Company Registration No. 13450502 (England and Wales)
SPRING CAPITAL GROUP HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
SPRING CAPITAL GROUP HOLDINGS LIMITED
COMPANY INFORMATION
Directors
J J Eede
M I C Arthur
William Nott
(Appointed 12 December 2023)
Dani Hristova
(Appointed 12 December 2023)
Company number
13450502
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 GROUP HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 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
Notes to the financial statements
14 - 26
SPRING CAPITAL GROUP HOLDINGS 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 Group Holdings is the holding company for various subsidiary companies ("the group"), including Spring Capital Partners ("Spring Capital") that act as an independent distribution partner to a small number of carefully selected investment management firms. The group 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 group 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 group’s key financial performance indicators during the year were as follow:

£'000

2023

2022

Sales

9,621

11,046

EBITDA

3,140

6,892

 

Principal risks and uncertainties

The group 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 group 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 group.

The Directors have agreed to wind up Kashmir Holdings Limited and a liquidator was appointed in December 2023.

Market Risk

Global Financial Markets and the performance of the funds, which can have an adverse impact on the revenues of the group, are outside the directors' 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. During this financial year most of the remaining outstanding debt was repaid, bringing the overall level of debt of the group down from £4.85m to £1.1m, by the financial year end. All the remaining external debt was fully paid in October 2023.

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 funds). This policy will help minimise the financial risk of the group, going forward.

Key performance indicators

The group monitors its key financial indicators which includes Revenue and EBITDA. For 2023/​24 we are targeting Revenue of £8m and EBITDA of £1.7m.

SPRING CAPITAL GROUP HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 2 -

On behalf of the board

M I C Arthur
Director
10 April 2024
SPRING CAPITAL GROUP HOLDINGS 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 and group continued to be that of making introductions for investment managers.

 

The company was incorporated 10 June 2021

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:

V A Muir
(Resigned 31 March 2024)
J J Eede
M I C Arthur
William Nott
(Appointed 12 December 2023)
Dani Hristova
(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 group 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 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
M I C Arthur
Director
10 April 2024
SPRING CAPITAL GROUP HOLDINGS 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 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.

SPRING CAPITAL GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPRING CAPITAL GROUP HOLDINGS LIMITED
- 5 -
Opinion

We have audited the financial statements of Spring Capital Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 July 2023 which comprise 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 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:

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 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:

SPRING CAPITAL GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPRING CAPITAL GROUP HOLDINGS LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent 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:

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 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:

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

SPRING CAPITAL GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPRING CAPITAL GROUP HOLDINGS 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.

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.

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 GROUP HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2023
- 8 -
Year
Period
ended
ended
31 July
31 July
2023
2022
Notes
£
£
Turnover
3
9,620,823
11,046,642
Administrative expenses
(8,864,159)
(6,536,401)
Other operating income
-
68,000
Operating profit
4
756,664
4,578,241
Interest payable and similar expenses
8
(217,789)
(451,766)
Other gains and losses
9
125,932
99,928
Profit before taxation
664,807
4,226,403
Tax on profit
10
(638,023)
(1,283,062)
Profit for the financial year
26,784
2,943,341
Other comprehensive income
Currency translation differences
2,566
-
0
Total comprehensive income for the year
29,350
2,943,341
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
SPRING CAPITAL GROUP HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
31 JULY 2023
31 July 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
6,883,778
9,178,371
Tangible assets
12
303,897
379,682
7,187,675
9,558,053
Current assets
Debtors
16
381,324
571,284
Investments
17
1,203,556
1,216,237
Cash at bank and in hand
1,473,304
2,293,178
3,058,184
4,080,699
Creditors: amounts falling due within one year
18
(2,144,226)
(4,490,061)
Net current assets/(liabilities)
913,958
(409,362)
Total assets less current liabilities
8,101,633
9,148,691
Creditors: amounts falling due after more than one year
19
-
(1,074,638)
Provisions for liabilities
Deferred tax liability
21
104,389
106,159
(104,389)
(106,159)
Net assets
7,997,244
7,967,894
Capital and reserves
Called up share capital
23
100,000
100,000
Share premium account
4,924,553
4,924,553
Foreign exchange reserves
2,566
-
0
Profit and loss reserves
2,970,125
2,943,341
Total equity
7,997,244
7,967,894
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:
10 April 2024
M I C Arthur
Director
SPRING CAPITAL GROUP HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 31 JULY 2023
31 July 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
13
13,162,106
13,138,131
Current assets
Debtors
16
1
1
Cash at bank and in hand
9,699
23,504
9,700
23,505
Creditors: amounts falling due within one year
18
(8,856,207)
(7,523,371)
Net current liabilities
(8,846,507)
(7,499,866)
Total assets less current liabilities
4,315,599
5,638,265
Creditors: amounts falling due after more than one year
19
-
(1,074,638)
Net assets
4,315,599
4,563,627
Capital and reserves
Called up share capital
23
100,000
100,000
Share premium account
4,924,553
4,924,553
Profit and loss reserves
(708,954)
(460,926)
Total equity
4,315,599
4,563,627

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 £248,028 (2022 - £460,926 loss).

