Company registration number 03681529 (England and Wales)
CREDO CAPITAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CREDO CAPITAL LIMITED
COMPANY INFORMATION
Directors
R Ettlinger
A Noik
D Chalmers
J Cahn
D Gouws
R Silver
C van der Merwe
G Crosland
Company number
03681529
Registered office
8-12 York Gate
100 Marylebone Road
London
NW1 5DX
Auditor
Gerald Edelman LLP
73 Cornhill
London
EC3V 3QQ
Business address
8-12 York Gate
100 Marylebone Road
London
NW1 5DX
CREDO CAPITAL LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 26
CREDO 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.

 

Strategic management

Credo was founded on two core, guiding principles: firstly, putting clients’ interests ahead of everything else, with the belief that if this was always done, the business would have a good chance of becoming successful, and secondly, ensuring that employees were treated as being a “part of the family”, as any company is only as good as its people.

 

Nearly twenty-five years later Credo still operates with both of these as core, guiding principles, with the result that today the business has a well-established culture which ensures that clients’ interests are prioritised in the first instance, and that employees are treated as individuals with equal opportunities to progress within the company.

 

Two significant consequences of this culture are that Credo has established strong personal relationships with a large number of clients, whilst maintaining many of the good employees over the years, and hence the company has a stable long-term workforce today, many of whom have spent more than ten years with the company. We believe that this creates a virtuous circle as clients and staff alike get to know each other over the years, thereby further enhancing the company’s ability to better serve client needs.

 

These principles have been major drivers in creating and preserving value for the company.

 

In addition to the above, Credo remains committed to serving both Private and Financial Intermediary clients in our two core markets, namely the United Kingdom and South Africa. Credo’s management will continue to ensure that investment in the business enhances the offerings to both these client segments and markets. A successful strategy in this regard will ultimately benefit shareholders as well.

 

 

Business environment

In last year’s report, mention was made of a slowing global economy, potentially culminating in a recession. Twelve months later, it would appear that the worst risks in this regard have abated, and growth has remained positive in most major regions (save for some small declines in the euro area and some other smaller countries).

 

Importantly, the globally dominant US economy has proved to be relatively resilient once again. In addition, the narrative has changed from serial interest rate hikes to one focusing not so much on when the US Federal Reserve may start easing, but how many cuts there may in fact be over the next year or two. Predictably, this had a positive effect on share prices (as investors once again start valuing equities with reference to a lower discount rate) as well as bonds (the value of which moves inversely to interest rates).

 

In addition, a number of the largest companies in the world as measured by market capitalisation (specifically the so-called “Magnificent Seven” – Microsoft, Apple, Amazon, Alphabet, Meta, Nvidia and Tesla) saw exceptionally strong share price growth in the second half of 2023, as excitement started building about the benefits they are likely to experience in a world where artificial intelligence plays an ever-increasing role in our lives.

 

Based on the above, the company’s assets under administration approached all-time highs towards the end of the year, which clearly had a positive impact on both management and platform fees earned. The diversified nature of the company’s business model and revenue streams further played a role in overall earnings which remained strong.

 

Given that inflation appears to be less of a concern than before – leading to a more benign interest rate scenario – the directors remain confident that the business environment remains supportive going forward.

 

 

CREDO CAPITAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Business performance and position

With the company’s assets under administration approaching all-time highs towards the end of the year, Credo’s revenue of £25,991,419 reflects an increase of 5.7% versus the prior year figure, despite the muted trading activity in 2023.

 

Average assets under administration increased over the past 12 months from £4.3bn to £4.5bn and gross margins across the company’s business continue to improve compared to the prior year.

 

The increase in administrative expenses reflects the continued investment made by the company in staff to service and continue to grow the business, along with additional data costs being incurred during the year that are key to our business activities.

 

Overall, the directors are satisfied with the operating performance of the business for the year ending 31 December 2023.

 

In addition, Credo has a strong balance sheet, evidenced by £8,903,585 of net current assets, which should support the company in weathering any potential business and market uncertainties.

