Adams Regulatory News (ADA)

RNS Number : 5341O

Adalta Real PLC

30 June 2010

 

For immediate release 30 June 2010

 

Adalta Real Plc

 

("Adalta Real" or the "Company")

 

 

Final Results for the year ended 31 March 2010

 

The Board of Adalta Real Plc ("Adalta Real" or the "Company") is pleased to present the Final Results for the Company for the year ended 31 March 2010, of which circa. 4 months was as Dawmed Systems Plc and circa. 8 months has been as Adalta Real Plc.

 

Adalta Real is a London Stock Exchange AIM listed company, previously named Dawmed Systems Plc in manufacturing/distribution of health care capital equipment and converted in August 2009 into a trading property Company in the world of commercial real estate. Our services range from AGENCY, comprising property acquisitions, sales, lettings, rent reviews and lease renewals and the like on behalf of Clients, DEVELOPMENT comprising in-house property development projects and joint venture development projects and INVESTMENT in long term retained in-house developed commercial properties and in long term external commercial property acquisitions.

 

Our strategy is to seek to achieve superior long term growth in shareholder value by focusing on:

 

 

·; fee earning Agency on behalf of the most sustainable commercial businesses;

·; fee earning Consultancy applied to Clients' property development proposals;

together with:

·; in-house commercial property development and sale of the tenanted investment assets;

 

·; in-house commercial property development and retention of the tenanted investment assets;

 

·; joint venture commercial property development where appropriate, usually followed by sales of the tenanted investment assets;

 

·; optimisation of returns through financing arrangements.

 

KEY POINTS

 

- Gross consideration for sale of original subsidiary £1,044,500;

 

- New Investment Policy implemented over only 7¾ months;

 

- Start up costs and 4¼ months of running original Group administration costs produces loss of £313,986;

 

- Company has begun to generate revenue;

 

- Commercial Property Agency and Development/Investment consultancies progress well beyond Directors expectations;

 

- Company working closely with a major retail company in respect of Agency and Consultancy services;

 

- Commercial property acquisitions and associated development activities expected to contribute significantly to Company performance in current year;

 

- Company has complied with AIM Rules regarding implementation of New Investing Policy;

 

- Board anticipates that Company investments will produce satisfactory results in the current year.

Commenting on today's announcement, Kevin Gilmore, Executive Chairman of Adalta Real Plc, said: "I am pleased to be able to report that your Company has achieved some noteworthy successes during only 7¾ months of New Investing Policy activities, which have laid strong foundations for the current and subsequent years upon which I am confident we can build an exciting future in the carrying out of our defined New Investing Policy".

 

 

-- ENDS --

 

 

Enquiries:

 

Adalta Real Plc Mob: 07785 396666

Kevin M Gilmore, Executive Chairman Tel: 01295 671923

 

Beaumont Cornish Limited

Roland Cornish Tel: 020 7628 3396

 

Bishopsgate Communications Limited

Maxine Barnes Tel: 020 7562 3350

 

Adalta Real plc

CHAIRMAN'S STATEMENT

 

 

I am pleased to present the Final Audited Results for the year ended 31 March 2010.

 

During the early part of the year, until 6 August 2009, the Company was a holding and management company which on that date disposed of its subsidiary, Dawmed International Limited ('DIL'), whose principal activities were the design, manufacture, sale and servicing of healthcare decontamination equipment and consumables, to Wassenburg & Co. B.V. ("Wassenburg").

 

Since then, we have become a property company whose services range from AGENCY, comprising property acquisitions, sales, lettings, rent reviews and lease renewals, development and investment consultancies and the like on behalf of Clients, DEVELOPMENT comprising in-house property development projects and joint venture development projects and INVESTMENT in long term retained in-house developed commercial properties together with long term external commercial built property acquisitions.

 

Our strategy is to seek to achieve superior long term growth in shareholder value by focusing on:

 

·; fee earning Agency on behalf of the most sustainable commercial businesses;

·; fee earning Consultancy applied to Clients' property development/investment proposals;

together with:

·; in-house commercial property development and sale of the tenanted investment assets;

 

·; in-house commercial property development and retention of the tenanted investment assets;

 

·; joint venture commercial property development where appropriate, usually followed by sales of the tenanted investment assets;

 

·; optimisation of returns through financing arrangements.

 

At the year end of 31 March 2010 the Company had no subsidiaries and accordingly the financial statements are presented on an unconsolidated basis ie. as a single entity. However, it should be noted that for consistency and in anticipation of expected requirements to prepare future single or consolidated accounts using International Financial Reporting Standards ('IFRS'), the Board has decided to prepare these financial statements using IFRS.

 

Financials

 

The proceeds from the sale of DIL to Wassenburg (the "Sale") finally amounted to £1,044,500 gross excluding a small amount of interest. This figure comprises the initial consideration of £950,000 gross as at 3 July 2009 and an additional £94,500 which was a Completion Accounts adjustment agreed on 17 December 2009 relating to the net assets of DIL achieved as at 30 June 2009, all in accordance with the terms of the Share Purchase Agreement. The beneficial interest amounted to £900.The audited accounts of the Company for the 18 months period to 31 March 2009 showed a book value for the shares in DIL of £800,000, representing the best estimate at the time of £1,015,000 for the total proceeds less £215,000 to cover the costs in connection with the Sale.

 

In the year ended 31 March 2010, the loss from continuing operations amounted to £313,986. This reflects not only the substantial start-up costs of implementing the New Investing Policy in September 2009, but also the previous administration costs of running the Dawmed Group, including management costs in connection with the subsidiary company, during the 4¼ months period from the beginning of the year on 1 April 2009 to the Sale date of 6 August 2009.

 

I am pleased to report that the Company has begun to generate revenue in accordance with the New Investing Policy of which a small amount, £10,952, related to the period prior to 31 March 2010.

