TIDMOPF
RNS Number : 4380O
Off-Plan Fund Limited (The)
29 June 2010
29 June 2010
The Off-Plan Fund Limited
(the "Fund")
Interim results for the six months ended 31 March 2010
Chairman's Statement
I am pleased to present the unaudited results for the six months ended 31 March
2010.
The Fund's Annual General Meeting was held on 23 April 2010 and all resolutions
were duly passed, including the resolution that the Company shall continue to
pursue its investment strategy until the conclusion of the next Annual General
Meeting at which another vote shall be taken.
Performance
The unaudited net asset value ("NAV") of the Fund as at 31 March 2010 was GBP2.9
million (30 September 2009: GBP7.1 million). The NAV per ordinary share reduced
to 52.3p at the period end from 63.4p as at 30 September 2009.
The Fund's share price at the start of the period was 50p and increased to 56.5p
at the period end. The Fund's share price closed at 47.5p on 28 June 2010.
During the period, approximately GBP6 million was returned to shareholders
through two compulsory partial redemptions, details of which are set out below.
Redemption of Shares
On 26 October 2009, the Fund announced that it had posted a circular to its
Members detailing proposals to redeem, on a pro rata basis, up to 5,576,549
Participating Shares, equivalent to 50 per cent of the Participating Shares in
issue, for cancellation in accordance with the relevant provisions of the
Companies (Jersey) Law 1991. The Participating Shares were redeemed on 30
October 2009 at a price of 70p per share, representing a redemption of
approximately GBP3.9 million.
Following the sale of units in Walton and Leicester, as detailed below, the
Board resolved to redeem, on a pro rata basis, up to a further 3,345,931
Participating Shares (equivalent to approximately 60 per cent of the 5,576,549
shares in issue) at a price of 63p per Participating Share, representing a
redemption of approximately GBP2.1 million. This redemption took place on 14 May
2010. In determining the level of the redemption the Directors considered the
ongoing running costs of the Fund for the next 12 months, together with a
suitable contingency, to allow them to continue the orderly winding down of the
activities of the Fund. As at today's date the Fund's cash reserves are
approximately GBP1 million.
Recovery of Deposits - Canon House, Wallington:
As at 31 March 2010, the Fund had made a provision in full for the GBP1.1
million deposit paid to Henry Homes (Wallington) Limited ("HHW") on the
commencement of the Canon House project. On the same date HHW was subject to a
winding up order and is now in insolvent liquidation. As a result of HHW's
insolvent liquidation and as a beneficiary of an insurance policy to cover such
a situation, the Fund believes that it is entitled to recover the entire amount
of the deposit from the insurer, Zurich Insurance ("Zurich"). A claim was made
under this policy on 9 April 2010.
Zurich's solicitors have queried the basis of the Fund's reasoning that the
liquidation of HHW resulted in the loss of the deposits, asserting that the loss
of the deposits was caused by the rescission of the purchase contracts for the
118 residential units which were to comprise the Canon House development. The
Fund's solicitors see little merit in this assertion which in their view, fails
to recognise that the true and fundamental cause of HHW's failure to perform was
its insolvency now confirmed in the winding up order. In the event payment of
the claim is not received in full by 8 July 2010, formal steps to recover the
monies due will be taken.
A further announcement will be made once it is possible to determine more
accurately the likely timetable for the conclusion of the recovery of the
deposits. The Directors of the Fund will consider whether it is appropriate to
make further redemptions or other forms of distribution to its Members when such
announcement is made.
Portfolio Review
The Heart, Walton-on-Thames: As previously announced, following the decision by
Members to commence the orderly winding down of the activities of the Fund, on 2
February 2010 the Fund exchanged contracts for the sale of all eight remaining
units to Karlton Properties Limited for a total cash consideration of
GBP1,332,000 (equating to a sale price of GBP166,500 per flat). On exchange the
Fund received a 10 per cent non-refundable deposit and completion took place on
2 March 2010.
Wimbledon House, Leicester: As previously announced, the properties were sold at
the Allsop residential property auction on 22 February 2010 for a total cash
consideration of GBP430,500. This equated to a sale price of GBP71,750 per flat.
On exchange, the Fund received a 10 per cent non-refundable deposit and, under
the terms and conditions of the auction, completion took place on 22 March 2010.
Cost Minimisation
With the objective of minimising the costs arising for the Fund during the
winding down of its activities, the Directors have resolved to serve protective
notice on certain of the Fund's service providers and other advisers as
necessary.