Principal risks and uncertainties

Credit risk

Included in receivables is £4,716,177 which relates to accrued income. This consists mainly of brokerage commission, platform fees and asset management fees due to the company. A significant proportion of the trade debtors were recovered post year end.

 

The directors are of the opinion that the company has no significant credit risk.    

 

Liquidity risk            

The company’s cash and cash equivalents as at 31 December 2023 totalled £3,959,042. Given this balance and the company’s high cash conversion within its operating business, the directors foresee no liquidity issues for the coming financial year nor any issues which would lead them to believe that there are any going concern problems with the company.

 

Market risk

The directors' view on market risk has been commented on above.

Promoting the success of the company

Section 172 of the Companies Act 2006 requires the directors to take into consideration the interests of stakeholders in their decision-making and this statement should be read in conjunction with the Strategic Report in its entirety.

 

The directors continue to have regard to the interests of the company's employees and other stakeholders including the impact of its activities on the community and the environment in which it operates, when making decisions. The directors act in good faith and fairly between the company's members and consider the steps that are most likely to promote the success of the company in the long term, for its members. The directors continue to strive to maintain the company's reputation for high standards of business conduct.

 

The company has long-established channels of communication within the organisation where employees can put forward their views and ideas. We continue to embrace diversity within our business and create an environment where staff have the opportunity to develop and progress. Our principal stakeholders including our shareholders, staff and suppliers are engaged on a regular basis.

CREDO CAPITAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

Capital and reserves    

The company's total equity at 31 December 2023 totalled £8,874,169 which is sufficient to meet the capital requirements as required by the Financial Conduct Authority.    

On behalf of the board

C van der Merwe
Director
24 April 2024
CREDO 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 the provision of asset management and platform services.

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £8,300,000 (2022: £6,800,000).

 

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

R Ettlinger
A Noik
D Chalmers
J Cahn
D Gouws
R Silver
C van der Merwe
G Crosland
Auditor

The auditor, Gerald Edelman LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

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:

 

 

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.

CREDO CAPITAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Statement of disclosure to auditor
So far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware. The directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information.
Public disclosure

The company's Public disclosure can be found on the company's website (www.credogroup.com).

Going concern

Having reviewed the company's financial forecast and expected future cash flows, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the going concern basis has been adopted in preparing the financial statements for the year ended 31 December 2023.

On behalf of the board
C van der Merwe
Director
24 April 2024
CREDO CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CREDO CAPITAL LIMITED
- 6 -
Opinion

We have audited the financial statements of Credo Capital Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

CREDO CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CREDO CAPITAL LIMITED
- 7 -
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:

 

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.

 

Our audit procedures were primarily directed towards testing the accounting systems in operation upon which we have based our assessment of the financial statements for the year ended 31 December 2023.

 

We planned our audit so that we have a reasonable expectation of detecting material misstatements in the financial statements resulting from irregularities, fraud or non-compliance with law or regulations.

Extent to which the audit was considered capable of detecting irregularities, including fraud

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

CREDO CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CREDO CAPITAL LIMITED
- 8 -
Audit response to risks identified
Fraud due to management override

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

Irregularities and non-compliance with laws and regulations

In response to the risk of irregularities and non compliance with laws and regulations, we designed procedures which included, but are not limited to:

The test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, mean that there is an unavoidable risk that even some material misstatements in respect of irregularities may remain undiscovered even though the audit is properly planned and performed in accordance with ISAs (UK). Furthermore, the more removed that laws and regulations are from financial transactions, the less likely that we would become aware of non-compliance.

 

Our examination should therefore not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance that might exist. The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the directors.

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.

