REGISTERED NUMBER: |
Financial Statements |
for the Year Ended 31 December 2023 |
for |
SFL UK MANAGEMENT LTD |
REGISTERED NUMBER: |
Financial Statements |
for the Year Ended 31 December 2023 |
for |
SFL UK MANAGEMENT LTD |
SFL UK MANAGEMENT LTD (REGISTERED NUMBER: 07294733) |
Contents of the Financial Statements |
for the year ended 31 December 2023 |
Page |
Company Information | 1 |
Balance Sheet | 2 |
Notes to the Financial Statements | 3 |
SFL UK MANAGEMENT LTD |
Company Information |
for the year ended 31 December 2023 |
Directors: |
Secretary: |
Registered office: |
Registered number: |
Auditors: |
Chartered Accountants and Statutory Auditors |
3rd Floor Marlborough House |
298 Regents Park Road |
Finchley |
London |
N3 2SZ |
SFL UK MANAGEMENT LTD (REGISTERED NUMBER: 07294733) |
Balance Sheet |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
Fixed assets |
Tangible assets | 4 |
Current assets |
Debtors | 5 |
Cash at bank |
Creditors |
Amounts falling due within one year | 6 |
Net current assets |
Total assets less current liabilities |
Capital and reserves |
Called up share capital | 8 |
Other reserves |
Retained earnings | ( |
) | ( |
) |
Shareholders' funds |
In accordance with Section 444 of the Companies Act 2006, the Profit and Loss Account has not been delivered. |
The financial statements were approved by the Board of Directors and authorised for issue on |
SFL UK MANAGEMENT LTD (REGISTERED NUMBER: 07294733) |
Notes to the Financial Statements |
for the year ended 31 December 2023 |
1. | Statutory information |
SFL UK MANAGEMENT LTD is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | Accounting policies |
Basis of preparing the financial statements |
The financial statements have been prepared on a going concern basis. |
Key source of estimation, uncertainty and judgement |
The preparation of financial statements in conformity with generally accepted accounting practice requires management to make estimates and judgement that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. |
There is estimation uncertainty in calculating depreciation. A full line by line review of fixed assets is carried out by management regularly. Whilst every attempt is made to ensure that the depreciation policy is as accurate as possible, there remains a risk that the policy does not match the useful life of the assets. |
There is estimation uncertainty in calculating deferred tax. A full line by line review of deferred tax is carried out by management regularly. Whilst every attempt is made to ensure that the deferred tax is as accurate as possible, there remains a risk that the provisions do not match the actual tax liability when asset is disposed of. |
Turnover |
Turnover represents management fees, exclusive of value added tax and is recognised on an accruals basis. Turnover is based on a cost plus arrangement and therefore is accounted for in line with related expenditure. Expenses are recognised on an accruals basis. |
Tangible fixed assets |
Tangible assets are stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price, costs directly attributed to bringing the asset to its working condition for its intended use, dismantling and restoration costs and borrowing costs capitalised. |
Fixtures and fittings are stated at cost less accumulated depreciation and accumulated impairment losses. |
Depreciation is calculated to allocate the cost to their residual values over their estimated useful lives, as follows. |
- Office equipment: depreciated at 20% per annum on a reducing balance basis |
- Computer costs: depreciated at 20% per annum on a reducing balance basis. |
SFL UK MANAGEMENT LTD (REGISTERED NUMBER: 07294733) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
2. | Accounting policies - continued |
Financial instruments |
Financial assets and financial liabilities are recognised in the balance sheet when the company becomes a party to the contractual provisions of the instrument. |
Trade and other debtors and creditors are classified as basic financial instruments and measured at initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the company will not be able to collect all amounts due. |
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank and bank overdrafts. |
Financial liabilities and equity instruments issued by the company are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit and Loss Account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Foreign currencies |
The financial statements are presented in Pounds Sterling, as this is the Company's functional and reporting currency. |
Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Resulting exchange differences are dealt with in profit or loss. |
Pension costs and other post-retirement benefits |
Payments to defined contribution pension schemes are charged as an expense as incurred. |
SFL UK MANAGEMENT LTD (REGISTERED NUMBER: 07294733) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
2. | Accounting policies - continued |
Share based payments |
The Company participates in the share option scheme of the ultimate parent company, SFL Corporation Ltd. the fair value of the share options is calculated using the Black-Scholes model at the date of grant. The corresponding expense is recognised on a straight line basis over the vesting period based on the Company's estimation of shares which will actually vest, with the reserve entry being recognised within capital contribution reserve. |
Going concern |
The net assets on the balance sheet as at 31 December 2023 is £425,457 (2022: £375,703) of which the amount owed to group undertaking is £154,576 (2022: £42,609). On this basis the financial statements have been prepared on a going concern basis. The Company has continued financial support from its ultimate parent, SFL Corporation Ltd. |
3. | Employees and directors |
The average number of employees during the year was |
4. | Tangible fixed assets |
Fixtures |
and | Computer |
fittings | equipment | Totals |
£ | £ | £ |
Cost |
At 1 January 2023 |
Additions |
