Limited Liability Partnership registration number OC415602 (England and Wales)
SHADOWFALL CAPITAL & RESEARCH LLP
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
SHADOWFALL CAPITAL & RESEARCH LLP
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 9
SHADOWFALL CAPITAL & RESEARCH LLP
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
As restated
unaudited
Notes
£
£
£
£
Fixed assets
Intangible assets
5
-
73
Tangible assets
4
43,738
45,765
Investments
6
107,658
63,202
151,396
109,040
Current assets
Debtors
7
1,440,665
388,184
Cash at bank and in hand
80,485
275,871
1,521,150
664,055
Creditors: amounts falling due within one year
8
(438,191)
(182,959)
Net current assets
1,082,959
481,096
Total assets less current liabilities
1,234,355
590,136
Represented by:
Members' other interests
Members' capital classified as equity
278,093
278,093
Other reserves classified as equity
956,262
312,043
1,234,355
590,136

The members of the limited liability partnership have elected not to include a copy of the profit and loss account within the financial statements.

These financial statements have been prepared and delivered in accordance with the provisions applicable to limited liability partnerships subject to the small limited liability partnerships regime.

The financial statements were approved by the members and authorised for issue on 7 August 2024 and are signed on their behalf by:
07 August 2024
M Earl
Designated member
Limited Liability Partnership Registration No. OC415602
SHADOWFALL CAPITAL & RESEARCH LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Limited liability partnership information

Shadowfall Capital & Research LLP is a limited liability partnership incorporated in England and Wales. The registered office is 5th Floor, 55 Bartholomew Close, London, United Kingdom, EC1A 7BF.

 

The limited liability partnership's principal activities are disclosed in the Members' Report.

1.1
Accounting convention

These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together 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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the limited liability partnership. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Turnover

Turnover comprises revenue recognised by the LLP in respect of research fees and management & performance fees receivable from investors (where the LLP manages their funds directly) or from the related managed fund, ShadowFall Fund Limited. Research fees are recognised on an accruals basis. Management fees are recognised at key points in the lifecycle of the investment in line with each indiviudal agreement. Performance fee revenue is recognised once obligations have been met as per the specific conditions of the indiviudal agreements.

1.3
Members' participating interests

Members' participation rights are the rights of a member against the LLP that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).

 

Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.

All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.

 

Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the LLP has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.

Once an unavoidable obligation has been created in favour of members through allocation of profits or other means, any undrawn profits remaining at the reporting date are shown as ‘Loans and other debts due to members’ to the extent they exceed debts due from a specific member.

SHADOWFALL CAPITAL & RESEARCH LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
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:

Other intangible assets
33.33% straight line
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.

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:

Fixtures and fittings
25% reducing balance
Computers
33.33% 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 recognised in the profit and loss account.

1.6
Fixed asset investments

Financial investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Transaction costs are expensed to profit or loss as incurred. Changes in fair value are recognised in other comprehensive income except to the extent that a gain reverses a loss previously recognised in profit or loss, or a loss exceeds the accumulated gains recognised in equity; such gains and loss are recognised in profit or loss.

1.7
Cash and cash equivalents

Cash at bank and in hand are basic financial assets and include cash in hand. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The limited liability partnership applies the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs.

SHADOWFALL CAPITAL & RESEARCH LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the limited liability partnership 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.

Basic financial liabilities

Basic financial liabilities, including creditors, are initially recognised at transaction price.

 

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.

Other financial liabilities

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 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.

1.9
Retirement benefits and post retirement payments to members

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

1.10
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.

SHADOWFALL CAPITAL & RESEARCH LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 5 -
1.11

FCA MIFIDPRU 8 disclosure

Our MIFIDPRU disclosure is published on our website at 

https://www.shadowfall.com/fund/wp-content/uploads/sites/2/documents/ShadowFall-Capital-Research-LLP-MIFIDPRU-8-Disclosure-2023.pdf

 

 

 

2
Judgements and key sources of estimation uncertainty

In the application of the limited liability partnership’s accounting policies, the members are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

The members do not believe that they have made any critical judgements or estimates in the process of applying the LLP's accounting policies that have a significant effect on the amounts recognised in the statutory financial statements.