CREDO CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CREDO CAPITAL LIMITED
- 9 -

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Hemen Doshi FCCA
Senior Statutory Auditor
For and on behalf of Gerald Edelman LLP
24 April 2024
Chartered Accountants
Statutory Auditor
73 Cornhill
London
EC3V 3QQ
CREDO CAPITAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
as restated
Notes
£
£
Revenue
3
25,991,419
24,589,408
Cost of sales
(6,754,142)
(6,335,865)
Gross profit
19,237,277
18,253,543
Administrative expenses
(14,827,720)
(14,390,325)
Operating profit
4
4,409,557
3,863,218
Investment income/(loss)
8
650,784
(852,693)
Other gains and losses
9
84,458
13,317
Profit before taxation
5,144,799
3,023,842
Tax on profit
10
(1,135,490)
(430,483)
Profit for the financial year
4,009,309
2,593,359

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

CREDO CAPITAL LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
as restated
Notes
£
£
£
£
Non-current assets
Intangible assets
12
-
0
2,501
Current assets
Trade and other receivables
15
6,244,550
5,860,356
Investments
16
2,328,068
9,444,034
Cash and cash equivalents
3,959,042
1,052,725
12,531,660
16,357,115
Current liabilities
17
(3,628,075)
(3,023,523)
Net current assets
8,903,585
13,333,592
Total assets less current liabilities
8,903,585
13,336,093
Provisions for liabilities
Deferred tax liability
19
29,416
171,233
(29,416)
(171,233)
Net assets
8,874,169
13,164,860
Equity
Called up share capital
20
750,000
750,000
Retained earnings
8,124,169
12,414,860
Total equity
8,874,169
13,164,860
The financial statements were approved by the board of directors and authorised for issue on 24 April 2024 and are signed on its behalf by
C van der Merwe
G Crosland
Director
Director
Company Registration No. 03681529
CREDO CAPITAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Retained earnings
Total
Notes
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
750,000
16,621,501
17,371,501
Year ended 31 December 2022:
Profit and total comprehensive income
-
2,593,359
2,593,359
Dividends
11
-
(6,800,000)
(6,800,000)
Balance at 31 December 2022
750,000
12,414,860
13,164,860
Year ended 31 December 2023:
Profit and total comprehensive income
-
4,009,309
4,009,309
Dividends
11
-
(8,300,000)
(8,300,000)
Balance at 31 December 2023
750,000
8,124,169
8,874,169
CREDO 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
27
4,467,309
2,534,638
Income taxes paid
(1,112,200)
(697,047)
Net cash inflow from operating activities
3,355,109
1,837,591
Investing activities
Purchase of investments
(16,657,593)
(7,050,421)
Proceeds on disposal of investments
24,448,125
8,632,804
Interest received
60,676
36,385
Net cash generated from investing activities
7,851,208
1,618,768
Financing activities
Dividends paid
(8,300,000)
(5,255,809)
Net cash used in financing activities
(8,300,000)
(5,255,809)
Net increase/(decrease) in cash and cash equivalents
2,906,317
(1,799,450)
Cash and cash equivalents at beginning of year
1,052,725
2,852,175
Cash and cash equivalents at end of year
3,959,042
1,052,725
CREDO CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

Credo Capital Limited is a private company limited by shares incorporated in England and Wales. The registered office is 8-12 York Gate, 100 Marylebone Road, London, NW1 5DX.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

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

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

The directors' assessment of the ability of the company to continue as a going concern is set out in the Directors' Report.true

1.3
Revenue

Turnover represents platform fees, advisory and asset management fees, brokerage commission and a share of interest on client money held by the company's custodians. The fees and commissions are recognised in the period in which the service is provided. Performance fees are recognised when the fees crystallise.

1.4
Cost of sales
The cost of sales includes third party fees and commissions payable as well as charges for brokerage and custody services provided to the company.
1.5
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.

Trademark
Amortised over a period of 10 years
1.6
Property, plant and equipment

Property, plant and equipment 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, fittings & equipment
33% straight line depreciation
CREDO CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.7
Impairment of non-current assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.8
Cash and cash equivalents

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.

1.9
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 statement of financial position 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 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.

CREDO 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 held at fair value through profit or 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 trade and other payables, 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.

 

Trade payables 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 payables 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

CREDO CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.10
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.

1.11
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 income statement 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 income statement, 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.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

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

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.15
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.

