REG - Dukemount Capital - Final Results
09/06/2023 10:30
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RNS Number : 2583C Dukemount Capital PLC 09 June 2023
Dukemount Capital Plc
("Dukemount" or the "Company")
Publication of Annual Report
The Board of Dukemount is pleased to announce the Company's audited financial
statements for the year ended 30 April 2022.
The Annual Report will be available on the Company's corporate website at
www.dukemountcapitalplc.com (//www.dukemountcapitalplc.com)
Following the publication of the Annual Report, the Company is in dialogue
with the FCA regarding lifting the suspension of trading in its shares.
The Board would like to re-iterate that it is very grateful to all its
stakeholders for their continuing patience and understanding in this matter.
For further information, please visit www.dukemountcapitalplc.com or contact:
Dukemount Capital Plc Email: info@dukemountcapitalplc.com
Geoffrey Dart / Paul Gazzard
Peterhouse Capital Limited Tel: +44 (0) 207 469 0930
Lucy Williams/Duncan Vasey
Chairman's Statement
I hereby present the annual financial statements for the year ended 30 April
2022. During the year the Group reported a loss of £1,127,395 (2021 - loss of
£913,827). These losses arose in the course of the Group: pursuing
transactions in its normal course of business as per its original stated
mandate of long dated income generation; impairment costs associated with two
development projects; maintaining the Company's listing on the Official List
of the UK Listing Authority by way of a standard listing including consultancy
fees, professional fees and directors' fees. As at the Statement of
Financial Position date the Group had £19,214 (2021: £24,657) of cash
balances.
During the year the Company entered into a 12-month convertible unsecured loan
facility for £1,000,000 of which £500,000 was available immediately and an
additional £500,000 available conditional on certain milestones.
In May 2021, the Company entered into a Joint Venture Agreement in relation to
flexibility power expert HSKB Ltd ("HSKB"). Pursuant to the Joint Venture
Agreement, Dukemount acquired 50% of the issued share capital of HSKB for
nominal value. The Company is deemed to exercise control through its direct
and indirect shareholding of DKE Flexible Energy and is therefore treated as a
subsidiary with full consolidation into the Group financial statements.
In September 2021, the Company signed off a subordinated funding package to
enable completion of the senior debt funding for gas peaking projects in
September 2021 and announced in October 2021 that HSKB had successfully
completed the purchase of two special purpose companies, each company
containing an 11kV gas peaking facility, ready to build, with full planning
permission and grid access. HSKB has also changed its name to DKE Flexible
Energy Limited ("DKE Energy"). Following the year end, the Company announced
that HSKB had completed the sale of the previously purchased two special
purpose companies containing the 11kV gas peaking facility for an aggregate
sale price of £350,000. Unfortunately the Company had little choice but to
pursue the sale despite having the funding in place to construct these assets.
The listing rules for standard list companies changed in December 2022 to
require a minimum market capitalization of £30m for any reverse, transaction
or listed value of the company, far below the combined value of these two
assets in the state they were being purchased or post construction. Thus, the
regulatory environment that evolved for Dukemount, as a standard listed
company, during the transaction to buy and then fund the construction of the
two assets meant the Company had no option but to dispose of these assets. The
proceeds of the sale, £350,000 in aggregate, have been used to repay a
portion of the sums owing to the lenders of the subordinated funding package.
Further to the disposal the lenders agreed to advance net proceeds of £50,000
in aggregate in addition to restructuring their existing funding arrangement.
The maturity date for the existing debt plus the further advance is to be 24
months from the date of the Advance (being 10 October 2024). The proceeds of
the further advance have been used to settle accrued liabilities of the
Company.
The board has taken steps through restructuring the Company's funding routes,
as described in detail in the RNS announcement of 11 October 2022, to ensure
that the financial position and prospects of the Company are maintained to
facilitate a future reverse transaction.
I would like to thank all those who have assisted and supported the Group
during the year.
Geoffrey Dart
Director
7 June 2023
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DUKEMOUNT CAPITAL PLC
Opinion
We have audited the financial statements of Dukemount Capital plc (the
'group') for the year ended 30 April 2022 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Parent Company
Statements of Financial Position, the Consolidated and Parent Company
Statements of Changes in Equity, the Consolidated and Parent Company
Statements of Cash Flows and notes to the financial statements, including
significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK-adopted
international accounting standards and as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act
2006.
In our opinion:
• the financial statements give a true and fair view of the state
of the group's and of the parent company's affairs as at 30 April 2022 and of
the group's loss for the year then ended;
• the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
• the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which indicates that
the group is dependent on successful fundraising or a future reverse takeover
transaction to continue as a going concern. The group has no contracts in
place at year-end or after year-end, with no trading plans. Additionally, the
group has a cash balance at the date of approval of the financial statements
that would not be able to support its operations and overheads for the
following twelve months. As stated in note 2, these events or conditions,
along with the other matters as set forth in note 2, indicate that a material
uncertainty exists that may cast significant doubt on the company's ability to
continue as a going concern. Our opinion is not modified in respect of this
matter.
