Company Registration No. 06310222 (England and Wales)
SPRING CAPITAL PARTNERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
SPRING CAPITAL PARTNERS LIMITED
COMPANY INFORMATION
Directors
M I C Arthur
J J Eede
Dani Hristova
(Appointed 12 December 2023)
William Nott
(Appointed 12 December 2023)
Secretary
Michaelides Warner & Co Limited
Company number
06310222
Registered office
Basildon House
7 Moorgate
London
EC2R 6AF
United Kingdom
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
SPRING CAPITAL PARTNERS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 19
SPRING CAPITAL PARTNERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 1 -
The directors present the strategic report for the year ended 31 July 2023.
Overview of the business
Spring Capital Partners (“Spring Capital”) acts as an independent distribution partner to a small number of carefully selected investment management firms. The company provides a full sales, marketing and client service function to those investment management firms and is remunerated by receiving a percentage of the management fee that the funds charge investors. This revenue is recurring but fluctuates with the net asset value of the funds and the level of fees that the funds charge.
Fair review of the business
The company saw its sales and earnings before interest, depreciation, and amortisation (EBITDA) decrease compared to 2022. This was on the back of a period of redemptions from the investment funds that Spring Capital distributes. These outflows were combined with a weak period in equity markets throughout 2022 and into the early part of 2023. The total assets under management in the funds peaked in December 2021 and fell during this financial year to a low point in September 2022, around £1bn in assets below the peak. This had a negative impact on revenues through the financial year.
The company’s key financial performance indicators during the year were as follow:
Principal risks and uncertainties
The company conducts most of its business in the United Kingdom and is heavily exposed to the UK equity market in terms of the strategy of the underlying funds. The business also has a relatively high dependency on a small number of larger funds and investors.
The company aims to mitigate these risks by generating new investors from a variety of clients into a mix of underlying funds. Additionally, the directors consider opportunities to diversify the fund offering and broaden the investing client segments and geographic scope. There are new potential fund offerings in the pipeline.
During 2023 Spring Capital opened offices in both Germany (Spring Capital Partners GmbH on 31st January 2023) and Sweden (Spring Capital Partners AB on 24th August 2023), with the aim of broadening the investor base with which it works. The removal of EU passporting rules, post Brexit, has made the costs of doing business in the EU more expensive, from a regulatory standpoint, but these costs are not material compared to the overall revenues of the company.
Market Risk
Global Financial Markets and the performance of the funds, which can have an adverse impact on the revenues of the company are outside the director’s control.
Financial risk
As a result of the change in control that happened in August 2021 the group took on debt, which was largely on a fixed term repayment schedule. This was the first time that the group has ever had any debt. The directors were confident that the revenue and strong free cashflows of the company would be sufficiently high to be able to service the debt repayments without compromising its ability to continue to both operate and grow. During this financial year most of the remaining debt was repaid. In the current financial year the external debt was fully paid in October 2023 and all security charges have been released.
It was agreed by the directors at a board meeting in December 2022 that the group would always operate with a minimum balance of easily realisable assets (cash & investments in our funds). This policy will help minimise the financial risk of the group, going forward.
Key performance indicators
The company monitors its key financial indicators which includes Revenue and EBITDA. For 2023/24 we are targeting Revenue of £7.5m and EBITDA of £2.1m.
SPRING CAPITAL PARTNERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 2 -
M I C Arthur
Director
10 April 2024
SPRING CAPITAL PARTNERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 July 2023.
Principal activities
The principal activity of the company continued to be that of making introductions for investment managers.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M I C Arthur
J J Eede
V A Muir
(Resigned 31 March 2024)
Dani Hristova
(Appointed 12 December 2023)
William Nott
(Appointed 12 December 2023)
Auditor
In accordance with the company's articles, a resolution proposing that HW Fisher LLP be reappointed as auditor of the company will be put at a General Meeting.
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.
