Company registration number 13182103 (England and Wales)
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
COMPANY INFORMATION
Directors
Mr J Dobbin
Mr P Moloney
Mr R Burrows
Secretary
Mr J Dobbin
Company number
13182103
Registered office
The Stables at The Grove
Pipers Lane
Harpenden
Herts
AL5 1AJ
Auditor
M J Bushell Audit LLP
8 High Street
Brentwood
Essex
CM14 4AB
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
CONTENTS
Page
Directors' report
1 - 2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Company statement of cash flows
14
Notes to the financial statements
15 - 31
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

The directors present their annual report and financial statements for the year ended 31 March 2023.

Principal activities

The principal activity of the company and group continued to be the provision of services to deliver better outcomes for lenders and borrowers through use of data and AI. We achieve this via:

We are an FCA regulated credit broker

Results and dividends

The Spark group had a year of innovation and growth. Our results for the year reflect the continued investment in our proposition, with a net loss after R&D credits of approximately £900k. Revenue has increased to £217k and has seen a significant rise in the following financial year as this now becomes a more important KPI.

We have a driven management team who are focused on achieving our goals.

We have invested in a number of key aspects of our platform, which are referred to in the Research & Development section below.

On 29th March 2023 we exchanged contracts to acquire JD Capital Finance Limited. After receiving FCA consent, we completed this acquisition on 19th July 2023 and our credit broking activities have been merged. We are benefiting from the combined teams’ wider experience of the SME lending market.

 

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr J Dobbin
Mr P Moloney
Mr R Burrows
Research and development

We have increased our spend on R&D, as this is the key investment that will unlock our value in the future. There are too many project to mention, some highly sensitive, but our achievements include:

 

SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Future developments

We moved the majority of our team into a new London office in June 2023. This allows us to access a wider talent pool, and brings us closer to both customers and the lending community.

In August 2023, we produced a video teaser of our use of Large Language Modelling to support the creation of automated credit papers. We see this as a key component of our value proposition – to provide the tools to reduce the cost of funding and make lenders more productive.

We expect a significant rise in revenue in the year ended 31 March 2024. By mid September 2023, we are showing an increase of some 610% compared to the same period last year.

Our platform usage has consistently grown since April. As of September 2023 a search or record open was performed by external users every 8 seconds. The use cases are also growing, with lenders, accountants, deliverable FX, wealth managers and even an angel network among the community.

Auditor

M J Bushell Audit LLP were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Energy and carbon report

As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

On behalf of the board
Mr J Dobbin
Mr P Moloney
Director
Director
Mr R Burrows
Director
29 September 2023
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
- 4 -
Opinion

We have audited the financial statements of Spark Finance Group PLC (Formerly Spark Finance PLC) (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report.

 

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Based on our understanding of the group and the industry, we identified that there were no specific laws or regulations that were critical to the operation of the business. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principle risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure, and management bias in accounting estimates.

Audit procedures performed by the engagement team included:

SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
- 6 -

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Corné von Wielligh ACA (Senior Statutory Auditor)
For and on behalf of M J Bushell Audit LLP
30 September 2023
Chartered Accountants
Statutory Auditor
8 High Street
Brentwood
Essex
CM14 4AB
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
217,483
46,489
Cost of sales
(8,171)
-
0
Gross profit
209,312
46,489
Administrative expenses
(1,415,853)
(632,660)
Other operating income
25,000
-
Operating loss
4
(1,181,541)
(586,171)
Interest receivable and similar income
8
958
-
0
Interest payable and similar expenses
9
(216)
-
0
Loss before taxation
(1,180,799)
(586,171)
Tax on loss
10
104,404
-
0
Loss for the financial year
21
(1,076,395)
(586,171)
Loss for the financial year is all attributable to the owners of the parent company.
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
£
£
Loss for the year
(1,076,395)
(586,171)
Other comprehensive income
-
-
Total comprehensive income for the year
(1,076,395)
(586,171)
Total comprehensive income for the year is all attributable to the owners of the parent company.
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
GROUP BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
30,716
30,670
Current assets
Debtors
14
52,091
5,437
Cash at bank and in hand
359,365
810,367
411,456
815,804
Creditors: amounts falling due within one year
15
(129,640)
(129,225)
Net current assets
281,816
686,579
Net assets
312,532
717,249
Capital and reserves
Called up share capital
19
1,251,532
917,644
Share premium account
20
646,190
355,690
Profit and loss reserves
21
(1,585,190)
(556,085)
Total equity
312,532
717,249
The financial statements were approved by the board of directors and authorised for issue on 29 September 2023 and are signed on its behalf by:
29 September 2023
Mr J Dobbin
Mr P Moloney
Director
Director
Mr R Burrows
Director
Company registration number 13182103 (England and Wales)
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
COMPANY BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
17,178
15,996
Investments
12
1
1
17,179
15,997
Current assets
Debtors
14
1,042,108
464,164
Cash at bank and in hand
318,342
724,020
1,360,450
1,188,184
Creditors: amounts falling due within one year
15
(98,778)
(106,007)
Net current assets
1,261,672
1,082,177
Net assets
1,278,851
1,098,174
Capital and reserves
Called up share capital
19
1,251,532
917,644
Share premium account
20
646,190
355,690
Profit and loss reserves
21
(618,871)
(175,160)
Total equity
1,278,851
1,098,174

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £448,026 (2022 - £176,237 loss).

The financial statements were approved by the board of directors and authorised for issue on 29 September 2023 and are signed on its behalf by:
29 September 2023
Mr J Dobbin
Mr P Moloney
Director
Director
Mr R Burrows
Director
Company registration number 13182103 (England and Wales)
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2021
450,016
-
0
-
0
450,016
Year ended 31 March 2022:
Loss and total comprehensive income
-
-
(586,171)
(586,171)
Issue of share capital
19
467,628
355,690
-
823,318
Credit to equity for equity settled share-based payments
18
-
-
30,086
30,086
Balance at 31 March 2022
917,644
355,690
(556,085)
717,249
Year ended 31 March 2023:
Loss and total comprehensive income
-
-
(1,076,395)
(1,076,395)
Issue of share capital
19
333,888
290,500
-
624,388
Credit to equity for equity settled share-based payments
18
-
-
47,290
47,290
Balance at 31 March 2023
1,251,532
646,190
(1,585,190)
312,532
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2021
450,017
-
0
-
0
450,017
Year ended 31 March 2022:
Loss and total comprehensive income for the year
-
-
(176,237)
(176,237)
Issue of share capital
19
467,627
355,690
-
823,317
Credit to equity for equity settled share-based payments
18
-
-
1,077
1,077
Balance at 31 March 2022
917,644
355,690
(175,160)
1,098,174
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
(448,026)
(448,026)
Issue of share capital
19
333,888
290,500
-
624,388
Credit to equity for equity settled share-based payments
18
-
-
4,315
4,315
Balance at 31 March 2023
1,251,532
646,190
(618,871)
1,278,851
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
24
(1,088,893)
(500,144)
Interest paid
(216)
-
0
Income taxes refunded
104,404
-
0
Net cash outflow from operating activities
(984,705)
(500,144)
Investing activities
Purchase of tangible fixed assets
(16,646)
(37,820)
Proceeds from disposal of subsidiaries, net of cash disposed
-
(1)
Interest received
958
-
0
Net cash used in investing activities
(15,688)
(37,821)
Financing activities
Proceeds from issue of shares
624,388
1,223,335
Issue of convertible loans
-
74,997
Repayment of convertible loans
(74,997)
-
0
Net cash generated from financing activities
549,391
1,298,332
Net (decrease)/increase in cash and cash equivalents
(451,002)
760,367
Cash and cash equivalents at beginning of year
810,367
50,000
Cash and cash equivalents at end of year
359,365
810,367
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
25
(945,704)
(606,401)
Interest paid
(216)
-
0
Net cash outflow from operating activities
(945,920)
(606,401)
Investing activities
Purchase of tangible fixed assets
(10,107)
(17,909)
Proceeds from disposal of subsidiaries
-
0
(1)
Interest received
958
-
0
Net cash used in investing activities
(9,149)
(17,910)
Financing activities
Proceeds from issue of shares
624,388
1,223,334
Issue of convertible loans
-
74,997
Repayment of convertible loans
(74,997)
-
0
Net cash generated from financing activities
549,391
1,298,331
Net (decrease)/increase in cash and cash equivalents
(405,678)
674,020
Cash and cash equivalents at beginning of year
724,020
50,000
Cash and cash equivalents at end of year
318,342
724,020
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 15 -
1
Accounting policies
Company information