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:
10 April 2024
M I C Arthur
Director
Company Registration No. 13450502
SPRING CAPITAL GROUP HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2023
- 11 -
Share capital
Share premium account
Foreign exchange reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 10 June 2021
-
0
-
0
-
-
0
-
Period ended 31 July 2022:
Profit and total comprehensive income for the period
-
-
-
2,943,341
2,943,341
Issue of share capital
23
100,000
4,924,553
-
-
5,024,553
Balance at 31 July 2022
100,000
4,924,553
-
0
2,943,341
7,967,894
Year ended 31 July 2023:
Profit for the year
-
-
-
26,784
26,784
Other comprehensive income:
Currency translation differences
-
-
-
2,566
2,566
Total comprehensive income for the year
-
-
-
29,350
29,350
Foreign exchange reserve movements
-
-
2,566
(2,566)
-
Balance at 31 July 2023
100,000
4,924,553
2,566
2,970,125
7,997,244
SPRING CAPITAL GROUP HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2023
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 10 June 2021
-
0
-
0
-
0
-
Period ended 31 July 2022:
Loss and total comprehensive income for the period
-
-
(460,926)
(460,926)
Issue of share capital
23
100,000
4,924,553
-
5,024,553
Balance at 31 July 2022
100,000
4,924,553
(460,926)
4,563,627
Year ended 31 July 2023:
Loss and total comprehensive income for the year
-
-
(248,028)
(248,028)
Balance at 31 July 2023
100,000
4,924,553
(708,954)
4,315,599
SPRING CAPITAL GROUP HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
4,109,895
1,654,042
Interest paid
(217,789)
(451,766)
Income taxes paid
(910,398)
(954,169)
Net cash inflow from operating activities
2,981,708
248,107
Investing activities
Purchase of business
-
(2,312,236)
Purchase of tangible fixed assets
(12,722)
(390,898)
Purchase of investments
(1,196,906)
(13,607)
Proceeds on disposal of investments
1,335,519
-
Net cash generated from/(used in) investing activities
125,891
(2,716,741)
Financing activities
Proceeds from issue of shares
-
157,003
Proceeds from borrowings
-
8,104,809
Repayment of borrowings
(3,930,039)
(3,500,000)
Net cash (used in)/generated from financing activities
(3,930,039)
4,761,812
Net (decrease)/increase in cash and cash equivalents
(822,440)
2,293,178
Cash and cash equivalents at beginning of year
2,293,178
-
0
Effect of foreign exchange rates
2,566
-
0
Cash and cash equivalents at end of year
1,473,304
2,293,178
SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
- 14 -
1
Accounting policies
Company information

Spring Capital Group Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Basildon House, 7 Moorgate, London, United Kingdom, EC2R 6AF.

 

The group consists of Spring Capital Group Holdings Limited 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, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The 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 for parent company information presented within the consolidated financial statements:

 

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Spring Capital Group Holdings Limited 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 July 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.

1.3
Going concern

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. 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.

1.4
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.

SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 15 -
1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

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:

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 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.

1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks.

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.

SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 16 -
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 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 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 group's contractual obligations expire or are discharged or cancelled.

SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 17 -
1.11
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.

1.12
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.

1.13
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.

1.14
Retirement benefits

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

1.15
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.

 

1.16
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.

SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 18 -
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.

 

The directors do not consider there to be any 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
9,620,823
11,046,642
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
9,468,320
11,046,642
Europe
152,503
-
9,620,823
11,046,642
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
(54)
(15,525)
Depreciation of owned tangible fixed assets
88,507
19,290
Amortisation of intangible assets
2,294,593
2,294,593
Operating lease charges
58,092
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 group and company
11,326
8,200
Audit of the financial statements of the company's subsidiaries
25,450
24,500
36,776
32,700
SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 19 -
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
14
12
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
3,996,773
2,740,062
-
0
-
0
Social security costs
541,814
362,492
-
-
Pension costs
104,097
62,413
-
0
-
0
4,642,684
3,164,967
-
0
-
0
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
Remuneration disclosed above includes 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
8
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
-
0
115
Other interest
217,789
451,651
Total finance costs
217,789
451,766
SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 20 -
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
608,692
1,196,416
Deferred tax
Origination and reversal of timing differences
29,331
86,646
Total tax charge
638,023
1,283,062

