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Re Western Heights and Farthingloe - From CGI own Financial Statements that are in the public domain:
In considering the Company's ability to continue operations for the foreseeable future, the Directors have considered the Company's forecast operating cashflow for the period up to the end of May 2012 and the cashflow associated with the Company's properties over periods appropriate to the development in each case.
In the view of the Directors the Company requires continued financial support in order to continue as a going concern. These interim financial statements have been prepared on a going concern basis in view of the continued support being received from the Company's lending bank Israel Discount Bank and from its shareholders.
The support received from Israel Discount Bank takes the form of facilities available subject to both specific and general conditions. The current facility was made available on 7 December 2010 in the amount of £34.5 million.
Of this facility the loan element of £31.4 million is fully drawn and the overdraft facility is to be utilised as follows:
· £115,000 to satisfy the Section 106 Agreement at Manston thereby allowing full planning permission to be granted. The property valuation detailed in Note 5 stated that the granting of full planning permission will increase the value of the Manston property by £720,000.
· £1,585,000 towards the cost of obtaining a master plan covering Western Heights and Farthingloe. This master plan will illustrate that the sites are suitable for residential development and in line with a valuation prepared by Drivers Jonas Deloitte in October 2010, prior to the granting of planning permission this will increase the value of these properties to approximately £16.97 million from their current stock value of £12.43 million.
· £1,400,000 to fund the banks future interest costs.
The facility is repayable on demand however the bank have confirmed that, subject to no breach of covenants, it is their present intention to continue to make this facility available until at least 30 November 2011.
The property valuations on Western Heights and Farthingloe further show that the granting of planning permission for private residential development on those sites will result in an increase in the value of the land concerned to a figure of up to £35.8 million. The Directors consider that the facility provided to prepare the master plan will be sufficient to allow the Company to deal with all matters in relation to the relevant planning applications.
IBD have indicated that should sufficient progress have been achieved with regard to planning permission at both Dover and Manston by 30 November 2011 they will give favourable consideration to an extension of the existing facility to at least 31 May 2012 subject to continuing compliance with the conditions associated with the facility. The Directors are confident in achieving such progress.
The Directors have reviewed the relevant aspects of the Company's forecasts and the potential position regarding the Company's properties for the period to 31 May 2012 and consider there should be no breaches of the covenants concerned. The Directors believe that the Company will meet all of the specific and general conditions associated with the facility going forward.
Since the year ended 30 November 2010 the Company's shareholders have invested further funds totalling £120,000 by way of private placements.
a) Planning permission
The assumption that the Company can continue operating as a going concern requires the eventual granting of planning permission on all of the Company's properties.
With regard to Dover it is assumed that sufficient progress will be achieved in relation to planning applications during the annual period to 30 November 2011 so as to increase the value of the properties and to allow both the Company's lending bank and its shareholders to consider favourably the provision of further support to the Company.