. Since the year end the Group has reached agreement with a
number of private investors to enable it to facilitate the consolidation of
creditors and allow it to refurbish some of the properties and increase
revenue. The Directors believe that these properties can readily be rented and
will provide a good payback on the investment required.
Although the influx of funds (GBP443,000 in total) has been slower than
originally anticipated the Group has been given assurances that the money
committed will be forthcoming albeit over a longer period of time.
The Group has also reached agreement with some of its long term creditors and
as part of this agreement issued 673,013,467 shares on 3 July at between 0.02p
and 0.03p to creditors for a total of GBP141,041.
Subsequent to this the shares in the Company were consolidated following a
General Meeting held on 24 August on a 1 for 1,000 basis.
Management will continue to concentrate on investment, continued robust
financial control and the continued drive in streamlining of operations and
costs.
Portfolios held at the year end
As at the year end the Group owned the following portfolios:
Portfolio Valuation at Cost Date Description
time of including Acquired
Acquisition transaction
costs
GBP000s GBP000s
Avanti 1,365 657 5 November 11 properties being
2008 terraced houses in north
Manchester
Berrymount 3,475 2,573 4 April 2008 28 properties largely
terraced houses in the
Wigan area
Compustar 6,957 5,445 November 60 properties largely
2007 to terraced houses in the
March 2008 Greater Manchester area
but including one 25 bed
hostel
Decaton 4,470 3,825 6 August 20 multi occupancy
2007 buildings, 11 divided
into flats and the others
as hostels. 18 are in
Stockton on Tees and 2 in
Kingston Upon Hull
______ ______
16,267 12,500
The Future
Clearly the current economic climate is bringing uncertainty to the property
sector. Two particular implications would appear to result from the current
conditions. First, it is a very difficult market in which to sell properties;
this means the Group will be less likely to be able to sell its existing stock
but conversely will be able to acquire new stock at particularly keen prices.
Second, it is expected that the rental market will strengthen as a result and
thus the income the Group obtains from the housing stock that is held should
increase. Due to this the Group is still looking at acquiring further property
portfolios.
Since the year end the going concern position has been further improved in
comparison to the previous year. A large number of creditors are now being
dealt with and after cutting overheads and introducing new investment funds
into the group to increase revenue we feel that we are now able to move forward
in a more successful and productive way.
David Meddings
Chairman
Marcus Cassidy
Chief Executive
IN HOUSE GROUP PLC
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 30 APRIL 2009
The directors present their annual report on the affairs of the Group together
with the financial statements for the year ended 30 April 2009.
Principal activities
The principal activity of the Group and Company was that of acquiring property
portfolios for break up and resale. The Group also had property lettings
activities that were complementary to the principal activity but these were
transferred to a third party after the year end. The subsidiary undertakings
included in the consolidated financial statements are listed in note 17 to the
financial statements.
Business review and future developments
The Chairman and Chief Executive's Statement has provided an overview of the
Business and the intentions of the Group for the future.
The results for the year ended 30 April 2009 are set out in the Consolidated
Income Statement on page 13. These show a loss for the year of GBP1,995,000
(2008: loss GBP786,000).
Developments during the year
The Group acquired a further property company in the year, Avanti Properties
Limited. This acquisition saw a positive impact to rental income over the
period and is a key addition to the group's portfolio.
The Board worked on a refinancing exercise for the Group. This came into
fruition after the year end through private placings.
The above developments will enable the group to move forward with positive cash
flows and concentrate on continued consolidation of current trading activities
as well as beginning to look towards a future sustainable growth strategy.
Review of the post year end position
On 24 May 2009 an agency agreement was signed transferring the management of
the Group's properties to UK Lettings Solutions Limited and as a result In
House Estates Limited ceased to trade.
A Private Placing for GBP443,000 was agreed as announced in July 2009 and
settlement was reached with creditors resulting in the issue of shares in
settlement of GBP101,404 of liabilities.
On 24 August 2009 a motion to consolidate the Ordinary Shares of the company on
a 1 for 1,000 basis was approved in General Meeting.
Future developments in the Business
The refinancing of the Group has put it on a firmer footing such that it can
concentrate on the renegotiation of the property related debt as it falls due.
Key Performance Indicators
The Key Performance Indicators for the Group are the book and market value of
property portfolios held for break up, gains on the sales from these portfolios
and the margins between rental income and finance costs on rental property.
At the year end the Group had trading properties with a book value of GBP12.8m;
on acquisition these properties were independently valued at GBP16.3m. None of
the properties acquired for trading have been sold to date. Due to the
concentration on managing the acquired portfolios, the number of properties
managed for third parties further declined in the year such that it was decided
that this activity be curtailed.
Principle risks and uncertainties
We are required by the Companies Act 2006 to describe the principal risks and
uncertainties facing the Group. The principal risks for the Group are:
Commercial risks
Future downturns in the UK property market could materially adversely affect
the value of properties acquired by the Group.
The terms of the loans with the lender are that should the market value of the
properties fall such that the loan values become more that 80% of the market
value, these loans can be recalled.
Where properties are acquired by the Group with existing tenants, in the event
of tenant default, there may be a rental income shortfall and the Group may
become liable for maintaining that part of the property portfolio. This may
affect investment returns and could lead to an event of default in any bank
facilities or other funding arrangements that the Group has at the time.
Any development of properties, prior to onward sale, may not be completed
within envisaged time scales if at all. This could therefore impact on the
profit made on such properties and therefore the value of the Group's business
as a whole.
Given the level of borrowings, changes in interest rates will have a material
impact on the Group's profits and losses.
Financial risks
The main risks arising from the Group's financial instruments are interest rate
risks and liquidity risk. Interest rate risk - the Group finances its
operations by bank borrowings at contracted rates of interest. Liquidity risk -
the directors consider that the Group's banking facilities are adequate going
forward. Details of financial instruments are set out in note 29 to the
financial statements.
Going concern
In determining the appropriate basis of preparation of the Financial
Statements, the Directors are required to consider whether the Group can
continue in operational existence for the foreseeable future.
The Board has prepared projected cash flow information for the period ending 12
months from the date of approval of these Financial Statements ("the
Projections").
These Projections include several key assumptions which will have an impact on
the Group's working capital:
* existing funding facilities from the Group's lenders will remain available
at their existing level;
* there will be continuing support from creditors;
* funds committed under the private placing announced 3 July 2009 to raise GBP
443,000 in total, will be received in accordance with the anticipated
timetable;
* bank base rates will remain around their current level;
* properties that have been identified for refurbishment will be updated
during the course of the year.
