TIDMDKE
RNS Number : 7635K
Dukemount Capital PLC
30 August 2019
30 August 2019
Dukemount Capital Plc
("Dukemount" or the "Company")
Final Results for the year ended 30 April 2019
Dukemount Capital Plc (LSE: DKE), the property management and
long dated income provider reports its Final Results for the year
ended 30 April 2019.
All financial amounts are stated in GBP British pounds unless
otherwise indicated.
Operational Highlights
-- 30-Year Agreement-to-lease signed on Wavertree project
-- Planning permission granted on Wavertree project
-- Forward funding and pre-sale of West Derby project agreed with institution
-- Assignment of contract and forward funding agreement on Wavertree
-- Wavertree building contract signed by contractor
-- West Derby building contract signed by contractor
Post Year End
-- GBP555,074 received from the two funds managed by Alpha Capita for West Derby and Wavertree
-- West Derby demolition complete and under construction
Outlook
-- Widened focus within the property sector with extra care,
student accommodation and independent retirement living added to
the long-dated income business model
-- Early stage talks with Universities to develop their spare
land for extra care, student accommodation and independent
retirement living.
-- The added focus is expected to lead to significantly larger development deals
Chairman's Statement
I hereby present the annual financial statements for the year
ended 30(th) April 2019. During the year the Group reported a loss
of GBP246,196 (2018 - loss of GBP285,968). These losses arose in
the course of the Group: pursuing transactions in its chosen
sector; costs associated with its first two projects; maintaining
the Company's listing on the Official List of the UK Listing
Authority by way of a standard listing and include: consultancy
fees, professional fees and directors' fees. As at the Statement of
Financial Position date the Company had GBP24,923 of cash
balances.
In May 2019 the company received reimbursement of the initial
capital outlay and ongoing costs for West Derby and Wavertree, of a
total of GBP555,074, under the funding and forward purchase
agreements with two funds managed by Alpha Real Capital.
Reimbursements are subsequently being made on a monthly basis as
the projects progress.
Since our last full year results, and with the existing projects
successfully moving ahead, the board has been investigating
expanding its long-dated income offering to institutions. As our
new website shows, we are widening our focus within the property
sector with the addition of extra care, student accommodation and
independent retirement living. We will not be the operator of these
properties, they will be leased and or managed by a third party
with the appropriate expertise and experience.
This year, the company has been busy working with our
consultants and several interested parties, with regards to this
expanded focus on large deals, allowing us to take advantage of the
funding and forward sale model that we have proven up with the
first two projects.
We are in early stage talks with universities who offer nursing
degrees and are seeking to develop extra care, student
accommodation and retirement living on land they own, whether on
campus or close to the universities.
This has the potential to free up capital for the universities
as well as offering valuable practical work experience for their
nursing students. These talks could potentially offer a significant
uplift in the size of project that Dukemount could be working on,
going forward.
During the financial year ended 30th April 2019 the board was
acquiring, financing and in negotiations with institutions with
regards to the West Derby full redevelopment project and the
Wavertree refurbishment project.
We concluded talks with a fund managed by Alpha Real Capital to
whom West Derby has been pre-sold and which they will forward-fund.
Dukemount Capital Plc (Dukemount) is responsible for the management
and development of the property to the exacting requirements of the
housing association which has signed an agreement-to-lease with a
CPI-Linked 50-year term on the property. This first project will
result in a development profit to Dukemount which will be reflected
in the results following completion of the re-development.
Demolition of the existing building at West Derby was completed
earlier this year and construction of the new building which
includes 3,200 square feet of retail space and 17 apartments is
going well with completion expected in July 2020.
On Wavertree we secured an agreement-to-lease with a CPI-Linked,
30-year term, received planning permission in a relatively short
period in order to maximize the amount of rooms within the
property, and potentially enhanced the value of that project. We
also agreed a forward funding and assignment of the contract of
Wavertree to Time:Social Freehold, a fund managed by Time
Investments, part of Alpha Real Capital. The preliminary
construction and associated costs that have been incurred have been
recovered from Time:Social Freehold and ongoing development costs
are being funded against architect's certifications. A development
profit will be paid upon practical completion of the conversion
works, expected in December of this year, and will be reflected in
the current years' results.
With the potential addition of universities, extra care, student
accommodation and independent retirement living, we are looking
forward to a busy year ahead.
I would like to thank all those who have assisted and supported
the Group during the year.