 

Whilst the Company showed an operating profit of £83,176 in the 18 months to 31 March 2009, the 2010 results are not comparable with that period because the implementation of the New Investing Policy resulted in entirely different setting up and operating activities. Accordingly, I have not attempted to make comparisons of the trading results.

 

The total equity attributable to shareholders at 31 March 2010 was £564,479 (2009 - £851,277), essentially comprising the proceeds from the Sale less the costs of the Sale and the administrative costs of running the Company for circa. eight months.

 

The working capital position altered firstly in line with the substantial changes in the level of activity during the period and secondly due to the change of year end. Net current assets (excluding the shares in Dawmed International Limited) increased by £489k to £540k, including cash balances which increased by £535k to £544k. Total assets decreased by £227k to £637k.

 

Outlook and Future Prospects

 

The Company's New Investing Policy, which was approved by a substantial majority of shareholders at the General Meeting held on 30 July 2009, is based predominantly upon commercial property agency and development/investment consultancy, the acquisition and development of and/or investment in commercial property comprising land or buildings, together with potential corporate acquisitions, the latter mainly in the property and financial sectors.

 

Following the establishment of an experienced in house team, appropriate facilities and key commercial property relationships, the Company's commercial property agency and consultancies have already made substantial progress well beyond the Directors' expectations and it is anticipated that these elements of the business will not only go from strength to strength, but will also materially assist the Company's cash flow and overall performance in these early stages of its New Investing Policy activities.

 

In particular, the Company continues to be pleased to be working closely with a major retail company through the provision of the Company's services including, but not limited to, commercial property agency including development/investment consultancy, land and property acquisitions, sales and leases as well as potential development opportunities in the long term, predominantly in, but not limited to, the South of England.

 

Acquisitions and associated development activities in commercial property are intended to commence in the current year and are anticipated to contribute significantly to the overall performance of the Company over the years ahead. Future specific property acquisitions and developments will each be separately financed on a case by case basis by appropriate combinations of internal and external arrangements still to be concluded. On the other hand, the acquisition of land for, and development of high end residential property is unlikely to be pursued until the long term effects of the current national fiscal and structural deficits, and the associated recession (which I opine may still "double dip"), have become clearer.

 

The Company is already an active investor and further investments may result in the Company acquiring the whole or part of a company or project. The Company's future investments may take the form of equity, joint venture, convertible instruments, licence rights, or other financial instruments as the Directors deem appropriate.

 

In the Annual Report and Accounts for the 18 month period ended 31 March 2009, issued on 28 August 2009, the Directors stated their belief that "the portents for the remaining 7 months [ie. of the financial year ended 31 March 2010] are reasonably good in terms of laying the foundations for future [New Investing Policy] activity and generating sufficient revenue to cover a reasonable proportion of the initial, but not unsubstantial overhead costs which will of course include the one off setting up costs". In the event, I am delighted to confirm that the achievements have exceeded those beliefs and expectations and have, in the Board's further belief, now firmly established the foundations for not only the current activities to generate increased revenues in the current year, but also for commercial property development activities to commence and to grow in both number and size in future years.

 

With reference to the AIM Rules referred to in the 14 July 2009 Circular to Shareholders, the Company is confident that its New Investing Policy will have been implemented within the required twelve months period from the General Meeting held on 30 July 2009 and thus be in compliance with those Rules, having invested over half of its available funds in its Agency and Consultancy services.

 

Sadly, we lost a valuable and experienced member of our team in the person of Gordon Francis Arbib, who died on 9 April 2010 and who will be sorely missed as a Director, a colleague and a friend.

 

Before concluding, I would like to take this opportunity to express my thanks to the team at Adalta Real, all of whom have made great progress in the relatively short period of its implementation of the New Investing Policy.

 

Notwithstanding the inevitable consequences of the appalling state of the Country's economy due, inter alia, to its enormous fiscal and structural deficits, the Board is hopeful in its anticipation that your Company's investments to date will produce satisfactory results in the current year and in the years ahead.

 

Kevin M Gilmore FRICS

Executive Chairman

 

29 June 2010

Adalta Real plc STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March 2010	Notes	Year ended 31 March 2010	18 Month Period ended 31 March 2009
		£	£
Revenue	4	10,952	270,000
Cost of sales		(7,184)	-
Gross profit		3,768	270,000
Administrative expenses		(303,562)	(186,824)
(Loss)/profit from operations before one-off items	5	(299,794)	83,176
Other expenses:
Loss on disposal of/impairment of investments		(15,092)	(1,851,860)
Loss from operations		(314,886)	(1,768,684)
Finance income		900	-
Loss before taxation	5	(313,986)	(1,768,684)
Taxation	9	-	-
Loss after taxation		(313,986)	(1,768,684)
Total comprehensive income for the period attributable to shareholders		(313,986)	(1,768,684)
Loss per share
Basic	10	(1.52)p	(8.58)p
Diluted	10	(1.52)p	(8.58)p

 

All amounts relate to continuing operations. During the year, there was no other comprehensive income.

Adalta Real plc STATEMENT OF FINANCIAL POSITION 31 March 2010	Notes	31 March 2010	31 March 2009
		£	£
ASSETS
Non-current assets
Property, plant and equipment	11	24,216	-
		24,216	-
Current assets
Inventories	13	3,023	-
Trade and other receivables	14	65,677	54,618
Cash and cash equivalents	17	544,362	9,948
		613,062	64,566
Non-current assets classified as held for sale	12	-	800,000
Total current assets		613,062	864,566
Total assets		637,278	864,566
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables	15	72,799	13,289
Equity
Called up share capital	18	1,030,665	1,030,665
Share premium account		1,558,079	1,558,079
Retained earnings		(2,024,265)	(1,737,467)
Total equity		564,479	851,277
Total equity and liabilities		637,278	864,566

 

 