It is a requirement of IFRS that, in determining that the going concern basis
is appropriate, the directors must consider a period of at least twelve months
from the date of approval of the accounts.
Our work in relation to going concern included:
• Discussing future plans with management and review of
budgets/forecast;
• Considering the appropriateness and sensitivity of the
assumptions used in the preparation of the forecasts;
• Reviewing the results of the subsequent events and assessing the
impact on the financial statements ;
• Reading board minutes for references to financing difficulties;
• Considering whether management have used all relevant
information in their assessment and enquiring whether any known events or
conditions beyond the period of assessment may affect going concern; and
• Reviewing and considering the impact of the new and amended
borrowing arrangements entered into after the year-end to assist the group to
continue its operations.
In view of the requirement to raise additional funds there is a material
uncertainty with regard to going concern because although the directors are
confident they can raise adequate funding that funding has not been agreed.
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the company's ability to continue to adopt the going concern
basis of accounting included reviewing management's assessment and going
concern forecasts for the next twelve months and forming an opinion on whether
the current financial position has the ability to fund the group's costs for
that period.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements on our audit and on the
financial statements. For the purposes of determining whether the financial
statements are free from material misstatement, we define materiality as the
magnitude of misstatement that makes it probable that the economic decisions
of a reasonably knowledgeable person would be changed or influenced. We also
determine a level of performance materiality which we use to assess the extent
of testing needed to reduce to an appropriately low level the probability that
the aggregate of uncorrected and undetected misstatements exceeds materiality
for the financial statements as a whole.
We determined the group materiality for the financial statements as a whole to
be £27,000 (2021: £33,000), with the parent company materiality set at
£25,000 (2021: £31,000). Performance materiality was set at £16,000 (2021:
£23,100) and £15,000 (2021: £21,700) respectively. The overall materiality
was based on 3% of net assets (2021: 5% of loss for the year). This
benchmark is considered appropriate because the principal driving force of the
business is the potential for a reverse takeover or further fundraising on its
asset position. Several adjustments were identified during the course of the
audit, however the materiality level of £27,000 was still considered
appropriate with no revisions necessary.
We agreed with the board that we would report all audit differences identified
during the course of our audit in excess of our triviality level of £1,350
(2021: £1,650) and £1,250 (2021: £1,550) for the group and parent company
respectively. There were certain misstatements identified during the course of
our audit that were individually considered to be material and adjusted for by
management.
Our approach to the audit
In designing our audit approach, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular we
assessed the areas involving significant accounting estimates and judgements
by the directors in respect of the recoverability of the debtors and
management's assessment in going concern and considered future events that are
inherently uncertain. We also addressed the risk of management override of
internal controls, including evaluation of whether there was evidence of bias
by the directors that represented a risk of material misstatement due to
fraud.
All subsidiaries were fully audited by the same audit team, with a full scope
audit being performed on the complete financial information of the
subsidiaries.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section we have
determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How our scope addressed this matter
Management override of controls
Under ISA (UK) 240 The Auditor's Responsibilities Relating to Fraud in an We considered the potential for the manipulation of financial results to be a
Audit of Financial Statements, there is a presumed significant risk of significant fraud risk.
management override of the system of internal controls.
Our work in this area included:
The primary responsibility for the prevention and detection of fraud rests
with management. Their role in the detection of fraud is an extension of their A review of journals processed during the period under review and in the
role in preventing fraudulent activity. preparation of the financial statements to determine whether these were
appropriate.
They are responsible for establishing a sound system of internal control
designed to support the achievement of policies, aims and objectives and to A review of key estimates, judgements and assumptions within the financial
manage the risks facing the entity; this includes the risk of fraud. statements for evidence of management bias, and agreeing to appropriate
supporting documentation.
Our audit is designed to provide reasonable assurance that the financial
statements as a whole are free from material misstatement, whether caused by An assessment of whether the financial results and accounting records included
fraud or error. any significant or unusual transactions where the economic substance was not
clear.
ISAs (UK) require the auditor to:
Identify fraud risks during the planning stages.
Inquire of management about risks of fraud and the controls put in place to
address those risks.
Understand the oversight given by those charged with governance of
management's processes over fraud.
Consider of the effectiveness of management's controls designed to address the
risk of fraud.
