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Keepmoat Annual Report 2020

  • Text
  • Lease
  • Keepmoat
  • Strategic
  • Annual
  • Income
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  • Limited
  • Homes
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  • October
Keepmoat has released its Group financial results for the year ending 31 October 2020.

NOTES TO THE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 23 – Related party disclosures (continued) Dormant and other subsidiaries Name of Company Principal activities Immediate parent shareholding* Group’s effective shareholding Keepmoat Site Services Limited Dormant 100% 89% Force Solutions Limited Dormant 100% 89% Conquest Bidco Limited Intermediate holding company 100% 89% Apollo Support Services Group Limited Intermediate holding company 100% 89% Apollo Holdco Limited Intermediate holding company 100% 89% Toucan Holdings Limited Property management 100% 89% Goldhall Electrical Limited Dormant 100% 89% Hull & Gipsyville Housing Venture Limited Dormant 81% 72% * Immediate parent shareholding means the shareholding held by the listed subsidiary’s immediate parent undertaking. All companies share the registered office of the Company, which is The Waterfront, Lakeside Boulevard, Doncaster, South Yorkshire, DN4 5PL. 24 – Post balance sheet events On 11 December 2020 Castle 1 Limited, a Keystone JVco Limited subsidiary, acquired BDW Trading Limited’s 50% members’ capital holding in BK Scotswood LLP for £2.0m. 25 – Ultimate controlling party Keystone JVco Limited is the owner of the smallest and largest group in which these results are consolidated. The Company’s immediate parent company is Cotton Holding S.à.r.l., a company incorporated in Luxembourg, whilst the Company’s ultimate parent is TDR Capital LLP through investment funds under their management. 108 KEEPMOAT.COM

FINANCIAL REVIEW 26 – Adoption of IFRS 16 As indicated in accounting policies and note 14 the Group has adopted IFRS 16 Leases retrospectively from 1 November 2019 but has not restated comparatives for the year to 31 October 2019, as permitted under the specific transition provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 November 2019. On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as operating leases under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 November 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 1 November 2019 varied depending on asset type and length of lease. In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard: • Applying a single discount rate to a portfolio of leases with reasonably similar characteristics; • Relying on previous assessments on whether leases are onerous as an alternative to performing an impairment review – there were no onerous contracts as at 1 November 2019; • Accounting for operating leases with a remaining lease term of less than 12 months as at 1 November 2019 as short-term leases; • Excluding initial direct costs for the measurement of the right-of-use asset at the date of initial application; and • Using hindsight in determining the lease term where the contract contains options to extend or terminate the lease. The Group has also elected not to reassess whether a contract is or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date the Group relied on its assessment made applying IAS 17 and IFRIC 4 Determining whether an Arrangement contains a Lease. The associated right-of-use assets for property leases were measured on a retrospective basis as if the new rules had always been applied. Other right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 31 October 2019. The following is a reconciliation of total operating lease commitments at 31 October 2019 (as disclosed in the financial statements to 31 October 2019) to the lease liabilities recognised at 1 November 2019: £’000 Total operating lease commitments disclosed at 31 October 2019 9,717 (Less) short-term leases not recognised as a liability (339) Adjustments as a result of extension and termination options 1,331 Operating lease liabilities before discounting 10,709 Discounted using the lessee’s incremental borrowing rate at the date of application (2,111) Lease liability recognised as at 1 November 2019 8,598 Of which are: - Current lease liability 2,562 Non-current lease liability 6,036 8,598 ANNUAL REPORT & FINANCIAL STATEMENTS 2020 109