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Registered number: 07456530









BAOBAB INVESTMENT MANAGERS LTD









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
COMPANY INFORMATION


Directors
P Evans 
B O'Connell 
M Van Blerk 




Registered number
07456530



Registered office
Leytonstone House
Leytonstone

London

E11 1GA




Independent auditors
Barnes Roffe LLP
Chartered Accountants

Leytonstone House

3 Hanbury Drive

Leytonstone

London

E11 1GA





 
BAOBAB INVESTMENT MANAGERS LTD
 

CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditors' Report
 
5 - 8
Statement of Comprehensive Income
 
9
Balance Sheet
 
10
Statement of Changes in Equity
 
11
Statement of Cash Flows
 
12
Analysis of Net Debt
 
13
Notes to the Financial Statements
 
14 - 26


 
BAOBAB INVESTMENT MANAGERS LTD
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The Directors present the company's strategic report for the year ended 31 December 2023.

Business review
 
During the year ended 31 December 2023, Baobab Investment Managers Ltd generated revenues of £668k compared to £426k last year. Costs are considered well below average for the industry.
The company established a Long-Term Incentive Plan (LTIP) in 2014 to facilitate staff recruitment and retention. The assets of the LTIP comprise shares in Baobab Global Fund Ltd, which are held in the LTIP for the benefit of the scheme members from time to time, pending such time as any shares may vest in individuals under the terms of the scheme.
As of 31 December 2023, the Firm had assets under management of $153,433,609. The Firm also has an agreement with an individual who has a long-standing relationship with the Directors to advise on additional capital, which was valued at CAD $33,433,237.56 as of 31 December 2023

Principal risks and uncertainties
 
The Directors determine the business strategy and risk appetite along with the risk management policies and procedures. An identification of risks to the company are considered and the company’s resultant exposure is assessed after the application of both management and mitigation of these risks. Furthermore, the company then conducts a series of stress tests and scenario analyses on these risks to determine the effect they would have on the business. 
If necessary, Baobab Investment Managers Ltd would allocate extra capital to the relevant risk, as per the risk and harm analysis. This process is conducted at regular Directors' meetings and the relevant policies and procedures updated where necessary. 
The Directors have identified concentration risk, and market risk as the main areas of risk of harm to the company and its clients. 
These risks are managed by a number of means, including: Baobab Investment Managers Ltd has a management contract in place for the management of the fund. The fund’s investment portfolio is significantly diversified in order to limit the impact of one investment or several investments on the income of Baobab Investment Managers Ltd. 
Locum arrangements are in place with experienced professionals in the UK. 
Management maintains all its capital in cash holdings and also through other investments, which are subject to market risk. The risk associated with these investments is however considered to be low with the investment fund managed by experienced professionals. 
Baobab Investment Managers Ltd has concluded that its Tier 1 capital is sufficient to cover its own funds threshold requirement. Furthermore, the firm is satisfied it has sufficient liquid assets to meet its liquid assets threshold requirements at all times. 
The market for securing assets under management remains highly competitive. With these risks and uncertainties in mind we are confident that we will continue to grow the fund client’s assets under management due to the fund client’s historical track record and the company’s marketing ability. 

Page 1

 
BAOBAB INVESTMENT MANAGERS LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial key performance indicators
 
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, EBITDA margin and return on capital employed.

Directors' statement of compliance with duty to promote the success of the Company
 
As the Directors of Baobab Investment Managers Ltd, we have a legal responsibility under section 172 of the Companies Act 2006 to act in the way we consider, honourable, would be most likely to advocate the company’s achievements for the interest of its members as a whole, and to have regard to the long-term effect our decisions on the company and its stakeholders. This statement addresses the ways in which we as a Board outwork this responsibility.
One of the underlying principles of the company is that we follow an owner's approach. All members of the team are encouraged to act as owners of the business and as such investors in Baobab Global Fund. We are therefore collectively incentivised to strive for success as this is directly beneficial for all members of the team regardless of seniority or position. Furthermore, profits from Baobab Investment Managers’ are reinvested into the fund – benefiting everyone. 
We are a well-established business who judge performance and success over a three to five year time period, therefore any decisions taken are done so through the lens of the long term impact and consequences. Since inception we have strived to develop long term relationships with all of those we interact with. We approach these relationships looking to be transparent, open and professional at all times and as a result of this approach we have an extremely strong network of business relationships many of which have been in place for a decade.
 