Adalta Real plc STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2010	Share capital	Share premium	Retained earnings	Total
	£	£	£	£
At 1 October 2007	1,030,665	1,558,079	19,445	2,608,189
Total comprehensive income:
Profit for the period before impairment of investments	-	-	83,176	83,176
Impairment of investments	-	-	(1,851,860)	(1,851,860)
Total comprehensive income			(1,768,684)	(1,768,684)
Reserve movement arising from share based payments	-	-	11,772	11,772
At 31 March 2009	1,030,665	1,558,079	(1,737,467)	851,277
Total comprehensive income	-	-	(313,986)	(313,986)
Reserve movement arising from share based payments	-	-	27,188	27,188
At 31 March 2010	1,030,665	1,558,079	(2,024,265)	564,479

Adalta Real plc STATEMENT OF CASH FLOWS for the year ended 31 March 2010	Notes	Year ended 31 March 2010	18 Month Period ended 31 March 2009
		£	£
Cash flows from operating activities
Loss from operations for the financial period		(314,886)	(1,768,684)
Adjustments for depreciation		1,643	-
Impairment of investments		-	1,851,860
Loss on disposal of subsidiary		15,092	-
Adjustments for share based payment expense		27,188	11,772
Cash flows from operations before changes in working capital		(270,963)	94,948
Changes in working capital
Increase in inventories		(3,023)	-
(Increase)/decrease in trade and other receivables		(11,059)	64,283
Increase/(decrease) in trade and other payables		59,510	(234,698)
Total changes in working capital		45,428	(170,415)
Net cash absorbed by operating activities		(225,535)	(75,467)
Cash absorbed by total operating activities		(225,535)	(75,467)
Cash flows from investing activities
Interest received		900	-
Proceeds from Disposal of subsidiary undertaking		1,044,500	-
Less expenditure in connection with disposal of subsidiary undertaking		(259,592)	-
Net expenditure on non-property related non-current assets		(25,859)	-
Net cash generated from investing activities		759,949	-
Net increase/(decrease) in cash and cash equivalents		534,414	(75,467)
Cash and cash equivalents at beginning of period		9,948	85,415
Cash and cash equivalents at end of period	17	544,362	9,948

 

Adalta Real plc

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 March 2010

 

 

1. Authorisation of financial statements

 

Adalta Real plc is a public limited company ('Company') incorporated and domiciled in the United Kingdom under the UK Companies Acts (Registration number 04075473), whose shares are publicly traded on the Alternative Investment Market (AIM). The address of the registered office is Church Court, Stourbridge Road, Halesowen, West Midlands, B63 3TT, United Kingdom.

 

The financial period represents the year ended 31 March 2010. At the beginning of the year, the Company's principal activities were that of a holding and management company. Its subsidiary company, Dawmed International Limited, was engaged in the design, development, manufacture, sale, distribution, testing and servicing of washer disinfectors and washer disinfector dryers for the primary and secondary healthcare sectors. This subsidiary was sold on 6 August 2009.

 

Following the resolution to sell the subsidiary, a new investment policy was introduced. Following the implementation of the new investment policy, the Company's principal activities have become commercial property agency (including development consultancy and investment consultancy). Going forward, it will also include the acquisition and development of and/or investment in commercial property and the eventual acquisition of land and development of high end residential property, together with potential corporate acquisitions, the latter mainly in the property sector.

 

1 Statement of compliance

 

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Standard Interpretations Committee (IFRIC) interpretations as endorsed by the European Union and with those parts of the Companies Acts 2006 applicable to companies reporting under IFRS.

 

2 Significant accounting policies

 

Basis of accounting

The financial statements have been prepared on the historical cost basis. The accounting policies set out below have been applied consistently to all periods presented in this report and in preparing an opening IFRS balance sheet at 1 October 2007 for the purposes of the transition to IFRS.

 

The financial statements are presented in Pounds Sterling, the functional currency of the Company. The functional currency is the currency of the primary economic environment in which the Company operates.

 

Basis of preparation

For all periods to 31 March 2009, the Company prepared its audited financial statements under UK Generally Accepted Accounting Principles (UK GAAP). For the period ended 31 March 2010 the Company has prepared its financial statements under IFRS.

 

This report has been prepared in accordance with the accounting policies set out below, taking into account the requirements and options in IFRS 1 'First-time adoption of International Financial Reporting Standards'. The transition date for the Company's application of IFRS is 1 October 2007. A reconciliation of the statement of comprehensive income (previously profit and loss account) and statement of financial position (previously balance sheet) from previously reported UK GAAP to IFRS is not required as the transition to IFRS has not resulted in any changes being required to the amounts already disclosed.

 

The comparative figures for the 18 months ended 31 March 2009 have been restated for the adoption of IFRS, and these changes are presentational only. Accordingly, it has been deemed unnecessary to provide a reconciliation of equity and reconciliation of loss to highlight the effect on the figures of the transition from UK GAAP to IFRS.

 

Reclassification

Investments in subsidiaries with a net book value of £nil (2009: £800,000) have been reclassified under IFRS to non-current assets classified as held for sale. Previously, they were classified as investments under UK GAAP.

 

Transition to IFRS

IFRS 1 grants certain exemptions from the full requirements of IFRS in the transition period. The following exemptions have been taken in these consolidated financial statements:

 

IFRS 2 - Share-Based Payment - has not been applied to share-based payments granted before 7 November 2002 nor those granted after 7 November 2002 that had vested prior to 1 October 2007. The Company has adopted IFRS 2 for share options granted after 7 November 2002 which had not vested at 1 October 2007. The adoption of IFRS 2 has not required numerical adjustments to be made to the balance sheet at 1 October 2007 or to the statement of comprehensive income for the 18 months ended 31 March 2009.

 

Going concern

The directors have reviewed the cash flow commitments that will be required during the next twelve months to continue the implementation of the new investing policy of the Company. This review indicated that the bank and cash balances at 31 March 2010 would be sufficient to provide adequate resources to meet the ongoing requirements of the Company during the period of the review. As a result, the directors have concluded that there are no material uncertainties regarding going concern and have therefore adopted the going concern basis of accounting.