As previously announced, the Fund's manager, Development Capital Management
(Jersey) Limited (the "Manager"), had agreed, subject to JFSC consent, to reduce
its notice period from twelve months under the management agreement for
termination by the Fund to six months, such notice not to be given prior to 30
June 2010. To minimise costs attributable to the Fund, the Fund and the Manager
have agreed that protective notice be served on the Manager on 30 June 2010. In
the event that the Fund has not been liquidated by 31 December 2010 and
continues to be regulated as a collective investment fund, it has been agreed
that the Manager will continue to manage the Fund on a rolling three month
contract, subject to JFSC consent.
Novation of management agreement
Pursuant to a regulatory restructuring of the DCM Group, the Manager and the
Fund have agreed, subject to JFSC consent, to novate the rights and obligations
of the Manager under the management agreement to its wholly-owned subsidiary,
DCM Funds Limited.
Reporting Fund Status
The UK offshore funds regime and the definition of "offshore fund" were changed
with effect on and from 1 December 2009. The Fund was not an offshore fund for
the purposes of this legislation under the old definition. However, it now falls
to be an offshore fund under the new definition. The effect of this new
legislation is that any Members who are resident or ordinarily resident in the
UK and who acquired their shares in the Fund on or after 1 December 2009 will be
subject to UK income tax (or corporation tax on income) on any gain they realise
on a disposal of shares unless the Fund is a reporting fund. The Fund has,
therefore, applied to HM Revenue & Customs to be a reporting fund under the UK
offshore funds legislation.
However, there can be no guarantee that such status will be obtained and
maintained for each period of account of the Fund.
The effect of obtaining "reporting fund" status would be that any gains arising
to Members resident or ordinarily resident in the UK on a sale, redemption or
other disposal of shares would be taxed as capital gains (or corporation tax on
gains) rather than as income (or corporation tax on income). Members who are
resident or ordinarily resident in the UK will be subject to UK income tax (or
corporation tax on income) on their share of the net income of the Fund whether
or not it is distributed.
A further announcement will be made on this matter when a response from HM
Revenue & Customs has been received.
Board and advisers
In October 2009 the Fund appointed Fairway Fund Management Limited as
administrator of the Fund.
Roger King
Chairman
29 June 2010
Further enquiries:
Development Capital Management
Andy Gardiner
020 7355 7600
Merchant John East Securities Limited
(Nominated Adviser)
Bidhi Bhoma/Simon Clements
020 7628 2200
Consolidated Income Statement for the six months ended 31 March 2010
+----------------------------------+-------+-----------+---------+-----------+
| Consolidated Income Statement |Notes | (unaudited) |
| | | Six months ended |
| | | 31 March 2010 |
+----------------------------------+-------+---------------------------------+
| | | Revenue | Capital | Total |
+----------------------------------+-------+-----------+---------+-----------+
| | | GBP | GBP | GBP |
+----------------------------------+-------+-----------+---------+-----------+
| | | | | |
+----------------------------------+-------+-----------+---------+-----------+
| Realised gains on investments | | - | 6,935 | 6,935 |
| held at fair value through | | | | |
| profit or loss | | | | |
+----------------------------------+-------+-----------+---------+-----------+
| Interest income | | 42,727 | - | 42,727 |
+----------------------------------+-------+-----------+---------+-----------+
| Rental income | | 36,988 | - | 36,988 |
+----------------------------------+-------+-----------+---------+-----------+
| Investment management fee | 4 | (96,849) | - | (96,849) |
+----------------------------------+-------+-----------+---------+-----------+
| Rental expenses | | (16,122) | - | (16,122) |
+----------------------------------+-------+-----------+---------+-----------+
| Other expenses | | (242,725) | - | (242,725) |
+----------------------------------+-------+-----------+---------+-----------+
| | | | | |
+----------------------------------+-------+-----------+---------+-----------+
| Net (loss)/gain on ordinary | | (275,981) | 6,935 | (269,046) |
| activities before taxation | | | | |
+----------------------------------+-------+-----------+---------+-----------+
| | | | | |
+----------------------------------+-------+-----------+---------+-----------+
| Taxation | 2 | (8,735) | - | (8,735) |
+----------------------------------+-------+-----------+---------+-----------+
| | | | | |
+----------------------------------+-------+-----------+---------+-----------+
| Net (loss)/gain for the period | 3 | (284,766) | 6,935 | (277,831) |
| after taxation | | | | |
+----------------------------------+-------+-----------+---------+-----------+
| | | | | |
+----------------------------------+-------+-----------+---------+-----------+
| (Loss)/gain per share (pence) | | (4.3) | 0.1 | (4.2) |
+----------------------------------+-------+-----------+---------+-----------+
+-----------+---------+-----------+-----------+-------------+-------------+