Having reviewed these Projections and having made reasonable enquiries in
making the underlying assumptions, together with assessing the position of
current lenders, creditors and investors the Directors have reasonable
expectation that the Group will be able to meet its liabilities moving forward
as they fall due. It is on this basis that the Directors consider it
appropriate to prepare the Group's Financial Statements on the going concern
basis. However, for the reasons described above, the Directors recognise that
there are material uncertainties that may cast significant doubt on the Group's
ability to continue as a going concern, and therefore, that it may be unable to
realise its assets and discharge its liabilities in the normal course of
business.
There is a risk that the above material uncertainties as to the Group's ability
to continue as a going concern may not be resolved satisfactorily. The
Financial Statements do not include the adjustments that would result if the
Group were unable to continue as a going concern, which would include writing
down the carrying value of assets to their recoverable amount and providing any
further liabilities that might arise, as it is not practicable to determine or
quantify them.
Dividends
The directors do not recommend payment of a dividend (2008: GBPnil).
Capital Structure
Details of issues of share capital in the holding company and share warrants
are contained in note 24 of these financial statements.
The company had ordinary shares which carried no right to fixed income. 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
agreement between holders of the company's shares that may result in
restrictions on the transfer of securities or voting rights.
No person has any special rights of control over the company's share capital
and all the shares issued are fully paid.
With regard to the appointment and replacement of directors, the company is
governed by its Articles of Association, the AIM Listing Rules, the Companies
Acts and related legislation. The Articles themselves may be amended by special
resolution of the shareholders. The powers of directors are described in the
Main Board Terms of Reference, copies of which are available on request, and
the Corporate Governance Statement on page 7.
Under its Articles of Association the Company had 839,248,182,628 0.001p
Ordinary Shares authorised, of which 4,253,181,209 were in issue at the year
end, together with 645,589,628 Deferred shares of 0.249p.
On 24 August 2009 a resolution was passed consolidating the Ordinary Shares on
a 1 for 1,000 basis.
Directors and their interests
The directors who served during the year are noted on page 1.
The interests (all of which are beneficial) of the directors who were in
service at the year end, and their families, in the ordinary shares of the
company are shown below:
30 April 2009 30 April 2008
0.001p Ordinary 0.25p Ordinary
Shares Shares
Number Number
D Meddings 1,600,000 -
M Cassidy 57,000,000 57,000,000
J Ferree 13,400,000 -
J Gordon - -
A Hollows 3,125,000 3,125,000
In accordance with the Articles of Association, David Meddings retires and,
being eligible, offers himself for re-election at the Annual General Meeting.
No changes took place in the interests of the directors between 30 April 2009
and 23 October 2009 other than arising from the Share Consolidation on 24
August 2009.
Details of the directors' interests in transactions with the Group are set out
in note 31 to the accounts.
Substantial shareholding
As at 22 October 2009 the Company had been notified of the following interests
in the ordinary share capital of the company:
Number of
ordinary shar %
es
JIM Nominees Limited 675,301,101 49.48%
DSL Client Nominees Limited 112,359,551 8.23%
Jeffrey & Lynda Caplan 96,296,296 7.06%
Marcus Cassidy 57,000,000 4.18%
David Langer 50,000,000 3.66%
Other than the above holdings and those of directors (see page 6), the board is
not aware of any beneficial holdings in excess of 3% of the issued share
capital of the company.
Corporate governance
The corporate governance rules and codes are not mandatory for companies traded
on the Alternative Investment Market (AIM). However, the directors are
committed to applying the requirements of the Code where they are considered
appropriate. This statement explains how the Group has applied the principles
of the Code throughout the period.
The Board meets regularly and is responsible for the overall Group strategy,
acquisition and divestment policy approval of major capital expenditure and
consideration of significant financing matters.
The Audit Committee is chaired by David Meddings (who is a Chartered
Accountant) and includes John Ferree. The committee convenes twice a year. The
auditors may attend the meetings at the request of the Committee.
Due to the nature and size of the Group at present it would not be appropriate
for the Group to have its own internal audit department reporting directly to
the Audit Committee.
The Remuneration Committee is chaired by David Meddings and includes John
Ferree. The Committee's responsibilities include the consideration and approval
of the terms of service, nomination, remuneration and benefits of the Company's
directors.
The Board, as a whole, determines the remuneration of the non-executive
directors.
Internal control
The Board, which presently comprises the chairman, the executive and
non-executive directors, meets formally on a regular basis. The directors are
responsible for ensuring that the Group maintains adequate internal control
over the business and its assets.
There is an agreed schedule of matters requiring referral to the Board. These
matters include the Group's corporate strategy, acquisitions and disposals and
approval of major capital expenditure. The Board has arrangements in place
enabling it to take independent professional advice when appropriate.
There is close day to day involvement by the executive directors in all of the
Group's activities and liaison with the non-executive directors when required.
Relations with shareholders
The Group is active in communicating with both its institutional and private
investors and responds to queries received verbally or in writing. General
meetings, at which directors are introduced and available for questions,
provide further opportunities for dialogue.
Creditor payment policy
It is the policy of the Group to agree and communicate the terms of payment as
part of the commercial arrangements negotiated with suppliers. At 30 April
2009, there were 164 days (2008: 80 days) purchases remaining unpaid.
Political contributions and charitable donations
The Group made no political or charitable donations during the period.
Social policies and employee involvement
The Group has not provided information relating to the effectiveness of
policies regarding the environment, employees and social community issues.
Post balance sheet events
The Details of the Group's post balance sheet events are shown at note 32.
The main events were:
On 24 May 2009 an agency agreement was signed transferring the management of
the Group's properties to UK Lettings Solutions Limited and as a result In
House Estates Limited ceased to trade.
A Private Placing for GBP443,000 was agreed as announced in July 2009 and
settlement was reached with creditors resulting in the issue of shares in
settlement of GBP141,404 of liabilities.
On 24 August 2009 a motion to consolidate the Ordinary Shares of the company on
a 1 for 1,000 basis was approved in General Meeting.
Statement of disclosure of information to Auditors
In the case of each of the persons who are directors at the time when the
report is approved, the following applies:
- so far as the directors are aware, there is no relevant audit information
(information needed by the Company's auditors in connection with preparing
their report) of which the Company's auditors are unaware;
- 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 the information.
This confirmation is given and should be interpreted in accordance with the
provisions of S.418 of the Companies Act 2006.
Alexander & Co have expressed their willingness to continue in office as
auditors and a resolution to reappoint them as auditors will be put to the
members at the Annual General Meeting.
By order of the Board
A Hollows
Company Secretary
30 October 2009
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF
IN HOUSE GROUP PLC
We have audited the Group and Parent Company financial statements (the
"financial statements") of In House Group plc for the year ended 30 April 2009
which comprise the Group Income Statement, the Group and Parent Company Balance
Sheets, the Group and Parent Company Cash Flow Statements, the Group and Parent
Company Statements of Changes in Equity 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 and as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to 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 auditors' report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company's members as a body for our
audit work, for this report or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors' Responsibilities, 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.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the Group's and the Parent Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness of
significant accounting estimates made by the directors; and the overall
presentation of the financial statements.