 

Exemption from preparing consolidated financial statements

The financial statements contain information about Adalta Real Plc as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 399(2) of the Companies Act 2006 from the requirements to prepare consolidated financial statements, as it was not a parent undertaking at 31 March 2010.

 

Non-current assets classified as held for sale

In line with IFRS 5 "Non-current assets held for sale and discontinued operations", at 31 March 2009, the company classified as held for sale its operating subsidiary Dawmed International Limited because agreement had been reached for the sale of the business to Wassenburg & Co BV. The sale completed on 6 August 2009 for a consideration which was subsequently agreed at £1,044,500, being the original fixed amount of £950,000 gross plus an additional £94,500 plus interest of £900, which was an adjustment relating to the net assets of DIL as at 30 June 2009 in accordance with the terms of the share purchase agreement.

 

Use of assumptions and judgements

The preparation of these financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future period which is affected.

 

The significant areas in which estimates and assumptions are made relate to the useful life of plant and equipment (5-10 years) and measurement of the value of share based payments (see note 19.

 

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable by the Company for services provided in the normal course of business, excluding VAT and trade discounts.

 

Revenue from property agency is recognised in the period in which the Company becomes entitled to consideration, which is usually the date of completion of a property transaction.

 

Where services are provided on a retainer basis, revenue is spread evenly over the duration of the contract. Revenue from other contract activities and consultancy services are recognised with reference to the stage of completion of the provision of services. The amount by which revenue recognised on contract activities is in excess of invoiced amounts is included in trade and other receivables as amounts recoverable on contract.

 

Interest income is accrued on a time-apportioned basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

 

Operating segments 

The Company has adopted IFRS 8 'Operating Segments' during the year. IFRS 8 provides segmental information for the Company on the basis of information reported internally to the chief operating decision-maker for decision-making purposes. The Company considers that the role of chief operating decision-maker is performed by the Board of Directors. The adoption of IFRS 8 has not had any impact on the performance or position of the Company but has affected the segmental reporting disclosures as the property activities and management services divisions are both reviewed by the Board.

 

Property, plant and equipment

Property, plant and equipment assets are stated at cost less accumulated depreciation and any recognised impairment loss.

 

Depreciation is charged so as to write off the cost of assets on a straight line basis over their estimated useful economic lives to their residual values. The rates used for each major asset category, which are reviewed annually, are:

 

Computer equipment	20%
Fixtures and other equipment	10%

 

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the statement of comprehensive income.

 

Impairment of assets

At each balance sheet date the Company reviews the carrying value of its non current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Any impairment losses are recognised in the period in which they occur.

 

An impairment loss is only reversed if there is a subsequent increase in the recoverable amount that can be related objectively to an event occurring after the impairment loss was recognised.

 

Leasing

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

 

Borrowing costs

Borrowing costs are recognised as an expense when incurred.

 

 

 

Inventories

Inventories comprise signboards and stationery which are held by the company at the year-end, and had not been matched with a related sale at the year-end date. Inventories are valued at the lower of cost and net realisable value using the first in first out basis, after making due allowance for obsolete and slow-moving items. Cost is defined as standard cost or purchase cost and includes all direct costs incurred in bringing each product to its present condition. Net realisable value is based on an estimated selling price less any further costs expected to be associated with a sale.

 

Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through sale rather than continuing use. This condition is considered to be reached only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale and completion should be expected within one year from the period end date.

 

Non-current assets and disposal groups are measured at the lower of carrying amount and fair value less costs to sell and classified as current.

 

Taxation

The tax expense represents the sum of the current tax expense and deferred tax expense.

 

The current tax payable is based on an estimation of the amount due on the taxable profit for the period. Taxable profit is different from net profit as reported in the income statement because it excludes items of income or expenditure which are not taxable or deductible in the period as a result of either the nature of the item or the fact that it is taxable or deductible in another period. The Company's liability to current tax is calculated by using tax rates that have been enacted or substantially enacted by the period end date.

 

Deferred tax is accounted for on the basis of temporary differences arising from the differences between the tax base and accounting base of assets and liabilities.

 

Deferred tax is recognised for all taxable temporary differences, except to the extent where it arises from the initial recognition of an asset or liability in a transaction that is not a business combination. Deferred tax is not provided for on the initial recognition of goodwill. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised.

 

Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case it is dealt with within equity. It is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.

 

Financial instruments

Financial assets and financial liabilities are recognised on the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

 

Investment in subsidiaries

Investment in subsidiaries is stated at cost less any provision for impairment.

 

Trade receivables

Trade receivables are classified as loans and receivables and are initially recognized at invoiced cost less any allowance made for doubtful receivables. They are subsequently measured at their amortised cost less any provision for impairment. A provision for doubtful amounts is made where there is a realistic belief that the full amount of the debt is no longer recoverable. Balances are written off when the probability of recoverability is assessed as remote. At the year-end the Company had no bad and doubtful debts.

 

Other receivables

Other receivables include amounts held in escrow pending any claims in respect of the disposal of Dawmed International Limited.

 

Cash and cash equivalents

Cash and cash equivalents in the balance sheet consist of cash at bank, cash in hand and short term deposits with an original maturity of three months or less. For the purposes of the statement of cash flows, cash and cash equivalents are stated net of any outstanding bank overdrafts.

 

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

 

Bank borrowings

Interest bearing bank loans and overdrafts are recorded at their fair value. Finance charges are allocated to the income statement using an effective interest rate, on the outstanding carrying value of the instrument.

 

Trade payables

Trade payables are not interest bearing and are stated at their amortised cost.

 

Equity instruments

Equity instruments are initially measured at fair value on initial recognition net of transaction costs

 

Share based payments

The Company has applied the requirements of IFRS 2 Share-based Payment. In accordance with the IFRS1 exemption, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that had not been vested prior to 1 October 2007.