The audit team identified the risk as a Key Audit Matter, given the possible
investment from third parties into the business, in which case these parties
will be interested in confirming that no issues have arisen through the way
management has operated the group.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report10. Our opinion on the group and parent company financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
• the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the parent company financial statements and the part of the
directors' remuneration report to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors' remuneration specified by law
are not made; or
• we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group's and parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
• We obtained an understanding of the group and parent company and
the sector in which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management,
industry research, and the application of our cumulative audit knowledge and
experience of the sector.
• We determined the principal laws and regulations relevant to the
group and parent company in this regard to be those arising from Companies Act
2006, LSE listing rules, and Disclosure and Transparency Rules.
• We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
and parent company with those laws and regulations. These procedures included,
but were not limited to:
o Enquiries of management, review of minutes, and review of legal and
regulatory correspondence.
• We also identified the risks of material misstatement of the
financial statements due to fraud. We considered the non-rebuttable
presumption of a risk of fraud arising from management override of controls as
a key audit matter.
• As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Other matters which we are required to address
We were appointed by the Board on 25 November 2022 to audit the financial
statements for the year ended 30 April 2022 and subsequent financial periods.
Our total uninterrupted period of engagement is 10 years, covering the periods
ended 30 April 2012 to 30 April 2022.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the group or the parent company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Eric Hindson (Senior Statutory Auditor)
15
Westferry Circus
For and on behalf of PKF Littlejohn
LLP Canary
Wharf
Statutory Auditor
London E14 4HD
7 June 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 30 APRIL 2022
The Accounting Policies and Notes form part of the financial statements.
Note Group Group
2022 2021
Continuing operations £ £
Revenue from contracts with customers 3 - 3,296,730
Cost of sales - (3,483,700)
_______ _______
Gross Profit/(Loss) - (186,970)
Other income 5,033 14,750
Administrative expenses 4 (185,775) (741,636)
Impairment of goodwill 9 (125,101) -
Impairment of receivables 10 (578,779) -
_______ _______
Operating loss (884,622) (913,856)
Interest received - 29
Finance charges 4 (242,773) -
_______ _______
Loss before taxation (1,127,395) (913,827)
Income tax 7 - -
_______ _______
Loss for the year attributable to equity owners (1,127,395) (913,827)
_______ _______
Total comprehensive income for the year attributable to the equity owners (1,127,395) (913,827)
_______ _______
Total comprehensive income for the year attributable to:
Owners of Dukemount Capital Plc (1,176,088) (913,827)
Non-controlling interests 48,693 -
_______ _______
(1,127,395) (913,827)
_______ _______
Earnings per share attributable to equity owners
Basic and diluted (pence) 12 (0.0022) (0.0020)
_______ _______
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2022
Note 30 April 2022 30 April 2021
£ £
Assets
Non current assets
Intangible assets 9 350,000 -
_______ _______
350,000 -
Current Assets
Trade and other receivables 10 38,164 576,316
Cash and cash equivalents 19,214 24,657
_______ _______
Total Assets 407,378 600,973
_______ _______
Equity and Liabilities
Equity
Share capital 13 513,535 481,283
Share premium 14 1,249,305 1,115,035
Share based payments reserve 2,960 2,960
Retained deficit (3,344,508) (2,217,113)
_______ _______
(1,578,708) (617,835)
Current Liabilities
Trade and other payables 16 1,986,086 1,218,808
_______ _______
Total Equity and Liabilities 407,378 600,973
_______ _______
Total equity and liabilities attributable to :
Owners of Dukemount Capital Plc 358,685 600,793
Non-controlling interests 48,693 -
_______ _______
407,378 600,793
_______ _______
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2022
Note 30 April 2022 30 April 2021
£ £
Assets
Non current assets
Investment in Subsidiaries 8 350,601 101
Current Assets
Trade and other receivables 10 13,436 133,324
Cash and cash equivalents 16,115 14,505
_______ _______
Total Assets 380,152 147,829
_______ _______
Equity and Liabilities
Equity
Share capital 13 513,535 481,283
Share premium 14 1,249,305 1,115,035
Share based payments reserve 2,960 2,960
Retained deficit (3,321,698) (2,190,926)
_______ _______
(1,555,898) (591,648)
Current Liabilities
