Spring Finance Group Limited |
Notes to the financial statements |
for the year ended 30 June 2024 |
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1 |
Accounting policies |
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Basis of preparation |
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The financial statements have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard), 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. |
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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 £. |
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Going concern |
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After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements. |
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Business combinations |
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In the parent company financial statements, the merger accounting method is used to account for a group reconstruction. The assets and liabilities of the parties to the combination arising from the group re-construction have not been restated to fair value. |
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Basis of consolidation |
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The consolidated group financial statements consist of the financial statements of the parent company Spring Finance Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates. |
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All financial statements are made up to 30 June 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group. |
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All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. |
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Under merger accounting the results of the combining entities are brought into the accounts from the beginning of the financial year in which the combination occurred. Comparatives are restated to combine the results of the combining entities for the previous period. |
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Turnover |
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Turnover represents fees for originating and servicing of term loans to customers, and interest receivable on loans to customers. |
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Interest income is recognised in the statement of income for all amounts receivable from customers and is measured at amortised costs using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of the financial asset or to the amortised cost of the financial liability. The effective interest rate is applied to the gross carrying amount of non-credit impaired customer receivables, the interest income is calculated by applying the effective interest rate to the amortised cost of the receivable. |
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Fee income earned for the arrangement of loans (loan origination fees) is recognised once the contract has been signed by the borrower and related terms are clearly identifiable. The performance obligation in the contract is considered to be the funding of the loan and the transaction price is clearly stated in the borrower's contract. Fees are recognised immediately once loans are fully funded and after the loans are accepted by the borrowers. At this point the performance obligation has been satisfied, there are no clawback provisions and the fee is recognised. |
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Intangible fixed assets |
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Intangible fixed assets are measured at cost less accumulative amortisation and any accumulative impairment losses. Amortisation is calculated to write off the cost of the assets over their useful lives of 5 years. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Leasehold land and buildings |
20% per annum |
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Motor vehicles |
15% per annum |
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Fixtures, fittings, and equipment |
33 % per annum |
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The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss. |
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Fixed Asset Investments |
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Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available. |
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In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. |
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A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. |
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Impairment of fixed assets |
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At each reporting period end date, the group 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. |
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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. |
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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. |
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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 cashgenerating 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. |
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Cash and cash equivalents |
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Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. |
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Financial instruments |
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The group 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 group's balance sheet when the group 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. |
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Basic financial assets |
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Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised. |
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Trade debtors |
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Trade debtors are amounts due from customers for term loans secured by legal charges over land and buildings made in the ordinary course of business. |
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Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables. |
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Impairment of financial assets |
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Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date. |
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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. |
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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. |
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Derecognition of financial assets |
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Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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. |
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Classification of financial liabilities |
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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. |
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Basic financial liabilities |
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Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. |
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Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
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Borrowings |
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Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing. |
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Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges. |
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Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. |
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Trade creditors |
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Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities. Trade creditors are recognised at the transaction price and subsequently measured at amoritsed costs using the effective interest method. |
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Trade creditors are recognised at the transaction price and subsequently measured at amoritsed costs using the effective interest method. |
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Derecognition of financial liabilities |
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Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled. |
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Equity instruments |
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Equity instruments issued by the group 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 group. |
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Employee benefits |
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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 fixed 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. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Retirement benefits |
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Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. |
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2 |
Judgements and key sources of estimation uncertainty |
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In the application of the group’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. |
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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. |
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3 |
Audit information |
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The audit report is unqualified. |
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Senior statutory auditor: |
Christopher Taylor |
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Firm: |
Adler Shine LLP |
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Date of audit report: |
18 October 2024 |
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4 |
Employees |
2024 |
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2023 |
Number |
Number |