Opinion
In our opinion:
* the financial statements give a true and fair view of the state of the
Group's and of the Parent Company's affairs as at 30 April 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;
* the Parent Company financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union and as applied in
accordance with the provisions of the Companies Act 2006;
* the financial statements have been properly prepared in accordance with the
requirements of the Companies Act 2006 and, as regards the Group financial
statements, Article 4 of the IAS Regulation.
Emphasis of matter - Going concern
In forming our opinion on the financial statements, which is not qualified, we
have considered the adequacy of the disclosures made in note 1 to the financial
statements concerning the Group's ability to continue as a going concern.
The Group incurred a net loss of GBP1,995,000 during the year ended 30 April 2009
and, at that date, had net liabilities of GBP2,063,000. These conditions, along
with the other matters explained in note 1 to the financial statements,
indicate the existence of a material uncertainty which may cast significant
doubt about the Group's ability to continue as a going concern. The financial
statements do not include the adjustments that would result if the Group was
unable to continue as a going concern.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
* the part of the Directors' Remuneration Report to be audited has been
properly prepared in accordance with the Companies Act 2006 and;
* 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 by the Parent Company, or
returns adequate for our audit have not been received from branches not
visited by us: or
* the Parent Company financial statements and the part of the Directors'
Remuneration Report to be audited are not in agreement with the accounting
records and returns;
* 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.
Gary Kramrisch (Senior Statutory Auditor)
For and on behalf of Alexander & Co
Chartered Accountants & Statutory Auditors
17 St Ann's Square
Manchester
M2 7PW
30 October 2009
IN HOUSE GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 APRIL 2009
Notes 2009 2008
GBP'000 GBP'000
Continuing operations
Revenue
Property sales and management fees 4 63 963
Other operating income 4 580 282
______ ______
643 1,245
Cost of sales (11) (935)
Write down of inventories (1,242) (139)
Other operating expenses (328) (171)
Administrative expenses (661) (713)
______ ______
Operating loss (1,599) (713)
Investment revenue 10 1 8
Release of negative goodwill 27 118 254
Finance costs 11 (611) (336)
______ ______
Loss on ordinary activities before 6 (2,091) (787)
taxation
Taxation 12 96 1
______ ______
Loss for the period attributable to (1,995) (786)
the equity holders of the parent
company
===== =====
Loss per share: basic (pence) 13 (0.095) (0.134)
===== =====
Loss per share: diluted (pence) 13 (0.087) (0.126)
===== =====
IN HOUSE GROUP PLC
CONSOLIDATED BALANCE SHEET
AS AT 30 APRIL 2009
2009 2008
Notes GBP'000 GBP'000
NON-CURRENT ASSETS
Intangible assets 15 - 12
Plant and equipment 16 - 3
______ ______
- 15
CURRENT ASSETS
Trading properties 18 12,789 12,606
Trade and other receivables 19 160 730
Cash and cash equivalents 20 22 162
______ ______
12,971 13,498
CURRENT LIABILITIES
Borrowings 21 (231) (141)
Trade and other payables 22 (586) (440)
______ ______
(817) (581)
______ ______
NET CURRENT ASSETS 12,154 12,917
NON-CURRENT LIABILITIES
Borrowings 21 (13,371) (12,805)
Deferred tax liabilities 23 (846) (648)
______ ______
(14,217) (13,453)
______ ______
NET LIABILITIES (2,063) (521)
====== ======
EQUITY ATTRIBUTABLE TO THE EQUITY
HOLDERS OF THE PARENT COMPANY
Share capital 24 1,650 1,614
Share premium account 1,896 1,479
Retained earnings (5,609) (3,614)
______ ______
TOTAL EQUITY (2,063) (521)
====== ======
The financial statements were approved by the board of directors and authorised
for issue on 30 October 2009.
They were signed on its behalf by:
Marcus Cassidy
Chief Executive
Company number: 05029994
IN HOUSE GROUP PLC
COMPANY BALANCE SHEET
AS AT 30 APRIL 2009
2009 2008
Notes GBP'000 GBP'000
NON-CURRENT ASSETS
Plant and equipment 16 - 3
Trade and other receivables 19 1,587 1,329
______ ______
1,587 1,332
CURRENT ASSETS
Trade and other receivables 19 11 46
Cash and cash equivalents 20 - 95
______ ______
11 141
CURRENT LIABILITIES
Borrowings 21 (88) (5)
Trade and other payables 22 (377) (253)
______ ______
(465) (258)
______ ______
NET CURRENT LIABILITIES (454) (117)
______ ______
NET ASSETS 1,133 1,215
====== ======
EQUITY ATTRIBUTABLE TO THE EQUITY
HOLDERS OF THE COMPANY
Share capital 24 1,650 1,614
Share premium account 1,896 1,479
Retained earnings (2,413) (1,878)
______ ______
TOTAL EQUITY 1,133 1,215
====== ======
The financial statements were approved by the board of directors and authorised
for issue on 30 October 2009.
They were signed on its behalf by:
Marcus Cassidy
Chief Executive
IN HOUSE GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 APRIL 2009
2009 2008
Notes GBP'000 GBP'000
CASH FLOWS FROM OPERATING 25 108 (9,550)
ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 1 8
Acquisition of subsidiary 27 (647) (1,420)
Purchase of plant and equipment - (4)
Disposal of plant and equipment - 3
______ ______
NET CASH FLOWS USED IN INVESTING (646) (1,413)
ACTIVITIES
CASH FLOWS FROM FINANCING
ACTIVITIES
Interest paid (611) (336)
Proceeds on issue of share capital 443 487
(net of costs)
Net new borrowings 566 11,514
______ ______
NET CASH GENERATED FROM 398 11,665
FINANCING ACTIVITIES
NET (DECREASE)/INCREASE IN CASH AND (140) 702
CASH EQUIVALENTS
====== ======
CASH AND CASH EQUIVALENTS AT THE 162 (540)
BEGINNING OF THE PERIOD
====== ======
CASH AND CASH EQUIVALENTS AT THE END 20 22 162
OF THE PERIOD
====== ======
IN HOUSE GROUP PLC
COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 APRIL 2009
2009 2008
Notes GBP'000 GBP'000
CASH FLOWS FROM OPERATING 26 (537) (329)
ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment - (4)
Disposal of trading investments - 3
______ ______
NET CASH FLOWS USED IN INVESTING - (1)
ACTIVITIES
CASH FLOWS FROM FINANCING
ACTIVITIES
Interest paid (1) (1)
Proceeds on issue of share capital 443 487
(net of costs)
______ ______
NET CASH GENERATED FROM 442 486
FINANCING ACTIVITIES
NET (DECREASE)/INCREASE IN CASH AND (95) 156
CASH EQUIVALENTS
====== ======
CASH AND CASH EQUIVALENTS AT THE 95 (61)
BEGINNING OF THE PERIOD
====== ======
CASH AND CASH EQUIVALENTS AT THE END 20 - 95
OF THE PERIOD
====== ======
IN HOUSE GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2009
GROUP
For the Year to 30 April 2009 Share Share Retained Total
Capital Premium Earnings Equity
Account
GBP'000 GBP'000 GBP'000 GBP'000
Opening 1,614 1,479 (3,614) (521)
New share capital subscribed 36 417 - 453
Loss for the period attributable - - (1,995) (1,995)
to the
equity holders of the parent
company
______ ______ ______ ______
Closing 1,650 1,896 (5,609) (2,063)
====== ====== ====== ======
For the Year to 30 April 2008 Share Share Retained Total
Capital Premium Earnings Equity
Account
GBP'000 GBP'000 GBP'000 GBP'000
Opening 959 1,607 (2,828) (262)
New share capital subscribed 655 46 - 701
Share issue expenses - (174) - (174)
Loss for the period attributable - - (786) (786)
to the
equity holders of the parent
company
______ ______ ______ ______
Closing 1,614 1,479 (3,614) (521)
====== ====== ====== ======
All equity is attributable to the equity holders of the parent company.