Our business is built on the foundations of both the families of the employees but also those who choose to partner with us. We therefore strive for the highest levels of personal integrity, and we look for these same high standards in those we partner.
As a small and agile business, we operate a policy of transparency amongst colleagues, this builds trust and confidence in each other. An example of this being our monthly management meetings which are attended by all staff where all topics are open for discussion. 
We set extremely high standards for both ourselves and those we partner with, all of which significantly promotes success within the company as detailed above.


This report was approved by the board on 22 April 2024 and signed on its behalf.



P Evans
Director

Page 2

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £30,106 (2022 - loss £884,980).

There were dividends of £171,353 declared in the year. The directors do not propose a further final dividend.

Directors

The directors who served during the year were:

P Evans (appointed 17 April 2023)
B O'Connell 
M Van Blerk 

Future developments

The company continues to provide services under its principal activities and seeks to continue to build upon its current client base which should result in continued revenue growth.

Page 3

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Engagement with suppliers, customers and others

The company is aware that our clients, staff, and suppliers are an important part of our operations. We strive to build longstanding and sustainable relationships with both to ensure mutual benefit, and to be honest and transparent in line with our culture. We treat customers and suppliers fairly.

Greenhouse gas emissions, energy consumption and energy efficiency action

The Company has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is 40,000kWh or lower.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Charitable Donations

During the year the company made charitable donations totalling £100,700 (2022 - £72,119).

Auditors

The auditorsBarnes Roffe LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 22 April 2024 and signed on its behalf.
 





P Evans
Director

Page 4

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BAOBAB INVESTMENT MANAGERS LTD
 

Opinion


We have audited the financial statements of Baobab Investment Managers Ltd (the 'Company') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 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.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.


Page 5

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BAOBAB INVESTMENT MANAGERS LTD (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.


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


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' 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 set out on page 3, 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.


Page 6

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BAOBAB INVESTMENT MANAGERS LTD (CONTINUED)


Auditors' 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 Auditors' 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:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

We identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the relevant sector;

We focused on specific laws and regulations, which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, FCA Handbook rules and ISO standards;

We assessed the extent of compliance with laws and regulations identified above through making enquires of management and inspecting legal correspondence and identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

Making enquires of management as to where they considered there was susceptibility to fraud, their knowledge of actual suspected and alleged fraud; and

Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

Performed analytical procedures to identify and unusual or unexpected relationships;

Tested journal entries to identify unusual transactions;

Assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and 

Investigated the rationale behind significant or unusual transactions.

Page 7

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BAOBAB INVESTMENT MANAGERS LTD (CONTINUED)


There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial statements, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect that those that arise from errors as they may involve deliberate concealment or collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 2006Our 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 Auditors' 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.





Adam Dodds (Senior Statutory Auditor)
for and on behalf of
Barnes Roffe LLP
Chartered Accountants
Leytonstone House
3 Hanbury Drive
Leytonstone
London
E11 1GA

23 April 2024
Page 8

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
667,760
425,717

Gross profit
  
667,760
425,717

Administrative expenses
  
(666,978)
(633,301)

Exceptional administrative expenses
  
(284,127)
(712,816)

Fair value movements
  
327,604
96,747

Operating profit/(loss)
 5 
44,259
(823,653)

Interest receivable and similar income
 9 
1,917
161

Profit/(loss) before tax
  
46,176
(823,492)

Tax on profit/(loss)
 10 
(76,282)
(61,488)

Loss for the financial year
  
(30,106)
(884,980)

  

Total comprehensive income for the year
  
(30,106)
(884,980)

The notes on pages 14 to 26 form part of these financial statements.

Page 9

 
BAOBAB INVESTMENT MANAGERS LTD
REGISTERED NUMBER: 07456530

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 13 
3,521
4,402

Investments
 14 
1,427,676
1,384,267

  
1,431,197
1,388,669

Current assets
  

Debtors: amounts falling due within one year
 15 
168,130
238,878

Cash at bank and in hand
 16 
446,733
149,678

  
614,863
388,556

Creditors: amounts falling due within one year
 17 
(1,440,197)
(1,007,025)

Net current liabilities
  
 
 
(825,334)
 
 
(618,469)

Total assets less current liabilities
  
605,863
770,200

Provisions for liabilities
  

Deferred tax
 18 
(191,580)
(154,458)

  
 
 
(191,580)
 
 
(154,458)

Net assets
  
414,283
615,742


Capital and reserves
  

Called up share capital 
 19 
200
200

Share premium account
 20 
98,998
98,998

Profit and loss account
 20 
315,085
516,544

  
414,283
615,742


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 22 April 2024.




P Evans
B O'Connell
Director
Director

The notes on pages 14 to 26 form part of these financial statements.