Geoffrey Dart
Executive Chairman
30 August 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEARED 30 APRIL 2019
Note Group Group
2019 2018
Continuing operations GBP GBP
Revenue from contracts with customers 621,875 -
Cost of sales (559,317) -
_______ _______
Gross Profit 62,558 -
Administrative expenses 3 (480,998) (363,110)
Profit on disposal of investment
property 7 172,132 -
_______ _____
Operating loss (246,308) (363,110)
Interest received 112 188
Profit/(loss) on disposal of available
for sale financial asset 9 - 76,954
_______ _____
Loss before taxation (246,196) (285,968)
Income tax 6 - -
_______ _____
Loss for the year attributable to
equity owners (246,196) (285,968)
_______ _____
Other Comprehensive Income:
Items that may be subsequently reclassified
to profit or loss:
Change in fair value of available
for sale financial assets 9 - 77,500
Reclassification of cumulative (gain)/loss
on available for sale financial
assets on disposal 9 - (77,500)
_______ _____
Total comprehensive income for the
year attributable to the equity
owners (246,196) (285,968)
_______ _____
Earnings per share attributable
to equity owners
Basic and diluted (pence) 12 (0.00071) (0.00084)
_______ _____
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 APRIL
2019
Note 30 April 2019 30 April 2018
GBP GBP
Assets
Non current assets
Investment properties 7 - 197,868
Current Assets
Trade and other receivables 10 677,137 32,847
Cash and cash equivalents 24,923 148,391
_______ _______
Total Assets 702,060 379,106
_______ _______
Equity and Liabilities
Equity
Share capital 13 366,166 339,500
Share premium 14 789,671 736,337
Share based payments reserve 30,499 30,499
Retained earnings (999,176) (752,980)
_______ _______
187,160 353,356
Current Liabilities
Trade and other payables 16 514,900 25,750
_______ _______
Total Equity and Liabilities 702,060 379,106
_______ _______
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 30 APRIL 2019
Note 30 April 2019 30 April 2018
GBP GBP
Assets
Non current assets
Investment in Subsidiaries 8 101 101
Current Assets
Trade and other receivables 10 133,848 244,614
Cash and cash equivalents 15,339 148,391
_______ _______
Total Assets 149,288 393,106
_______ _______
Equity and Liabilities
Equity
Share capital 13 366,166 339,500
Share premium 14 789,671 736,337
Share based payments reserve 30,499 30,499
Retained earnings (1,156,400) (731,480)
_______ _______
29,936 374,856
Current Liabilities
Trade and other payables 16 119,352 18,250
_______ _______
Total Equity and Liabilities 149,288 393,106
_______ _______
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30
APRIL 2019
Share Share Share Retained Total
Capital premium based earnings
payments
reserve
GBP GBP GBP GBP GBP
Balance as at 1 May 2018 339,500 736,337 30,499 (752,980) 353,356
---------- ---------- ---------------- ---------- ------------
Loss for the year - - - (246,196) (246,196)
Other comprehensive Income - - - - -
Total comprehensive income
for the year - - - (246,196) (246,196)
---------- ---------- ---------------- ---------- ------------
Transactions with equity
owners
Issue of ordinary shares 26,666 53,334 - - 80,000
---------- ---------- ---------------- ---------- ------------
Total transactions with owners 26,666 53,334 - - 80,000
---------- ---------- ---------------- ---------- ------------
Balance as at 30 April 2019 366,166 789,671 30,499 (999,176) 187,160
---------- ---------- ---------------- ---------- ------------
Share Share Share based Retained Total
Capital premium payments earnings
reserve
GBP GBP GBP GBP GBP
Balance as at 1 May 2017 338,300 731,537 30,499 (467,012) 633,324
---------- ------------- ------------------ ---------- ------------
Loss for the year - - - (285,968) (285,968)
Other comprehensive Income
Change in fair value of available
for sale financial assets - - - 77,750 77,500
Reclassification of cumulative
gain on available for sale
financial assets on disposal - - - (77,750) (77,500)
---------- ------------- ------------------ ---------- ------------
Total comprehensive income
for the year - - - (285,968) (285,968)
---------- ------------- ------------------ ---------- ------------
Transactions with equity
owners
Issue of ordinary shares 1,200 4,800 - - 6,000
---------- ------------- ------------------ ---------- ------------
Total transactions with owners 1,200 4,800 - - 6,000
---------- ------------- ------------------ ---------- ------------
Balance as at 30 April 2018 339,500 736,337 30,499 (752,980) 353,356
---------- ------------- ------------------ ---------- ------------
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30 APRIL
2019
Share Share Share based Retained Total
Capital premium payments earnings
reserve
GBP GBP GBP GBP GBP
Balance as at 1 May 2018 339,500 736,337 30,499 (731,480) 374,856
---------- ------------- ------------------ ------------ ------------
Loss for the year - - - (424,920) (424,920)
Other comprehensive Income - - - - -
Total comprehensive income
for the year - - - (424,920) (424,920)
---------- ------------- ------------------ ------------ ------------
Transactions with equity
owners
Issue of ordinary shares 26,666 53,334 - - 80,000
---------- ------------- ------------------ ------------ ------------
Total transactions with owners 26,666 53,334 - - 80,000
---------- ------------- ------------------ ------------ ------------
Balance as at 30 April 2019 366,166 789,671 30,499 (1,156,400) 29,936
---------- ------------- ------------------ ------------ ------------
Share Share Share based Retained Total
Capital premium payments earnings
reserve
GBP GBP GBP GBP GBP
Balance as at 1 May 2017 338,300 731,537 30,499 (467,012) 633,324
---------- ------------- ------------------ ---------- ------------
Loss for the year - - - (264,468) (264,468)
Other comprehensive Income
Change in fair value of available