IN HOUSE GROUP PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2009
COMPANY
For the Year to 30 April 2009 Share Share Retained Total
Capital Premium Earnings Equity
Account
GBP'000 GBP'000 GBP'000 GBP'000
Opening 1,614 1,479 (1,878) 1,215
New share capital subscribed 36 417 - 453
Loss for the period attributable - - (535) (535)
to the
equity holders of the company
______ ______ ______ ______
Closing 1,650 1,896 (2,413) 1,133
====== ====== ====== ======
For the Year to 30 April 2008 Share Share Retained Total
Capital Premium Earnings Equity
Account
GBP'000 GBP'000 GBP'000 GBP'000
Opening 959 1,607 (1,335) 1,231
New share capital subscribed 655 46 - 701
Share issue expenses - (174) - (174)
Loss for the period attributable - - (543) (543)
to the
equity holders of the company
______ ______ ______ ______
Closing 1,614 1,479 (1,878) 1,215
====== ====== ====== ======
IN HOUSE GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2009
General information
In House Group plc is a company incorporated in the United Kingdom under the
Companies Act 2006. The address of the registered office is given on page 1.
The nature of the Group's operations and its principal activities are set out
in note 5 and in the Chairman and Chief Executive's Statement on pages 2 and 3.
The summary accounts set out above do not constitute statutory accounts as
defined by the UK Companies Act 2006. The summarised consolidated balance sheet
at 30 April 2009 and the summarised consolidated income statement, summarised
consolidated statement of changes in equity and the summarised consolidated
cash flow statement for the year then ended have been extracted from the
Group's 2009 audited statutory financial statements. The auditor's report on
the statutory financial statements for the year ended 30 April 2009 was
unqualified and did not contain any statement under Section 237(2) or (3) of
the Companies Act 1985.
The comparative figures relating to the year to 30 April 2008 are taken from
the audited statutory accounts for that year. This financial statements for the
year ended 30 April 2008 have been reported on by the Company's auditors and
delivered to the Register of Companies.
1. Significant accounting policies
Basis of accounting
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the EU as they apply to the
Group for the year ended 30 April 2009 applied in accordance with the Companies
Act 2006.
The financial statements have been prepared under the historical cost
convention.
The functional currency is sterling as this is the currency of the primary
economic environment in which the Group operates. The chosen presentation
currency is also sterling.
The principal accounting policies are set out below:
Going concern
In determining the appropriate basis of preparation of the Financial
Statements, the Directors are required to consider whether the Group can
continue in operational existence for the foreseeable future.
The Board has prepared projected cash flow information for the period ending 12
months from the date of approval of these Financial Statements ("the
Projections").
These Projections include several key assumptions which will have an impact on
the Group's working capital:
* existing funding facilities from the Group's lenders will remain available
at their existing level;
* there will be continuing support from creditors;
* funds committed under the private placing announced 3 July 2009 to raise GBP
443,000 in total, will be received in accordance with the anticipated
timetable;
* bank base rates will remain around their current level;
* properties that have been identified for refurbishment will be updated
during the course of the year.
Having reviewed these Projections and having made reasonable enquiries in
making the underlying assumptions, together with assessing the position of
current lenders, creditors and investors, the Directors have reasonable
expectation that the Group will be able to meet its liabilities moving forward
as they fall due. It is on this basis that the Directors consider it
appropriate to prepare the Group's Financial Statements on the going concern
basis. However, for the reasons described above, the Directors recognise that
there are material uncertainties that may cast significant doubt on the Group's
ability to continue as a going concern, and therefore, that it may be unable to
realise its assets and discharge its liabilities in the normal course of
business.
There is a risk that the above material uncertainties as to the Group's ability
to continue as a going concern may not be resolved satisfactorily. The
Financial Statements do not include the adjustments that would result if the
Group were unable to continue as a going concern, which would include writing
down the carrying value of assets to their recoverable amount and providing any
further liabilities that might arise, as it is not practicable to determine or
quantify them.
Basis of consolidation
The Group accounts incorporate the accounts of In House Group plc and all its
subsidiary undertakings. Intra-company balances, and any unrealised gains and
losses or income and expenses arising from intra-group transactions, are
eliminated when preparing the consolidated financial information. The results
of subsidiaries acquired during the year are included in the consolidated
income statement from the effective date of acquisition.
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 acquiree, plus
any costs directly attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised at their fair value at
the acquisition date.
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 identifiable assets, liabilities
and contingent liabilities exceeds the cost of the business combination, the
excess is recognised immediately in profit or loss.
Revenue recognition
Revenue represents the fair value of consideration received or receivable (net
of value added tax) from the sale of properties and from the management of
properties on behalf of third parties. Revenue is recognised only on legal
completion of the sale of properties or when the management services are
provided.
Other operating income includes rental income from the trading properties. This
is recognised on a receivable basis.
Leasing
Rentals paid under operating leases are recognised in profit or loss on a
straight line basis over the period of the lease.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs 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
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
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 taxable profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at 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.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net
basis.
Goodwill
Goodwill is stated at cost less impairment.
Plant and equipment
Plant and equipment is stated at cost less depreciation and any provision for
impairment.