| (unaudited) | (audited) |
| Six months ended | Year ended |
| 31 March 2009 | 30 September 2009 |
+---------------------------------+---------------------------------------+
| Revenue | Capital | Total | Revenue | Capital | Total |
+-----------+---------+-----------+-----------+-------------+-------------+
| GBP | GBP | GBP | GBP | GBP | GBP |
+-----------+---------+-----------+-----------+-------------+-------------+
| | | | | | |
+-----------+---------+-----------+-----------+-------------+-------------+
| - | 209,800 | 209,800 | - | (378,016) | (378,016) |
+-----------+---------+-----------+-----------+-------------+-------------+
| - | - | - | - | - | - |
+-----------+---------+-----------+-----------+-------------+-------------+
| - | - | - | - | (113,323) | (113,323) |
+-----------+---------+-----------+-----------+-------------+-------------+
| - | 18,108 | 18,108 | - | 18,108 | 18,108 |
+-----------+---------+-----------+-----------+-------------+-------------+
| - | 8,907 | 8,907 | - | 8,907 | 8,907 |
+-----------+---------+-----------+-----------+-------------+-------------+
| - | 32,132 | 32,132 | - | 39,486 | 39,486 |
+-----------+---------+-----------+-----------+-------------+-------------+
| 48,186 | - | 48,186 | 60,696 | - | 60,696 |
+-----------+---------+-----------+-----------+-------------+-------------+
| 33,920 | - | 33,920 | 88,034 | - | 88,034 |
+-----------+---------+-----------+-----------+-------------+-------------+
| (92,890) | - | (92,890) | (186,267) | - | (186,267) |
+-----------+---------+-----------+-----------+-------------+-------------+
| - | - | - | - | (1,100,000) | (1,100,000) |
+-----------+---------+-----------+-----------+-------------+-------------+
| (15,177) | - | (15,177) | (31,265) | - | (31,265) |
+-----------+---------+-----------+-----------+-------------+-------------+
| (160,710) | - | (160,710) | (275,819) | - | (275,819) |
+-----------+---------+-----------+-----------+-------------+-------------+
| | | | | | |
+-----------+---------+-----------+-----------+-------------+-------------+
| (186,671) | 268,947 | 82,276 | (344,621) | (1,524,838) | (1,869,459) |
+-----------+---------+-----------+-----------+-------------+-------------+
| | | | | | |
+-----------+---------+-----------+-----------+-------------+-------------+
| (3,243) | - | (3,243) | (17,607) | - | (17,607) |
+-----------+---------+-----------+-----------+-------------+-------------+
| - | - | - | (100,000) | - | (100,000) |
+-----------+---------+-----------+-----------+-------------+-------------+
| | | | | | |
+-----------+---------+-----------+-----------+-------------+-------------+
| (189,914) | 268,947 | 79,033 | (462,228) | (1,524,838) | (1,987,066) |
+-----------+---------+-----------+-----------+-------------+-------------+
| | | | | | |
+-----------+---------+-----------+-----------+-------------+-------------+
| (1.7) | 2.4 | 0.7 | (4.1) | (13.7) | (17.8) |
+-----------+---------+-----------+-----------+-------------+-------------+
Consolidated Balance Sheet for the six months ended 31 March 2010
+-------------------------------+-------+-------------+-------------+-------------+
| | Notes | (unaudited) | (unaudited) | (audited) |
| | | 31 March | 31 March | 30 |
| | | 2010 | 2009 | September |
| | | | | 2009 |
+-------------------------------+-------+-------------+-------------+-------------+
| | | GBP | GBP | GBP |
+-------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Non-current assets | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Investment property | 5 | - | 2,519,000 | - |
+-------------------------------+-------+-------------+-------------+-------------+
| Investments held at fair | 6 | - | 97,834 | 105,422 |
| value through profit or loss | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Property contracts yet to | 7 | - | 1,353,573 | - |
| complete | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Debtors | | | - | |
+-------------------------------+-------+-------------+-------------+-------------+
| | | - | 3,970,407 | 105,422 |
+-------------------------------+-------+-------------+-------------+-------------+
| Current assets | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Investment property | | - | - | 1,931,184 |
+-------------------------------+-------+-------------+-------------+-------------+
| Debtors | | 3,486 | 18,419 | 161,430 |
+-------------------------------+-------+-------------+-------------+-------------+
| Cash in escrow | | - | 3,000,000 | - |
+-------------------------------+-------+-------------+-------------+-------------+
| Cash and cash equivalents | | 3,108,525 | 2,215,242 | 5,041,169 |
+-------------------------------+-------+-------------+-------------+-------------+
| | | | 5,233,661 | 7,133,783 |
| | | 3,112,011 | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Creditors - amounts falling | | | | |
| due within one year | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Other payables | | (198,128) | (69,939) | (171,175) |
+-------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Net current assets | | 2,913,883 | 5,163,722 | 6,962,608 |
+-------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Total net assets | | 2,918,883 | 9,134,129 | 7,068,030 |