 

The Company issues equity-settled share-based payments to certain employees, whereby employees render services in exchange for share options.

 

Where employees are rewarded using share based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the instrument granted to the employee. This fair value is appraised at the grant date using an option-pricing model (Black-Scholes) and excludes the impact of non-market vesting conditions.

 

Equity-settled share based payments are expensed in the income statement. Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital, and where appropriate share premium.

 

In addition, the Company has issued warrants to one supplier in exchange for services supplied. The fair value is ascertained on the same basis as for the options.

 

New standards, amendments and interpretations not yet applicable

The following standards and interpretations have been issued by IASB and IFRIC with an effective date after the date of these financial statements:

 

·; Revised IFRS 1 'First-time Adoption of International Financial Reporting Standards', effective for annual periods commencing on or after 1 July 2009.

 

·; Improvement to IFRS 2 'Share-based payment', effective for annual periods commencing on or after 1 July 2009.

 

·; Amendment to IFRS 2 'Share-based payment - Cash-settled Share-based Payment Transactions', effective for annual periods commencing on or after 1 January 2010.

 

·; Amendment to IFRS 3 'Business Combinations - Comprehensive revision on applying the acquisition method', effective for annual periods commencing on or after 1 July 2009.

 

·; Amendment to IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations' (including consequential amendments from IAS 41), effective for annual periods commencing on or after 1 July 2009.

 

·; Improvement to IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations', effective for annual periods commencing on or after 1 January 2010.

 

·; Improvement to IFRS 6 'Exploration for and Evaluation of Mineral Resources' (including consequential amendments from IAS 7), effective for annual periods commencing on or after 1 January 2010.

 

·; Improvement to IFRS 8 'Operating Segments', effective for annual periods commencing on or after 1 January 2010.

 

·; Improvement to IAS 1 'Presentation of Financial Statements', effective for annual periods commencing on or after 1 January 2010.

 

·; Improvement to IAS 7 'Statement of Cash Flows', effective for annual periods commencing on or after 1 January 2010.

 

·; Improvement to IAS 17 'Leases', effective for annual periods commencing on or after 1 January 2010.

 

·; Amendment to IAS 27 'Consolidated and Separate Financial Statements', IAS 28 'Investments in Associates' and IAS 31 'Investments in Joint Ventures' - arising from IFRS 3 - effective for annual periods commencing on or after 1 July 2009.

 

·; Amendment to IAS 32 'Financial Instruments: Presentation - Amendment; Classification of Rights Issues', effective for annual periods commencing on or after 1 July 2009.

 

·; Improvement to IAS 36 'Impairment of Assets', effective for annual periods commencing on or after 1 January 2010.

 

·; Improvement to IAS 38 'Intangible Assets', effective for annual periods commencing on or after 1 July 2009.

 

·; Amendment to IAS 39 'Financial Instruments: Recognition and Measurement - Eligible hedged items', effective for annual periods commencing on or after 1 July 2009.

 

·; Improvement to IAS 39 'Financial Instruments: Recognition and Measurement', effective for annual periods commencing on or after 1 January 2010.

 

·; Improvement to IFRIC 9 'Reassessment of Embedded Derivatives', effective for annual periods commencing on or after 1 July 2009.

 

·; Improvement to IFRIC 16 'Hedges of a Net Investment in a Foreign Operation', effective for annual periods commencing on or after 1 July 2009.

 

·; IFRIC 17 'Distributions of Non-cash Assets to Owners', effective for annual periods commencing on or after 1 July 2009.

 

·; IFRIC 18 'Transfers of Assets from Customers', effective for annual periods commencing on or after 1 July 2009.

 

·; Amendments arising from the Annual Improvements to IFRS's project 2008 and 2009

 

The directors do not anticipate that adoption of these standards and interpretations will have a material impact on the Company's financial statements in the period of initial application.

 

3 Segmental reporting

 

Primary format - business segments

 

During the year ended 31 March 2010, the Company operated from its UK base supplying services into two main segments, that of management services prior to the disposal of the subsidiary and since then that of implementing the new investing policy in respect of property agency and development/investment consultancies.

 

The segmental results for the year ended 31 March 2010 are as follows:

 

	Year ended 31 March 2010	Year ended 31 March 2010	Year ended 31 March 2010	18 Month Period ended  31 March 2009
	Property activities	Central & Management services	Total	Central and Total
	£	£	£	£
Revenue	10,952	-	10,952	270,000
Costs	(103,549)	(207,197)	(310,746)	(186,824)
(Loss)/Profit from operating activities	(92,597)	(207,197)	(299,794)	83,176
Loss on disposal of/impairment of investments			(15,092)	(1,851,860)
Finance income			900	-
Loss for the period		-	(313,986)	(1,768,684)

 

Revenue represents sales to external customers. There were no inter-segment sales in the period (2009: - £nil).

 

 

Segmental Assets			31 March 2010	31 March 2009
			£	£
Property activities			55,833	-
Central - unallocated			581,445	864,566
Total segment assets			637,278	864,566
Segment Liabilities			31 March 2010	31 March 2009
			£	£
Property activities			18,298	-
Central - unallocated			54,501	13,289
Total segment liabilities			72,799	13,289
Current tax liabilities			-	-
Total liabilities			72,799	13,289
	Depreciation		Capital expenditure
	Year ended 31 March 2010	18 Month Period ended 31 March 2009	Year ended 31 March 2010	18 Month Period ended 31 March 2009
	£	£	£	£
Property activities	1,643	-	25,859	-
Central - unallocated	-	_	-	-
Total	1,643	-	25,859	-

 

The results for the 18 months ended 31 March 2009 related entirely to providing management services to, and negotiations in connection with the sale of its former subsidiary, Dawmed International Limited.