Spark Finance Group PLC (Formerly Spark Finance PLC) (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Stables at The Grove, Pipers Lane, Harpenden, Herts, AL5 1AJ.

 

The group consists of Spark Finance Group PLC (Formerly Spark Finance PLC) and all of its subsidiaries.

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.

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
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Spark Finance Group PLC (Formerly Spark Finance PLC) together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 March 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

The Directors have prepared the financial statements on a going concern basis even though the group made a loss of £1,180,799.

 

The group has secured £1,897,722 of shareholder equity funding to 31 March 2023 and has since raised an additional £500,000 through further equity. This funding is expected to be sufficient to enable the group and this company to continue to trade for the foreseeable future.

 

The Directors have prepared forecasts and considered a variety of different scenarios. In preparing these scenarios, the Directors have considered the current level of leads, conversion rates and actual results to date. In all scenarios the Directors believe that the company has sufficient resources to be able to meet its liabilities as they fall due and have therefore concluded that the going concern basis of accounting is appropriate.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings
3 years straight line
Computers
3 years straight line
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 17 -

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.7
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible 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 (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 18 -

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
Cash and cash equivalents

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.

1.10
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

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.

SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 19 -
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 group 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 group 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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.11
Compound instruments

The component parts of compound instruments issued by the group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.

SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 20 -
1.12
Equity instruments

Equity instruments issued by the group 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 group.

1.13
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 group’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 if, and only if, there is 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.

1.14
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.15
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.16
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

 

The expense in relation to options over the parent company’s shares granted to employees of a subsidiary is recognised by the company as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.

SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 21 -

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.17
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

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.

Share based payments

Employees of the group were issued options for shares in the Spark Finance under an EMI scheme. The valuation of these options and the related share based payment charge has estimation uncertainty. The directors have applied the Black-Scholes model for this valuation, based on their understanding of the group and the required inputs. The current year charge for the group is £47,290.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Broking Commission
195,682
21,489
Software Platform
21,801
25,000
217,483
46,489
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
217,483
46,489
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
3
Turnover and other revenue
(Continued)
- 22 -
2023
2022
£
£
Other revenue
Interest income
958
-
4
Operating loss
2023
2022
£
£
Operating loss for the year is stated after charging:
Depreciation of owned tangible fixed assets
16,600
7,150
Share-based payments
47,290
30,086
Operating lease charges
58,352
21,536
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
6,500
6,500
Audit of the financial statements of the company's subsidiaries
4,500
5,500
11,000
12,000
For other services
Taxation compliance services
-
3,800
All other non-audit services
4,200
4,000
4,200
7,800
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Directors
4
4
3
3
Employees
19
11
11
7
Total
23
15
14
10
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
6
Employees
(Continued)
- 23 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
1,059,983
437,240
474,405
111,290
Social security costs
106,455
37,734
45,285
7,250
Pension costs
19,112
7,322
8,334
1,388
1,185,550
482,296
528,024
119,928
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
89,583
75,000
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
958
-
0
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
958
-
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
216
-
10
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(104,404)
-
0
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
10
Taxation
(Continued)
- 24 -