Trade and other payables 16 1,936,050 739,477
_______ _______
Total Equity and Liabilities 380,152 147,829
_______ _______
The Company has elected to take the exemption under Section 408 of the
Companies Act 2006 from presenting the Parent Company Income Statement and
Statement of Comprehensive Income. The loss for the Parent Company for the
year was £1,130,772 (2021: £680,677) and the total comprehensive loss for
the year was £1,130,772 (2021: £680,677).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 30 APRIL 2022
Share capital Share premium Share based payment reserve Retained deficit Total Non controlling interests Total
Equity
£ £ £ £ £
Balance as at 1 May 2020 439,033 952,211 30,499 (1,330,825) 90,918 - 90,918
Loss for the year - - - (913,827) (913,827) - (913,827)
Other comprehensive income - - - - - - -
Total comprehensive income for the year - - - (913,827) (913,827) - (913,827)
Transactions with equity owners
Issue of ordinary shares 42,250 162,824 - - 205,074 - 205,074
Exercise of warrants - - (27,539) 27,539 - - -
Total transactions with owners 42,250 162,824 (27,539) 27,539 205,074 - 205,074
Balance as at 30 April 2021 481,283 1,115,035 2,960 (2,217,113) (617,835) - (617,835)
Balance as at 1 May 2021 481,283 1,115,035 2,960 (2,217,113) (617,835) - (617,835)
Loss for the year - - - (1,156,761) (1,156,761) 29,366 (1,127,395)
Other comprehensive income - - - - - -
Total comprehensive income for the year - - - (1,156,761) (1,156,761) 29,366 (1,127,395)
Transactions with equity owners
Issue of ordinary shares 32,252 134,270 - - 166,522 - 166,522
Total transactions with owners 32,252 134,270 - - 166,522 - 166,522
Balance as at 30 April 2022 513,535 1,249,305 2,960 (3,373,874) (1,608,074) 29,366 (1,578,708)
COMPANY STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 30 APRIL 2022
Share Share premium Share based payment reserve Retained deficit Total
Capital
£ £ £ £ £
Balance as at 1 May 2020 366,166 789,671 30,499 (1,156,400) 29,936
Loss for the year - - - (680,677) (680,677)
Other comprehensive income - - - - -
Total comprehensive income for the year - - - (680,677) (680,677)
Transactions with equity owners
Issue of ordinary shares 42,250 162,824 - - 205,074
Exercise of warrants - - (27,539) 27,539 -
Total transactions with owners 42,250 162,824 (27,539) 27,539 205,074
Balance as at 30 April 2021 481,283 1,115,035 2,960 (2,190,926) (591,648)
Balance as at 1 May 2021 481,283 1,115,035 2,960 (2,190,926) (591,648)
Loss for the year - - - (1,130,772) (1,130,772)
Other comprehensive income - - - - -
Total comprehensive income for the year - - - (1,130,772) (1,130,772)
Transactions with equity owners
Issue of ordinary shares 32,252 134,270 - - 166,522
Total transactions with owners 32,252 134,270 - 166,522
Balance as at 30 April 2022 513,535 1,249,305 2,960 (3,321,698) (1,555,898)
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED 30 APRIL 2022
Note 2022 2021
£ £
Cash Flows from Operating Activities
Loss before taxation (1,127,395) (913,827)
Changes in working capital:
Shares issued in lieu of expenses 30,727 -
Impairment of goodwill 9 125,101 -
Impairment of receivables 10 578,779 -
(Increase)/decrease in trade and other receivables 10 (40,627) 33,242
(Decrease)/Increase in trade and other payables 16 (232,722) 265,070
Net Cash generated from/(used in) Operating Activities (666,137) (615,515)
Cash Flows from Financing Activities
Net proceeds from issue of shares 12 - 231,761
Loans received 16 1,000,000 -
Net Cash generated from Financing Activities
1,000,000 231,761
Cash Flows from Investing Activities
Investment in subsidiary (339,306) -
Net cash used in Investing Activities (339,306) -
Net Decrease in Cash and Cash Equivalents (5,443) (383,754)
Cash and cash equivalents at the beginning of the year 24,657 408,411
Cash and Cash Equivalents at the End of the Year 19,214 24,657
COMPANY STATEMENT OF CASH FLOWS
YEAR ENDED 30 APRIL 2022
Note 2022 2021
£ £
Cash Flows from Operating Activities
Loss before taxation (1,130,772) (680,677)
Adjustments for:
Changes in working capital:
Provision for inter company loans 10 491,628 -
Impairment 9 125,101 -
Shares issued in lieu of expenses 30,727 -
Decrease in trade and other receivables 10 1,060 283,435
(Decrease)/increase in trade and other payables 16 (176,828) 168,137
Net Cash used in Operating Activities (659,084) (229,105)
Cash Flows from Investing Activities
Funding issued/repaid from subsidiary undertakings - (145,516)
Investment in subsidiary (339,306)
Net Cash used in Investing Activities (339,306) (145,516)
Cash Flows from Financing Activities
Net proceeds from fundraising 12 - 231,761
Loans received 16 1,000,000 -
Net Cash generated from/used in Financing Activities
1,000,000 231,761
Net Increase/(Decrease) in Cash and Cash Equivalents 1,610 (142,860)
Cash and cash equivalents at the beginning of the year 14,505 157,365
Cash and Cash Equivalents at the End of the Year 16,115 14,505
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 APRIL 2022
The Accounting Policies and Notes form part of the financial statements.