On behalf of the board
M I C Arthur
Director
10 April 2024
SPRING CAPITAL PARTNERS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2023
- 4 -
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;
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.
SPRING CAPITAL PARTNERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPRING CAPITAL PARTNERS LIMITED
- 5 -
Opinion
We have audited the financial statements of Spring Capital Partners Limited (the 'company') for the year ended 31 July 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 FRS 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 July 2023 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.
SPRING CAPITAL PARTNERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPRING CAPITAL PARTNERS LIMITED
- 6 -
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 and 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:
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
We enquired of management the systems and controls the company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006.
We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Testing key revenue lines, in particular cut-off, for evidence of management bias.
Performing a physical verification of key assets.
Obtaining third-party confirmation of material bank balances and investments.
Documenting and verifying all significant related party balances and transactions.
Reviewing documentation such as the company board minutes for discussions of irregularities including fraud.
SPRING CAPITAL PARTNERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPRING CAPITAL PARTNERS LIMITED
- 7 -
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. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors and management.
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.
Russell Nathan (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
10 April 2024
SPRING CAPITAL PARTNERS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
9,468,320
11,046,642
Administrative expenses
(6,296,764)
(4,198,992)
Other operating income
68,000
Operating profit
4
3,171,556
6,915,650
Interest payable and similar expenses
8
(115)
Other gains and (losses)
9
125,932
99,928
Profit before taxation
3,297,488
7,015,463
Tax on profit
10
(636,622)
(1,283,062)
Profit for the financial year
2,660,866
5,732,401
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SPRING CAPITAL PARTNERS LIMITED
BALANCE SHEET
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
301,553
379,682
Current assets
Debtors
13
8,295,968
4,556,283
Investments
14
1,203,556
1,216,237
Cash at bank and in hand
1,411,155
2,264,794
10,910,679
8,037,314
Creditors: amounts falling due within one year
15
(1,047,745)
(911,605)
Net current assets
9,862,934
7,125,709
Total assets less current liabilities
10,164,487
7,505,391
Provisions for liabilities
Deferred tax liability
16
104,389
106,159
(104,389)
(106,159)
Net assets
10,060,098
7,399,232
Capital and reserves
Called up share capital
18
90
90
Profit and loss reserves
10,060,008
7,399,142
Total equity
10,060,098
7,399,232
The financial statements were approved by the board of directors and authorised for issue on 10 April 2024 and are signed on its behalf by:
M I C Arthur
Director
Company Registration No. 06310222
SPRING CAPITAL PARTNERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 August 2021
90
1,666,741
1,666,831
Year ended 31 July 2022:
Profit and total comprehensive income for the year
-
5,732,401
5,732,401
Balance at 31 July 2022
90
7,399,142
7,399,232
Year ended 31 July 2023:
Profit and total comprehensive income for the year
-
2,660,866
2,660,866
Balance at 31 July 2023
90
10,060,008
10,060,098
SPRING CAPITAL PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
- 11 -
1
Accounting policies
Company information
Spring Capital Partners Limited is a private company limited by shares incorporated in England and Wales. The registered office is Basildon House, 7 Moorgate, London, United Kingdom, EC2R 6AF.
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, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Spring Capital Group Holdings Limited. These consolidated financial statements are available from its registered office,
1.2
Going concern
Atruet 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. The directors monitor the company's key financial indicators which includes Revenue and EBITDA. For 2023/24 the company is targeting Revenue of £8.5m and EBITDA of £3m. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
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:
Leasehold improvements
20% straight line
Fixtures and fittings
25% straight line
Computers
25% straight line
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.
SPRING CAPITAL PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 12 -
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.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand.
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.
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.
SPRING CAPITAL PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 13 -
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 and loans from fellow group companies 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.
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.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
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.
SPRING CAPITAL PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 14 -
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Intercompany Loans
At 31 July 2023 the company was owed £7,822,537 by its parent. The directors have exercised judgement in determining
the recoverability of this amount and do not consider it to be impaired.