+-------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Equity | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Stated capital | | 6,601,572 | 10,505,154 | 10,505,154 |
+-------------------------------+-------+-------------+-------------+-------------+
| Capital reserve | | (1,806,392) | (46,808) | (1,840,593) |
+-------------------------------+-------+-------------+-------------+-------------+
| Issue costs reserve | | (679,868) | (679,868) | (679,868) |
+-------------------------------+-------+-------------+-------------+-------------+
| Revenue reserve | | (1,201,429) | (644,349) | (916,663) |
+-------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Total shareholders' funds | | 2,918,883 | 9,134,129 | 7,068,030 |
| (all equity) | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
| Net asset value per share | | 52.3 | 81.9 | 63.4 |
| (pence) | | | | |
+-------------------------------+-------+-------------+-------------+-------------+
Consolidated Cash Flow Statement for the six months ended 31 March 2010
+-------------------------------+----+-------------+-------------+-------------+
| | | (unaudited) | (unaudited) | (audited) |
| | | Six months | Six months | Year |
| | | ended | ended | ended |
| | | 31 March | 31 March | 30 |
| | | 2010 | 2009 | September |
| | | | | 2009 |
+-------------------------------+----+-------------+-------------+-------------+
| | | GBP | GBP | GBP |
+-------------------------------+----+-------------+-------------+-------------+
| | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Cash flow from operating | | | | |
| activities | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Deposits and acquisition | | - | - | (1,526,384) |
| costs relating to property | | | | |
| contracts | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Cash released from escrow | | 150,000 | - | 3,000,000 |
+-------------------------------+----+-------------+-------------+-------------+
| Rental income received | | 39,756 | 46,862 | 89,383 |
+-------------------------------+----+-------------+-------------+-------------+
| Deposit interest received | | 36,468 | 104,015 | 225,444 |
+-------------------------------+----+-------------+-------------+-------------+
| Other income | | 9,485 | - | - |
+-------------------------------+----+-------------+-------------+-------------+
| Sale of property | | 1,967,500 | - | 185,292 |
+-------------------------------+----+-------------+-------------+-------------+
| Proceeds for rescission of | | - | - | 332,489 |
| Oldham Place | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Investment management fees | | (96,849) | (92,890) | (186,267) |
| paid | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Secretarial fees paid | | - | (2,343) | - |
+-------------------------------+----+-------------+-------------+-------------+
| Rental expenses | | (16,122) | (20,925) | (31,265) |
+-------------------------------+----+-------------+-------------+-------------+
| Other expenses | | (227,107) | (174,931) | (289,133) |
+-------------------------------+----+-------------+-------------+-------------+
| Net cash inflow /(outflow) | | 1,863,131 | (140,212) | 1,799,559 |
| from operating activities | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Taxation paid | | - | (3,532) | (7,708) |
+-------------------------------+----+-------------+-------------+-------------+
| | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Cash flow from investing | | | | |
| activities | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Interest income received | | 4,500 | 98,999 | 19,782 |
+-------------------------------+----+-------------+-------------+-------------+
| Sale of investments | | 103,307 | 2,984,640 | 2,955,336 |
+-------------------------------+----+-------------+-------------+-------------+
| Proceeds from rescission of | | - | 332,489 | - |
| Oldham Place | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Purchase of investment | | - | (1,516,634) | - |
| property | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Proceeds from sale of | | - | 185,292 | - |
| investment property | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Net cash inflow from | | 107,807 | 2,084,786 | 2,975,118 |
| investing activities | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Increase in cash before | | 1,970,938 | 1,941,042 | 4,766,969 |
| financing | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Cash flow from financing | | | | |
| activities | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Redemption of shares | | (3,903,582) | - | - |
+-------------------------------+----+-------------+-------------+-------------+
| | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Net (decrease) / increase in | | (1,932,644) | 1,941,042 | 4,766,969 |
| cash and cash equivalents | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Cash and cash equivalents at | | 5,041,169 | 274,200 | 274,200 |
| the start of the period | | | | |
+-------------------------------+----+-------------+-------------+-------------+
| Cash and cash equivalents at | | 3,108,525 | 2,215,242 | 5,041,169 |
| the end of the period | | | | |
+-------------------------------+----+-------------+-------------+-------------+
Consolidated statement of changes in equity for the six months ended 31 March
2010
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| | Stated | Capital | Issue | Revenue | Total |