 

Secondary format - geographical segments

 

During both the year ended 31 March 2010 and the 18 months ended 31 March 2009, the Company's operations have taken place entirely within the UK

 

 

 

4 Income and expenses

 

		Year ended 31 March 2010	18 Month Period ended 31 March 2009
		£	£
Loss before taxation from continuing operations is stated after charging:
Cost of inventories recognised as an expense		1,031	-
Depreciation of property, plant and equipment		1,643	-
Impairment of investment in subsidiary undertaking		-	1,851,860
Operating lease expenses:
	property	3,485	-
Auditor's remuneration
During the financial period, the following services were obtained from the Company's auditor, Baker Tilly UK Audit LLP and its associates:
Auditor services
	Audit fees in respect of the accounts of the Company	10,750	22,950
Other services
	Other services relating to the disposal of a subsidiary undertaking	22,800	25,000
	Other services relating to taxation	2,900	18,200

 

5 Expenses by nature

	Year ended 31 March 2010	18 Month Period ended  31 March 2009
	£	£
The following table analyses the nature of expenses:
Cost of sales	7,184	-
Other Staff costs and management services	182,031	64,936
Premises and administration costs	45,631	8,834
Compliance and professional costs	74,257	113,054
Depreciation	1,643	-
Total cost of sales, administrative expenses and other operating expenses	310,746	186,824

 

 

6 Staff costs and directors' emoluments

 

		Year ended  31 March 2010	18 Month Period ended  31 March 2009
		Company	Company
		£	£
Staff costs
Wages and salaries		89,030	57,000
Social security costs		8,348	-
Share based payments		19,925	11,772
		117,303	68,772
Directors' emoluments
Basic salaries and fees		78,070	57,000
Management services and facilities (see note 8 below)		69,948	-
Share-based payments		11,834	11,772
Share-based payment expensed charge in respect of former directors		8,091	-
		167,943	68,772
		Year ended 31 March 2010	18 Month Period ended  31 March 2009
		Company	Company
		£	£
Directors' emoluments disclosed include the following payments in connection with the highest paid director:
Fees		12,000	22,500
Imseco Holdings Ltd management services		69,948	-
Share based payment charge to Statement of Comprehensive Income		2,421	-
Total		84,369	22,500

No pension costs were incurred by the Company in respect of directors either during the year or during the previous period.

 

The share-based payment expense in respect of former directors represents the final charge recognised in connection with the lapse of share options in respect of some of the former directors of the former Dawmed Group, following the disposal of the subsidiary, Dawmed International Limited.

 

The directors represent the key management of the company.

 

The emoluments of individual directors are disclosed in the directors' report.

 

	Year ended 31 March 2010	18 Month Period ended  31 March 2009
	Number	Number
The average number of persons (including directors) employed by the Company during the year was:
Sales and sales administration	2	1
Management and administration	3	4
	5	5

 

All staff costs and directors' emoluments related to continuing operations.

 

7 Related party transactions

 

During the year ended 31 March 2010, the Company purchased management services and expenses from Imseco Holdings Limited under its agreement with the Company dated 19 December 2000. Imseco Holdings Ltd is a company controlled by Mr K M Gilmore by virtue of his majority shareholding. The management services amounted to £69,948 (18 months to 31 March 2009 - £nil, but see below) and expenses amounted to £10,816 (2009 - £nil, but see below), a total of £80,764 (2009 - £nil, but see below). The amount owing to Imseco Holdings Limited at the year-end date was £8,813 (2009 - £nil).

 

Because Imseco Holdings Limited also provided management services and expenses directly to the Company's subsidiary, Dawmed International Limited, for running a separate office for the Group during the time that this was a subsidiary of the Company, the total amount of both for the 18 months to 31 March 2009 was £190,810, which gives an annualised amount of £127,220.

 

8 Taxation

 

No liability to UK corporation tax arose on ordinary activities for the year ended 31 March 2010, nor for the period ended 31 March 2009. This was due to the availability of losses for 2010 and the availability of group losses for the period ended 31 March 2009. In calculating the tax losses at 31 March 2010, capital allowances have been taken in excess of depreciation of £24,216 (2009 - £nil). This gives rise to a deferred tax liability of £5,085 assuming a corporation tax rate of 21%. As the deferred tax asset due to tax losses amounted to £67,736 at 31 March 2010, this results in a net deferred tax asset at that date of £62,681 (2009 - £nil).

 

The company has corporation tax losses as set out below. The related deferred tax asset has not been provided for since there is deemed to be insufficient certainty as to its recoverability against future profits at this stage.

 

The charge for the year can be reconciled to the loss per the Statement of Comprehensive Income as follows:

 

	Year ended  31 March 2010	%	18 Month  Period ended 31 March 2009	%
	£		£
Loss before taxation	(313,986)		(1,768,684)
Tax at the income tax rate of 28%	(65,937)	(21.0)	(365,587)	(20.7)
Loss on disposal/Impairment of investment	3,169	1.0	382,779	21.7
Items not allowable for tax purposes	87	0.0	2,491	0.1
Deferred tax asset	62,681	20.0	-
Group losses	-		(19,683)	(1.1)
Tax expense and effective tax rate for the period	-	0.0	-	0.0

 

9 Loss per share

 

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period.

 

Diluted earnings per share at 31 March 2010 is calculated using the weighted average number of shares adjusted to assume conversion of all ordinary share options at 31 March 2010 that had an exercise price below the average fair price for the year ended 31 March 2010.

 

Since the exercise price of the 1,960,000 (2009: 2,390,000) share options is above the average fair price for the year and the prior period, the diluted earnings per share is equivalent to the basic earnings per share.

