Company registration number 09789374 (England and Wales)
HELLEBORE CAPITAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
HELLEBORE CAPITAL LIMITED
COMPANY INFORMATION
Directors
L Beruti
P Donnat
Company number
09789374
Registered office
73 Cornhill
London
EC3V 3QQ
Auditors
Gerald Edelman LLP
73 Cornhill
London
EC3V 3QQ
Business address
Michelin House
81 Fulham Road
London
SW3 6RD
HELLEBORE CAPITAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 22
HELLEBORE CAPITAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Review of the business
Business Overview
Hellebore Capital Limited (‘the Company’) is an FCA regulated Alternative Investment Fund Manager (‘AIFM’). During 2022 it continued to support a group company, Hellebore Capital SAS, based in Paris, in its management of a Luxembourg umbrella fund, Hellebore Credit SICAV-RAIF (‘the SICAV), and its sub-funds; the SICAV is comprised of sub-funds trading in credit and equity derivatives strategies.
Hellebore Capital Limited, whilst continuing to provide support services to the Paris-based AIFM, remains an AIFM in its own right and remains open to business opportunities.
Risks to the Business
Markets & Client Concentration
The Company’s prospects remain closely linked to its sole client, Hellebore Capital SAS. However, on a ‘look-through’ basis, the ultimate client base of the Luxembourg funds being managed remains relatively broad which provides a level of comfort.
Regulations & Compliance
The firm continues to allocate significant resources to regulatory engagement and compliance.
Outlook
As of year-end 2022, Hellebore Capital Limited remains well placed to continue to earn revenue through supporting the Paris based AIFM.
Promoting the success of the company
With regard to Section 172 of the UK companies act 2006, Hellebore Capital Limited has taken into account the following in respect of its business operations:
the likely consequences of any decision in the long term;
The business operations of the Company continue to be mindful of its obligations in supporting the business of Hellebore Capital SAS in Paris. Long term sustainability of operations which includes managing stakeholders across Economic, Social and Political domains is essential to the group’s clients.
the interests of the company's employees the need to act fairly between members of the company;
The business of the Company relies on its ability to attract and retain individuals of the highest value. The terms and conditions of work are structured accordingly.
the need to foster the Company's business relationships with suppliers, customers and others;
An active dialogue is maintained with the Company’s suppliers, customers and other stakeholders in an effort to manage the Company’s relationships within the business ecosystem.
the impact of the Company's operations on the community and the environment; and
The operations of the Company are such that it adds value locally as a business requiring services whilst at the same time minimising its effect on the environment through a constant search to run its IT systems in as efficient a manner as possible.
the desirability of the company maintaining a reputation for high standards of business conduct.
As mentioned above in respect of its and the group’s clients and given the company’s registration with the FCA, maintaining a reputation for high standards is considered a prerequisite for the company.
HELLEBORE CAPITAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
P Donnat
Director
26 April 2023
HELLEBORE CAPITAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The company's principal activity is providing investment management services. The company is regulated by the Financial Conduct Authority.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
L Beruti
P Donnat
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £Nil (2021: £1,300,000).
Remuneration code disclosures and Public disclosure
In accordance with the rules of the Financial Conduct Authority, the company has published information on its risk management objectives and policies on its regulatory capital requirements resources. The information included as remuneration code disclosures and public disclosure in these financial statements are not audited.
Remuneration code disclosures
The company is subject to the FCA Rules on remuneration as they apply to a small and non-interconnected (SNI) MIFIDPRU investment firm. These are contained in the FCA’s MIFIDPRU Remuneration Code located in SYSC19G of the FCA’s Handbook.
The company maintains a remuneration policy which applies to all staff and is designed to meet the following objectives:
• to reward employees for functional and individual performance;
• to ensure total remuneration is competitive by market standards;
• to align their interests with those of shareholders;
• to link remuneration with the strategic goals and performance of the company;
• to avoid conflicts of interest.
Remuneration is comprised of fixed and variable elements.
The AIFM ensures that any fixed remuneration awarded represents a sufficiently high proportion of the total remuneration to allow the operation of a fully flexible policy on variable remuneration components, including the possibility to pay no variable remuneration component.