The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(1,180,799)
(586,171)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(224,352)
(111,372)
Tax effect of expenses that are not deductible in determining taxable profit
12,392
1,783
Unutilised tax losses carried forward
216,071
36,547
Permanent capital allowances in excess of depreciation
(4,111)
(4,570)
Research and development tax credit
(104,404)
-
0
Share based payment charge
-
0
5,511
-
0
72,101
Taxation credit
(104,404)
-
11
Tangible fixed assets
Group
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 April 2022
9,804
28,016
37,820
Additions
3,866
12,780
16,646
At 31 March 2023
13,670
40,796
54,466
Depreciation and impairment
At 1 April 2022
1,794
5,356
7,150
Depreciation charged in the year
4,234
12,366
16,600
At 31 March 2023
6,028
17,722
23,750
Carrying amount
At 31 March 2023
7,642
23,074
30,716
At 31 March 2022
8,010
22,660
30,670
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
11
Tangible fixed assets
(Continued)
- 25 -
Company
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 April 2022
3,653
14,256
17,909
Additions
2,229
7,878
10,107
At 31 March 2023
5,882
22,134
28,016
Depreciation and impairment
At 1 April 2022
203
1,710
1,913
Depreciation charged in the year
1,876
7,049
8,925
At 31 March 2023
2,079
8,759
10,838
Carrying amount
At 31 March 2023
3,803
13,375
17,178
At 31 March 2022
3,450
12,546
15,996
12
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
13
-
0
-
0
1
1
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 April 2022 and 31 March 2023
1
Carrying amount
At 31 March 2023
1
At 31 March 2022
1
13
Subsidiaries

Details of the company's subsidiaries at 31 March 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Clover Technology Limited
86-90 Paul Street, London, EC21 4NE
Ordinary
100.00
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
13
Subsidiaries
(Continued)
- 26 -

Since the year end, the Company acquired 100% of the share capital in Spark Finance Ltd (formerly JD Capital Finance Limited).

14
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
5,637
-
0
3,631
-
0
Amounts owed by group undertakings
13,350
-
13,350
-
Other debtors
50
-
50
-
0
Prepayments and accrued income
33,054
5,437
29,527
2,565
52,091
5,437
46,558
2,565
Amounts falling due after more than one year:
Amounts owed by group undertakings
-
-
995,550
461,599
Total debtors
52,091
5,437
1,042,108
464,164
15
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Convertible loans
16
-
0
74,997
-
0
74,997
Other taxation and social security
29,423
20,294
9,275
9,292
Other creditors
1
1
1
1
Accruals and deferred income
100,216
33,933
89,502
21,717
129,640
129,225
98,778
106,007
16
Convertible loan notes
Group
Company
2023
2022
2023
2022
£
£
£
£
Liability component of convertible loan notes
-
74,997
-
74,997

The net proceeds received from the issue of the convertible loan notes have been split between the financial liability element and an equity component, representing the fair value of the embedded option to convert the financial liability into equity.

SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
16
Convertible loan notes
(Continued)
- 27 -

The liability component is measured at amortised cost, and the difference between the carrying amount of the liability at the date of issue and the amount reported in the Balance Sheet represents the effective interest rate less interest paid to that date.

The effective rate of interest is 3.25%.

The equity component of the convertible loan notes has been credited to the equity reserve.

17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
19,112
7,322

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

18
Share-based payment transactions
Group
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 April 2022
154,650
-
1.20
-
Granted
112,600
154,650
1.90
1.20
Forfeited
(50,000)
-
1.50
-
Outstanding at 31 March 2023
217,250
154,650
1.90
1.20
Exercisable at 31 March 2023
-
-
-
-

The options outstanding at 31 March 2023 had an exercise price ranging from £1, and a remaining contractual life of 9 years.