for sale financial assets - - - 77,750 77,500
Reclassification of cumulative
gain on available for sale
financial assets on disposal - - - (77,750) (77,500)
---------- ------------- ------------------ ---------- ------------
Total comprehensive income
for the year - - - (264,468) (264,468)
---------- ------------- ------------------ ---------- ------------
Transactions with equity
owners
Issue of ordinary shares 1,200 4,800 - - 6,000
---------- ------------- ------------------ ---------- ------------
Total transactions with owners 1,200 4,800 - - 6,000
---------- ------------- ------------------ ---------- ------------
Balance as at 30 April 2018 339,500 736,337 30,499 (731,480) 374,856
---------- ------------- ------------------ ---------- ------------
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARED 30 APRIL
2019
Note 2019 2018
GBP GBP
Cash Flows from Operating Activities
Loss before taxation (246,196) (285,968)
Adjustments for:
Profit on disposal of Investment Property (172,132)
Profit on disposal of available for
sale financial assets 9 - (76,954)
Share based payment 15 80,000 6,000
Changes in working capital:
(Increase)/Decrease in trade and other
receivables (644,290) 8,946
Increase/(Decrease) in trade and other
payables 489,150 (1,125)
---------- ----------
Net Cash used in Operating Activities (493,468) (349,101)
---------- ----------
Cash Flows from Investing Activities
Proceeds from sale of investment property 370,000 -
Sale/(Purchase) of investment property 7 - (197,868)
Proceeds from sale of available for
sale financial assets 9 - 101,954
---------- ----------
Net Cash generated from/used in Investing
Activities 370,000 (95,914)
---------- ----------
Net Decrease in Cash and Cash Equivalents (123,468) (445,015)
---------- ----------
Cash and cash equivalents at the beginning
of the year 148,391 593,406
---------- ----------
Cash and Cash Equivalents at the End
of the Year 24,923 148,391
---------- ----------
COMPANY STATEMENT OF CASH FLOWS FOR THE YEARED 30 APRIL 2019
Note 2019 2018
GBP GBP
Cash Flows from Operating Activities
Loss before taxation (424,920) (264,468)
Adjustments for:
(Profit)/Loss on disposal of available
for sale financial assets 9 - (76,954)
Share based payment 15 80,000 6,000
Changes in working capital:
(Increase)/Decrease in trade and other
receivables 5,664 (202,821)
Increase/(Decrease) in trade and other
payables 38,854 (8,625)
---------- ----------
Net Cash used in Operating Activities (300,402) (546,868)
---------- ----------
Cash Flows from Investing Activities
Loans granted to subsidiary undertakings 105,101 -
Loans due from subsidiary undertakings 62,249 -
Purchase of subsidiaries 8 - (101)
Proceeds from sale of available for
sale financial assets 9 - 101,954
---------- ----------
Net Cash generated from Investing Activities 167,350 101,853
---------- ----------
Net Decrease in Cash and Cash Equivalents (133,052) (445,015)
---------- ----------
Cash and cash equivalents at the beginning
of the year 148,391 593,406
---------- ----------
Cash and Cash Equivalents at the End
of the Year 15,339 148,391
---------- ----------
NOTES TO THE ANNOUNCEMENT FOR THE YEARED 30 APRIL 2019
1. General Information
Dukemount Capital Plc was incorporated in the UK on 20 April
2011 as a public limited company with the name Black Lion Capital
Plc. The Company subsequently changed its name to Black Eagle
Capital Plc on 13 September 2011 and on 15 November 2016 changed
its name to Dukemount Capital Plc. On 29 March 2017 the Company was
admitted to the London Stock Exchange by way of a standard
listing.
The Group's principal activity is to acquire, manage, develop
and, where appropriate on-sell, real estate portfolios specialising
mainly in the supported living and hotels sector.
The parent company's registered office is located at 50 Jermyn
Street, London SW1Y 6LX.
2. Summary of Significant Accounting Policies
The principal Accounting Policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the periods presented, unless
otherwise stated.
a) Basis of Preparation of Financial Statements
The financial statements of Dukemount Capital Plc have been
prepared in accordance with International Financial Reporting
Standards (IFRSs) and IFRIC interpretations (IFRS IC) as adopted by
the European Union and the Companies Act 2006 applicable to
companies reporting under IFRS. The financial statements have also
been prepared under the historical cost convention.
The financial statements are presented in Pound Sterling (GBP),
rounded to the nearest pound.
The consolidated entities include the wholly owned subsidiaries
DKE (North West) Limited and DKE (Wavertree) Limited. Both
subsidiaries were dormant in the previous period.
The individual entity financial statements of each subsidiary
were prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (FRS 101).
b) Basis of consolidation
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control
ceases.
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the
subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the
subsidiary.
2. Summary of Significant Accounting Policies (continued)
b) Basis of consolidation (continued)
The group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity interests issued by the group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The group recognises any non-controlling interest
in the acquired companies on an acquisition-by-acquisition basis,
either at fair value or at the non-controlling interest's
proportionate share of the recognised amounts of acquiree's
identifiable net assets.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated. When necessary, amounts reported by
subsidiaries have been adjusted to conform with the group's
accounting policies.
c) Going Concern
The preparation of consolidated financial statements requires an
assessment on the validity of the going concern assumption.