 

3
Employees

The average number of persons (excluding members) employed by the partnership during the year was:

2023
2022
unaudited
Total
4
6
SHADOWFALL CAPITAL & RESEARCH LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023 (unaudited)
114,227
Additions
13,513
At 31 December 2023
127,740
Depreciation and impairment
At 1 January 2023 (unaudited)
68,462
Depreciation charged in the year
15,540
At 31 December 2023
84,002
Carrying amount
At 31 December 2023
43,738
At 31 December 2022 (unaudited)
45,765
5
Intangible fixed assets
Stamp Duty Land Tax
£
Cost
At 1 January 2023 (unaudited) and 31 December 2023
2,646
Amortisation and impairment
At 1 January 2023 (unaudited)
2,573
Amortisation charged for the year
73
At 31 December 2023
2,646
Carrying amount
At 31 December 2023
-
As 31 December 2022 (unaudited)
73
SHADOWFALL CAPITAL & RESEARCH LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
6
Fixed asset investments
2023
2022
unaudited
£
£
Other investments other than loans
107,658
63,202
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 January 2023 (unaudited)
63,202
Additions
49,447
Disposals
(4,991)
At 31 December 2023
107,658
Carrying amount
At 31 December 2023
107,658
At 31 December 2022 (unaudited)
63,202
7
Debtors
2023
2022
unaudited
Amounts falling due within one year:
£
£
Trade debtors
71,651
94,414
Other debtors
1,369,014
293,770
1,440,665
388,184
8
Creditors: amounts falling due within one year
2023
2022
As restated
unaudited
£
£
Trade creditors
131,552
17,967
Taxation and social security
12,199
3,194
Other creditors
294,440
161,798
438,191
182,959
SHADOWFALL CAPITAL & RESEARCH LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
9
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

Senior Statutory Auditor:
Anil Kapoor
Statutory Auditor:
Mercer & Hole LLP
10
Operating lease commitments

At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

2023
2022
unaudited
£
£
60,766
76,283

The outstanding commitments at 31 December 2023 of £60,766 were due within one year from the reporting end date.

11
Events after the reporting date

The partnership ceased to supply research services in the following period following a demerger, and turnover from research services ceased accordingly with effect from 31 March 2024. Research services income made up 30.5% of turnover in the period (2022: 53.8%).

12
Related party transactions

At 31 December 2023, an amount of £41,625 (2022: Nil) was owed to ShadowFall Services Limited, a company in which one of the partners has a controlling interest. The balance is repayable on demand and no interest has been charged.

13
Prior period adjustment

The financial statements for the year ended 31 December 2022 have been restated to incorporate an overprovision of an accrual for rates in the year ended 31 December 2022 and corresponding underprovision in the years ended 31 December 2020 and 31 December 2021. The overall adjustment to reserves at 31 December 2022 is nil.

 

A further adjustment was made to recognise the members' fixed salary drawings of £53,410 as an expense through the profit and loss that had previously been recognised directly through other reserves classified as equity.

 

SHADOWFALL CAPITAL & RESEARCH LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Prior period adjustment
(Continued)
- 9 -
Changes to the balance sheet
As previously reported at 31 Dec 2022
Adjustment at 1 Jan 2022
Adjustment at 31 Dec 2022
As restated at 31 Dec 2022
£
£
£
£
Other reserves classified as equity
312,043
(43,375)
43,375
312,043
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 December 2022
£
£
£
Administrative expenses
(1,058,538)
43,375
(1,015,163)
Members' remuneration charged as an expense
-
(53,410)
(53,410)
Profit for the financial period
676,804
(10,035)
666,769
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