The Directors present their Report and Audited Financial Statements for the period ended 31 March 2012.

Principal Activities

The principal activity of the Company is that of a Holding Company.

The principal activity of the principal subsidiary undertaking, Combe Bank Homes Limited, continued to be that of home building and property development.

Business review, results and dividends

The Consolidated Results of the period’s trading, presented on the basis of accounting, are shown here in the Financial Statements. The Consolidated Profit for the period amounted to £208,464 (2010: Loss £903,100). This is however, after writing off £291,075 of exceptional one-off costs relating to the acquisition of Combe Bank Homes Ltd.

Principal risks & uncertainties

Set out below are certain risk factors which could have an impact on the Group’s long term performance. The factors discussed below should not be regarded as a complete and comprehensive statement of all potential risks and uncertainties facing the Group.

The principal risk and uncertainties facing the Group are:

1. Any possibility that lending criteria from the Company’s Bankers may harden with little prior notice.

2. Construction costs may escalate and eat into gross profit margins.

3. Heavy overheads may be incurred especially when projects have been completed and before others have been commenced.

4. The Company could pay too much for land acquisitions.

5. The Company might fail to adhere to good corporate governance policies.

The Group considers that it mitigates these risks with the following policies and actions:

1. The Group affords its bankers and other lenders a strong level or asset and income cover and maintains good relationships with a range of funding sources from which it is able to secure finance on favourable terms.

2. Construction costs are outsourced on a fixed price contract basis, thereby passing on to the contractor all risk of development cost overspend, including from increased material, labour or other costs.

3. Most other professional services also are outsourced, thus providing known fixed cost before any project is taken forward and avoiding the risk that can arise in employing in-house professionals of a high unproductive overhead at times when activity is slack.

4. Land buying decisions are taken at Board level, after careful research by the Directors personally, who have substantial experience of the house building industry, potential construction issues and the local market.

The Group focuses on a niche market sector of new home developments in the range of 4 to 20 units. Within this unit size, competition to purchase development sites from land buyers is relatively weak, as this size is unattractive to major national and regional house builders who require a larger scale to justify their administration and overheads, whilst being too many units for the jobbing builder to finance or undertake as a project. Within this market, there are opportunities to negotiate land acquisitions on favourable terms. Many competitors who also focus on this niche have yet to recapitalise and are unable to raise finance.

5. The Group has a rigorous corporate governance policy appropriate for a publicly quoted company with ambitions substantially to raise its profile within the wide investor community.