The continuation of the contract providing support to Hellebore Capital SAS provides comfort that the present levels of turnover and profitability will at least be maintained. In the meantime, the Company remains open to opportunities to develop more business locally.
From a balance sheet perspective, apart from its own resources the Company benefits from access, if required, to a centralised group treasury management function.
Regulatory capital requirements continue to be met.
HELLEBORE CAPITAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
Remuneration for the year ended 31 December 2022 is as follows:
Fixed Remuneration £ 403,200
Variable Remuneration £ 150,828
Total £ 554,028
Number of beneficiaries 3
Senior management £ 347,675
Other members having a material impact on risk profile of AIF £ 206,353
Total £ 554,028
Number of beneficiaries 3
Public disclosure
The disclosures in this document are made in respect of Hellebore Capital Limited. The Firm is authorised and regulated by the Financial Conduct Authority and is categorised as a Limited Licence €75,000 firm. Its FCA Part IV permission does not allow it to hold client money or client assets. The Firm does not fall within the definition of a UK consolidation group and is thus not required to prepare disclosures on a consolidated basis.
Risk management
The Firm's approach to risk management is predicated on the need to manage the full range of risks facing the Firm including credit, market, business, operational and liquidity. The overriding aim in this area is to minimise the risks to the Firm's clients, its counterparties and other stakeholders and to ensure it remains in full compliance with regulatory and legal requirements.
Credit risk and Market risk
The firm is careful to distinguish the risks it faces as an investment manager as distinguished to any credit risks the client fund may face. The credit and market risk capital allocations in respect of the firm are already accounted for under the FCA regulations relating to capital reporting under FCA003 and considered adequate.
Liquidity risk
All capital/spare cash is held in cash.
Operational risk
Operational risk is defined as the risk of loss from inadequate or failed internal processes, people and systems - this includes legal risk, but excludes strategic and reputational risk.
Common industry practice for sound operational risk governance often relies on three lines of defence - (i) business line management, (ii) and independent corporate operational risk management function and (iii) an independent review.
Any operational mismatches (rather than errors) arising from trading activities are acted upon by close of business. A daily operational report is made.
The Manager's Liquidity Risk
The risk of the business not settling its obligations is considered nominal from the perspective that surpluses are kept in cash and not reinvested.
Business risk
The main business risk is dealt with in extremis as a wind down scenario.
Orderly Wind-down
One of the main operational risks would also be an orderly wind-down in the event that its main client fund itself ceased trading.
It is reasonable to suppose that in its delegated capacity, the manager and, together, Hellebore Capital Limited would be retained to liquidate the portfolio and assist the board of the fund in the distribution of proceeds. We have assumed a 6 month wind up period including funds redistribution.
HELLEBORE CAPITAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
In the event of an orderly wind-down whether caused by events at group level or otherwise, it is reasonable to suppose under the current business profile a 6 month wind up period. The business would then be liable for the balance of the employment costs over 6 months and the lease term on its offices - presently contracted until October 2023. The wind-down cost has been estimated at £114k (net of residual income etc).
The firm's regulatory capital is adequate to cover this contingency given both the ongoing fee from the fund and the additional reserves held by the company.
Auditors
The auditor, Gerald Edelman LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the 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 company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 company’s auditor 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 company’s auditor is aware of that information.
Going concern
Having reviewed the company's financial forecasts and expected future cash flows, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Consequently they have adopted the going concern basis in preparing the financial statements for the year ended 31 December 2022.
On behalf of the board
P Donnat
Director
26 April 2023
HELLEBORE CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HELLEBORE CAPITAL LIMITED
- 6 -
Opinion
We have audited the financial statements of Hellebore Capital Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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 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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HELLEBORE CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HELLEBORE CAPITAL LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 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 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
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.
Enquiring of management of whether they are aware of any non-compliance with laws and regulations.
Enquiring of management whether they have knowledge of any actual, suspected or alleged fraud.
Enquiring of management their internal controls established to mitigate risk related to fraud or non-compliance with laws and regulations.
Discussions amongst the engagement team on how and where fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion, we identified potential for fraud in the following areas; posting of unusual journals.