CREDO 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
Revenue

An analysis of the company's revenue is as follows:

2023
2022
as restated
£
£
Management fees
9,107,881
8,575,083
Platform fees
6,593,762
6,133,401
Commission income
7,093,222
7,375,903
Other income
3,196,554
2,505,021
25,991,419
24,589,408
Refer to note 25 for restatement of revenue.
2023
2022
£
£
Other significant revenue
Interest income
60,676
36,385

All turnover was generated within the United Kingdom.

 

 

4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Depreciation of owned property, plant and equipment
-
858
Amortisation of intangible assets
2,501
-
Operating lease charges
421,962
392,617
CREDO 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 and associates:
£
£
For audit services
Audit of the financial statements of the company
36,990
31,975
For other services
Taxation compliance services
3,000
2,650
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
81
82

Their aggregate remuneration comprised:

2023
2022
£
£
as restated
Wages and salaries
8,300,329
7,662,258
Social security costs
966,258
932,479
Pension costs
269,234
250,765
9,535,821
8,845,502

Refer to note 25 for restatement of the wages and salaries.

 

7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
2,769,670
2,604,505
Company pension contributions to defined contribution schemes
14,687
17,931
2,784,357
2,622,436
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
458,736
441,418
CREDO CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
8
Investment income
2023
2022
£
£
Interest income
Other interest income
60,676
36,385
Other income from investments
Gains/(Losses) on financial instruments measured at fair value through profit or loss
590,108
(889,078)
Total income
650,784
(852,693)
9
Other gains and losses
2023
2022
£
£
Gains on disposal of current asset investments
84,458
13,317

The gains and losses on disposal are recognised on financial assets measured at fair value through profit or loss.

10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,277,307
822,924
Deferred tax
Origination and reversal of timing differences
(141,817)
(392,441)
Total tax charge
1,135,490
430,483
CREDO CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 21 -

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
5,144,799
3,023,842
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
1,286,200
574,530
Tax effect of expenses that are not deductible in determining taxable profit
11,676
3,033
(Gains)/Losses not taxable
(168,642)
168,925
Group relief
(33,714)
(25,064)
Permanent capital allowances in excess of depreciation
-
0
163
Share based payment charge
-
0
(113,911)
Deferred tax adjustments
(141,817)
(392,441)
Tax at marginal rate
(80,344)
-
0
Chargeable gains
262,131
218,294
Other tax adjustments
-
0
(3,046)
Taxation charge for the year
1,135,490
430,483
11
Dividends
2023
2022
£
£
Dividends paid
8,300,000
6,800,000
12
Intangible fixed assets
Trademark
£
Cost
At 1 January 2023 and 31 December 2023
2,501
Amortisation and impairment
At 1 January 2023
-
0
Amortisation charged for the year
2,501
At 31 December 2023
2,501
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
2,501
CREDO CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
13
Property, plant and equipment
Fixtures, fittings & equipment
£
Cost
At 1 January 2023 and 31 December 2023
16,778
Depreciation and impairment
At 1 January 2023 and 31 December 2023
16,778
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
14
Financial instruments
2023
2022
as restated
£
£
Carrying amount of financial assets
Measured at amortised cost
5,727,037
5,350,160
Equity instruments measured at fair value
2,328,068
9,444,034
Carrying amount of financial liabilities
Measured at amortised cost
3,454,638
3,015,193
15
Trade and other receivables
2023
2022
as restated
Amounts falling due within one year:
£
£
Trade receivables
299,466
242,641
Amounts owed by group undertakings
711,007
585,349
Other receivables
31,722
74,438
Prepayments and accrued income
5,202,355
4,957,928
6,244,550
5,860,356
16
Current asset investments
2023
2022
£
£
Listed investments
2,328,068
9,444,034

The current asset investments are stated at fair value, being the market value of the investments as at the period end date.

