Company registration number 06387449 (England and Wales)
ISLANDBRIDGE CAPITAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ISLANDBRIDGE CAPITAL LIMITED
COMPANY INFORMATION
Directors
J M McCarthy
A N Harrison
G P Couch
Company number
06387449
Registered office
18/19 Albemarle Street
London
W1S 4HR
Auditor
Mercer & Hole LLP
21 Lombard Street
London
EC3V 9AH
Business address
18/19 Albemarle Street
London
W1S 4HR
Solicitors
Tallar LLP
44 Kingscote Road
Birmingham
B15 3JY
ISLANDBRIDGE CAPITAL LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 24
ISLANDBRIDGE CAPITAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Background
Islandbridge is a London based investment manager and multi-family office authorised and regulated by the Financial Conduct Authority. The business has evolved considerably since inception over 15 years ago. Today it has global reach, reflecting its client base in private equity, technology and property. The business model is aligned with clients’ to meet their need for expert and independent advice.
Islandbridge clients are primarily highly successful entrepreneurs and their families. The client’s demand their capital and structures are managed by an experienced team with strong values and a long-term view. They also place a high importance on outstanding financial strategy and implementation – which means not only generating high investment returns, but also executing thoughtful planning and management with a deep understanding of purpose and goals.
The team has continued to grow and we have settled well into our new Mayfair offices. There was an increased focus on training, coaching and team building during 2023. We dedicated time and energy to focussing on our values, and maintaining our great culture. Critically, this is central to our Firm and defines the character and attitude we take to working with our clients and collaborators across the investment industry and professional services teams.
2023 Review
During 2023, the Islandbridge team was successful in its key goals of supporting strong investment performance and delivering exceptional client service. The global economy was generally supportive and there was a broad recovery in asset values. However, the year also saw a variety of global challenges emanating from elevated interest rates, rising geopolitical instability, banking stress, and growing corporate and real estate funding gaps. However, we are deeply proud of how the team responded with clear heads, resilience and focus.
As a team, we continue to learn and grow and believe we are becoming better managers and client partners. But we say that with humility and thanks for the trust placed with us by our exceptional clients.
Into 2024, the team are seeing better risk / reward opportunities versus the frothy backdrop in late 2021 and through 2022. But, the valuation excesses have not totally cleared and we remain disciplined. The investment world is rapidly changing due to mega-trends in AI, resources and climate. It is one of the most incredibly interesting times in our careers to be working on these complex and exciting areas.
Impact
Away from markets, we have continued to be highly active in supporting clients in defining and implementing the PURPOSE of their capital (beyond purely financial measures). We also increased next generation engagement and education. The team also supports the running and investment management of client foundations (and other philanthropic vehicles). This is a growing part of our business reflecting the awareness and shared mission of many of our clients.
A significant change for the Firm during 2023 was how we communicate externally. Whilst we remain deeply private on the clients that trust their family offices with us, we have started to consider our influence more widely. This has ranged from convening like-minded investors to sharing select conversations with global thought leaders on our social media channels. This has been driven by our commitment to be advocates for more responsible management of financial capital - and the often overlooked value of human and intellectual capital. It has also raised our profile to clients where there is a match in their need and our model. We look forward to continuing to share the learnings and interactions that we are privileged to experience.
As a B-Corp, the team continues to be deeply focused on the impact of our investment activities. We have continued to place a high importance on climate and continue to develop exposure in this area and work to expand our network of like-minded investors globally.
Finally, we say a big “THANK YOU” to our clients, managers and team for another great year. Despite the challenges facing our planet, we are “all-in” to lead by example and reward the responsibility entrusted on us by our exceptional clients.
ISLANDBRIDGE CAPITAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties
Govenance risk
The Firm is governed by a board of directors consisting of one executive director and two non-executive directors. The board members meet on a regular basis and hold board meetings where the performance of the Firm is evaluated against budgets, forecasts and the expectations of the board.
The Firm oversees and manages its risks through a combination of a compliance manual, routine monitoring of policies and procedures, a business continuity plan, an annual independent audit and reporting process, and the use of an independent UK compliance firm. The Firm's policies, procedures and financial controls are regularly reviewed and revised as needed.
Market risk
Market risk is the risk that the value of, or income arising from, the Firm's assets and liabilities varies as a result of changes in the market price of financial assets, changes in exchange rates or changes in interest rates. The Firm is subject to market risk as this could impact the fees charged by lslandbridge which are directly linked to the market value of client assets. The Firm regularly evaluates the sensitivity of income against market risk.
