Lombard Capital PLC - Annual Financial Report PR Newswire

Lombard Capital PLC

Final results for the year ended 31 March 2019

Chairman’s Statement

Dear Shareholders

During the year under review your Board has continued working towards producing secure bond investments where the instrument will be fully secured by tangible assets. Up to the year end £750,000 Nominal of 4% Bonds 2022 have been placed.

Since the balance sheet date, a further £220,000 Nominal of 4% Bonds 2022 have been placed and your Board continues to work towards raising further funds in order to complete asset purchases. Your Board expects to be able to make an announcement in the second or third quarter of the new financial year.

I look forward to the future with enthusiasm and thank all my colleagues and our professionals for their support and advice.

I also thank you all as shareholders for your continuing support. 

David Grierson
Chairman
Lombard Capital PLC
30 August 2018

The directors of Lombard Capital Plc accept responsibility for this announcement.

For further information please contact:

Brent Fitzpatrick
Tel:  07718 883813

NEX Corporate Adviser:
Alfred Henry Corporate Finance Limited
Nick Michaels:  020 7251 3762

Statutory Information

The financial information set out below does not constitute the Group’s statutory accounts for the year ended 31 March 2019 but is derived from those accounts.

The financial information has been extracted from the statutory accounts of Lombard Capital Plc and is presented using the same accounting policies, which have not yet been filed with the Registrar of companies, but on which the auditors, Jeffreys Henry LLP, gave a qualified report on 30 August 2019. The audit report included the following modification: -

“Qualified Opinion

We have audited the financial statements of Lombard Capital Plc (the ‘Group’) for the year ended 31 March 2019 which comprise the statement of income and other comprehensive income, the statement of financial position, the statement of cash flows, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report:

    --  the financial statements give a true and fair view of the state of the
        Group’s affairs as at 31 March 2019 and of the Group’s loss for the year
        then ended;
    --  the financial statements have been properly prepared in accordance with
        IFRSs as adopted by the European Union; and
    --  the financial statements have been prepared in accordance with the
        requirements of the Companies Act 2006.

Basis for qualified opinion

The Group’s investments at amortised cost represent loans advanced during the year and are carried at £700,700 on the consolidated statement of financial position as at 31 March 2019, we were unable to obtain sufficient appropriate audit evidence about these carrying amounts or whether any impairments were required. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.

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 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 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 qualified opinion.

Material uncertainty related to going concern

We draw attention to note 2 in the financial statements, which explains that the group is dependent upon ongoing fundraising and forecast revenue streams to commercialise and develop its core businesses. In addition, the group has bonds due to be paid in 31 March 2020 as explained in Note 11.  These events or conditions along with other matters as set forth in note 2, indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern.”

The Annual Report of Lombard Capital Plc for year ended 31 March 2019 is available upon request from the Company’s registered office at 19 Goldington Road, Bedford, England, MK40 3JY.

Consolidated Income Statement


for the year ended 31 March 2019

                                                                2019      2018

                                                                 GBP       GBP

Continuing operations:


Operating expenses                                         (292,337) (340,268)

Share based payments                                               -  (44,390)

Operating loss                                             (292,337) (384,658)

Finance Charges                                             (29,469)         -

Loss before taxation                                       (321,806) (384,658)

Taxation expense                                                   -         -

Loss for the year, attributable to owners of the Group     (321,806) (384,658)

Loss per share attributable to owners of the Group during      Pence     pence
the year

Basic and diluted

Total and continuing operations                                (9.3)    (11.1)



Consolidated Statement of Financial Position

as at 31 March 2019


                                                             2019        2018

                                                              GBP         GBP

Non-current assets

Financial assets at fair value through other              131,250     112,500
comprehensive income

Financial Assets at amortised cost                        700,700           -

Total non-current assets                                  831,950     112,500

Current assets

Trade and other receivables                                41,296           -

Cash and cash equivalents                                  12,059       2,154

Total current assets                                       53,355       2,154

Total assets                                              885,305     114,654

Equity

Share capital                                             194,116     194,116

Share premium                                             954,574     954,574

Share option reserve                                       80,300      80,300

Investment revaluation reserve                            118,934     100,184

Retained earnings                                     (1,885,275) (1,563,469)

Equity attributable to owners of the Group and total    (537,351)   (234,295)
equity

Current liabilities

Trade and other payables                                  672,656     348,949

Loans and other borrowings                                750,000           -

Total equity and liabilities                              885,305     114,654



.