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
664,807
4,226,403
Expected tax charge based on the standard rate of corporation tax in the UK of 21.01% (2022: 19.00%)
139,676
803,017
Tax effect of expenses that are not deductible in determining taxable profit
514,619
452,618
Adjustments in respect of prior years
-
0
51
Other movements
(16,272)
27,376
Taxation charge
638,023
1,283,062
SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 21 -
11
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 August 2022 and 31 July 2023
11,472,964
Amortisation and impairment
At 1 August 2022
2,294,593
Amortisation charged for the year
2,294,593
At 31 July 2023
4,589,186
Carrying amount
At 31 July 2023
6,883,778
At 31 July 2022
9,178,371
The company had no intangible fixed assets at 31 July 2023 or 31 July 2022.
12
Tangible fixed assets
Group
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 August 2022
278,248
105,431
60,627
444,306
Additions
-
0
-
0
12,722
12,722
At 31 July 2023
278,248
105,431
73,349
457,028
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
43,974
303,897
At 31 July 2022
268,948
63,081
47,653
379,682
The company had no tangible fixed assets at 31 July 2023 or 31 July 2022.
SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 22 -
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
13,162,106
13,138,131
Movements in fixed asset investments
Company
Shares in group undertakings
£
Cost or valuation
At 1 August 2022
13,138,131
Additions
23,975
At 31 July 2023
13,162,106
Carrying amount
At 31 July 2023
13,162,106
At 31 July 2022
13,138,131
14
Subsidiaries

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

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Kashmir Holdings Limited
Anson Court La Route des Camps St Martin Guernsey GY4 6AD
Ordinary
100.00
-
Spring Capital Partners Limited
Basildon House 7 Moorgate London England EC2R 6AF
Ordinary
-
100.00
Spring Capital Partners AB
Strandvägen 7A 114 56 Stockholm Sweden
Ordinary
100.00
-
Spring Capital Partners GmbH
Opernplatz 14 60313 Frankfurt a. Main Germany
Ordinary
100.00
-
15
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
1,180,000
1,202,630
n/a
n/a
SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 23 -
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
62,773
485,281
-
0
-
0
Other debtors
66,470
1
1
1
Prepayments and accrued income
252,081
86,002
-
0
-
0
381,324
571,284
1
1
17
Current asset investments
Group
Company
2023
2022
2023
2022
£
£
£
£
Listed investments
1,180,000
1,202,630
-
-
Unlisted investments
23,556
13,607
-
-
1,203,556
1,216,237
-
0
-
0
Listed investments carrying amount
1,180,000
1,202,630
-
-
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Other borrowings
20
674,770
3,530,171
674,770
3,530,171
Trade creditors
279,456
46,082
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
7,822,537
3,985,000
Corporation tax payable
259,580
530,185
-
0
-
0
Other taxation and social security
499,731
307,245
-
-
Other creditors
392,339
38,678
350,000
-
0
Accruals and deferred income
38,350
37,700
8,900
8,200
2,144,226
4,490,061
8,856,207
7,523,371
19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Other borrowings
20
-
0
1,074,638
-
0
1,074,638
SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 24 -
20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Other loans
674,770
4,604,809
674,770
4,604,809
Payable within one year
674,770
3,530,171
674,770
3,530,171
Payable after one year
-
0
1,074,638
-
0
1,074,638

The loans are secured by fixed charges over the assets of the company.

21
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
104,389
106,159
The company has no deferred tax assets or liabilities.
Group
Company
2023
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%)

22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
104,097
62,413

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.

SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 25 -
23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100,000
100,000
100,000
100,000
24
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
123,552
20,592
-
-
Between two and five years
319,176
442,728
-
-
442,728
463,320
-
-
25
Related party transactions

Included in creditors falling due within one year is an amount of £350,000 (2022: £350,000) owed to a director.

 

26
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
26,784
2,943,341
Adjustments for:
Taxation charged
638,023
1,283,062
Finance costs
217,789
451,766
Amortisation and impairment of intangible assets
2,294,593
2,294,593
Depreciation and impairment of tangible fixed assets
88,507
19,290
Amounts written off investments
(125,932)
(99,928)
Decrease in provisions
-
(4,770,581)
Movements in working capital:
Decrease/(increase) in debtors
189,960
(482,451)
Increase in creditors
780,171
14,950
Cash generated from operations
4,109,895
1,654,042
SPRING CAPITAL GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 26 -
27
Analysis of changes in net funds/(debt) - group
1 August 2022
Cash flows
Exchange rate movements
31 July 2023
£
£
£
£
Cash at bank and in hand
2,293,178
(822,440)
2,566
1,473,304
Borrowings excluding overdrafts
(4,604,809)
3,930,039
-
(674,770)
(2,311,631)
3,107,599
2,566
798,534
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