| | capital | reserves | costs | reserve | |
| | | | reserve | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| | GBP | GBP | GBP | GBP | GBP |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| For the six months ended | | | | | |
| 31 March 2010 (unaudited) | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| At 1 October 2009 | 10,505,154 | (1,840,593) | (679,868) | (916,663) | 7,068,030 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| Redemption of shares | (3,903,582) | - | - | - | (3,903,582) |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| Realised capital | - | 34,201 | - | - | 34,021 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| Loss for the period | - | | - | (254,766) | (254,766) |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| At 31 March 2010 | 6,601,572 | (1,806,392) | (679,868) | (1,171,429) | 2,943,883 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| For the six months ended | | | | | |
| 31 March 2009 (unaudited) | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| At 1 October 2008 | 10,505,154 | (315,755) | (679,868) | (454,435) | 9,055,096 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| Revaluation of investment | - | 209,800 | - | - | 209,800 |
| property | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| Gain/(loss) for the | - | 59,147 | - | (189,914) | (130,767) |
| period | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| At 31 March 2009 | 10,505,154 | (46,808) | (679,868) | (644,349) | 9,134,129 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| For the year ended 30 | | | | | |
| September 2009 (audited) | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| At 1 October 2008 | 10,505,154 | (315,755) | (679,868) | (454,435) | 9,055,096 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| Revaluation of investment | - | (378,016) | - | - | (378,016) |
| property | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| Loss for the year | - | (1,146,822) | - | (462,228) | (1,609,050) |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| | | | | | |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
| At 30 September 2009 | 10,505,154 | (1,840,593) | (679,868) | (916,663) | 7,068,030 |
+---------------------------+-------------+-------------+-----------+-------------+-------------+
Notes to the interim results for the six months ended 31 March 2010
1. Accounting Policies
(a) Basis of preparation
The consolidated interim financial statements have been prepared under the
historical cost convention, as modified to include the revaluation of quoted
investments and investment properties and in accordance with applicable
Accounting Standards and the Statement of Recommended Practice for "Financial
Statements of Investment Trust Companies" issued in January 2009. Applicable
Accounting Standards for these purposes are International Financial Reporting
Standards ("IFRS"), as adopted by the International Accounting Standards Board
("IASB").
(i) IFRS applied
The preparation of financial statements in conformity with IFRS requires the use
of certain critical accounting estimates. It also requires management to
exercise its judgment in the process of applying the Fund's accounting policies.
Changes in assumptions may have a significant impact on the financial
statements in the period the assumptions changed. Management believes that the
underlying assumptions are appropriate.
The IFRS improvements project contains numerous amendments to IFRS that the IASB
considers non-urgent but necessary. 'Improvement to IFRS' comprise amendments
that result in accounting changes for presentation, recognition or measurement
purposes, as well as terminology or editorial amendments related to a variety of
individual IFRS standards. Most of the amendments are effective for annual
periods beginning on or after 1 January 2010 respectively, with earlier
application permitted. No material changes to accounting policies are expected
as a result of these amendments.
The accounting policies adopted in the preparation of the interim financial
statements are consistent with those followed in the preparation of the annual
financial statements for the year ended 30 September 2009. New accounting
standards have been issued since the year end 30 September 2009 but none of
these are yet effective.
(ii) Going concern
At the EGM of the Company held on 4 December 2009, a resolution was passed to
commence an orderly winding down of the Company's activities.
The financial statements have therefore not been prepared on the going concern
basis because the company is winding down.
The effect on the financial statements is that all assets and liabilities are
disclosed as current, and the accounting effect is that the assets and
liabilities are recognised at their realisable amounts net of costs of sale (or
best estimate thereof). In addition, provision is made for future costs to
completion of the orderly wind down of the Fund's activities.
(b) Use of estimates and judgments
The preparation of financial statements requires management to make judgments,
estimates and assumptions that affect the application of accounting polices and
the reporting amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the estimate is
revised and in any future periods affected.