Consolidated Statement of Cashflows

for the year ended 31 March 2019


                                                              2019      2018
                                                               GBP       GBP

Operating activities

Loss before tax                                          (321,806) (384,658)

Adjustment for: Expenses and retention related to bond     120,000         -

Share based payment                                              -    67,140
(Increase)/decrease in trade and other receivables        (41,296)     7,800

Increase/(decrease) in trade and other payables            323,707   221,886

Net cash flow from operating activities                     80,605  (87,832)

Investing activities

Loan advanced                                            (700,700)         -

Net cash flow from investing activities                  (700,700)         -

Financing activities

Proceeds from issue of shares                                    -    89,364

Cash received from the Issuance of bonds                   630,000

Net cash flow from financing activities                    630,000    89,364

Net increase / (decrease) in cash and cash equivalents       9,905     1,532

Cash and cash equivalents at start of year                   2,154       622

Cash and cash equivalents at the end of the year/period     12,059     2,154

Cash and cash equivalents comprise:

Cash and cash in bank                                       12,059     2,154

Cash and cash equivalents at end of year/period             12,059     2,154



Notes to the Financial Statements

for the year ended 31 March 2019

1 General information

Lombard Capital Plc is a limited Company incorporated and domiciled in the United Kingdom.  The registered office is 19 Goldington Road, Bedford, MK40 3JY.

2 Principal 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.

Basis of preparation

The financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS), and IFRIC interpretations as adopted in the European Union and as applied in accordance with the provisions of the Companies Act 2006, and under the historical cost convention.

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates.  It also requires management to exercise its judgement in the process of applying the Group’s accounting policies.  The areas involving a higher degree of judgement or complexity, or areas where assumption and estimates are significant to the Financial Statements, are disclosed later in these accounting policies.

The financial statements are presented in sterling (£).

Going concern

During the period, the Group made a loss of £321,806 and at the year-end had net current liabilities of £1,369,301.  The cash balance at the year-end was £12,059.

The Chairman’s statement has explained the current fundraising activities, therefore, the directors have formed the opinion that with the revenue streams from bond issuances, the eradication of debt and the inflow of funds from the conversion of warrants, the Group will secure adequate funds for the working capital requirements of the Group in the foreseeable future.  Further, this will ensure that adequate arrangements will be in place to enable the settlement of their financial commitments as and when they fall due.

For this reason, the directors continue to adopt the going concern basis in preparing the financial statements. Whilst there are inherent uncertainties in relation to future events, and therefore no certainty over the outcome of the matters described, the directors consider that, based on financial projections and dependent on the success of their efforts to complete these activities, the Group will be a going concern for the next 12 months.

Changes in accounting policy

During the financial year, the Group has adopted the following new and amended IFRS and IFRIC interpretations that are mandatory for current financial year:


Amendments to IAS 7                  Disclosure Initiative

Amendments to IAS 12                 Recognition of Deferred Tax Assets for
                                     Unrealised Losses

Annual Improvements to IFRS standard Amendments to IFRS 12 Disclosure of
2014- 2016                           Interest in Other Entities



The impact of adopting the above amendments had no material impact on the financial statements of the Group.

The following standards, amendments and interpretations applicable to the Group are in issue but are not yet effective and have not been early adopted in these financial statements. They may result in consequential changes to the accounting policies and other note disclosures. We do not expect the impact of such changes on the financial statements to be material. These are outlined in the table below:

IFRS 5                                                     Non-current assets held for sale and discontinued operations

IFRS 7                                                     Financial instruments

IFRS 9                                                     Financial instruments

IFRS 10   (amended)                              Consolidated Financial Statements

IFRS 11   (amended)                              Joint Arrangements

IFRS 12   (amended)                              Disclosure of Interests in Other Entities

IFRS 14                                                   Regulatory deferral accounts

IFRS 15                                                   Revenue from Contracts with Customers

IFRS 16                                                   Leases

IFRS 17                                                   Insurance Contracts

IAS 1 (amended)                                    Presentation of Items of Other Comprehensive Income

IAS 16 & 41 (amended)                          Property, Plant and Equipment

IAS 19                                                     Employee benefits

IAS 27 (amended)                                  Separate Financial Statements

IAS 28 (amended)                                  Investments in Associates and Joint Ventures

IAS16 & 38 (amended)                           Intangible assets

IAS 34                                                     Interim financial reporting

In addition, there are certain requirements of Improvements to IFRSs which are not yet effective.