The Directors have reviewed projections for a period of at least
12 months from the date of approval of the Financial
Statements..
In making their assessment of going concern, the Directors
acknowledge that the Group has a very small cost base, and
development of its existing projects have been pre-funded. They can
therefore confirm that they hold sufficient funds to ensure the
Group continues to meet its obligations as they fall due for a
period of at least one year from date of approval of these
Financial Statements. Accordingly, the Board believes it is
appropriate to adopt the going concern basis in the preparation of
the Financial Statements.
d) Changes in accounting policies and disclosure
i) New and Amended Standards mandatory for the first time for
the period beginning 1 May 2018
During the year ended 30 April 2019, the Group adopted the
following new and revised standards:
IFRS 15 'Revenue from Contracts with Customers'; effective 1
January 2018
The Group has adopted IFRS 15 for the first time during the year
ended 30 April 2019 The standard sets out requirements for revenue
recognition from contracts with customers. This is the first year
that the group has recognised Revenue and as such there is no
impact on prior accounting periods.
IFRS 9 'Financial instruments: Classification and measurement';
effective 1 January 2018
The Group has reviewed the requirements of IFRS 9. The Group's
principal financial assets are trade receivables which will
continue to be measured at amortised cost. However the Group has
adopted the expected credit loss model when calculating impairment
losses on its financial assets measured at amortised costs. This
resulted in increased judgement being required in order to assess
the requirement for an impairment provision due to the need to
factor in forward looking information when estimating the
appropriate amount of provisions. No material impairment provisions
were recognised as a result of the adoption of IFRS 9 and the
impact of this change was not material.
2. Summary of Significant Accounting Policies (continued)
d) Changes in accounting policies and disclosure (continued)
ii) New standards, amendments and interpretations in issue but
not yet effective or not yet endorsed and not early adopted
The standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the financial statements
are listed below. The Group intends to adopt these standards, if
applicable, when they become effective.
Standard Impact on initial application Effective date
IFRS 16 Leases 1 January
2019
IFRIC 23 Uncertainty over Income Tax Treatments 1 January
2019
Annual improvements 2015-2017 Cycle 1 January
2019
*Subject to EU endorsement
The Group is evaluating the impact of the new and amended
standards above. The Directors believe that these new and amended
standards are not expected to have a material impact on the Group's
results or shareholders' funds.
e) Segmental reporting
Identifying and assessing investment projects is the only
activity the Group is involved in and is therefore considered as
the only operating/reportable segment. As the subsidiaries grow and
acquire additional properties and projects, management will then
consider them as separate reportable segments.
Therefore the financial information of the single segment is the
same as that set out in the Statement of Comprehensive Income,
Statement of Financial Position, Statement of Changes in Equity and
the Statement of Cashflows.
f) Revenue
Revenue relates to amounts contractually due under a property
development agreement at the balance sheet date relating to the
stage of completion of a contract as measured by surveys of work
performed to date.
Revenue is recognised for services when the Group has satisfied
its contractual performance obligation in respect of the services.
The amount recognised for the services performed is the
consideration that the Group is entitled to for performing the
services provided. Revenue from contracts with customers is
recognised over time.
Estimates of revenues, costs or extent of progress toward
completion are revised if circumstances change. Any resulting
increases or decreases in estimated revenues or costs are reflected
in profit or loss in the period in which the circumstances that
give rise to the revision become known by management.
g) Tangible Assets
i. Investment properties
Investment properties are stated at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. During the year the
investment property was disposed of.
2. Summary of Significant Accounting Policies (continued)
h) Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand and current and
deposit balances with banks and similar institutions. This
definition is also used for the Statement of Cash Flows.
The Group considers the credit ratings of banks in which it
holds funds in order to reduce exposure to credit risk. The Group
will only keep its holdings of cash and cash equivalents with
institutions which have a minimum credit rating of 'AA-'.
The Group considers that it is not exposed to major
concentrations of credit risk.
i) Financial Instruments
Financial assets
Accounting policy applied until 30 April 2018. The Group and
Company has applied IFRS 9 retrospectively but has elected not to
restate comparative information. As a result, the comparative
information provided continues to be accounted for in accordance
with the previous accounting policy.
From 1 May 2018 the Group and Company classifies its financial
assets in the following measurement categories:
-- Those to be measured subsequently at fair value through profit or loss; and
-- Those to be measured at amortised cost.
The classification depends on the business model for managing
the financial assets and the contractual terms of the cash flows.
Financial assets are classified as at amortised cost only if both
of the following criteria are met:
-- The asset is held within a business model whose objective is
to collect contractual cash flows; and
-- The contractual terms give rise to cash flows that are solely
payments of principal and interest.
Financial assets at amortised cost are subsequently measured
using the effective interest rate (EIR) method and are subject to
impairment. The Group's and Company's financial assets at amortised
cost include trade and other receivables and cash and cash
equivalents. A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial assets) is
primarily derecognised when:
-- The rights to receive cash flows from the asset have expired; or
-- The Group and Company has transferred its rights to receive
cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party
under a 'pass-through' arrangement; and either (a) the Group and
Company has transferred substantially all the risks and rewards of
the asset, or (b) the Group and Company has neither transferred nor
retained substantially all the risks and rewards of the asset, but
has transferred control of the asset.