Depreciation of plant and equipment is calculated to write off the cost less
any residual value of each asset over their estimated useful lives as follows:
Motor vehicles 33 per cent. straight line basis
Plant and Equipment 33 per cent. straight line basis
Trading Properties
Trading properties include development properties and property interests held
for re-sale. They are valued at the lower of cost and net realisable value.
Cost includes all expenses of acquisition and development. Trading properties
acquired on the acquisition of Berrymount Developments Limited and Avanti
Properties Limited are valued at fair value in accordance with IFRS3 - Business
Combinations.
Properties
Acquisitions and disposals are considered to have taken place where, by the end
of the accounting period, there is a legally binding unconditional and
irrevocable contract.
Trade receivables
Trade receivables are initially recognised at fair value and subsequently
measured at amortised cost. Appropriate allowances for estimated irrecoverable
amounts are recognised in profit or loss when there is objective evidence that
the asset is impaired.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances with banks.
Trade payables
Trade payables are initially measured at fair value and subsequently at
amortised cost.
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.
Borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. After initial recognition borrowings are
measured at amortised cost.
Borrowing costs are recognised in profit or loss in the period in which they
are incurred.
Equity
Equity instruments issued by the company are recorded at the proceeds received,
net of direct issue costs.
Share-based payments
Where equity investments are granted to persons other than employees, the
income statement is charged with the fair value of the goods and services
received, except to the extent to which such goods or services form part of the
acquisition costs of an asset. In such cases the fair value of goods and
services received is added to the cost of the asset. Where the equity
investments are granted in relation to the conversion of loans, the carrying
value of the equivalent loan is reduced accordingly.
2. Critical accounting judgements and key sources of estimation uncertainty
In applying the Group's accounting policies, 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 directors
consider that the critical accounting judgement relates to the adoption of the
going concern basis of accountancy. The directors' reasons for continuing to
adopt this basis are set out in note 1 to the financial statements.
The directors consider that the key assumption that has the potential to have
the most significant effect on amounts recognised in the financial statements
is that relating to trading properties which are valued at the lower of cost
and net realisable value.
As the properties have all significantly changed in value due to the current
economic downturn, particularly in the property sector, the directors have
reconsidered carefully the current values attributable to the portfolios in
each Group company. As a result of this review, the carrying value of trading
properties has been written down by GBP1,242,000 to GBP12,789,000.
3. Revenue
An analysis of the Group's revenue is as follows:
2009 2008
GBP'000 GBP'000
Sale of Properties - 894
Property Management Fees 63 69
______ ______
63 963
Other operating income - property rental 580 282
income
______ ______
643 1,245
Investment Revenue 1 8
______ ______
644 1,253
====== ======
4. Group loss for the year
2009 2008
GBP'000 GBP'000
The Group loss for the year is stated
after charging/(crediting):
Depreciation of plant & equipment 3 3
Impairment of goodwill 12 6
Release of negative goodwill to income (118) (254)
(note 27)
Cost of inventories recognised as an - 935
expense
Write down of inventories recognised as 1,242 139
an expense
Staff costs (see note 9) 95 225
5. Auditors' remuneration
2009 2008
GBP'000 GBP'000
The analysis of auditors' remuneration is
as
follows:
Fees payable to the company's auditors 14 14
for the
audit of the company's annual accounts
Fees payable to the company's auditors 12 12
for the
audit of the company's subsidiaries
pursuant
to legislation
______ ______
Total audit fees 26 26
====== ======
Fees payable to the company's auditors
for other
services to the Group
- Tax services 4 4
- Internal audit services - 4
- Corporate finance services - 9
- Other services - 40
______ ______
Total non-audit fees 4 57
====== ======
Fees payable to Alexander & Co for non-audit services to the company are not
required to be disclosed because the consolidated financial statements are
required to disclose such fees on a consolidated basis.
6. Directors
Details of the Directors' remuneration are given in the Report of the
Remuneration Committee on page 9. There is no other key management other than
the directors.
Information on related party transactions is disclosed in note 30 to these
accounts.
7. Staff costs
2009 2008
GBP'000 GBP'000
Staff costs including executive directors'
emoluments:
Wages and salaries 58 169
Fees 29 41
Social Security costs 8 15
______ ______
95 225
______ ______
The average monthly number of employees, Number Number
including executive directors was:
Management 2 2
Administration 3 3
______ ______
5 5
______ ______
8. Investment revenue
2009 2008
GBP'000 GBP'000
Bank deposits 1 2
Other loans and receivables - 6
______ ______
1 8
______ ______
9. Finance Costs
2009 2008
GBP'000 GBP'000
Interest on Bank Borrowings 611 336
______ ______
10. Taxation
2009 2008
GBP'000 GBP'000
Current tax (33) (1)
Deferred tax (note 23) (63) -
(96) (1)
====== ======
Corporation tax is calculated at 28% (2008: 30%) of the estimated assessable
profit for the year.
The charge for the year can be reconciled to the loss per the income statement
as follows:
2009 2008
GBP'000 GBP'000
Loss before tax:
Continuing operations (2,091) (787)
====== ======
Tax at the UK corporation tax rate of 28% (585) (236)
(2008: 30%)
Tax effect of expenses that are not 60 (29)
deductible in
determining taxable profit
Tax effect of utilisation of tax losses not (9) (1)
previously
recognised
Tax effect of unutilised tax losses not 503 266
recognised
Over provision in prior years (2) (1)
Tax expense for the year (33) (1)
====== ======
11. Loss per share
The calculation of basic earnings per ordinary share is based on a loss of GBP
2,091,000 and on 2,190,856,318 ordinary shares being the weighted average
number of ordinary shares in issue during the year.
The calculation of the diluted earnings per ordinary share is based on a loss
of GBP2,091,000 and on 2,392,351,977 ordinary shares being the weighted average
number of ordinary shares and warrants in issue during the year.
2009 2008
pence pence
Basic loss per share (0.095) (0.134)
Diluted loss per share (0.087) (0.126)
2009 2008
Weighted average number of ordinary shares for 2,190,856,318 587,724,160
the purposes of basic earnings per share
Share Warrants 201,495,659 34,871,547
_________ _________
Weighted average number of ordinary shares for 2,392,351,977 622,595,707
the purposes of diluted earnings per share
12. Loss for the financial period of the parent company
The Company has not presented its own income statement, as permitted by Section
408 of the Companies Act 2006. The Company made losses of GBP535,000 after
taxation (2008: GBP543,000).
