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14. SHARE CAPITAL

     Issued allotted & Paid share capital

Background and current year position - Ordinary shares, warrants and loan notes

Ordinary Shares:

On 18 August 2023, the company issued 125,000,000 new ordinary shares at 0.1p as a result of placing of shares that raised gross proceeds of £125,000. The funds raised provide the Company with additional working capital.

On 27 March 2024, 26,000,000 ordinary shares at 0.1p per ordinary share were issued in order to settle certain liabilities amounting to £26,000.

On 27 March 2024, a convertible loan note with an aggregate amount of £905,000 was fully converted into 226,250,000 ordinary shares at 0.4p per ordinary shares. Previously, in year 2022, the Company agreed with Mr C Johnson a consolidation and variation of terms of the two unsecured convertible loan notes and direct debt held by him. As a result of the consolidation and variation agreement, the total amount owed to Mr C. Johnson was converted into an unsecured convertible loan note with an aggregate amount of £905,000, which was set to expire on 31 July 2024 but was fully converted into equity during the year. Further to the conversion, Mr C Johnson has instructed the Company's Broker, Peterhouse Capital Limited ("Peterhouse") to immediately place the entirety of the 2022 Conversion Shares, at a price of £0.00044 per share (a 12% discount to the mid-market closing price of £0.0005 on 20 March 2024, the last practical date prior to this announcement), raising £99,550. Of the £99,550 total cash consideration received by Mr C Johnson for the 2022 Conversion Shares, £50,000 is to be subscribed for by Paul Treadaway, Trafalgar's Chief Executive Officer, and £10,000 by Gary Thorneycroft, the Company's Group Financial Director.

Deferred Shares:

On 13 July 2020 the Company undertook a sub-division of its ordinary shares, which sub divided the 487,690,380 0.1p ordinary shares of 0.1p each into 487,690,380 ordinary shares of 0.01p each and 487,690,380 0.09p deferred shares of 0.09p each. The 0.09p deferred shares of 0.09p each were consolidated into deferred shares of 0.9p each ranking pari passu as one class with the existing deferred shares of 0.9p each.

Deferred shares do not entitle the holder to receive notice of and to attend or vote at any general meeting of the Company or to receive dividends or other distributions. Upon winding up or dissolution of the Company the holders of deferred shares shall be entitled to receive an amount equal to the nominal amount paid up thereon, but only after holders of ordinary shares have received £100,000 per ordinary share. Holders of deferred shares are not entitled to any further rights of participation in the assets of the Company. The Company has the right to purchase the deferred shares in issue at any time for no consideration.

The weighted average interest rates paid on the bank loans were as follows: Bank loans: 3.4 % (2023: 3.4%)

All of the Directors’ loans are repayable after more than 1 year . All loans are interest bearing and charged accordingly. However, Mr C Johnson has waived his right to interest in the current year and the previous year. Interest of £nil (2023: £1,559) was paid to Mr J Dubois at the rate of 12% pa (2022: 12% pa).

Historic loan notes with a nominal value of £600,000 and £200,000 respectively were rolled up in to a new convertible loan note agreement in the year 2022 along with related party loans of £105,000 to create a new convertible loan note with a nominal value of £905,000. The liability in respect of this transaction is disclosed within directors loans above with a present value as at 31st March 2024 of £nil due to the conversion of the loan notes during the period (2023: £797,796 ). As a financial instrument with both debt and equity components, an amount had been recognised directly into a Loan Note Equity Reserve on issue, , with the debt element being unwound at an implied interest rate of 10% and the interest recognized through profit and loss. During the year, the Loan Note Equity Reserve was reversed following the conversion of the Loan Note. Refer to note 14 for further details.

The remaining directors loan balance is disclosed in note 15.

Included in other loans is £560,000 (2023: £560,000 ) advanced by Mr G Howard (son-in-law to Mr C Johnson) to the Company at rates of 10% & 5% per annum (2023: 10% & 5% pa) and loans provided during the year by Period Homes at £134,500 and Forum Energy Services Ltd at £25,000. Details of the negotiated loan interest reduction with Mr G Howard for accrued interest are given in note 17.

Selmat had also granted to Paragon Mortgages a legal charge over the freehold property at Hildenborough. The mortgage was interest only, for a term of seven years with a fixed interest rate for the first five years. The property had been rented out but was sold during the year. The bank borrowings are repayable as follows:  

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11. INVENTORY

Inventories recognised as an expense during the period totalled £nil (2023: £nil). Borrowing costs capitalized in the year total £38,208 (2023: – £6,393 ).

Write-down of inventories recognised as an expense in the period totalled £nil (2023: £29,750). For 2023, it was due to the owners of the Leatherhead site taking an alternative offer for their project from an independent third party.

Inventories pledged as security for liabilities as at the year end totalled £275,000 (2023: £275,000 ).

A 10% fall in the estimated future value of the property would result in an impairment totalling £80,000.

12. TRADE AND OTHER PAYABLES

13. BORROWINGS