At 31 December 2023 |
Depreciation |
At 1 January 2023 |
Charge for year |
At 31 December 2023 |
Net book value |
At 31 December 2023 |
At 31 December 2022 |
SFL UK MANAGEMENT LTD (REGISTERED NUMBER: 07294733) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
5. | Debtors: amounts falling due within one year |
2023 | 2022 |
£ | £ |
Amounts owed by group undertakings |
Other debtors |
VAT recoverable | 16,923 | 5,356 |
Deferred tax asset |
Prepayments and accrued income |
6. | Creditors: amounts falling due within one year |
2023 | 2022 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Social security and other taxes |
Other creditors |
Accrued expenses |
7. | Leasing agreements |
Renal payable on operating leases are charged to profit or loss on a straight line basis over the period of the lease. Rent-free periods are also straight lined over the period of the lease. |
8. | Called up share capital |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | 1 | 1 | 1 |
Capital contribution reserve |
The capital contribution reserve charges relates to the share option expenses where the shares are to be made available by the ultimate parent company (Note 12). |
9. | Disclosure under Section 444(5B) of the Companies Act 2006 |
The Report of the Auditors was unqualified. |
for and on behalf of |
SFL UK MANAGEMENT LTD (REGISTERED NUMBER: 07294733) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
10. | Related party transactions |
In accordance with the exemption available under FRS 102, transactions with SFL Corporation Ltd, which controls 100% of the Company's voting rights, and any 100% owned fellow subsidiaries have not been disclosed. |
From December 2015, the Company began leasing a new office premises from Frontline Corporate Services Limited. Frontline Corporate Services Limited is considered to be a related party to the Company due to a common investor who exerts significant influence over SFL Corporation Ltd and Frontline Corporate Services Limited. |
During the year ended 31 December 2023, Frontline Corporate Services Limited charged the Company rental costs of £95,117 (2022: £47,900), rates and service charge of £62,980 (2022: £26,809), and other overhead costs of £9,946 (2022: £9,312). As at 31 December 2023, the net payable balance to Frontline Corporate Services Limited was £44,818 (2022: £4,832). |
11. | Ultimate controlling party |
In the opinion of the directors, the Company's ultimate holding Company and controlling party at 31 December 2023 was SFL Corporation Ltd, which is incorporated in Bermuda. SFL Corporation Ltd, is a public Company and its shares are traded on the New York Stock Exchange. Its financial statements wherein the results of SFL UK Management Ltd are consolidated can obtained from SFL Corporation Ltd, PO Box HM 1593, Par la Ville Place, 4th Floor, 14 Par la Ville Road, Hamilton HM08, Bermuda. |
SFL UK MANAGEMENT LTD (REGISTERED NUMBER: 07294733) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
12. | Share options |
The Company participates in an ownership-based compensation scheme for employees run by its ultimate parent company, SFL Corporation Ltd. SFL Corporation Ltd. has issued an aggregate of 65,000 shares options to employees of the Company over the last 5 years. On 21 March 2019 (30,000) and 17 February 2020 (35,000) options were issued at initial strike prices of $12.35, and $13.45 respectively. The share price at the time of grant was at or below the strike price. |
The strike price for all options reduces by the amount of all dividends declared by SFL Corporation Ltd. in the period from the date of grant until the date the option is exercised, provided the strike price is never reduced below the par value of the share. The options granted vest over a period of one to three years. |
In November 2016 the directors approved a UK mirror plan which is identical in terms to the ultimate parent company plan except that stock options vest in total after three years. |
The fair value of the options was estimated using the Black-Scholes option valuation model, with the following assumptions: |
March 2019 | February 2020 |
Risk free interest rate | 2.34% | 1.40% |
Expected volatility of shares | 24% | 22% |
Expected dividend yield | 0% | 0% |
Average expected term of options | 3.5 years | 3.5 years |
Forfeiture rate | 0% | 0% |
The risk-free interest rate was estimated using the interest rate on 3-year US treasury zero coupon issues. The volatility was estimated using historical share price data. The dividend yield has been estimated at 0% as the exercise price is reduced by all dividends declared by SFL Corporation Ltd. from the date of grant to the exercise date. The options must be exercised between the first tranche vesting date of 1 year and the expiration date of 5 years. The expected term is assumed to be 3 years for the first tranche options, 3.5 years for the second tranche options and 4 years for the third tranche options. |
The expected term estimated by assigning equal probability to each exercise date between vesting and expiry. It is assumed that 100% of all options granted will vest. |
A summary of option activity during the year ended 31 December 2023 is summarized below: |
Number of share options | Weighted average exercise price |
Options outstanding at 1 January 2023 | 88,000 | $9.89 |
Options granted during the year | - | - |
Options exercised during the year |
Options expired during the year | (23,000 | ) | $9.47 |
Options outstanding at 31 December 2023 | 65,000 | $8.98 |
Options exercisable at 31 December 2023 | 65,000 | $8.98 |
SFL UK MANAGEMENT LTD (REGISTERED NUMBER: 07294733) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
The share option expense for the above options was £1,062 (2022: £11,788). |
13. | Pension commitments |
The Company operates a defined contribution scheme. The pension cost charges represents contributions payable by the Company to the defined contribution scheme and amounted to £52,665 for the year ended 31 December 2023 (2022: £51,272). |