13. Goodwill
Group
GBP'000
Cost
At 1 May 2007 20
Additions in year -
At 1 May 2008 20
Additions in year -
At 30 April 2009 20
Impairment losses
At 1 May 2007 2
Charged during the year 6
At 1 May 2008 8
Charged during the year 12
At 30 April 2008 20
Net Book Value
At 30 April 2009 -
At 30 April 2008 12
14. Plant & Equipment
Group Company
GBP'000 GBP'000
Cost
At 1 May 2007 11 8
Additions in year 4 4
Disposals (3) (3)
At 1 May 2008 12 9
Additions in year - -
At 30 April 2009 12 9
Depreciation
At 1 May 2007 7 5
Charged during the year 3 2
Eliminated on disposal (1) (1)
At 1 May 2008 9 6
Charged during the year 3 3
At 30 April 2009 12 9
Net Book Value
At 30 April 2009 - -
At 30 April 2008 3 3
15. Subsidiaries
The subsidiary undertakings, listed below were all incorporated in England.
Proportion of voting
Name of subsidiary Class of shares rights and shares Nature of
held business
Avanti Properties Ordinary shares* 100% Property
Limited ** Ownership
Berrymount Developments Ordinary shares* 100% Property
* Ownership
Limited
Compustar Limited Ordinary shares 100% Property
Ownership
Decaton Limited Ordinary shares 100% Property
Ownership
Haydock Properties Ordinary shares* 100% Property
Development
(General Partner)
Limited
In House Consulting Ordinary shares 100% Property Brokers
Limited
In House Estates Ordinary shares 100% Property Managers
Limited
In House Property Ordinary shares 100% Dormant
Developments Limited
In House Property Ordinary shares 100% Intermediate
Projects Limited Holding Company
Keywave Limited Ordinary shares 100% Dormant
Metroview Limited Ordinary shares 100% Dormant
Merseybank Limited Ordinary shares 100% Property
Development
Merseybank (SLP) Ordinary shares* 100% Property
Limited Development
* Held in the name of Merseybank Limited
** Held in the name of In House Property Projects Limited
*** Held in the name of Compustar Limited
All the above companies are consolidated in the Group accounts.
16. Trading properties
Group Group Company Company
2009 2008 2009 2008
GBP'000 GBP'000 GBP'000 GBP'000
Trading properties 12,789 12,606 - -
The Group's entire portfolio of trading properties has been pledged as security
for the Group's borrowings.
17. Trade and other receivables
Group Group Company Company
2009 2008 2009 2008
GBP'000 GBP'000 GBP'000 GBP'000
Trade receivables 3 14 - 1
Other receivables 26 513 1 15
Prepayments and accrued income 131 203 10 30
Amounts owed by subsidiary - - 1,587 1,329
undertakings
160 730 1,598 1,375
Included within the Company receivables are amounts falling due after more than
one year of GBP1,587,000 in respect of amounts owed by subsidiary undertakings
(2008: GBP1,329,000).
The directors consider that the carrying amount of trade and other receivables
approximates to their fair value.
18. Cash & cash equivalents
Group Group Company Company
2009 2008 2009 2008
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 22 162 - 95
Cash and cash equivalents comprise cash held by the Group and company.
19. Borrowings
Group Group Company Company
2009 2008 2009 2008
GBP'000 GBP'000 GBP'000 GBP'000
Amount due for settlement within 12 231 141 88 5
months
Amount due for settlement after 12 13,371 12,805 - -
months
The amount due for settlement within 12 months includes an unsecured loan of GBP
125,000 on which interest is payable at 5 per cent. above Base Rate; and an
unsecured bank overdraft of GBP25,000 repayable on demand.
The amounts due for settlement after 12 months relate to mortgage loans that
are all secured on the properties that they were taken out to finance. The
interest payable on such loans ranges from 1.00 per cent. to 1.25 per cent. per
annum over base rate, and 1 per cent. over LIBOR.
All loans due for settlement after 12 months are on an interest only basis and
are repayable in full during the year ended 2011.
20. Trade and other payables
Group Group Company Company
2009 2008 2009 2008
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables and accruals 586 440 377 253
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade
purchases is 164 days. No interest is being is charged on outstanding balances
by suppliers.
The directors consider that the carrying amount of trade and other payables
approximates to their fair value.
21. Deferred tax liabilities
Deferred tax is calculated in full on temporary timing differences under the
liability method using a tax rate of 28% (2008: 28%).
The following are the major deferred tax liabilities recognised by the Group
and movements thereon during the current and prior reporting period:
Fair value adjustment
to trading properties
GBP'000
At 1 May 2007 -
Acquisition of subsidiary 648
At 1 May 2008 648
Acquisition of subsidiary 261
Credit to income (63)
At 30 April 2009 846
======
The Group has un-utilised tax losses of approximately GBP4,652,000, the value of
which is not recognised in the balance sheet. The losses represent a potential
deferred tax asset of GBP1,302,000 which would be recoverable should the Group
make sufficient taxable profits in the future.
22. Share capital
2009 2008
Authorised GBP'000 GBP'000
2,000,000,000 Ordinary Shares 0.25p - 5,000
839,248,182,628 Ordinary Shares of 0.001p 8,392 -
645,589,628 Deferred Shares of 0.249p 1,608 -
10,000 5,000
Issued and fully paid
645,589,628 Ordinary Shares of 0.25p each - 1,614
4,253,181,209 Ordinary Shares of 0.001p 42 -
645,589,628 Deferred Shares of 0.249p 1,608 -
1,650 1,614
At the year end the company had ordinary shares which carried no right to fixed
income.
On 27 May 2008 the Company's Share Capital was reorganised with 645,589,628
0.249p Deferred Shares being created and 839,248,182,628 0.001p Ordinary Shares
being authorised of which 645,589,628 were in issue at that time. The Deferred
Shares carried no voting rights or rights to income.
Share issues
On 23 June 2008 the Company issued 132,978,723 shares at 0.0376p to Silverhall
Estates Limited on conversion of a loan of GBP50,000 provided for working capital
purposes.
On 14 July 2008 the Company issued 120,000,000 shares at 0.0376p to Shekel
Limited on exercise of a warrant raising GBP45,120.
On 15 July 2008 the Company issued 83,333,333 shares at 0.03p to Cairns
Investment Holdings Limited on conversion of a loan of GBP25,000 provided for
working capital purposes.
On 15 July 2008 the Company issued 30,000,000 shares at 0.0376p to Shekel
Limited on exercise of a warrant raising GBP11,280.
On 11 August 2008 the Company issued 10,000,000 shares at 0.1p for a continued
Lock -Out fee of GBP10,000 on the acquisition of Avanti Properties Limited.
On 18 August 2008 the Company issued 47,620,000 shares at 0.021p to UEB
Consulting Limited on conversion of a loan of GBP10,000 provided for working
capital purposes.
On 26 August 2008 the Company issued 95,240,000 shares at 0.021p to UEB
Consulting Limited on conversion of a loan of GBP20,000 provided for working
capital purposes.