The directors do not consider there to be any other significant judgements or estimation uncertainty in the preparation of the accounts.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Fees receivable
9,468,320
11,046,642
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
9,468,320
11,046,642
SPRING CAPITAL PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 15 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
2,189
(15,525)
Fees payable to the company's auditor for the audit of the company's financial statements
25,450
24,500
Depreciation of owned tangible fixed assets
88,507
19,290
Operating lease charges
55,615
188,906
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 company
25,450
24,500
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
14
12
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,873,279
2,740,062
Social security costs
522,994
362,492
Pension costs
78,488
62,413
4,474,761
3,164,967
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
1,845,015
1,030,000
Company pension contributions to defined contribution schemes
14,667
-
1,859,682
1,030,000
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
SPRING CAPITAL PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
7
Directors' remuneration
(Continued)
- 16 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
900,000
500,000
Company pension contributions to defined contribution schemes
7,333
5,833
Benefits in kind
2,439
2,236
8
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
115
9
Amounts written off investments
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
80,000
99,928
Other gains/(losses)
Gain on disposal of financial assets held at fair value through profit or loss
45,932
125,932
99,928
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
607,291
1,196,416
Deferred tax
Origination and reversal of timing differences
29,331
86,646
Total tax charge
636,622
1,283,062
SPRING CAPITAL PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
10
Taxation
(Continued)
- 17 -
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:
2023
2022
£
£
Profit before taxation
3,297,488
7,015,463
Expected tax charge based on the standard rate of corporation tax in the UK of 21.01% (2022: 19.00%)
692,802
1,332,938
Tax effect of expenses that are not deductible in determining taxable profit
9,328
10,273
Adjustments in respect of prior years
51
Group relief
(61,276)
(76,676)
Other movements
(4,232)
16,476
Taxation charge for the year
636,622
1,283,062
11
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 August 2022
278,248
105,431
60,627
444,306
Additions
10,378
10,378
At 31 July 2023
278,248
105,431
71,005
454,684
Depreciation and impairment
At 1 August 2022
9,300
42,350
12,974
64,624
Depreciation charged in the year
55,650
16,456
16,401
88,507
At 31 July 2023
64,950
58,806
29,375
153,131
Carrying amount
At 31 July 2023
213,298
46,625
41,630
301,553
At 31 July 2022
268,948
63,081
47,653
379,682
12
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
1,180,000
1,202,630
SPRING CAPITAL PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 18 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
62,773
485,281
Amounts owed by group undertakings
7,939,754
3,985,000
Other debtors
41,360
Prepayments and accrued income
252,081
86,002
8,295,968
4,556,283
14
Current asset investments
2023
2022
£
£
Listed investments
1,180,000
1,202,630
Unlisted investments
23,556
13,607
1,203,556
1,216,237
Listed investments included above:
Listed investments carrying amount
1,180,000
1,202,630
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
257,890
46,082
Corporation tax
259,580
530,185
Other taxation and social security
499,731
307,245
Other creditors
5,094
3,593
Accruals and deferred income
25,450
24,500
1,047,745
911,605
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
104,389
106,159
SPRING CAPITAL PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
16
Deferred taxation
(Continued)
- 19 -
2023
Movements in the year:
£
Liability at 1 August 2022
106,159
Credit to profit or loss
(1,770)
Liability at 31 July 2023
104,389
The corporation tax rate used to calculate deferred tax was 25% (2022: 25%)
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
78,488
62,413
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.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
90
90
90
90
19
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:
2023
2022
£
£
Within one year
123,552
20,592
Between two and five years
319,176
442,728
442,728
463,320
20
Ultimate controlling party
The controlling party of Spring Capital Partners Limited is Spring Capital Group Holdings Limited. The controlling party is Malcolm Arthur, who owns over 75% of the share capital of Spring Capital Group Holdings Limited.
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