Page 10

 
BAOBAB INVESTMENT MANAGERS LTD
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 January 2022
200
98,998
1,501,440
1,600,638



Loss for the year
-
-
(884,980)
(884,980)

Dividends: Equity capital
-
-
(99,916)
(99,916)



At 1 January 2023
200
98,998
516,544
615,742



Loss for the year
-
-
(30,106)
(30,106)

Dividends: Equity capital
-
-
(171,353)
(171,353)


At 31 December 2023
200
98,998
315,085
414,283


The notes on pages 14 to 26 form part of these financial statements.

Page 11

 
BAOBAB INVESTMENT MANAGERS LTD
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit/(loss) for the financial year
(30,106)
(884,980)

Adjustments for:

Depreciation of tangible assets
881
1,100

Interest received
(1,917)
(161)

Taxation charge
76,282
61,488

Decrease/(increase) in debtors
60,782
(142,453)

Increase in creditors
403,978
20,315

Net fair value (gains) recognised in P&L
(327,604)
(343,973)

Corporation tax received/(paid)
-
(97,780)

Net cash generated from operating activities

182,296
(1,386,444)


Cash flows from investing activities

Purchase of unlisted and other investments
-
(12,720)

Sale of unlisted and other investments
284,195
293,715

Interest received
1,917
161

Net cash from investing activities

286,112
281,156

Cash flows from financing activities

Dividends paid
(171,353)
(99,916)

Net cash used in financing activities
(171,353)
(99,916)

Net increase/(decrease) in cash and cash equivalents
297,055
(1,205,204)

Cash and cash equivalents at beginning of year
149,678
1,354,882

Cash and cash equivalents at the end of year
446,733
149,678


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
446,733
149,678

446,733
149,678


The notes on pages 14 to 26 form part of these financial statements.

Page 12

 
BAOBAB INVESTMENT MANAGERS LTD
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

149,678

297,055

446,733


The notes on pages 14 to 26 form part of these financial statements.

Page 13

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Baobab Investment Managers Ltd ("the Company") is a Company limited by shares, incorporated in England and Wales. Its registered office is Leytonstone House, Leytonstone, London, England, E11 1GA.
The principal activity of Baobab Investment Managers Ltd is that of fund management.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

The financial statements have been prepared on a going concern basis. The directors have considered the operating surplus for the period and statement of financial position at the accounting date and reviewed forecasts and are satisfied that the company is in a position to meet its liabilities as they fall due over the next twelve months. In arriving at this conclusion, the Directors have taken account of current and anticipated financial performance in the current economic conditions, and the company’s reserves position. The directors are of the view that should there be a need to meet current liabilities then the fixed asset investment will be sold for cash. The directors have concluded that it remains appropriate to prepare the financial statements on the going concern basis.

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.



Page 14

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.

Depreciation is provided on the following basis:

Office equipment
-
20%
Computer equipment
-
33%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.5

Valuation of investments

Investments where market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

 
2.6

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.7

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

Page 15

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Page 16

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.8
Financial instruments (continued)

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

 
2.9

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.10

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

 
2.11

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

 
2.12

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Page 17

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.14

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

  
2.15

Long Term Incentive Plan

The company operates a Long Term Incentive Plan “LTIP” for its employees. Employees will accrue rights to the plan subject to meeting certain conditions in the course of employment. The Incentive is held in the balance sheet until such time the vesting criteria are met. The company accrues a provision in the balance sheet for any amounts reserved for its employees. Any movement in value in the LTIP Investment is accounted for through the profit and loss account, and a corresponding adjustment is made to the accrued provision.

 
2.16

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

Page 18

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. 
Critical accounting estimates and assumptions: 
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. There are however considered to be no areas subject to such material judgement and estimation uncertainty.


4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Management fees
541,227
425,717

Recharge
126,533
-


All turnover arose within the United Kingdom.


5.


Operating loss

The operating loss is stated after charging:

2023
2022
£
£

Impairment of tangible fixed assets
881
1,100

Exchange differences
6,088
(37,131)

Other operating lease rentals
47,943
35,862

Defined contribution pension cost
4,842
4,242


6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors and their associates:


2023
2022
£
£

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
9,450
8,200

Fees payable to the Company's auditors and their associates in respect of:

Taxation compliance services
1,050
1,410
Page 19

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
256,742
198,676

Staff long term incentive plan
284,127
712,816

Social security costs
27,854
17,326

Cost of defined contribution scheme
2,369
4,242

571,092
933,060


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Employees
5
6


8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
177,801
17,464

Company contributions to defined contribution pension schemes
2,473
-

180,274
17,464


During the year retirement benefits were accruing to 1 director (2022 - NIL) in respect of defined contribution pension schemes.