Credit risk
Credit risk refers to the potential risk that customers fail to meet their obligations as they fall due. lslandbridge is exposed to the credit risk of its bankers and receivables from its clients. lslandbridge considers these risks on a continuous basis but does not believe that it is significant. The Firm regularly reviews the credit rating of institutions where cash is held on deposit.
Liquidity risk
The Firm's liquidity policy is to maintain sufficient liquid resources to cover cash flow imbalances and fluctuations in fees received/receivable. The Firm maintains sufficient cash balances with its banking partners to cover liquidity risk. Furthermore, the Firm continuously monitors income and expenditure levels and adjusts plans and forecasts accordingly.
Other risks
Other risks the Firm considered included:
Business risk: failure of business plan, resulting in losses or reduced income.
Concentration risk: whether overly dependent on any customer or group in terms of income or credit risk.
Residual risk: any other material risk specific to the Firm.
The Firm completed its 2023 Internal Capital and Risk Assessment Process (“ICARA”) which did not identify any additional capital requirements.
Key performance indicators
The Firm’s key financial and other performance indicators during the year were as follows:
ISLANDBRIDGE CAPITAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Section 172 statement
The directors are aware of their duty under s.172 of the Companies Act 2006 to act in the way which they consider, in good faith, would be most likely to promote the success of the Firm for the benefit of its members as a whole and, in doing so, to have regard (amongst other matters) to:
the likely consequences of any decision in the long term;
the interests of the Firm's employees;
the need to foster the Firm's business relationships with suppliers, customers and others;
the impact of the Firm's operations on the community and the environment;
the desirability of the Firm's maintaining a reputation for high standards of business conduct; and
the need to act fairly as between members of the Firm.
(“the s.172 matters”)
The directors of the Firm have sought to balance the needs of its members with the s.172 matters throughout the year, ensuring that the Firm's reputation for high standards of conduct are maintained and through strong relationships with employees and partners. The directors of the Firm have a duty to promote the success of the Firm, and this relies on smooth operations and the support and joint efforts of management. Thus, effective communication and interaction are indispensable in the Firm's business operations.
J M McCarthy
Director
23 April 2024
ISLANDBRIDGE CAPITAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the Company continued to be that of provision of family office and investment management services.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J M McCarthy
A N Harrison
G P Couch
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £571,214.
MiFIDPRU 8 Disclosure
Islandbridge Capital Limited is authorised and regulated in the UK by the FCA. It is authorised as a Markets in Financial Instrument Directive (“MiFID”) Investment Manager. As MiFID firm, it is subject to the new Investment Firms Prudential Regime (“IFPR”) which came into force on 1 January 2022. Under this regime, it is categorised as a small and non-interconnected firm (“SNI”) and adheres to all requirements applicable to SNI firms. The IFPR introduced a new Internal Capital and Risk Assessment (ICARA) process which no longer requires a firm to prepare and disclose its Pillar 3 report.
The Company's MiFIDPRU 8 disclosure can be found on our website www.ib-capital.com.
Remuneration Disclosures
As the Company is categorised by the FCA as an SNI Firm it is still entitled to disapply many of the technical requirements of the Remuneration Code and proportionately apply the Remuneration Code's rules and principles in establishing the Firm's policy. Quantitative and qualitative information on the Company's remuneration can be found in our MiFIDPRU 8 disclosure.
Materiality
Information is generally viewed as material if its omission or misstatement could change or influence the assessment or decision of someone relying on that information for the purpose of making economic decisions. If a certain disclosure is omitted from this statement, we viewed the disclosure to be immaterial or inapplicable to us.
Confidentiality
Information is generally viewed as proprietary if sharing that information with the public would undermine a competitive position. Proprietary information may include information on products or systems that, if shared with competitors, would render the Firm's investments therein less valuable. Further, the Firm must regard information as confidential if there are obligations to customers or other counterparty relationships binding the Firm to confidentiality. In the event that any such information is omitted, the Firm shall disclose such and explain the grounds why it has not been disclosed.
ISLANDBRIDGE CAPITAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Developments
The Firm continues its principal activities as detailed above. The directors believe there are no future developments that require disclosure.
Auditor
The auditor, Mercer & Hole LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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 auditors are 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 auditors are aware of that information.
On behalf of the board
J M McCarthy
Director
23 April 2024
ISLANDBRIDGE CAPITAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
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.
ISLANDBRIDGE CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ISLANDBRIDGE CAPITAL LIMITED
- 7 -
Opinion
We have audited the financial statements of Islandbridge Capital Limited (the 'Company') for the year ended 31 December 2023 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 a summary of 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 December 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.
ISLANDBRIDGE CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ISLANDBRIDGE CAPITAL LIMITED
- 8 -
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates and considered the risk of acts by the Company that were contrary to applicable laws and regulations, including fraud. These included, but were not limited to, the Companies Act 2006, FCA regulations and tax legislation.