2. Summary of Significant Accounting Policies (continued)
i) Financial Instruments (continued)
The Group recognises an allowance for expected credit losses
(ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and all
the cash flows that the Group expects to receive, discounted at an
approximation of the original EIR. The expected cash flows will
include
cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
For trade receivables (not subject to provisional pricing) and
other receivables due in less than 12 months, the Group applies the
simplified approach in calculating ECLs, as permitted by IFRS 9.
Therefore, the Group does not track changes in credit risk, but
instead, recognises a loss allowance based on the financial asset's
lifetime ECL at each reporting date.
The Group and Company classifies the following financial assets
at fair value through profit or loss:
-- Debt instruments that do not qualify for measurement at
either amortised cost or fair value through other comprehensive
income; and
-- Equity investments for which no election has been made to
recognise fair value gains and losses through other comprehensive
income.
The Group and Company measures all equity investments at fair
value through profit or loss.
j) Financial liabilities
Financial liabilities, comprising trade and other payables, are
held at amortised cost.
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less. If not, they are
presented as non-current liabilities.
Trade and other payables are recognised initially at fair value,
and subsequently measured at amortised cost using the effective
interest method.
2. Summary of Significant Accounting Policies (continued)
k) De-recognition of Financial Instruments
i. Financial Assets
A financial asset is derecognised where:
-- the right to receive cash flows from the asset has expired;
-- the Group retains the right to receive cash flows from the
asset, but has assumed an obligation to pay them in full without
material delay to a third party under a pass-through arrangement;
or
-- the Group has transferred the rights to receive cash flows
from the asset, and either has transferred substantially all the
risks and rewards of the asset or has neither transferred nor
retained substantially all the risks and rewards of the asset, but
has transferred control of the asset.
ii. Financial Liabilities
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires. Where an
existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original
liability and the recognition of a new liability, and the
difference in the respective carrying amounts is recognised in the
statement of comprehensive income.
l) Taxation
Current tax
Current tax is based on the taxable profit or loss for the year.
Tax is recognised in profit or loss, except to the extent that it
relates to items recognised in other comprehensive income or
recognised in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.
Current tax is calculated at the tax rates (and laws) that have
been enacted or substantively enacted at the reporting date.
Deferred tax
Deferred tax is recognised using the liability method in respect
of temporary differences arising from differences between the
carrying amount of assets and liabilities in the Financial
Statements and the corresponding tax bases used in the computation
of taxable profit. However, deferred tax is not accounted for if it
arises from initial recognition of an asset or liability in a
transaction that at the time of the transaction affects neither
accounting nor taxable profit or loss. In principle, deferred tax
liabilities are 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.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred tax assets and
liabilities relate to income taxes
levied by the same taxation authority on either the same taxable
entity or different taxable entities where there is an intention to
settle the balances on a net basis.
Deferred tax is calculated at the tax rates (and laws) that have
been enacted or substantively enacted at the Statement of Financial
Position date and are expected to apply to the period when the
deferred tax asset is realised or the deferred tax liability is
settled.
Deferred tax assets and liabilities are not discounted.
2. Summary of Significant Accounting Policies (continued)
m) Equity
Equity comprises the following:
-- Share capital representing the nominal value of the equity shares;
-- Share premium representing consideration less nominal value
of issued shares and costs directly attributable to the issue of
new shares;
-- Share based payments reserve representing the fair value of
share based payments valued in accordance with IFRS 2;
n) Share Capital
Ordinary shares are classified as equity.
o) Share Based Payments
The Group has issued warrants over the ordinary share capital as
described in note 15. In accordance with IFRS 2, the total amount
to be expensed over the vesting period for warrants issued for
services is determined by reference to the fair value of the
warrants granted, excluding non--market vesting conditions.
Non--market vesting conditions are included in assumptions about
the number of warrants that are expected to vest.
For warrants issued relating to the raising of finance, the
relevant expense is offset against the share premium account. The
total amount to be expensed is determined by reference to the fair
rate of the warrants granted, excluding non--market vesting
conditions. Non--market vesting conditions are included in
assumptions about the number of warrants that are expected to
vest.
p) Financial Risk Management
Financial Risk Factors
The Group's activities expose it to a variety of financial
risks: market risk (price risk), credit risk and liquidity risk.
The Group's overall risk management programme seeks to minimise
potential adverse effects on the Group's financial performance.
None of these risks are hedged.
The Group has no foreign currency transactions or borrowings, so
is not exposed to market risk in terms of foreign exchange risk.
The Group will require funding to acquire and develop and/or
refurbish its properties and accordingly will be subject to
interest rate risk.
Risk management is undertaken by the Board of Directors.
Market Risk - price risk
The Group was exposed to equity securities price risk because of
investments held by the Group, classified as available-for-sale
financial assets. These assets were sold in the year, and therefore
the carrying value at the year end is GBPNil, which represents the
maximum exposure for the Group.