CREDO CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
17
Current liabilities
2023
2022
as restated
£
£
Trade payables
157,864
77,079
Amounts owed to group undertakings
343,112
367,768
Corporation tax
173,437
8,330
Other taxation and social security
649,879
713,106
Other payables
683,196
582,413
Accruals and deferred income
1,620,587
1,274,827
3,628,075
3,023,523
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
269,234
250,765

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.

19
Deferred taxation
2022
Movements in the year:
£
Liability at 1 January 2023
171,233
Credit to profit or loss
(141,817)
Liability at 31 December 2023
29,416
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
750,000
750,000
750,000
750,000
CREDO CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
21
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
17,874
355,102
Between two and five years
6,444
10,693
24,318
365,795
22
Financial commitments, guarantees and contingent liabilities

The company has a possible future obligation that arises from a tax matter linked to a fellow subsidiary company within the wider Credo group.

 

At this stage, the obligation cannot be measured with sufficient reliability, but should it materialise, it will not have any impact on the ongoing viability of the business.

 

The company operates a deferred bonus scheme for certain of its employees. The bonuses awarded to eligible employees are calculated with reference to a particular period-end but the payments are deferred over a number of years.

 

A bonus that is awarded under this scheme will only be paid to the eligible employee if certain criteria are satisfied, including that the employee is still employed by the company at the relevant payment date and is not working out their notice period.

 

The amounts payable at the end of each period-end, assuming all criteria have been met, are clearly communicated to the relevant employees.

 

The directors have therefore decided that due to the qualifying criteria outlined in the scheme, the bonuses do not meet the recognition requirements for accrual in the accounts as they constitute contingent liabilities. The total payments in respect of bonuses which are considered to be contingent liabilities as at 31 December 2023 amount to £441,950 (2022: £527,850).

 

23
Related party transactions

The company has taken advantage of the exemption in FRS 102 section 33.1A from the requirement to disclose transactions with group companies on the grounds that all transactions were undertaken with wholly owned companies within the group.

 

24
Ultimate controlling party

The ultimate parent company is Credo Wealth Limited, a company registered in the British Virgin Islands.

There is no ultimate controlling party.

 

 

 

 

CREDO CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
25
Prior period adjustment
Reconciliation of changes in equity
1 January
31 December
2022
2022
Notes
£
£
Adjustments to prior year
Revenue
(i)
-
2,892,772
Cost of sales
(i)
-
(2,892,772)
Management charge
(ii)
-
115,455
Wages and salaries
(ii)
-
(115,455)
Accruals and deferred income
(iii)
-
705,406
Prepayments and accrued income
(iii)
-
(705,406)
Total adjustments
-
-
Equity as previously reported
17,371,501
13,164,860
Equity as adjusted
17,371,501
13,164,860
Reconciliation of changes in profit for the previous financial period
2022
Notes
£
Adjustments to prior year
Revenue
(i)
2,892,772
Cost of sales
(i)
(2,892,772)
Management charge
(ii)
115,455
Wages and salaries
(ii)
(115,455)
Total adjustments
-
Profit as previously reported
2,593,359
Profit as adjusted
2,593,359
Notes to reconciliation

(i) The prior year adjustment relates to a reclassification between revenue and cost of sales which had a nil effect on profit and equity.

(ii) The prior year adjustment relates to a reclassification between the management charge and wages and salaries which had a nil effect on profit and equity.

(iii) The prior year adjustment relates to the netting off of fees received but payable to financial intermediaries which had a nil effect on equity.

 

 

CREDO CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
26
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,052,725
2,906,317
3,959,042
27
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
4,009,309
2,593,359
Adjustments for:
Taxation charged
1,135,490
430,483
Investment income/(loss)
(650,784)
852,693
Amortisation and impairment of intangible assets
2,501
-
0
Depreciation and impairment of property, plant and equipment
-
0
858
Gain on sale of investments
(84,458)
(13,317)
Movements in working capital:
(Increase)/decrease in trade and other receivables
(384,194)
68,296
Increase/(decrease) in trade and other payables
439,445
(1,397,734)
Cash generated from operations
4,467,309
2,534,638
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