The most significant estimates and judgements relate to the determination of
fair value of investment property and the disclosed fair value of properties
that are the subject of property contracts yet to complete. The fair values of
both kinds of properties are determined by independent valuers and are based
upon a market approach methodology, using assumptions on local markets prices,
comparable units and transaction levels.
(c)Basis of consolidation
The consolidated interim financial statements incorporate the financial
statements of the Company and entities controlled by the Company (its
subsidiaries) made up for the six months ended 31 March. Control exists when the
Company has the power, directly or indirectly, to govern the financial and
operating policies of an entity so as to obtain benefits from activities. The
financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences up to the date that control
ceases.
The Company has only one subsidiary, OPF Investment Properties Limited, which it
acquired during the year ended 30 September 2007. As this subsidiary has not yet
commenced trading and remained dormant throughout the period, the Company's
financial statements are materially similar in all respects to the Group's
financial statements, therefore the Company has presented only consolidated
financial statements for the six months ended 31 March 2010, 31 March 2009 and
31 March 2008, and the years ended 30 September 2009 and 30 September 2008.
(d)Revenue recognition
(i) Interest income
Interest receivable on fixed interest securities is recognised in
"Interest income" using the effective interest method. The effective interest
method is a way of calculating the amortised cost of a financial asset or a
financial liability (or groups of financial assets or financial liabilities) and
of allocating the interest income or interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts
estimated future cash receipts or payments through the expected life of the
financial instrument or, where appropriate, a shorter period, to the net
carrying amount of the financial asset or financial liability. When calculating
the effective interest rate, the Group estimates cash flows considering all
contractual terms of the financial instrument but not future credit losses. The
calculation includes all amounts paid or received by the Group that are an
integral part of the effective interest rate, including transaction costs and
all other premiums or discounts.
(ii) Profit on off-plan sales
Profit on off-plan sales is recognised once contracts with onward
buyers have become unconditional. The profit or loss is calculated in line with
the profit-share arrangement with each developer based on the difference between
the amount agreed with the buyer and the Company's purchase price.
(iii) Rental income
Rental income from investment properties is based on a short term
tenancy agreements and is recognised in the period earned. Property operating
costs are expensed as incurred including any element of expenditure not
recovered from tenants.
(e) Expenses
Expenses are charged through the income statement, except for expenses which are
attributable to the disposal of an investment, which are deducted from the
disposal proceeds of the investment. In addition, certain expenses associated
with the acquisition of an investment have been capitalised.
(f) Investments
(i) General
Assets are recognised at the trade date of acquisition, and are
recognised initially at fair value plus any directly attributable transaction
costs.
The Group does not hold, or intends to hold, any financial instruments
for the purpose of trading.
(ii) Investments at fair value through profit or loss
An instrument is classified as at fair value through profit or loss if
it is held as at fair value through profit or loss. Financial instruments are
designated at fair value through the profit or loss if the Group manages such
investments and makes purchase and sale decisions based on their fair value.
Fair value is the amount at which an investment could be exchanged between
knowledgeable willing parties in an arms length transaction.
Purchases of investments are recognised on the trade date, being the
date that amounts are due for payment. Investments are derecognised when the
rights to receive cash flows from the investments have expired or the Group has
transferred substantially all risks and rewards of ownership. Investments are
initially recognised at fair value being the transaction price. Transaction
costs for all financial assets carried at fair value through profit and loss are
expensed as incurred.
Subsequent to initial recognition, all financial assets at fair value
through the profit or loss are measured at fair value. Gains and losses arising
from changes in fair value are presented in the income statement in the year in
which they arise. On disposal, realised gains and losses are also recognised in
the income statement.
Fair values of financial instruments traded in active markets are
based on quoted market prices as at the balance sheet date. The quoted market
price used for financial assets held by the Group is the current bid price.
(iii) Property contracts yet to complete
The Group has contractual obligations to purchase property that is
currently being constructed, i.e. it has entered into contracts to purchase the
property "off-plan". Under these contracts the Group is obliged to purchase
these properties at a contracted price, but has the right to sell or transfer
the contract to a third party. The "Property contracts yet to complete" are
included in the balance sheet at the lower of cost and net realisable value.
Cost includes legal and other expenses incurred to acquire the contracts.
Realised gains and losses arising on the disposal of these contracts
are taken to the realised capital reserve.
(iv) Investment property
Property that is held for capital appreciation, and that is not
occupied by the companies in the Group, is classified as investment property.