Obtaining understanding of the legal and regulatory framework the company operates in focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations. The key laws and regulations we considered in this context included UK Companies Act, tax legislation FCA regulation.
Audit response to risks identified
Fraud due to management override
To address the risk of fraud through management bias and override of controls, we:
Performed analytical procedures to identify any unusual or unexpected relationships.
Audited the risk of management override of controls.
Assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
Investigated the rationale behind significant or unusual transactions.
HELLEBORE CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HELLEBORE CAPITAL LIMITED
- 8 -
Irregularities and non-compliance with laws and regulations
In response to the risk of irregularities and non compliance with laws and regulations, we designed procedures which included, but are not limited to:
Agreeing financial statements disclosures to underlying supporting documentation.
Reviewing minutes of meetings of those charged with governance.
Enquiring of management as to actual and potential litigation claims.
Reviewing correspondence with FCA.
The test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, mean that there is an unavoidable risk that even some material misstatements in respect of irregularities may remain undiscovered even though the audit is properly planned and performed in accordance with ISAs (UK). Furthermore, the more removed that laws and regulations are from financial transactions, the less likely that we would become aware of non-compliance.
Our examination should therefore not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance that might exist. The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the directors.
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.
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.
Hemen Doshi FCCA
Senior Statutory Auditor
For and on behalf of Gerald Edelman LLP
26 April 2023
Chartered Accountants
Statutory Auditor
73 Cornhill
London
EC3V 3QQ
HELLEBORE CAPITAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
2022
2021
Notes
£
£
Turnover
3
1,422,788
908,033
Administrative expenses
(924,974)
(1,076,303)
Profit/(loss) before taxation
497,814
(168,270)
Tax on profit/(loss)
7
(50,331)
86,408
Profit/(loss) for the financial year
447,483
(81,862)
The Statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
HELLEBORE CAPITAL LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
35,058
26,729
Current assets
Debtors
10
1,034,523
477,403
Cash at bank and in hand
471,059
480,997
1,505,582
958,400
Creditors: amounts falling due within one year
11
(358,285)
(250,257)
Net current assets
1,147,297
708,143
Net assets
1,182,355
734,872
Capital and reserves
Called up share capital
13
500,000
500,000
Profit and loss reserves
682,355
234,872
Total equity
1,182,355
734,872
The financial statements were approved by the board of directors and authorised for issue on 26 April 2023 and are signed on its behalf by:
P Donnat
Director
Company Registration No. 09789374
HELLEBORE CAPITAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2021
500,000
1,616,734
2,116,734
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
(81,862)
(81,862)
Dividends
8
-
(1,300,000)
(1,300,000)
Balance at 31 December 2021
500,000
234,872
734,872
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
447,483
447,483
Balance at 31 December 2022
500,000
682,355
1,182,355
HELLEBORE CAPITAL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
18
(75,788)
1,507,444
Income taxes refunded/(paid)
82,950
(264,110)
Net cash inflow from operating activities
7,162
1,243,334
Investing activities
Purchase of tangible fixed assets
(17,100)
Net cash used in investing activities
(17,100)
-
Financing activities
Dividends paid
(1,300,000)
Net cash used in financing activities
-
(1,300,000)
Net decrease in cash and cash equivalents
(9,938)
(56,666)
Cash and cash equivalents at beginning of year
480,997
537,663
Cash and cash equivalents at end of year
471,059
480,997
HELLEBORE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
1
Accounting policies
Company information
Hellebore Capital Limited is a private company limited by shares incorporated in England and Wales. The registered office is 73 Cornhill, London, EC3V 3QQ.
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
Going concern
Atrues disclosed fully within the directors' report, at the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover, stated net of VAT, represents management and consultancy fees recognised on an accruals basis, and performance fees recognised when the fees crystallise.
1.4
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:
Computer equipment
25% reducing balance basis
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 credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company 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.
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.
HELLEBORE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
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.
1.6
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.
1.7
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.
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.
HELLEBORE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
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.
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 company’s contractual obligations expire or are discharged or cancelled.
1.8
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.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
HELLEBORE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
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.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
HELLEBORE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
1.12
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 leases asset are consumed.