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure.
ISLANDBRIDGE CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ISLANDBRIDGE CAPITAL LIMITED
- 9 -
Audit procedures performed by the engagement team included:
discussions with management, including considerations of known or suspected instances of non-compliance with laws and regulations and fraud;
gaining an understanding of management's controls designed to prevent and detect irregularities; and
identifying and testing journal entries.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non- compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
Miss Helen Cain BA FCA
Senior Statutory Auditor
For and on behalf of Mercer & Hole LLP
23 April 2024
Chartered Accountants
Statutory Auditor
Mercer & Hole LLP
21 Lombard Street
London
EC3V 9AH
ISLANDBRIDGE CAPITAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
2,720,628
2,449,300
Administrative expenses
(2,117,041)
(1,918,205)
Operating profit
4
603,587
531,095
Interest receivable and similar income
8
22,044
1,803
Profit before taxation
625,631
532,898
Tax on profit
9
(150,175)
(121,754)
Profit for the financial year
475,456
411,144
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ISLANDBRIDGE CAPITAL LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
38,072
47,914
Current assets
Debtors
14
325,770
255,201
Investments
15
735,547
Cash at bank and in hand
1,125,313
1,823,632
2,186,630
2,078,833
Creditors: amounts falling due within one year
16
(964,928)
(771,215)
Net current assets
1,221,702
1,307,618
Net assets
1,259,774
1,355,532
Capital and reserves
Called up share capital
18
50,000
50,000
Profit and loss reserves
1,209,774
1,305,532
Total equity
1,259,774
1,355,532
The financial statements were approved by the board of directors and authorised for issue on 23 April 2024 and are signed on its behalf by:
J M McCarthy
Director
Company registration number 06387449 (England and Wales)
ISLANDBRIDGE CAPITAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
50,000
1,466,388
1,516,388
Year ended 31 December 2022:
Profit and total comprehensive income
-
411,144
411,144
Dividends
10
-
(572,000)
(572,000)
Balance at 31 December 2022
50,000
1,305,532
1,355,532
Year ended 31 December 2023:
Profit and total comprehensive income
-
475,456
475,456
Dividends
10
-
(571,214)
(571,214)
Balance at 31 December 2023
50,000
1,209,774
1,259,774
ISLANDBRIDGE CAPITAL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
706,523
1,150,263
Income taxes paid
(113,076)
(179,546)
Net cash inflow from operating activities
593,447
970,717
Investing activities
Purchase of tangible fixed assets
(5,151)
(2,851)
Purchase of investments
(735,547)
Loans (advanced)/repaid
(1,898)
45,408
Interest received
22,044
1,803
Net cash (used in)/generated from investing activities
(720,552)
44,360
Financing activities
Dividends paid
(571,214)
(572,000)
Net cash used in financing activities
(571,214)
(572,000)
Net (decrease)/increase in cash and cash equivalents
(698,319)
443,077
Cash and cash equivalents at beginning of year
1,823,632
1,380,555
Cash and cash equivalents at end of year
1,125,313
1,823,632
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information
Islandbridge Capital Limited is a private company limited by shares incorporated in England and Wales. The registered office is 18/19 Albemarle Street, London, W1S 4HR.
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 certain financial instruments at fair value. The principal accounting policies adopted are set out below.
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. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts chargeable in respect of professional services provided to clients net of VAT.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Intangible assets
Over 5 years
1.5
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.
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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:
Software
20% straight line
Fixtures & fittings
20% straight line
Office equipment
20% straight line
Motor vehicles
33% 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.
1.6
Impairment of fixed assets
At each reporting period end date, the Company reviews the carrying amounts of its 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).
1.7
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 and other short-term liquid investments with original maturities of three months or less.
1.8
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.
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the Company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
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:
2023
2022
£
£
Turnover analysed by class of business
Family Office Investment Services
2,720,628
2,449,300
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
1,051,203
825,609
Rest of World
1,669,425
1,623,691
2,720,628
2,449,300
2023
2022
£
£
Other revenue
Interest income
22,044
1,803
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Exchange losses
14,971
110,657
Depreciation of owned tangible fixed assets
14,993
14,762
Operating lease charges
166,832
108,107
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £14,971 (2022: £110,657).
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
5
Auditor's remuneration
2023
2022
Fees payable to the Company's auditor:
£
£
For audit services
Audit of the financial statements of the Company
9,400
9,500
6
Employees
The average monthly number of persons (including directors) employed by the Company during the year was 13 (2022: 11).
Their aggregate remuneration comprised wages of £1,215,311 (2022: £1,112,467), social security costs of £153,157 (2022: £148,199), and pension costs of £30,793 (2022: £8,392).