Investment property is measured initially at its cost, including
related transaction costs. After initial recognition, investment property is
carried at fair value, although the property may not be revalued in the year of
acquisition. Changes in fair values are recorded in the income statement.
Fair value is based on active market prices, adjusted if necessary for
any difference in the nature, location or condition of the specific asset. If
this information is not available, the Group uses alternative valuation methods.
The valuations are prepared annually by Savills (L&P) Limited for Wimbledon
House and Edwin Evans Surveyors Limited for The Heart.
Realised gains and losses on the disposal of investment property are
recognised once sale contracts have been exchanged and the purchaser's deposit
has been received.
(g) Cash and cash equivalents
Cash and cash equivalents comprise current deposits with banks. Cash
equivalents comprises of current deposits with banks.
(h) Taxation
The taxation charge arises from income tax deducted at source on the net rental
income.
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the balance sheet date, where transactions or
events that result in an obligation to pay more tax in the future or right to
pay less tax in the future have occurred at the balance sheet date. This is
subject to deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the future
reversal of the temporary differences can be deducted.
(i) Share capital
Founder shares
Founder shares are classified as equity. Founder shares are not eligible for
participation in Company investments and carry no voting rights at general
meetings of the Company.
(j) Currency
The results and financial position of the Group are expressed in Pounds
Sterling, which is the Group's functional currency.
2. Taxation
With effect from the 2009 year of assessment Jersey abolished the exempt company
regime for existing companies. Profits arising in the Company for the 2009 year
of assessment and future periods will be subject to tax at the rate of 0%. In
the prior year the Company was exempt from taxation under the provisions of
Article 123A of the Income Tax (Jersey) Law 1961 as amended.
3. Returns per share
The return per share is based on the net loss for the period of GBP277,831 (31
March 2009: net gain GBP79,033; 30 September 2009 net loss: GBP1,987,066) and on
6,618,322 shares (31 March 2009: 11,153,098; 30 September 2009: 11,153,098),
being the weighted average number of shares in issue.
4. Management fee
+-----------------------------+-------------+----------+-----------+
| | Six months | Six | Year |
| | ended | months | ended |
| | 31 March | ended | 30 |
| | 2010 | 31 March | September |
| | | 2009 | 2009 |
+-----------------------------+-------------+----------+-----------+
| | GBP | GBP | GBP |
+-----------------------------+-------------+----------+-----------+
| Management fee | 96,849 | 92,890 | 186,267 |
+-----------------------------+-------------+----------+-----------+
The management fees paid to Development Capital Management (Jersey) Limited with
effect from July 2009 are GBP175,000 per annum. The management agreement between
the Company and the Manager has been reduced from 12 months and is now
terminable by giving the Manager not less than six months notice in writing,
such notice not to be given before 30 June 2010.
5. Investment property
+------------------------------------+-----------+-------------+-------------+
| | Wimbledon | The | Total |
| | House | Heart | |
+------------------------------------+-----------+-------------+-------------+
| | GBP | GBP | GBP |
+------------------------------------+-----------+-------------+-------------+
| Opening book cost | 989,183 | 1,504,700 | 2,493,883 |
+------------------------------------+-----------+-------------+-------------+
| Movements during the period: | | | |
+------------------------------------+-----------+-------------+-------------+
| Sales - net proceeds | (407,609) | (1,523,575) | (1,931,184) |
+------------------------------------+-----------+-------------+-------------+
| Sales - realised (loss) / gain | (581,574) | 18,875 | (562,699) |
+------------------------------------+-----------+-------------+-------------+
| Closing book cost | - | - | - |
+------------------------------------+-----------+-------------+-------------+
| Closing unrealised (depreciation) | - | - | - |
| / appreciation | | | |
+------------------------------------+-----------+-------------+-------------+
| Closing valuation | - | - | - |
+------------------------------------+-----------+-------------+-------------+
The rental income arising from these properties in the period was [GBP36,988 -
figure to be clarified] (2009 - GBP33,920) with direct expenses of GBP16,122
(2009 - GBP15,177).