1.13
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Management fees
508,555
609,426
Performance fees
914,233
298,606
1,422,788
908,032
2022
2021
£
£
Turnover analysed by geographical market
Europe
1,422,788
908,032
HELLEBORE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Directors
1
1
Administration
2
4
Total
3
5
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
627,891
639,153
Social security costs
80,274
83,455
Pension costs
1,321
3,269
709,486
725,877
5
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
202,577
208,342
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
202,577
195,648
6
Operating profit/(loss)
2022
2021
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(21,369)
115,487
Fees payable to the company's auditor for the audit of the company's financial statements
7,100
7,100
Non-audit fees payable to the company's auditor
7,000
8,715
Depreciation of owned tangible fixed assets
8,771
8,910
Operating lease charges
152,403
144,828
HELLEBORE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
7
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
49,691
(83,590)
Adjustments in respect of prior periods
640
(2,818)
Total current tax
50,331
(86,408)
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit/(loss) before taxation
497,814
(168,270)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
94,585
(31,971)
Tax effect of expenses that are not deductible in determining taxable profit
1,668
1,693
Adjustments in respect of prior years
640
(2,818)
Group relief
(3,472)
Capital allowances
(4,225)
Research and development tax credit
(38,865)
(53,312)
Taxation charge/(credit) for the year
50,331
(86,408)
8
Dividends
2022
2021
£
£
Interim paid
1,300,000
HELLEBORE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
9
Tangible fixed assets
Computer equipment
£
Cost
At 1 January 2022
91,672
Additions
17,100
At 31 December 2022
108,772
Depreciation and impairment
At 1 January 2022
64,943
Depreciation charged in the year
8,771
At 31 December 2022
73,714
Carrying amount
At 31 December 2022
35,058
At 31 December 2021
26,729
10
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
59,461
-
Corporation tax recoverable
83,590
Amounts owed by group undertakings
99
99
Other debtors
42,000
40,899
Prepayments and accrued income
932,963
352,815
1,034,523
477,403
11
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
16,671
15,458
Corporation tax
49,691
Other taxation and social security
23,579
14,223
Accruals and deferred income
268,344
220,576
358,285
250,257
HELLEBORE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
12
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,321
3,269
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
13
Share capital
2022
2021
£
£
Ordinary share capital
Issued and fully paid
500 Ordinary shares of £1,000 each
500,000
500,000
500,000
500,000
14
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
121,500
116,370
15
Financial commitments, guarantees and contingent liabilities
The company operates a bonus scheme for its employees. The bonuses for eligible employees are calculated with reference to a particular period end but the payments are deferred over a number of years.
The amounts payable are clearly communicated to the relevant employees but the remuneration policy states a number of criteria that must be met over the period, one of which is that the employee must still be employed by the company at the payment date.
The directors have therefore decided that due to the criteria outlined in their remuneration policy, the bonuses do not meet the recognition requirements to accrue in the accounts. The total payments in respect of bonuses which are considered to be contingent liabilities as at 31 December 2022 amount to £251,764 (2021: £219,407).
HELLEBORE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
16
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2022
2021
£
£
Aggregate compensation
202,577
195,648
The company has taken advantage of the exemption in section 33 of FRS 102 to not disclose transactions entered into between two or more members of a group, provided that any subsidiary which is party to the transactions is wholly-owned by such a member.
17
Ultimate controlling party
Hellebore Capital Limited is a wholly owned subsidiary of Hellebore Group SAS (a company incorporated in France)
The ultimate controlling party is P Donnat, a director of the company.
18
Cash (absorbed by)/generated from operations
2022
2021
£
£
Profit/(loss) for the year after tax
447,483
(81,862)
Adjustments for:
Taxation charged/(credited)
50,331
(86,408)
Depreciation and impairment of tangible fixed assets
8,771
8,910
Movements in working capital:
(Increase)/decrease in debtors
(640,710)
1,928,211
Increase/(decrease) in creditors
58,337
(261,407)
Cash (absorbed by)/generated from operations
(75,788)
1,507,444
19
Analysis of changes in net funds
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
480,997
(9,938)
471,059
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