On 2 September 2008 the Company issued 142,860,000 shares at 0.021p to UEB
Consulting Limited on conversion of a loan of GBP30,000 provided for working
capital purposes.
On 15 September 2008 the Company issued 57,142,857 shares at 0.0175p to UEB
Consulting Limited on conversion of a loan of GBP10,000 provided for working
capital purposes.
On 26 September 2008 the Company issued 57,142,857 shares at 0.0175p to UEB
Consulting Limited on conversion of a loan of GBP10,000 provided for working
capital purposes.
On 16 October 2008 the Company issued 142,857,143 shares at 0.007p to UEB
Consulting Limited on conversion of a loan of GBP10,000 provided for working
capital purposes.
On 22 October 2008 the Company issued 29,375,000 new ordinary shares at a price
of 0.04p per share to Ulysses Marketing & Communications as settlement of the
firm's initial fees of GBP10,000 plus VAT.
On 27 October 2008 the Company issued 62,500,000 new ordinary shares at a price
of 0.04p per share to High Capital Investments Limited in settlement of
commissions of GBP25,000 due for the introduction to Damac Properties Co.
On 28 October 2008 the Company issued 11,750,000 new ordinary shares at a price
of 0.05p per share to Anthony Flanagan as settlement of his firm's initial fees
of GBP5,000 plus VAT.
On 31 October 2008 the Company issued 20,000,000 new ordinary shares at a price
of 0.05p per share to Graf Commercial Services as settlement of finance
facility fees of GBP10,000.
On 31 October 2008 the Company issued 41,666,667 new ordinary shares at a price
of 0.06p per share to Duke Holdings Corp as settlement of finance facility fees
of GBP25,000.
On 4 November 2008 the company issued 3,125,000 ordinary shares at a price of
0.08p per share in settlement of a GBP2,500 introductory commission to Mufid & Co
re an agreement with Primegold Properties Limited to manage its 12 residential
properties in Lancashire.
On 6 November 2008 the company issued 285,714,286 ordinary shares at a price of
0.007p to UEB Consulting Limited on conversion of GBP20,000 of the loans for
working capital purposes.
On 17 November 2008 the company issued 50,000,000 Ordinary Shares at a price of
0.05p in settlement of a GBP25,000 payment for a three month exclusivity period
to acquire Breatheasy Finance Limited.
On 19 November 2008 the company issued 285,714,286 ordinary shares at a price
of 0.007p to UEB Consulting Limited on conversion of GBP20,000 of the loans for
working capital purposes.
On 19 November 2008 the company issued 20,000,000 ordinary shares at a price of
0.02p per share to UEB Consulting Limited in settlement of a GBP4,000 fee for
repair work on property owned by the Group.
On 16 December 2008 the company issued 142,857,143 ordinary shares at a price
of 0.0035p to UEB Consulting Limited on conversion of GBP5,000 of the loans for
working capital purposes.
On 16 December 2008 the company issued 342,857,143 ordinary shares at a price
of 0.0035p Cairns Investment Holdings Limited on conversion of a GBP12,000 loan
provided for working capital purposes.
On 7 January 2009 the company issued 142,857,143 ordinary shares at a price of
0.0035p to UEB Consulting Limited on conversion of GBP5,000 of the loans for
working capital purposes.
On 2 February 2009 the company issued 1,250,000,000 ordinary shares at a price
of 0.004p to Graf Commercial Services Limited in settlement of a GBP50,000
working capital loan.
Share warrants
Share warrants in issue at 30 April 2009 were as follows:
Date granted No. of warrants Exercise price Exercise period
granted
4 February 2004 2,250,000 1p 4 Feb 2004 - 4 Feb 2014
10 October 2005 5,517,232 3.625p 14 Oct 2006 - 14 Oct
2015
29 March 2007 27,104,315 0.6p 29 Mar 2007 - 31 Mar
2010
9 May 2007 11,666,666 0.6p 9 May 2007 - 31 Mar 2010
6 July 2007 5,000,000 0.6p 6 July 2007 - 31 Mar
2010
6 July 2007 34,000,000 0.25p 6 July 2007 - 31 Mar
2010
24 June 2008 115,957,446 0.0376p 24 June 2008 - 1 May
2010
25. Notes to the cash flow statement
GROUP
2009 2008
GBP'000 GBP'000
Loss for the year (2,091) (787)
Adjustments for:
Investment revenues (1) (8)
Negative goodwill released to income (118) (254)
Finance costs 611 336
Depreciation of plant and equipment 3 3
Impairment of intangibles 12 6
Gain on disposal of plant and equipment - (1)
Write down of trading properties 1,242 139
______ ______
Operating cash flows before movements in (342) (566)
working capital
______ ______
Increase in trading properties (60) (8,241)
Decrease/(increase) in receivables 570 (687)
Decrease in payables (60) (36)
______ ______
Cash generated/(absorbed) by operations 108 (9,530)
Income taxes paid - (20)
______ ______
CASH FLOWS FROM OPERATING ACTIVITIES 108 (9,550)
====== ======
26. Notes to the cash flow statement
COMPANY
2009 2008
GBP'000 GBP'000
Loss for the year (535) (543)
Adjustments for:
Finance costs 1 1
Depreciation of plant and equipment 3 2
Gain on disposal of plant and equipment - (1)
______ ______
Operating cash flows before movements in (531) (541)
working capital
______ ______
(Increase)/decrease in receivables (213) 199
Increase in payables 207 13
______ ______
CASH FLOWS FROM OPERATING ACTIVITIES (537) (329)
====== ======
27. Acquisition of subsidiary
On 5 November 2008 the Group acquired 100% of the issued share capital of
Avanti Properties Limited for a total consideration of GBP657,000. Avanti
Properties Limited owns a portfolio of residential properties. This transaction
has been accounted for by the purchase method of accounting.
Book value Fair value
GBP'000 GBP'000
Net assets acquired:
Trading properties 485 1,365
Trade and other receivables 1 1
Trade and other payables (330) (330)
Deferred tax liabilities - (261)
______ ______
156 775
====== ======
Excess of acquirer's interest in the net (118)
fair value of acquiree's identifiable
assets, liabilities and contingent
liabilities over cost - recognised in
income statement
______
Total consideration 657
======
Satisfied by:
Cash 543
Directly attributable costs 104
Shares issued - 10,000,000 ordinary 10
shares at 0.1 pence per share
______
657
======
Net cash outflow arising on acquisition:
Cash consideration 647
______
647
======
The company contributed GBP16,000 profit to the Group's loss before tax for the
period between the date of acquisition and the balance sheet date.
If the acquisition of Avanti Properties Limited had been completed on the first
day of the financial year, the directors estimate that total Group revenues for
the period would have been GBP669,000 and Group Loss attributable to equity
holders of the parent would have been GBP1,996,000. This information is based on
the unaudited financial statements of Avanti Properties Limited for the year
ended 31 July 2008 and the audited financial statements for the period ended 30
April 2009.
