Company registration number 08444579 (England and Wales)
SPARKLING VENTURES LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
PAGES FOR FILING WITH REGISTRAR
SPARKLING VENTURES LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
SPARKLING VENTURES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 1 -
2021
2020
Notes
£
£
£
£
Fixed assets
Investments
5
684,506
112,679
Current assets
Debtors
6
100,000
100,378
Cash at bank and in hand
20,274
23,856
120,274
124,234
Creditors: amounts falling due within one year
7
(517,192)
(291,278)
Net current liabilities
(396,918)
(167,044)
Total assets less current liabilities
287,588
(54,365)
Provisions for liabilities
(73,130)
-
0
Net assets/(liabilities)
214,458
(54,365)
Capital and reserves
Called up share capital
8
100
100
Profit and loss reserves
214,358
(54,465)
Total equity
214,458
(54,365)

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 27 July 2022 and are signed on its behalf by:
Mr S K Gulhati
Director
Company Registration No. 08444579
SPARKLING VENTURES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
1
Accounting policies
Company information

Sparkling Ventures Limited is a private company limited by shares incorporated in England and Wales. The registered office is 7-12 Half Moon Street, Mayfair, London, W1J 7BH.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

The company had truenet assets of £214,458 (2020: net liabilities of £54,365) and net current liabilities of £396,918 (2020: £167,044). 

 

The company's parent undertaking, Veladail Hotels Limited, has pledged its continuing support to the company. As at the balance sheet date, the company owed its parent £506,854 (2020: £283,854).

 

The directors have carried out a detailed review of the company’s financial position including a review of cash flows and forecasts taking into account recoverability of debts and future investment commitments. Within this review, the directors have considered the increasingly broad effects of COVID-19 and events in Ukraine and their impact on the global economy and the company's trading position. At the time of approving the financial statements, the directors are of the opinion that the company will continue to be able to meet its financial obligations as they fall due and to continue in operational existence for at least the next twelve months from the date of approval of the accounts.

 

Therefore the directors consider it is appropriate to prepare the financial statements on the going concern basis.

1.3
Fixed asset investments

Fixed asset investments not carried at market value are recognised at amortised cost. Fixed asset investments for which a fair value cannot be measured reliably are valued at cost.

1.4
Cash at bank and in hand

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.5
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

SPARKLING VENTURES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 3 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

SPARKLING VENTURES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 4 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.6
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

1.7
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.8
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

SPARKLING VENTURES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
2
Judgements and key sources of estimation uncertainty
(Continued)
- 5 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Bad debts

As at 31 December 2021, an outstanding debtor of £100,000 (2020: £100,000) was owed to the company. The directors have reviewed the potential recoverability of this debt, which included a credit analysis and discussions with the relevant party. Having carried out such enquiries, it is the directors’ opinion that the debt is recoverable in full.

Investment fair value measurement

The fair value of a fund investment was determined by the directors using a valuation report and the fund’s audited accounts, prepared by the investment fund manager in accordance with International Private Equity and Venture Capital Valuation Guidelines. The fair values of the underlying unlisted investments were determined using valuation techniques such as the price of recent transactions supported by quantitative and qualitative performance analysis, earnings multiples less net debt and industry valuation benchmarks. The fair values of other investments at the year end were determined based on the prices of recent transactions which were used as inputs to the valuation model. Other factors including significant changes to the underlying investments were also considered when they may have had a material impact on the fair market value.

 

Notwithstanding the basis of valuations stated above, there are inherent limitations in any valuation technique and the eventual realised proceeds may differ from the year end valuation, especially under volatile economic conditions.

3
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2021
2020
Number
Number
Total
-
0
-
0
4
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2021
2020
Notes
£
£
In respect of:
Fixed asset investments
5
-
73,189
Recognised in:
Amounts written off investments
-
73,189

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

SPARKLING VENTURES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
4
Impairments
(Continued)
- 6 -

Reversals of previous impairment losses have been recognised in profit or loss as follows:

2021
2020
Notes
£
£
In respect of:
Fixed asset investments
5
94,727
-
Recognised in:
Amounts written off investments
94,727
-
5
Fixed asset investments
2021
2020
£
£
Other investments other than loans
684,506
112,679
Fixed asset investments revalued

Investments with a fair value of £258,427 (2020: £Nil) and historical cost of £135,512 (2020: £ 42,396) have been valued by the directors based on the valuation provided by the fund's investment managers and the fund's audited accounts. As observable prices were not available for the investments, the investment managers used valuation techniques to derive their fair value; and

 

Investments with a fair value of £169,242 (2020:  £33,265) and historical cost of £33,265 (2020: £33,265) have been valued based on the price of the relevant entity’s last funding round.

Financial assets for which fair value cannot be measured reliably

As at 31 December 2021, investments amounting to £256,837 (2020: £37,018) had been valued at amortised cost as the fair value information could not be measured reliably.

SPARKLING VENTURES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
5
Fixed asset investments
(Continued)
- 7 -
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 January 2021
269,151
Additions
218,208
Valuation changes
258,892
Disposals
(61,745)
At 31 December 2021
684,506
Impairment
At 1 January 2021
156,472
Impairment loss reversals
(94,727)
Disposals
(61,745)
At 31 December 2021
-
Carrying amount
At 31 December 2021
684,506
At 31 December 2020
112,679
6
Debtors
2021
2020
Amounts falling due within one year:
£
£
Other debtors
100,000
100,378

As at 31 December 2021 the company had a specific overdue outstanding debt due to it. The directors have reviewed the potential recoverability of this debt, including a detailed credit analysis and discussions with the relevant party. Having carried out such enquiries, it is the opinion of the directors that the debt is recoverable in full. The total outstanding amount as at 31 December 2021 was £100,000 (2020: £100,000).

 

7
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
-
0
328
Amounts owed to group undertakings
506,854
283,854
Other creditors
10,338
7,096
517,192
291,278
SPARKLING VENTURES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
8
Called up share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
100 ordinary shares of £1 each
100
100
9
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

The senior statutory auditor was David Truscott and the auditor was PK Audit LLP.
10
Capital commitments

Amounts contracted for but not provided in the financial statements:

2021
2020
£
£
Acquisition of investments
25,000
7,465
11
Events after the reporting date

The directors continue to closely monitor the ongoing impact upon the business of COVID-19 and the events Ukraine. They continue to implement a range of business support measures, tailored to the current situation, and to continue to operate the business as a going concern.

 

On 14 January 2022, an investment held in one special purpose vehicle ('SPV') was publicly listed on the New York Stock Exchange. As at 31 December 2021, the shares held by the SPV were valued at $5.00 per share and as at the date of signing these financial statements they were valued at $1.51 per share, reducing the investment's fair value by £31,192. This was considered to be an unadjusting post balance sheet event.

12
Parent company

The immediate parent company is Veladail Hotels Limited, a company registered in England and Wales.

 

Veladail Hotels Limited prepares group financial statements and copies can be obtained from 7-12 Half Moon Street, London, W1J 7BH.

 

The ultimate holding company is Arrow Trading & Investment Est. 1920, a company incorporated in Vaduz.

 

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