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 now to ensure that the financial position
and prospects of the Company are maintained to facilitate a future reverse
transaction.
The parent company's registered office is located at 70 Jermyn Street, London
SW1Y 6NY.
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 consolidated financial statements of Dukemount Capital Plc have been
prepared in accordance with UK-adopted international accounting standards and
with the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The financial statements have been prepared
under the historical cost convention.
The financial statements are presented in Pound Sterling (£), rounded to the
nearest pound.
The consolidated entities include the wholly owned subsidiaries DKE (North
West) Limited and DKE (Wavertree) Limited; and DKE Flexible Energy Limited
in which the Company acquired a 50% equity interest and is deemed to exercise
control from the date of its acquisition on 20 May 2021.
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.
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.
The Group's interest in Gas Peaking projects is treated as a business
combination instead of an asset acquisition as there is an intention to enter
that business, supported by a business plan.
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 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 have discussed the
Company's position with its funders and professional advisors. In November
2022 the Company agreed a term sheet with its current investors and broker in
which its broker will facilitate a capital investment into the Company of
circa £250,000 to £400,000; a commitment to pay certain outstanding fees and
a commitment to provide further funding whilst looking for a possible reverse
transaction. The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the Group has
sufficient funds available to it following events after the year end.
The Directors note that the Group has always been successful with past
fundraises and continue to believe strongly in the Group's potential. However,
the success of securing funding or a reverse transaction has been identified
as a material uncertainty which may cast significant doubt over the going
concern assessment. Whilst acknowledging this uncertainty, based upon the
expectation of completing a successful fundraising in the near future, and the
continued support of it investors and broker, the Directors consider it
appropriate to continue to prepare the financial statements on a going concern
basis.
d) Changes in accounting policies and disclosure
In issue and effective for periods commencing on 1 May 2021
The Company has applied the following standard and amendments for the first
time for its annual reporting period commencing 1 May 2021
• Definition of Material - Amendments to IAS 1 and IAS 8;
• Definition of a Business - Amendments to IFRS 3;
• Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39 and
IFRS 7;
• Revised Conceptual Framework for Financial Reporting;
• Annual improvements to IFRS Standards 2018-2020 Cycle; and
• COVID-19 related rent concessions - Amendments to IFRS.
The adoption of these standards and amendments have not had a material impact
on the Group or Company in the year.
In issue but not effective for periods commencing on 1 May 2022
A number of new standards and amendments to standards and interpretations are
effective for annual periods beginning after 1 April 2022 and have not been
applied in preparing these financial statements. None of these are expected to
have a significant effect on the financial statements of the company, except
the following set out below:
There are no other IFRSs or IFRIC interpretations that are not yet effective
that would be expected to have a material impact on the Group or Company.
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.
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 from contracts with customers
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, and may include cost contingencies to take
into account specific risks within each contract. Cost contingencies are
reviewed on a regular basis throughout the life of the contract. However, the
nature of the risks on projects are such that they often cannot be resolved
until the end of the project and therefore may reverse until the end of the
project. 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. The estimated final
outcomes on projects are continuously reviewed, and adjustments are made when
necessary. Provision is made for all known or expected losses on individual
contracts once such losses are foreseen.
Where costs incurred plus recognised profits less recognised losses exceed
progress billings, the balance is recognised as contract assets within trade
and other receivables. Where progress billings exceed costs incurred plus
recognised profits less recognised losses, the balance is recognised as
contract liabilities within trade and other payables.
g) Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand and current and deposit
balances with banks. 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 considers that it is not exposed to major concentrations of credit
risk.
h) Financial Instruments
Financial assets
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, contract assets 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.
The Group currently does not recognise an allowance for expected credit losses
(ECLs) for all debt instruments not held at fair value through profit or loss,
as the effect would be immaterial on these financial statements. 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 assesses a non-performing debt based on the payment terms of the
receivable.
i) 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.
j) 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.
k) 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.
l) 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.
m) Share Capital
Ordinary shares are classified as equity.
n) 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 nonmarket vesting
conditions. Nonmarket 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
nonmarket vesting conditions. Nonmarket vesting conditions are included in
assumptions about the number of warrants that are expected to vest.
o) Investments
Equity investments in subsidiaries are held at cost, less any provision for
impairment.
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 £nil, 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.
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 asset of £407,378 as at 30 April 2022 (2021: net asset
£600,973).
q) 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 UK-adopted
international accounting standards. 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.
ii) Percentage completion method used for long term contracts
The Group makes an estimate of the stage of completion of a development
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.
iii) Intercompany balances
Subsequent to the year end, the Company has also commenced a group
reorganisation process of novating and capitalising intercompany debts and
whilst this process is ongoing they have concluded that no impairment is
required at 30 April 2022.