The Group is not exposed to commodity price risk. The Directors
will revisit the appropriateness of this policy should the Group's
operations change in size or nature.
Credit risk
Credit risk arises from cash and cash equivalents as well as any
outstanding receivables. Management does not expect any losses from
non-performance of these receivables. The amount of exposure to any
individual counter party is subject to a limit, which is assessed
by the Board.
The Group considers the credit ratings of banks in which it
holds funds in order to reduce exposure to credit risk, which is
stated under the cash and cash equivalents accounting policy.
2. Summary of Significant Accounting Policies (continued)
Liquidity risk
Liquidity risk arises from the Group's management of working
capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due. The proceeds
raised from the placing are being held as cash to enable the Group
to fund a transaction as and when a suitable target is found.
Controls over expenditure are carefully managed, in order to
maintain its cash reserves whilst it targets a suitable
transaction.
Financial liabilities are all due within one year.
Capital risk management
The Group's objectives when managing capital is to safeguard the
Group's ability to continue as a going concern, in order to provide
returns for shareholders and benefits for other stakeholders, and
to maintain an optimal capital structure. The Group has no
borrowings.
In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return
capital to shareholders or issue new shares.
The Group monitors capital on the basis of the total equity held
by the Group, being a net liability of GBP187,160 as at 30 April
2019 (2018: net asset GBP353,356).
q) Fair Value Estimation
The table below analyses financial instruments carried at fair
value, by valuation method. The level at which a financial
instrument can be defined is as follows:
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
-- Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (Level
2); and
-- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level
3).
The fair value of financial instruments traded in active markets
is based on quoted market prices at the end of the reporting
period. A market is regarded as active if quoted prices are readily
and regularly available from an exchange, dealer, broker, industry
group, pricing service or regulatory agency, and those prices
represent actual and regularly occurring market transactions on an
arm's length basis. The fair values of quoted investments are based
on current bid prices.
The fair value of financial instruments that are not traded in
an active market is determined by using valuation techniques. These
valuation techniques maximise the use of observable market data
where it is available, and rely as little possible on
entity-specific estimates. If all significant inputs required to
fair value an instrument are observable, the instrument is included
in Level 2. If one or more of the significant inputs is not based
on observable market data, the instrument is included in Level
3.
Specific valuation techniques used to value financial
instruments include:
-- quoted market prices or dealer quotes for similar instruments;
-- other techniques, such as discounted cash flow analysis or
the last available quoted market price are used to determine fair
value for the remaining financial instruments.
2. Summary of Significant Accounting Policies (continued)
q) Fair Value Estimation (continued)
The following table presents the changes in Level 1 instruments
for the period ended:
2019 2018
GBP GBP
Balance as at 1 May - -
Transfer from Level 3 to Level 1 - 25,000
Fair value profit/(loss) - 77,750
Disposals of Level 1 - (102,750)
______ ______
Balance as at 30 April - -
______ ______
The following table presents the changes in Level 3 instruments
for the period ended:
2019 2018
GBP GBP
Balance as at 1 May - 25,000
Transfer from Level 3 to Level 1 - (25,000)
______ ______
Balance as at 30 April - -
______ ______
r) Critical Accounting Estimates and Judgements
The Directors make estimates and assumptions concerning the
future as required by the preparation of the financial statements
in conformity with EU endorsed IFRSs. The resulting accounting
estimates will, by definition, seldom equal the related actual
results.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
i. Share based payments
In accordance with IFRS 2 'Share Based Payments' the Group has
recognised the fair value of warrants calculated using the
Black-Scholes option pricing model. The Directors have made
significant assumptions particularly regarding the volatility of
the share price at the grant date in order to calculate a total
fair value. Further information is disclosed in Note 15.
2. Summary of Significant Accounting Policies (continued)
r) Critical Accounting Estimates and Judgements (continued)
ii. Impairment of investment property
The Group makes an estimate of the recoverable value of
investment property. When assessing impairment of investment
properties, management considers factors including the condition of
the property and expected rent yield. As asset's carrying amount is
written down immediately to its recoverable amount if it is greater
than its estimated recoverable amount. See note 7 for the net
carrying amount of the investment property.
iii) Percentage completion method used for long term
contracts
The Group makes an estimate of the stage of completion of a
project based on the costs incurred at the year end. Management
then make assumptions regarding the collectability of billings and
expected future costs. The method used is as stated in the
constructions contract accounting policy 2f). Estimation
uncertainty will exist with regard to the gross profit being
recognised at the year end. The Directors believe that this
uncertainty is reduced to an acceptable level by using quantity
surveyors' reports to assess the stage of contract completion at
the year end.
3. Expenses by Nature
2019 2018
GBP GBP
Directors' fees 135,833 128,959
Share based payment expense 80,000 -
Social security and other taxation - 13,611
Establishment costs 32,507 34,149
Legal and professional fees 177,269 145,635
Listing/ regulatory costs 38,014 29,763
Travel and accommodation 7,143 4,993
Other expenses 10,232 6,000
______ ______
Total Administrative Expenses 480,998 363,110
______ ______
4. Directors' Remuneration
Company
2019 2018
GBP GBP
Geoffrey Dart 155,000 64,584
Timothy Le Druillenec (resigned 4 February
2019) 33,333 40,000
Paul Gazzard 27,500 24,375
_____ _____
Total 215,833 128,959
______ ______
There are no other employees of the Group.