9.


Interest receivable

2023
2022
£
£


Other interest receivable
1,917
161

Page 20

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
29,194
(9,966)

Adjustments in respect of previous periods
9,966
436


39,160
(9,530)


Total current tax
39,160
(9,530)

Deferred tax


Origination and reversal of timing differences
37,122
34,278

Changes to tax rates
-
36,740

Total deferred tax
37,122
71,018


Taxation on profit on ordinary activities
76,282
61,488

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit/(loss) on ordinary activities before tax
46,176
(823,492)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
11,544
(156,463)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
(8,849)
123,587

Capital allowances for year in excess of depreciation
220
72

Adjustments to tax charge in respect of prior periods
9,966
-

Capital gains
29,566
22,838

deferred tax on unrealised gain in unlisted investment
37,122
71,018

Other differences leading to an increase (decrease) in the tax charge
(3,287)
436

Total tax charge for the year
76,282
61,488

Page 21

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
10.Taxation (continued)


Factors that may effect future tax charges

There were no factors that may affect future tax charges.


11.


Dividends

2023
2022
£
£


Dividends paid
171,353
99,916


12.


Exceptional items

2023
2022
£
£


Staff long term incentive plan
284,127
712,816


13.


Tangible fixed assets





Office equipment
Computer equipment
Total

£
£
£



Cost or valuation


At 1 January 2023
20,924
15,854
36,778



At 31 December 2023

20,924
15,854
36,778



Depreciation


At 1 January 2023
16,522
15,854
32,376


Charge for the year on owned assets
881
-
881



At 31 December 2023

17,403
15,854
33,257



Net book value



At 31 December 2023
3,521
-
3,521



At 31 December 2022
4,402
-
4,402

Page 22

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Fixed asset investments





Unlisted investments

£



Cost or valuation


At 1 January 2023
1,384,267


Disposals
(284,195)


Revaluations
327,604



At 31 December 2023
1,427,676




Included within the unlisted investment balance above at the year end are amounts allocated to the LTIP of £1,226,684 (2022 - £942,557).

Page 23

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Debtors

2023
2022
£
£


Trade debtors
52,465
2,142

Other debtors
115,665
160,065

Prepayments and accrued income
-
76,671

168,130
238,878



16.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
446,733
149,678



17.


Creditors: Amounts falling due within one year

2023
2022
£
£

Corporation tax
29,194
-

Other creditors
128,278
17,339

Accruals and deferred income
1,282,725
989,686

1,440,197
1,007,025



18.


Deferred taxation




2023
2022


£

£






At beginning of year
(154,458)
(83,440)


Charged to profit or loss
(37,122)
(71,018)



At end of year
(191,580)
(154,458)

Page 24

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
18.Deferred taxation (continued)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(1,376)
(1,376)

Unrealised gain on unlisted investments
(190,204)
(153,082)

(191,580)
(154,458)


19.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



200 (2022 - 200) Ordinary shares of £1.00 each
200
200



20.


Reserves

Share premium account

Share premium account relates to an excess of consideration received over the nominal value of shares purchased.

Profit and loss account

Profit and loss account reserve relates to accumulated profits less distributions to shareholders.


21.


Pension commitments

The company operates a defined contribution pension scheme for its directors and employees. The assets of the schemes are held separately from those of the company in an independently administered fund. 
During the year contributions to the scheme totalled £4,842
 (2022 - £4,242)
There were £901 
(2022 - £797) contributions outstanding at the year end. 

Page 25

 
BAOBAB INVESTMENT MANAGERS LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
24,362
3,907

Later than 1 year and not later than 5 years
44,719
-

69,081
3,907


23.


Related party transactions

At the year end, shareholders owed the company £30,704 (2022 - £90,620). Interest was charged at HMRC's official rate.
During the year, directors received £171,353 
(2022 - £99,916) through dividends.
During the year, the company paid rent of £21,640 
(2022 - £12,420) to a shareholder.
During the year, the company earned fees of £667,760 
(2022 - £425,717) from a companies with common directors. At the year end a debtor was due from companies with common directors at an amount of £5,659 (2022 - £98,845).


24.


Controlling party

The controlling parties are M Van Blerk and E Van Blerk by virtue of their joint shareholding, which comprises 90% ownership of the company. Subsequent to the year end and following a share transfer M Van Blerk became the sole controlling party.

 
Page 26