 

 

 

		31 March 2010
	Earnings/ (Loss)	Weighted average number of shares	Per-share amount
Basic EPS	£		Pence
Earnings attributable to ordinary shareholders:	(313,986)	20,613,292	(1.52)
Effect of dilutive securities	-	-	-
Diluted EPS
Adjusted earnings	(313,986)	20,613,292	(1.52)

 

 

 

 

 

 

		31 March 2009
	Earnings/ (Loss)	Weighted average number of shares	Per-share amount
Basic EPS	£		Pence
Earnings attributable to ordinary shareholders:	(1,768,684)	20,613,292	(8.58)
Effect of dilutive securities	-	-	-
Diluted EPS
Adjusted earnings	(1,768,684)	20,613,292	(8.58)

 

10 Property, plant and equipment

			Fixtures & equipment	Computer equipment	Total
			£	£	£
Cost
At 1 October 2007 and 1 April 2009			-	-	-
Additions			15,005	10,854	25,859
At 31 March 2010			15,005	10,854	25,859
Depreciation
At 1 October 2007 and 1 April 2009			-	-	-
Charge for year			690	953	1,643
At 31 March 2010			690	953	1,643
Net book value
At 31 March 2010			14,315	9,901	24,216
At 30 September 2007 and 31 March 2009			-	-	-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11 Non-current assets classified as held for sale

	Shares in group undertakings
	£
Cost
At 1 October 2007 and 1 April 2009	2,651,860
Disposals	(2,651,860)
At 31 March 2010	-
Provisions
At 1 October 2007	-
Impairment charge	1,851,860
At 1 April 2009	1,851,860
Eliminated on disposal	(1,851,860)
At 31 March 2010	-
Net book value
At 31 March 2010	-
At 31 March 2009	800,000
At 30 September 2008	2,651,860

 

The investment held at 31 March 2009 was the company's 100% holding of the ordinary shares of Dawmed International Limited, registered in England and Wales. The nature of that business was that of design, development, manufacturing, selling, distributing and servicing of washer disinfectors and washer disinfector dryers and selling spare parts and chemicals for the primary and secondary healthcare sectors. The investment was classified as held for sale because a sale had been agreed at 31 March 2009.

 

12 Inventories

 

	31 March 2010	31 March 2009
	£	£
Finished goods	3,023	-

 

13 Trade and other receivables

	31 March 2010	31 March 2009
	£	£
Amounts recoverable on contracts	9,300	-
Trade receivables	1,942	2,938
Other debtors and prepayments	54,435	51,680
	65,677	54,618

Other debtors include an amount of £35,000 (2009 - £nil) which is held in escrow until 6 November 2010. Thedirectors are not aware of any claims in relation to these funds.

 

 

 

 

14 Trade and other payables

 

	31 March 2010	31 March 2009
	£	£
Trade payables	39,169	-
Amounts owed to group undertakings	-	2,665
Other taxation and social security	5,634	-
Accruals	27,996	10,624
	72,799	13,289

 

The carrying amounts of trade and other payables approximate to their fair values.

 

15 Financial liabilities

 

At 31 March 2009, the Dawmed Group had a bank overdraft facility which was secured by a fixed and floating charge over the assets of the Group. No such charge existed at 31 March 2010

 

16 Cash and cash equivalents

 

	31 March 2010	31 March 2009
	£	£
Cash at bank and in hand	544,362	9,948

 

17 Share capital

	31 March 2010	31 March 2009
	£	£
Authorised:
25,000,000 (2009: 25,000,000) ordinary shares of 5p each	1,250,000	1,250,000
Allotted, called up and fully paid:
20,613,292 (2009: 20,613,292) ordinary shares of 5p each	1,030,665	1,030,665

 

The ordinary shares entitle holders to vote and receive dividends, and on liquidation would be repaid the normal amount paid up.
There were no shares issued during the year or in the previous period.
The Company has issued share options and warrants on its ordinary shares of 5p each as follows:

 

 

 

 

At 1 April 2009	New issues	Cancelled  & re-issued		Lapsed	At 31 March 2010	Exercise price	Date of Grant	Expiry date
Number	Number	Number		Number	Number	p
Options
480,000	-	-		-	480,000	25.0	19 December 2000	18 December 2010
100,000	-	-		-	100,000	25.0	22 June 2001	21 June 2011
700,000	-	-		(450,000)	250,000	20.0	1 July 2004	30 June 2014
160,000	-	-		(160,000)	-	12.5	8 February 2006	7 February 2016
450,000	-	-		(450,000)	-	10.0	23 August 2007	22 August 2017
300,000	-	300,000		-	300,000	5.0	24 January 2002	30 December 2020
100,000	-	100,000		-	100,000	5.0	19 December 2000	30 December 2020
100,000	-	100,000		-	100,000	5.0	1 July 2004	30 December 2014
	270,000	-		-	270,000	5.0	26 February 2010	25 February 2020
Warrants
-	356,000	-		-	356,000	5.0	26 February 2010	25 February 2016
Total
2,390,000	626,000	500,000		(1,060,000)	1,956,000

 

18 Share based payments

On 26 February 2010, the remaining options held by three of the Company's employees were amended to an exercise price of 5p and their exercise periods were extended. Also, new options and warrants as above were issued. The vesting period of the new options and warrants is 1 year. The amended options immediately vested. If options or warrants remain unexercised after the specified expiry date, the options expire.
	31 March 2010		31 March 2009
	Options Number	Weighted average exercise price (p)	Options Number	Weighted average exercise price (p)
Outstanding at 1 April/1 October	2,390,000	19.7	2,946,676	20.7
Granted during the period	626,000	5.0	-	-
Forfeited during the period	(1,060,000)	14.6	(556,676)	25.0
Cancelled during the period	(500,000)	24.0	-	-
Reissued during the period	500,000	5.0	-	-
Exercised during the period	-	-	-	-
Outstanding at 31 March	1,956,000	12.8	2,390,000	19.7
Exercisable at 31 March	1,690,000	14.1	1,780,000	22.8
The options and warrants outstanding at 31 March 2010 had a weighted average remaining contractual life of 6.5 years (31 March 2009: 4.7 years). The exercise prices of these ranged from 5p to 25p.