5. Services provided by the Company's Auditors
During the year, the Group obtained the following services from
the Group's auditors and its associates:
2019 2018
GBP GBP
Fees payable to the Company's auditor and its
associates for the audit
of the Group and Company Financial Statements 24,000 19,500
______ ______
6. Taxation
Tax Charge for the Year
No taxation arises on the result for the year due to taxable
losses.
Factors Affecting the Tax Charge for the Period
The tax credit for the period does not equate to the loss for
the period at the applicable rate of UK Corporation Tax of 19.00%
(2018: 19.00%). The differences are explained below:
2019 2018
GBP GBP
Loss for the period before taxation (246,196) (285,968)
______ ______
Loss for the period before taxation multiplied
by the standard
rate of UK Corporation of 19.00% (2018: 19.00%) (46,777) (54,334)
Expenses not deductible for tax purposes - 458
Income not taxable for tax purposes - -
Losses carried forward on which no deferred
tax asset is recognised 46,777 53,876
______ _____
- -
______ _____
Factors Affecting the Tax Charge of Future Periods
Tax losses available to be carried forward by the Group at 30
April 2019 against future profits are estimated at GBP909,000 (2018
- GBP663,000).
A deferred tax asset has not been recognised in respect of these
losses in view of uncertainty as to the level of future taxable
profits.
7. Investment properties
Investment
property
Group GBP
Cost
As at 1 May 2018 197,868
Additions -
Disposals (197,868)
As at 30 April 2019 -
===============
The investment property was disposed of during the year. The
sale generated a profit on sale of GBP172,132.
8. Investment in subsidiaries
Company
2019 2018
GBP GBP
Shares in Group Undertaking
As at 1 May 101 -
Additions in the year - 101
At 30 April 101 101
======= =======
Details of Subsidiaries
Details of the subsidiaries at 30 April 2019 are as follows:
Name of subsidiary Country of Share Principal activities
incorporation capital
held by % share capital
Parent held
DKE (North West Property management
Limited) England 100 100% and development
DKE (Wavertree) Property management
Limited England 1 100% and development
The registered office of all subsidiary undertakings is the same
as the parent company.
9. Available for sale financial assets
2019 2018
GBP GBP
At beginning of period - 25,000
Disposals - (102,750)
Fair value profit/(loss) - 77,750
______ ______
At End of Period - -
Less: non-current portion - -
______ ______
Current Portion - -
______ ______
As at 30 April 2018 all available for sale financial assets had
been realised.
The Group previously held 2,500,000 Ordinary share of 1p each at
par in Hemogenyx Pharmaceuticals Plc (formerly Silver Falcon Plc).
Silver Falcon was listed on the FTSE All Share Index of the London
Stock Exchange on 9 November 2015. The Group sold its entire
holding in Hemogenyx Pharmaceuticals Plc for GBP101,954 on 26
February 2018. On disposal, the gain of GBP77,750 previously
recognised in other comprehensive income has been reclassified to
profit or loss. This gave a net gain of GBP76,954 recognised in
profit or loss.
10. Trade and Other Receivables
Group Company Group Company
2019 2019 2018 2018
GBP GBP GBP
Other receivables, including
prepayments 55,263 26,183 32,847 31,847
Amounts owed by group undertakings - 107,665 - 212,767
Amounts recoverable on contracts 621,874 - - -
-------- -------- ------- --------
677,137 133,848 32,847 244,614
The fair value of all receivables is the same as their carrying
values stated above.
At 30 April 2019 all receivables were fully performing, and
therefore do not require impairment.
The maximum exposure to credit risk at the reporting date is the
carrying value mentioned above. The Group does not hold any
collateral as security.
Amounts recoverable on contracts represents sales invoices
issued after 30 April 2019 in respect of work undertaken during the
year ended 30 April 2019 with appropriate provision being made in
accruals and deferred income for costs incurred in undertaking such
work but which had not been invoiced at 30 April 2019.
Amounts due from group undertakings are unsecured, interest
free, have no fixed date of repayment and repayable on demand. They
have been advances to the subsidiaries in order to fund the
redevelopment project.
11. Dividends
No dividend has been declared or paid by the Company during the
year ended 30 April 2019 (2018: Nil).
12. Earnings per share
Basic earnings per share is calculated by dividing the loss
attributable to equity holders of the Group by the weighted average
number of ordinary shares in issue during the year. In accordance
with IAS 33, basic and diluted earnings per share are identical as
the effect of the exercise of the warrants would be to decrease the
loss per share.