IFRS 9 – Financial Instruments IFRS 9 replaced the classification and measurement models for financial instruments contained in IAS 39 Financial Instruments: Recognition and Measurement and is effective for accounting periods beginning on or after 1 January 2018.

The directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the Group.

Key estimates and assumptions

The Group makes estimates and assumptions concerning the future.  The resulting accounting estimates will, by definition, seldom equal the related actual results.

The only estimates and assumptions that may cause material adjustment to the carrying value of assets and liabilities relate to the valuation of unquoted investments.  These are valued in accordance with the techniques set out in the accounting policy for ‘Financial Assets and Liabilitiess’ on page 15.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax is the tax currently payable based on taxable profit for the period.  Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.  The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method.  Deferred tax liabilities are generally 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.  Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interest in joint ventures, except where the group is able to control the reversal of the temporary difference and it I probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that the temporary difference will not reverse in the foreseeable future.

Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.  Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the profit or loss income statement, except where they relate to items that are recognised in other comprehensive income in which case the related deferred tax is also charged or credited directly to equity.

Segmental reporting

A segment is a distinguishable component of the Group’s activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group’s chief operating decision maker to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available.

As the chief operating decision maker reviews financial information for and makes decisions about the Group’s investment activities as a while, the directors have identified a single operating segment, that of developing secure bond investment.

Financial assets and liabilities

i. Recognition and initial measurement                                                                                                                  

The Group initially recognises loans and advances, trade and other receivables/payables, and borrowings plus or minus transactions costs when and only when the Group becomes party to the contractual provisions of the instruments.

Financial assets at amortised cost

The Group’s financial assets at amortised cost comprise trade and other receivables. These represent debt instruments with fixed or determinable payments that represent principal or interest and where the intention is to hold to collect these contractual cash flows.

They are initially recognised at fair value, included in current and non-current assets, depending on the nature of the transaction, and are subsequently measured at amortised cost using the effective interest method less any provision for impairment

Financial assets at fair value through other comprehensive income

  i. Classification of financial assets at fair value through other
     comprehensive income

Financial assets at fair value through other comprehensive income (FVOCI) comprise:

Equity securities which are not held for trading, and which the group has irrevocably elected at initial recognition to recognise in this category. These are strategic investments and the group considers this classification to be more relevant.

Debt securities where the contractual cash flows are solely principal and interest and the objective of the group’s business model is achieved both by collecting contractual cash flows and selling financial assets.

       ii. Equity investments at fair value through other comprehensive income

Financial liabilities at amortised cost                              

Financial liabilities at amortised cost comprise trade and other payables. They are classified as current and non-current liabilities depending on the nature of the transaction, are subsequently measured at amortised cost using the effective interest method.

Financial assets

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and current and deposit balances deposits at banks, together with other short-term highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. 

Equity

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.  Equity instruments issued by the Group are recorded at the proceeds received net of direct issue costs.

The share premium account represents premiums received on the initial issuing of the share capital.  Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

The investment revaluation reserve represents the difference between the purchase costs of the available-for-sale investments less any impairment charge and the market value of those investments at the accounting date.

Retained earnings include all current and prior period results as disclosed in the statement of comprehensive income.

Financial liabilities

Financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument.  All interest related charges are recognised as an expense in finance cost in the income statement using the effective interest rate method.  The Group’s financial liabilities comprise trade and other payables. 

The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

Trade payables are recognised initially at their fair value and subsequently measured at amortised cost less settlement payments.

3 Earnings per share

The basic and diluted earnings per share is calculated by dividing the loss attributable to owners of the Group by the weighted average number of ordinary shares in issue during the year.


                                                                 2019      2018
                                                                  GBP       GBP

Earnings

Loss for the purposes of basic and fully diluted loss per   (321,806) (384,658)
share

Number of shares

Weighted average number of shares for calculating basic and
fully diluted                                               3,455,865 3,455,865
earnings per share

                                                                 2019      2018

                                                                Pence     Pence

Earnings per share

Basic and fully diluted loss per share                          (9.3)    (11.1)



In 2017 the Group issued up to £100,000 warrants, during 2018 the Group received notice from the holders of 75,000 warrants to convert them into 75,000 ordinary shares for a consideration of £7,500.