 

The weighted average fair value of options, warrants and option amendments granted in the year ended 31 March 2010 using the Black-Scholes option pricing model was £24,574. The inputs into the Black-Scholes model are as follows:
31 March 2010
Weighted average share price at date of grant	3.50p
Weighted average exercise price	5.00p
Expected volatility	98.3%
Expected life - average (years)	3.75
Risk free rate	5.02%
Expected dividends	Nil
Expected volatility was determined by calculating the historical volatility of the Company's share price over the previous seven years.   During the year, the Company recognised total share-based payment expenses of £27,198 (period ended 31 March 2009: £11,772). The share-based payment expense did not include any amount related to equity-settled share-based payment transactions (2009: £nil) and no options were exercised during the year (2009: £nil).   The increase in fair value as a result of the options which were cancelled and reissued during the year was £11,290 (2009 - £nil).

 

19 Reserves

 

The nature and purpose of each reserve within equity is as follows:

 

Reserve	Description and purpose
Share premium	Amount subscribed for share capital in excess of nominal value
Retained earnings	Cumulative net gains and losses recognised in the consolidated income statement

 

20 Contingent liabilities and capital commitments

 

There were no capital commitments or contingent liabilities at the year end or at the prior year end.

 

21 Operating lease commitments

 

The total future minimum lease payments under non-cancellable operating leases are as follows:

 

		31 March 2010	31 March 2009
		£	£
Land and buildings
	Within one year	2,594	-

 

Operating lease payments represent rentals payable for office facilities until the first unexpired break clause date in the lease.

 

22 Financial risk management

 

Treasury management

The Company's financial instruments comprise cash, short-term deposits, and short-term receivables and payables that arise directly from its operations. The main purpose of these financial instruments is to fund the Company's operations as well as to manage working capital requirements.

It is, and has been throughout the period under review, the Company's policy not to enter into derivative transactions and no trading in financial instruments has been undertaken. The Company faces few risks in respect of its financial instruments.

Interest rate risk

The Company's interest rate exposure is limited to interest earned on cash balances as it does not have any borrowings. At 31 March 2010, all other financial assets and liabilities were non-interest bearing.

Trade and other receivables

These are detailed in note 14 to the financial statements. Trade receivables are not material in the context of the financial statements. At 31 March 2010, there were no amounts receivable (2009 - £nil) that were impaired in relation to customers who are known to be in financial difficulty and from whom payment was overdue by more than three months.   There are no significant credit risks arising from financial assets that are not past, due or impaired.   At 31 March 2010, all amounts receivable were denominated in sterling.   The directors consider that the carrying amount of trade and other receivables approximates their fair value.

Other receivables

Other receivables include an amount of £35,000 held in escrow as described in note 14. The Company is unable to draw on this until 6 November 2010.

Cash and cash equivalents

Cash and cash equivalents comprise cash held by the Company and short-term bank deposits which are instantly accessible. The carrying amount of these assets approximates to their fair value.

Credit risk and credit risk exposure

The Company's principal financial assets are bank balances and cash, although a small proportion of them are trade and other receivables.   The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. As the Company's credit risk is primarily attributable to these liquid funds, the Directors consider that the credit risk is minimal at present.   During the year ended 31 March 2011, the directors anticipate an increase in exposure to trade receivables. However, the relevant customers are principally expected to be large blue-chip organisations and as such, credit risk is expected to remain minimal.   Credit exposure is managed by assessing the credit quality of each customer internally before accepting and terms of trade. Internal procedures are performed taking into account their reputation within their industry and past experience, and if necessary, their financial position.   The Company's maximum exposure to credit risk, gross of any collateral held, relating to its financial assets is equivalent to their carrying value as disclosed below. All financial assets have a fair value which is equal to their carrying value.

Liquidity risk

The Company closely monitors, on a regular basis, its access to bank and other credit facilities in comparison with its outstanding commitments, to ensure that it has sufficient funds to meet its obligations as they fall due. The Board receives regular forecasts which estimate the cash flows over the next twelve months, so that they can ensure that sufficient financing is in place as required.   The Board regularly reviews whether its initial losses arising from early implementation of the New Investing Policy will be covered by available liquid funds, and is confident that the Company will achieve profitability before these funds are exhausted.   At 31 March 2010, the Company's financial liabilities on a contractual gross undiscounted cash flow basis comprised £72,799 (2009 - £13,289) of trade and other payables, all of which fall due within 6 months and are as shown in note 15. The Company had bank balances well in excess of this and expects sufficient cash to be available to meet the contractual cash flows in the next twelve months.

Capital management

The Company's main objective when managing capital is to protect returns to shareholders by ensuring that it will continue to trade in the foreseeable future.   The Company manages its capital with regard to risks inherent in the business and the sector within which it operates by monitoring its capital on a regular basis.   The Company does not have any borrowings. However, it does have a requirement under AIM rules with regard to the implementation of its New Investing Policy, to invest a substantial proportion of the funds available at the time this was approved in the implementation of the Policy within twelve months of such approval. The Directors are confident that this will have been achieved. Otherwise, the Company has no further externally imposed capital requirements.

 

 

Maximum exposure to credit risk

 

	31 March 2010	31 March 2009
	£	£
Trade and other receivables	65,677	54,618
Cash and cash equivalents	544,362	9,948
	610,039	64,566

 

 

 

23 Related party transactions

 

Directors' interests and related party transactions are disclosed in the report of the Directors and note 8. Directors' emoluments are disclosed in note 7.

 

Note to the announcement:

 

The extracts set out above do not constitute statutory accounts as defined in Section 435 of the Companies Act 2006 in respect of the accounts for the year ended 31 March 2010 or by Section 240 of the Companies Act 1985 in respect of the accounts for the 18 months to 31 March 2009. The Annual Report and Financial Statements will be posted to Shareholders in due course.

 

 

 

 

 

 

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