2019 2018
GBP GBP
Loss attributable to equity holders of the Group 246,196
285,968
______ ______
Total 246,196 285,968
______ ______
Weighted average number of ordinary shares in issue (thousands) 346,002 339,497
______ _____
13. Share Capital
Group and Company
2019 2018
No. No
Allotted, issued and fully paid (000's) (000's)
366,166,666 ordinary shares of GBP0.001 each 366,166 339,500
_______ _______
14. Share Premium
Group and Company
Share Premium Less share Net Share Premium
GBP issue costs GBP
GBP
At 1 May 2018 736,337 - 736,337
Issue of shares 53,334 - 53,334
At 30 April 2019 789,671 - 789,671
================ ============== ====================
15. Share Based Payments
Details of the warrants outstanding at 30 April 2019 are
included below. The fair value of the warrants was determined using
the Black Scholes valuation model. The parameters used are detailed
below:
Warrant granted on: Various dates
between 8 September
2011 and
26 October
2011 At 29 March At 29 March
2017 2017
Warrant life remaining 4 years 2 years 2 years
(years)
Warrants granted 25,925,000 27,064,000 2,004,000
Risk free rate 2.2% 0.5% 0.5%
Expiry date 8 September 29 March 2020 29 March 2020
2021
Exercise price (GBP) 0.005 0.005 0.0075
Expected volatility 20% 20% 20%
Expected dividend yield - - -
Marketability discount 20% 20% 20%
Total fair value of warrants
granted (GBP) 23,308 7,125 66
The expected volatility for the warrants granted is based on the
historical share price volatility of similar listed entities from
their date of admission to the market up to the completion of the
first six months of trading. This is considered to be the most
reasonable measure of expected volatility, given the relatively
brief trading history of the Group.
The warrants issued in 2011 have been modified in the prior
year, with their expiry date being extended until 8 September 2021.
The fair value adjustment as required under IFRS 2 as a result of
this modification was immaterial and as such no change in the fair
value has been reflected in the Financial Statements.
The risk free rate of return is based on zero yield government
bonds for a term consistent with the warrant life. A reconciliation
of warrants in issue over the period to 30 April 2018 is shown
below:
Number Weighted average
exercise price
(GBP)
As at 1 May 2018 54,993,000 0.005
Outstanding as at 30 April 2019 54,993,000 0.005
Exercisable at 30 April 2019 54,993,000 0.005
_________ _____
The weighted average contracted and expected life (years) for
the above warrants is 2 years (2018 - 3 years).
16. Trade and Other Payables
Group Company Group Company
2019 2019 2018 2018
GBP GBP GBP GBP
Trade payables 171,548 36,553 - -
Amounts due to - 62,249 - -
group companies
Accruals 20,550 20,550 25,750 18,250
Accrued costs 322,802 - - -
514,900 119,352 25,750 18,250
-------- -------- ------- --------
Accrued costs represents costs of work undertaken at 30 April
2019.
17. Treasury Policy and Financial Instruments
The Group operates an informal treasury policy which includes
the ongoing assessments of interest rate management and borrowing
policy. The Board approves all decisions on treasury policy.
The Group has financed its activities by the raising of funds
through the placing of shares in the previous period.
There are no material differences between the book value and
fair value of the financial instruments.
18. Capital Commitments
There were no capital commitments authorised by the Directors or
contracted for at 30 April 2019.
19. Related Party Transactions
Silver Falcon Plc
The Group previously held 2,500,000 Ordinary shares of 1p each
at par in Hemogenyx Pharmaceuticals Plc (formerly Silver Falcon
Plc), all of which were sold in 2018. The Group charged an amount
of GBPnil (2018: GBP1,250) to Silver Falcon Plc in respect of
office space utilised on an ad hoc basis. As at the year end,
GBPNil (2017: GBPNil) was owed by Silver Falcon in respect of rent.
Geoffrey Dart was a director of Silver Falcon Plc at the time of
the rental charge.
Argo Blockchain Plc
During the year, the Group charged an amount of GBP3,300 (2018:
GBP1,375) to Argo Blockchain Plc in respect of office space
utilised on an ad hoc basis. As at the year end, GBPNil (2018:
GBPNil) was owed by Argo Blockchain Plc in respect of rent. Timothy
Le Druillenec is a director of Argo Blockchain Plc.
Briarmount Limited
In 2018 prior to the establishment of a Group payroll, the Group
paid GBPnil (2018: GBP3,333) to Briarmount Limited in respect of
consultancy services. As at the year-end, GBPNil (2018: GBPNil) was
owed to Briarmount Limited. Timothy Le Druillenec is a director of
Briarmount Limited.
Chesterfield Capital Limited
In 2018 prior to the establishment of a Group payroll, the Group
paid GBPnil (2018: GBP4,167) to Chesterfield Capital Limited in
respect of Director's fees. As at the year end, GBPNil (2018:
GBPNil) was owed to Chesterfield Capital Limited. Geoffrey Dart is
a director of Chesterfield Capital Limited.
20. Ultimate Controlling Party
The Directors believe there to be no ultimate controlling
party.
21. Events after the reporting period
There are no subsequent events.
22. Copies of the Annual Report
Copies of the annual report will be available on the Company's
website at www.dukemountcapitalplc.com and from the Company's
registered office, Room 4, 1st Floor, 50 Jermyn Street, London,
SW1Y 6LX.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR PMMJTMBAJBAL
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