3. Revenue
Analysis of turnover by geography:
2022 2021
£ £
United Kingdom - 3,926,730
- 3,926,730
Analysis of turnover by category:
2022 2021
£ £
Property management and building development services - 3,926,730
- 3,926,730
All revenue is recognised over time.
4. Expenses by Nature
2022 2021
£ £
Directors' fees 51,250 102,500
Establishment costs 28,733 27,219
Legal and professional fees 40,763 460,629
Listing/ regulatory costs 26,592 89,689
Travel and accommodation 2,196 2,791
Other expenses 31,208 58,808
Finance charges 242,773 -
Impairment (Note 9) 125,101 -
Impairment (Note 10) 578,779 -
Total Administrative Expenses 1,127,395 741,636
Finance charges relate to fees incurred in financing activities; £101,250 of
these fees are accrued interest and arrangement fees; £141,523 were satisfied
by the issue of ordinary shares.
5. Directors' Remuneration
Company
2022 2021
£ £
Geoffrey Dart 37,500 85,303
Paul Gazzard 13,750 27,500
_____ _____
Total 51,250 112,803
______ ______
The Directors elected not to be paid, nor accrue their entitlement from
November 2021. Other benefits of £nil (2021: £10,303) were also paid to the
directors.
Details of directors' remuneration are included in the Directors' Remuneration
Report.
The average number of employees (including directors) during the year was 2
(2021: 2).
6. Services provided by the Company's Auditors
During the year, the Group obtained the following services from the Group's
auditors and its associates:
2022 2021
£ £
Fees payable to the Company's auditor for:
Audit of the Group and Company 26,000 26,250
Audit of the subsidiary undertakings 10,000 11,250
36,000 37,500
7. 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% (2021: 19.00%). The
differences are explained below:
2022 2021
£ £
Loss for the period before taxation (1,127,395) (913,827)
______ ______
Loss for the period before taxation multiplied by the standard (214,205) (173,627)
rate of UK Corporation of 19.00% (2021: 19.00%)
Losses carried forward on which no deferred tax asset is recognised 214,205 173,627
______ ______
- -
______ _____
Factors Affecting the Tax Charge of Future Periods
Tax losses available to be carried forward by the Group at 30 April 2022
against future profits are estimated at £3,282,222 (2021 - £2,154,827).
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.
There is no expiry date on carried forward tax losses.
8. Investment in subsidiaries
Company
2022 2021
£ £
Shares in Group Undertakings
As at 1 May 101 101
Additions in the year 475,601 -
Impairment (note 9) (125,101) -
At 30 April 350,601 101
Details of Subsidiaries
Details of the subsidiaries at 30 April 2022 are as follows:
Name of subsidiary Address of registered office Country of incorporation Share capital held by Parent % share capital held Principal activities
DKE (North West Limited) 70 Jermyn Street, London, UK England 100 100% Property management and development
DKE (Wavertree) Limited 70 Jermyn Street, London, UK England 1 100% Property management and development
Dukemount Limited 70 Jermyn Street, London, UK England 1 100% Dormant
DKE Flexible Energy Limited* 70 Jermyn Street, London, UK England 500 50% Flexibility power
ARL Limited 70 Jermyn Street, London, UK England indirect - Flexibility power
ADV 001 Limited 70 Jermyn Street, London, UK England indirect - Flexibility power
*On 20 May 2021, the Company acquired a 50% interest in the equity of HSKB
Limited under a Joint Venture and Shareholders' Agreement. HSKB Limited was
subsequently renamed DKE Flexible Energy Limited on 1 October 2021 following
its acquisition of 100% of the share capital of ARL 018 Limited and ADV 001
Limited.
9. Intangible assets
On 20 May 2021 Dukemount Capital Plc, entered into a Joint Venture Agreement
in relation to flexibility power expert HSKB Ltd ("HSKB"), of which Dukemount
non-executive director Paul Gazzard is a founder and shareholder. Pursuant to
the Joint Venture Agreement, Dukemount acquired 50% of the issued share
capital of HSKB for nominal value. On 1 October 2021 HSKB purchased two
special purpose companies, ARL 018 Limited and ADV 001 Limited. Each company
containing the rights to an 11kV gas peaking facility, ready to build, with
full planning permission and grid access. HSKB has changed its name to DKE
Flexible Energy Limited ("DKE Energy").