7
Directors' remuneration
Directors' remuneration for qualifying services amounted to £329,416 (2022: £314,260). The Company made pension contributions of £1,321 (2022: £1,321) to the directors' defined contribution schemes.
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
330,977
304,431
Company pension contributions to defined contribution schemes
1,321
1,321
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
22,044
1,803
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
22,044
1,803
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
150,175
113,642
Adjustments in respect of prior periods
8,112
Total current tax
150,175
121,754
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 20 -
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
625,631
532,898
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
156,408
101,251
Tax effect of expenses that are not deductible in determining taxable profit
5,233
7,880
Other permanent differences
(1,429)
(704)
Under/(over) provided in prior years
8,112
Other timing differences
(10,037)
5,215
Taxation charge for the year
150,175
121,754
10
Dividends
2023
2022
£
£
Final paid
571,214
572,000
11
Intangible fixed assets
Intangible assets
£
Cost
At 1 January 2023 and 31 December 2023
6,870
Amortisation and impairment
At 1 January 2023 and 31 December 2023
6,870
Carrying amount
At 31 December 2023
At 31 December 2022
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
12
Tangible fixed assets
Software
Fixtures & fittings
Office equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
16,356
90,822
57,339
69,770
234,287
Additions
5,151
5,151
At 31 December 2023
16,356
90,822
62,490
69,770
239,438
Depreciation and impairment
At 1 January 2023
16,356
89,330
54,108
26,579
186,373
Depreciation charged in the year
646
2,652
11,695
14,993
At 31 December 2023
16,356
89,976
56,760
38,274
201,366
Carrying amount
At 31 December 2023
846
5,730
31,496
38,072
At 31 December 2022
1,492
3,231
43,191
47,914
13
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
281,172
234,048
Instruments measured at fair value through profit or loss
735,547
5,093
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
11,327
-
Measured at amortised cost
691,467
643,027
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
105,710
76,755
Amounts owed by group undertakings
6,000
Derivative financial instruments
-
5,093
Other debtors
1,898
69,061
Prepayments and accrued income
212,162
104,292
325,770
255,201
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
15
Current asset investments
2023
2022
£
£
Unlisted investments
735,547
The Company holds bonds with maturity dates in January 2024 and September 2024 and are therefore held as current investments.
16
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
10,368
68,658
Corporation tax
150,741
113,642
Other taxation and social security
111,393
14,546
Derivative financial instruments
11,327
Other creditors
26,107
24,106
Accruals and deferred income
654,992
550,263
964,928
771,215
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
30,793
8,392
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.
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
18
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
50,000 ordinary shares of £1 each
50,000
50,000
50,000
50,000
19
Financial commitments, guarantees and contingent liabilities
The Company has entered into various foreign exchange hedging transactions during the year. At the year end the Company had outstanding forward rate contracts for the principal sum of $972,000 (2022: $843,000), due to mature at various contract rates. At 31 December 2023, there was a liability at a fair value of £11,327 (2022: asset of £5,093) arising from these transactions.
20
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
171,218
157,129
Between two and five years
128,414
299,632
299,632
456,761
21
Related party transactions
During the year the Company entered into the following transactions with related parties:
At the balance sheet date the Company was owed £6,000 (2022: £nil) by its parent, Islandbridge Group Limited. This amount is interest free and repayable on demand.
The Company was charged legal fees of £38,110 (2022: £10,000) by a partnership controlled by a director.
The Company received fees of £90,157 (2022: £nil) from a Director.
The Company received fees of £38,965 (2022: £39,494) from a person related to a Director in the year. At the balance sheet date, this amount was outstanding within trade debtors (2022: £nil).
At the balance sheet date, the amount of £1,898 was owed to the Company by a Director (2022: £771 was owed to a director by the Company).
ISLANDBRIDGE CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
22
Ultimate controlling party
At the balances sheet date the Company’s immediate parent company was Islandbridge Group Limited, a company incorporated in the United Kingdom and registered in England and Wales. At the balance sheet date the ultimate controlling party was J M McCarthy by virtue of his shareholding in Islandbridge Group Limited.
23
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
475,456
411,144
Adjustments for:
Taxation charged
150,175
121,754
Investment income
(22,044)
(1,803)
Depreciation and impairment of tangible fixed assets
14,993
14,762
Fair value gain/(loss) on derivatives
16,420
(5,664)
Movements in working capital:
(Increase)/decrease in debtors
(73,764)
632,023
Increase/(decrease) in creditors
145,287
(21,953)
Cash generated from operations
706,523
1,150,263
24
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,823,632
(698,319)
1,125,313
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