6. Investments held at fair value through profit or loss
+---------------------------------+-----------+-------------+-------------+
| | 31 | 31 March | 30 |
| | March | 2009 | September |
| | 2010 | | 2009 |
+---------------------------------+-----------+-------------+-------------+
| | GBP | GBP | GBP |
+---------------------------------+-----------+-------------+-------------+
| Opening valuation | 105,422 | 3,012,365 | 3,012,365 |
+---------------------------------+-----------+-------------+-------------+
| Opening unrealised (gain) / | (6,935) | 32,551 | 32,551 |
| loss | | | |
+---------------------------------+-----------+-------------+-------------+
| Opening book cost | 98,487 | 3,044,916 | 3,044,916 |
+---------------------------------+-----------+-------------+-------------+
| Movements during the period: | | | |
+---------------------------------+-----------+-------------+-------------+
| Sales - proceeds | (105,422) | (2,951,762) | (2,951,762) |
+---------------------------------+-----------+-------------+-------------+
| Amortisation of fixed income | - | (3,808) | (3,574) |
| book costs | | | |
+---------------------------------+-----------+-------------+-------------+
| Sales - realised gains | 6,935 | 8,907 | 8,907 |
+---------------------------------+-----------+-------------+-------------+
| Closing book cost | - | 98,253 | 98,487 |
+---------------------------------+-----------+-------------+-------------+
| Closing unrealised (loss) / | - | (419) | 6,935 |
| gain | | | |
+---------------------------------+-----------+-------------+-------------+
| Closing fair value | - | 97,834 | 105,422 |
+---------------------------------+-----------+-------------+-------------+
7. Property contracts yet to complete
+--------------------------------+----------+-----------+-------------+
| | 31 March | 31 March | 30 |
| | 2010 | 2009 | September |
| | | | 2009 |
+--------------------------------+----------+-----------+-------------+
| | GBP | GBP | GBP |
+--------------------------------+----------+-----------+-------------+
| Opening book cost | - | 1,508,823 | 1,508,823 |
+--------------------------------+----------+-----------+-------------+
| Movements during the period: | | | |
+--------------------------------+----------+-----------+-------------+
| | | | |
+--------------------------------+----------+-----------+-------------+
| | | | |
+--------------------------------+----------+-----------+-------------+
| Rescission costs | - | - | (1,080,500) |
+--------------------------------+----------+-----------+-------------+
| Write off capitalized expenses | - | - | (263,323) |
+--------------------------------+----------+-----------+-------------+
| Purchases | - | 9,750 | - |
+--------------------------------+----------+-----------+-------------+
| The Heart - cost of property | - | (165,000) | (165,000) |
| disposed | | | |
+--------------------------------+----------+-----------+-------------+
| Closing book cost | - | 1,353,573 | - |
+--------------------------------+----------+-----------+-------------+
8. Post balance sheet events
Compulsory redemption
As stated in the Fund's Preliminary Results for the year ended 30 September
2009, announced on 31 March 2010 ("Preliminary Announcement"), following the
sale of units in Walton and Leicester for a total aggregate cash consideration
of GBP1,770,500 (as announced on 3 February 2010 and 23 February 2010,
respectively) the Board resolved to return, on a pro rata basis, GBP2,107,937 to
Members, such cash being surplus to the Fund's current working capital and
solvency requirements.
Following completion of the Redemption on 17 May 2010, the total number of
Participating Shares outstanding was reduced by 3,345,931 to 2,230,622
Participating Shares in issue.
Recovery of Deposits - Canon House, Wallington:
As at 31 March 2010, the Fund had made a provision in full for the GBP1.1
million deposit paid to Henry Homes (Wallington) Limited ("HHW") on the
commencement of the Canon House project. On the same date HHW was subject to a
winding up order and is now in insolvent liquidation. As a result of HHW's
insolvent liquidation and as a beneficiary of an insurance policy to cover such
a situation, the Fund believes that it is entitled to recover the entire amount
of the deposit from the insurer, Zurich Insurance ("Zurich"). A claim was made
under this policy on 9 April 2010.
Zurich's solicitors have queried the basis of the Fund's reasoning that the
liquidation of HHW resulted in the loss of the deposits, asserting that the loss
of the deposits was caused by the rescission of the purchase contracts for the
118 residential units which were to comprise the Canon House development. The
Fund's solicitors see little merit in this assertion which in their view, fails
to recognise that the true and fundamental cause of HHW's failure to perform was
its insolvency now confirmed in the winding up order. In the event payment of
the claim is not received in full by 8 July 2010 formal steps to recover the
monies due will be taken.
9. Availability of interim results
Hard copies of the interim results will be available from the Company's
registered office 8th Floor, Union House, Union Street, St Helier, Jersey JE4
8TQ, and will be available to download from the Company's website,
www.offplanfund.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR XKLFLBQFXBBQ
Off-plan Fund (LSE:OPF)
Graphique Historique de l'Action
De Oct 2024 à Nov 2024
Off-plan Fund (LSE:OPF)
Graphique Historique de l'Action
De Nov 2023 à Nov 2024