The assets and liabilities as of 1 October 2021 arising from the acquisition
of ARL 018 Limited and ADV 001 Limited are as follows:
Book value at acquisition Fair value adjustments Fair value at acquisition
£ £ £
Consideration 315,642 - 315,642
Cash 55 - 55
Assets 44,049 - 44,049
Liabilities (87,317) (87,317)
Reserves (52,750) (52,750)
-
At 30 April 411,605 - 411,605
During the period to 30 April 2022, the Group added £63,496 to the value of
the assets in relation to deposits resulting in a carrying value at 30 April
2022 of £475,101. In performing an assessment of the carrying value of the
assets at the reporting date, the Directors concluded that as no development
activity had been undertaken during the year ended 30 April 2022, it was
appropriate to book an impairment of £125,101, resulting in a carrying value
of £350,000 at 30 April 2022.
The Directors formed this opinion based upon their calculation of estimated
fair value less cost to sell. This was considered to be in excess of the
carrying value of the asset. Further post year end, on 5 October 2022, the
Company announced that DKE Flexible Energy sold the two special purpose
companies, for an aggregate sale price of £350,000. Despite having the
funding in place to construct these assets, the regulatory environment that
evolved for the Company during the transaction to buy and then fund the
construction of them meant there was little option but to dispose of the
assets. The proceeds of the sale have been used to repay a portion of the sums
owing to the Company's lenders.
10. Trade and Other Receivables
Group Company Group Company
2022 2022 2021 2021
£ £ £
Other receivables, including prepayments 38,164 13,436 15,100 14,496
Amounts owed by group undertakings - - - 118,828
Amounts recoverable on contracts - - 561,216 -
38,164 13,436 576,316 133,324
The fair value of all receivables is the same as their carrying values stated
above.
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 in respect of work undertaken during the year with appropriate provision
being made in accruals and deferred income for costs incurred in undertaking
such work but which had not been invoiced. The directors have reviewed the
balances due under the funding arrangement and taken the decision that these
are not recoverable and impaired the amount of £578,779 owing at 30 April
2022 (2021: £561,216) in full.
Amounts due from group undertakings are unsecured, interest free, have no
fixed date of repayment and repayable on demand. Advances were made to the
subsidiaries in order to fund the redevelopment projects. As these projects
have reached practical completion, the Company has made a bad debt provision
for the amounts owing of £491,628 in full.
11. Dividends
No dividend has been declared or paid by the Company during the year ended 30
April 2022 (2021: 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.
2022
2021
£ £
Loss attributable to equity holders of the
Group
1,127,395 913,827
______ ______
Total
1,127,395 913,827
______ ______
Weighted average number of ordinary shares in issue
(thousands) 504,873
456,930
______ _____
2022 2021
Basic and diluted profit per share
2022 2021
£ £
Continuing Operations - basic and
diluted
0.0022 0.0020
13. Share Capital
Group and Company
2022 2021
No. No
Allotted, issued and fully paid (000's) (000's)
Beginning of year 481,283 439,033
New shares issued (32,252,308 ordinary shares of £0.001 each)
32,252
42,250
At 30 April 513,535,974 ordinary shares of £0.001 each 513,535 481,283
(2021: 481,283,666 ordinary shares of £0.001 each)
14. Share Premium
Group and Company
Share Premium Share issue costs Net Share Premium
£ £ £
At 1 May 2021 1,140,838 (25,803) 1,115,035
Issue of shares 134,270 - 134,270
At 30 April 2022 1,274,108 (25,803) 1,249,305
15. Share Based Payments
Details of the warrants outstanding at 30 April 2022 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: At 29 March 2017
Warrant life remaining (years) 1 year
Warrants granted 27,064,000
Risk free rate 0.5%
Expiry date 29 March 2023
Exercise price (£) 0.005
Expected volatility 20%
Expected dividend yield -
Marketability discount 20%
Total fair value of warrants granted (£)
7,125
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 2017 were modified in 2021, with their expiry date
being extended until 29 March 2023. 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 2022 is shown below:
Number Weighted average exercise price (£)
As at 1 May 2021 10,739,000 0.005
Expired during year (10,675,000) 0.005
Outstanding as at 30 April 2022 64,000 0.005
Exercisable at 30 April 2022 64,000 0.005
_________ _____
The weighted average contracted and expected life (years) for the above
warrants is 1 year (2021 - 1 year).
16. Trade and Other
Payables
Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Trade payables 806,296 772,549 1,052,660 615,038
Other creditors 1,101,250 1,101,250 - -
Accruals 78,540 62,251 166,148 124,439
1,986,086 1,936,050 1,218,808 739,477
In May 2021, the Company entered into a 12-month convertible unsecured loan
facility for £1,000,000 ("Facility") of which £500,000 was available
immediately and the additional £500,000 available conditional on certain
milestones being met by the Company. The Facility was interest free and
unsecured. The Facility was convertible at the election of the Company or the
Lenders into ordinary shares at a deemed issued price of £0.0065 per share,
subject to the Company having sufficient authorities in place and to the
publication of any prospectus required pursuant to the Prospectus Regulation
Rules. In June 2021, the Company issued 13,286,713 ordinary shares as payment
under the Facility Agreement in relation to fees. An availability fee of
£70,000, £10,000 drawdown fees and reimbursement of legal fees were
converted into ordinary shares at 0.715p.