Company
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 April 2022
55,000
-
1.50
-
Granted
20,000
55,000
1.90
1.50
Forfeited
(50,000)
-
1.50
-
Outstanding at 31 March 2023
25,000
55,000
1.90
1.50
Exercisable at 31 March 2023
-
-
-
-
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
18
Share-based payment transactions
(Continued)
- 28 -
The options outstanding at 31 March 2023 had an exercise price ranging from £1, and a remaining contractual life of 9 years.
Group

The value of the options have been calculated using the Black-Scholes method with the market value of the shares being sourced from recent share issues.

Inputs were as follows:
2023
2022
Weighted average share price
2.00
1.75
Weighted average exercise price
1.90
1.20
Expected volatility
25.00
25.00
Expected life
3.47
2.62
Risk free rate
3.43
3.01
Company

The value of the options have been calculated using the Black-Scholes method with the market value of the shares being sourced from recent share issues.

Inputs were as follows:
2023
2022
Weighted average share price
2.00
1.75
Weighted average exercise price
1.90
1.50
Expected volatility
25.00
25.00
Expected life
3.47
2.39
Risk free rate
3.43
3.01
Group
Company
2023
2022
2023
2022
£
£
£
£
Expenses recognised in the year
Arising from equity settled share based payment transactions
47,290
30,086
4,315
1,077
19
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,251,504
917,616
1,251,504
917,616
Ordinary "B" shares of £1 each
16
16
16
16
Ordinary "C" shares of £1 each
12
12
12
12
1,251,532
917,644
1,251,532
917,644
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
19
Share capital
(Continued)
- 29 -

The Ordinary shares, B shares and C shares are separate classes of shares but rank pari passu in all respect save for the differing rights on capital distribution in the event of sale or listing.

20
Share premium account
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
355,690
-
0
355,690
-
0
Issue of new shares
290,500
355,690
290,500
355,690
At the end of the year
646,190
355,690
646,190
355,690
21
Profit and loss reserves
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
(556,085)
-
(175,160)
-
Loss for the year
(1,076,395)
(586,171)
(448,026)
(176,237)
Share based payment transactions
47,290
30,086
4,315
1,077
At the end of the year
(1,585,190)
(556,085)
(618,871)
(175,160)
22
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
40,255
40,255
28,411
28,411
Between two and five years
26,044
66,299
26,044
54,455
66,299
106,554
54,455
82,866
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 30 -
23
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Purchases
Purchases
2023
2022
£
£
Group
Other related parties
56,952
21,220
Company
Other related parties
46,292
12,692
24
Cash absorbed by group operations
2023
2022
£
£
Loss for the year after tax
(1,076,395)
(586,171)
Adjustments for:
Taxation credited
(104,404)
-
0
Finance costs
216
-
0
Investment income
(958)
-
0
Depreciation and impairment of tangible fixed assets
16,600
7,150
Equity settled share based payment expense
47,290
30,086
Movements in working capital:
Increase in debtors
(46,654)
(5,437)
Increase in creditors
75,412
54,228
Cash absorbed by operations
(1,088,893)
(500,144)
SPARK FINANCE GROUP PLC (FORMERLY SPARK FINANCE PLC)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 31 -
25
Cash absorbed by operations - company
2023
2022
£
£
Loss for the year after tax
(448,026)
(176,237)
Adjustments for:
Finance costs
216
-
0
Investment income
(958)
-
0
Depreciation and impairment of tangible fixed assets
8,925
1,913
Equity settled share based payment expense
4,315
1,077
Movements in working capital:
Increase in debtors
(577,944)
(464,164)
Increase in creditors
67,768
31,010
Cash absorbed by operations
(945,704)
(606,401)
26
Analysis of changes in net funds - group
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
810,367
(451,002)
359,365
Convertible loan notes
(74,997)
74,997
-
735,370
(376,005)
359,365
27
Analysis of changes in net funds - company
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
724,020
(405,678)
318,342
Convertible loan notes
(74,997)
74,997
-
649,023
(330,681)
318,342
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