28. Operating lease arrangements
The Group as lessee
Annual Group and Company obligations under operating leases are as follows:
2009 2008
GBP'000 GBP'000
Minimum lease payments under operating
leases recognised as an expense in the
year
Leased Movable Assets 9 9
Rent 22 36
31 45
At the balance sheet, date the Group had outstanding commitments for future
minimum lease payments under non cancellable operating leases, which fall due
as follows:
2009 2008
GBP'000 GBP'000
Within one year 27 44
In the second to fifth years inclusive 77 154
After 5 years 156 348
260 546
Operating lease payments primarily represent rentals payable by the Group for
its office property.
The significant change relates to a renegotiation of the Office Lease reducing
the rent to GBP18,000 a year due to the cessation of In House Estates Limited's
activities. The term of the lease remains unchanged, expiring on 29 November
2022.
The Group as lessor
The trading properties are rented out on Assured Short Term Tenancies and
rental income arising is included in Other Operating Income and amounted to GBP
584,000 (2008 - GBP282,000) in the current year with associated Operating Costs
of GBP296,000 (2008 - GBP171,000).
29. Financial instruments
The Group manages its capital to ensure that entities in the Group will be able
to continue as going concerns while maximising the return to stakeholders
through the optimization of the debt and equity balance. The capital structure
of the Group consists of debt, which includes the borrowings disclosed in note
21, cash and cash equivalents and equity attributable to equity holders of the
parent, comprising issued capital, reserves and retained earnings as disclosed
on page 18.
The Group aims to finance acquisitions of trading stock through a combination
of debt and equity issued to the vendors of the stock.
The Group is not subject to externally imposed capital requirements.
There are no material differences between book value and fair value of
financial instruments as at 30 April 2008 and 30 April 2009.
The main risks arising from the Group's financial instruments are interest rate
risks and liquidity risk.
Interest rate risk - the Group finances its operations by bank borrowings at
contracted rates of interest. As noted in note 21 on Borrowings all loans are
on floating rates linked to Base Rate or LIBOR.
If interest rates had been 50 basis points higher and all other variables were
held constant, the Group's loss for the year and net liabilities at that date
would have increased by GBP68,000 (2008 - GBP65,000). This is attributable to the
Group's exposure to movements in interest rates on its variable borrowings.
Liquidity risk - the directors consider that the Group's banking facilities are
adequate going forward. The Borrowings due after more than one year are all
three year interest only loans commencing from the date of drawdown.
The Group has an overdraft facility of GBP25,000 on the holding company's current
account.
30. Related party transactions
The Group entered into the following transactions in which certain of the
directors were materially interested:
Rents of GBP22,000 (2008 - GBP36,000) were payable to Quantum Property Services
Limited (a company owned by M Cassidy). At the year end GBP26,000 (2008 - GBP5,000)
was owed to Quantum Property Services Limited of which GBP5,000 is included in
borrowings due for settlement within 12 months and GBP21,000 is included with
trade payables and accruals.
At the year end GBP5,000 was owed to Capital Synergy (a company of which A
Hollows is a shareholder and director) and the amount is included in borrowings
due for settlement within 12 months. During the year Capital Synergy made a
loan of GBP5,000 to the Group (2008 - GBP35,000) on which it received a GBP2,000
(2008 - GBP5,000) arrangement fee. During the year ended 30 April 2008 Capital
Synergy arranged loans to the Group totalling GBP50,000 from a third party for
which it received fees totalling GBP22,000.
Included in borrowings due for settlement within 12 months is a loan from M
Cassidy of GBP15,000 (2008 - GBP11,000). The loan is interest free.
31. Events after the balance sheet date
On 24 May 2009 the management of the Group's properties was transferred to a
third party and In House Estates Limited ceased to trade. The Group's property
management business segment ceased at this date.
On 3 July 2009 the Company issued 673,013,467 shares at between 0.02p and 0.03p
to creditors for a total of GBP141,404.
On 3 July 2009 the Company issued 489,047,619 shares at 0.0105p in a private
placing for a total of GBP51,350 along with warrants for the same number of
shares exercisable at the same price.
On 5 August 2009 the Company issued 385,714,286 shares at 0.007p in a private
placing for a total of GBP27,000, along with warrants for the same number of
shares exercisable at the same price.
On 24 August 2009 the Ordinary Shares in the Company were consolidated on a 1
for 1,000 basis and 5,800,957 1p Ordinary Shares were subsequently admitted to
AIM.
On 16 September 2009 the Company issued 714,286 shares at 7p in a private
placing for a total of GBP50,000 along with warrants for the same number of
shares exercisable at the same price.
On 12 October 2009 the Company issued 357,143 shares at 7p in a private placing
for a total of GBP25,000 along with warrants for the same number of shares
exercisable at the same price.
32. Share based payments
The Group entered into share based transactions with parties other than
employees during the year. Fair value was measured at the market price for the
services. These comprised:
2009
GBP'000
Issue of 132,978,723 shares at 0.0376 pence 50
per share in lieu of settlement of working
capital loans
Issue of 83,333,333 shares at 0.03 pence per 25
share in lieu of settlement of working capital
loans
Issue of 10,000,000 shares at 0.1 pence per 10
share in
lieu of acquisition of trading properties
Issue of 91,875,000 shares at 0.04 pence per 37
share in
lieu of the settlement of professional fees
Issue of 285,720,000 shares at 0.021 pence per 60
share in
lieu of settlement of working capital loans
Issue of 81,750,000 shares at 0.05 pence per 41
share in
lieu of settlement of professional fees
Issue of 114,285,714 shares at 0.0175 pence 20
per share in
lieu of settlement of working capital loans
Issue of 714,285,715 shares at 0.007 pence per 50
share in
lieu of settlement of professional fees
Issue of 41,666,667 shares at 0.06 pence per 25
share in lieu of settlement of professional
fees
Issue of 3,125,000 shares at 0.08 pence per 2
share in lieu of settlement of professional
fees
Issue of 628,571,429 shares at 0.0035 pence 22
per share in
lieu of settlement of working capital loans
Issue of 1,250,000,000 shares at 0.004 pence 50
per share in
lieu of settlement of working capital loans
Issue of 20,000,000 shares at 0.02 pence per 4
share in
lieu of settlement of professional fees
______
396
======
33. Control
In the opinion of the directors, there is no single controlling party of the
Group.
Contact: Marcus Cassidy, In House Group Plc on 0845 061 9999
mcassidy@ihgroup.co.uk
Roland Cornish, Beaumont Cornish Limited,
0207 628 3396
- 1 -
END
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