In September 2021, the Company signed off a subordinated funding package
necessary to enable completion of the senior debt funding for the gas peaking
projects first announced via its JV with HSKB in March 2021 ("Generation
Project"). As a condition for this funding package, the Company also made
significant positive adjustments to its balance sheet and is restructuring its
board with seasoned energy market executives to enhance the company's ability
to deliver the projects in its recently announced JV. The Chesterfield
convertible loan of £500,000 will be fully converted into ordinary shares of
the company at £0.0065 price per share. The £1,000,000 unsecured loan
facility signed in May 2021 was repaid from the new funding and that facility
was terminated. The new funding package assembled by the Company comprises:
£3,000,000 mezzanine, 18 month loan facility with 4 month repayment holiday.
£1,000,000 was drawn down immediately upon execution with a balance of
£1,101,250 at 30 April 2022 including charges and accrued interest. The terms
of this new facility were varied in October 2022 with total amounts due
deferred and to be repaid under new terms (Note 21)
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.
There are no material differences between the book value and fair value of the
financial instruments.
Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Carrying amount of financial assets
Measured at amortised cost 407,378 380,152 600,973 147,829
407,378 380,152 600,973 147,829
Carrying amount of financial liabilities
Measured at amortised cost 1,986,086 1,936,050 1,218,808 739,477
1,986,086 1,936,050 1,218,808 739,477
18. Capital Commitments
There were no capital commitments authorised by the Directors or contracted
for at 30 April 2022.
19. Related Party Transactions
The Directors are Key Management and information in respect of key management
is given in Note 5.
A bonus accrual brought forward from prior year of £75,000 relating to
Geoffrey Dart has been cancelled and reversed as at 30 April 2022.
At 30 April 2022, the Company was due from DKE (Wavertree), a wholly owned
subsidiary of the Group, £223,365 (2021: due to £103,065). The Company has
provided against this amount in full (Note 9).
At 30 April 2022, the Company was due from DKE (Northwest), a wholly owned
subsidiary of the Group, £268,263 (2021: due to £15,763). The Company has
provided against this amount in full (Note 9).
At 30 April 2022, the Company was due £339,306 (2021: nil) from DKE Flexible
Energy Limited, a company in which Dukemount owns 50% of the shares and in
which Paul Gazzard is a shareholder. Dukemount loaned DKE Flexible Energy
Limited £329,306 on an interest free, repayable on demand loan on 6 October
2021 to acquire ADV 001 Limited and ARL 018 Limited in which Paul Gazzard was
a director from 6 September 2021 to 6 October 2022. Following the year end,
DKE Flexible Energy Limited sold its interests in ADV 001 Limited and ARL 018
Limited for aggregate proceeds of £350,000. The proceeds were used by
Dukemount to satisfy debt.
20. Ultimate Controlling Party
The Directors believe there to be no ultimate controlling party.
21. Events after the reporting period
On 5 October 2022 the Company announced that HSKB Limited ("HSKB"), in which
it holds a 50% interest, had completed the sale of two special purpose
companies containing an 11kV gas peaking facility, ready to build, with full
planning permission and grid access for an aggregate sale price of £350,000.
The proceeds of the sale have been used to repay a portion of the sums owing
to the lenders as detailed in the announcement of 15 September 2021.
Further to the disposal of the gas peaking facilities, the lenders agreed to
advance net proceeds of £50,000 in aggregate in addition to restructuring
their existing funding arrangement. The maturity date for the existing debt
plus the further advance is to be 24 months from the date of the Advance
(being 10 October 2024). The proceeds of the further advance have been used to
settle accrued liabilities of the Company.
The board has taken steps to ensure that the financial position and prospects
of the Company are maintained to facilitate a future reverse transaction. To
that end, the board has confirmed that the directors have released the Company
from all accrued but unpaid emoluments; Chesterfield Capital Limited have
confirmed that the outstanding balance of £500,000 due to Chesterfield
Capital Limited will be converted at a price of 0.65p. Such subscription to
settle all balances due from the Company and to be settled by the issuance of
shares at the earlier of (a) the approval of a prospectus, (b) the direction
of the board of the Company and (c) 31 December 2023.
The restructuring and further advance debt is convertible at the nominal value
of 0.1p of the ordinary shares of the Company. The further advance is subject
to a 5% implementation fee. The Company has settled a 9.5% extension fee of
£74,575 to the Noteholders in the form of ordinary shares at nominal value.
Accordingly the Company issued 74,575,000 ordinary shares in the Company on 12
October 2022 and 28,132,190 ordinary shares on 28 October 2022.
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