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Average number of persons (including directors) employed by the group |
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31 |
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21 |
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Average number of persons (including directors) employed by the company |
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2 |
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2 |
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5 |
Intangible fixed assets |
£ |
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Group |
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Computer software: |
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Cost |
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At 1 July 2023 |
225,224 |
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Additions |
75,949 |
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At 30 June 2024 |
301,173 |
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Amortisation |
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At 1 July 2023 |
145,466 |
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Provided during the year |
21,172 |
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At 30 June 2024 |
166,638 |
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Net book value |
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At 30 June 2024 |
134,535 |
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At 30 June 2023 |
79,758 |
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Computer software is being written off in equal annual instalments over its estimated economic life of 5 years. |
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6 |
Tangible fixed assets |
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Group |
Land and buildings |
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Motor vehicles |
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Fixtures, fittings and equipment |
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Total |
£ |
£ |
£ |
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Cost |
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At 1 July 2023 |
- |
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- |
|
44,206 |
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44,206 |
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Additions |
12,238 |
|
112,468 |
|
24,145 |
|
148,851 |
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At 30 June 2024 |
12,238 |
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112,468 |
|
68,351 |
|
193,057 |
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Depreciation |
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At 1 July 2023 |
- |
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- |
|
19,055 |
|
19,055 |
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Charge for the year - owned assets |
1,836 |
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- |
|
16,584 |
|
18,420 |
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Charge for the year - leased assets |
- |
|
5,931 |
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- |
|
5,931 |
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At 30 June 2024 |
1,836 |
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5,931 |
|
35,639 |
|
43,406 |
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Net book value |
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At 30 June 2024 |
10,402 |
|
106,537 |
|
32,712 |
|
149,651 |
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At 30 June 2023 |
- |
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- |
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25,151 |
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25,151 |
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7 |
Fixed Asset Investments |
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Company |
Investments in |
subsidiary |
undertakings |
Total |
£ |
£ |
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Cost |
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At 30 June 2023 and 30 June 2024 |
1,033,235 |
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1,033,235 |
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Company and Group |
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On 16 August 2022 Spring Finance Limited undertook a group reconstruction. Spring Finance Group Limited ("the company") issued shares to the shareholders of Spring Finance Limited in exchange for shares in the company, and Spring Finance Limited distributed its shares in subsidiary undertakings to the company. After this group reconstruction, Spring Finance Group Limited became the new parent company of the group, but the ultimate equity holders remained the same and the rights of each equity holder, relative to the others, remained unchanged. |
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The business combination arising from the group reconstruction has been accounted for as a merger in the consolidated accounts. |
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8 |
Subsidiaries |
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Details of the entities included in the business combination at 30 June 2024 and at 30 June 2023 and the subsidiaries of the company are as follows: |
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Name of undertaking |
Registered office |
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Nature of business |
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Class of shares held |
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% Held |
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Spring Finance Limited |
United Kingdom |
operation of term loans |
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Ordinary Shares |
|
100 |
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SF 11 Limited |
United Kingdom |
operation of term loans |
|
Ordinary Shares |
|
100 |
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SF 13 Limited |
United Kingdom |
bridging finance |
|
Ordinary Shares |
|
100 |
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Spring Finance M1 Limited |
United Kingdom |
provision of finance to group |
|
Ordinary Shares |
|
100 |
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SF 22 Limited |
United Kingdom |
bridging finance |
|
Ordinary Shares |
|
100 |
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SF 24 Limited |
United Kingdom |
dormant |
Ordinary Shares |
|
100 |
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9 |
Debtors |
2024 |
|
2023 |
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Group |
£ |
£ |
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Amounts falling due within one year: |
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Loans and advances to customers |
59,741,691 |
|
30,458,988 |
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Deferred tax asset |
|
|
|
|
394,222 |
|
- |
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Corporation tax recoverable |
|
|
|
|
- |
|
40,489 |
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Other debtors |
2,285,892 |
|
457,392 |
|
|
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|
|
|
62,421,805 |
|
30,956,869 |
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Amounts falling due after more than one year: |
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Loans and advances to customers |
42,625,720 |
|
28,294,242 |
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Total debtors |
105,047,525 |
|
59,251,111 |
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10 |
Creditors: amounts falling due within one year |
2024 |
|
2023 |
|
Group |
£ |
£ |
|
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Obligations under finance lease and hire purchase contracts |
24,696 |
|
- |
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Trade creditors |
87,111 |
|
52,939 |
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Taxation and social security costs |
79,839 |
|
57,841 |
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Other loans |
3,160,000 |
|
2,636,894 |
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Other creditors |
1,372,675 |
|
1,087,296 |
|
|
|
|
|
|
4,724,321 |
|
3,834,970 |
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Creditors falling due within one year include loan notes of £3,160,000 (2023: £2,636,894) which are secured by fixed and floating charges over the assets of the Group. |
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10 |
Creditors: amounts falling due within one year (continued) |
|
Company |
2024 |
|
2023 |
£ |
£ |
|
|
Amounts owed to group undertakings |
|
300 |
|
200 |
|
|
|
|
|
|
300 |
|
200 |
|
|
|
|
|
|
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|
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11 |
Creditors: amounts falling due after one year |
2024 |
|
2023 |
|
Group |
£ |
£ |
|
|
Bank loans |
75,375,214 |
|
41,515,000 |
|
Obligations under finance lease and hire purchase contracts |
65,856 |
|
- |
|
Other loans |
|
|
|
|
24,867,565 |
|
12,890,320 |
|
|
|
|
|
|
100,308,635 |
|
54,405,320 |
|
|
|
|
|
|
|
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Creditors falling due after more than one year include bank loans of £75,375,214 (2023 - £41,515,000) and loan notes of £24,867,565 (2023 - £12,890,320 ) which are secured by fixed and floating charges over the assets of the Group. |
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12 |
Obligations under finance leases and hire purchase |
2024 |
|
2023 |
|
contracts |
£ |
£ |
|
|
Minimum lease payments under hire purchase fall due as follows: |
|
Within one year |
24,696 |
|
- |
|
Within 1-2 years |
24,696 |
|
- |
|
Within 2-5 years |
41,160 |
|
- |
|
|
|
|
|
|
90,552 |
|
- |
|
|
|
|
|
|
|
|
|
|
Hire purchase and finance leases are secured over the assets to which they relate. |
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13 |
Pension commitments |
|
|
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £96,134 (2023 - £66,114). Contributions totalling £Nil (2023 - £9,947) were payable to the fund at the balance sheet date. |
|
|
14 |
Share capital |
2024 |
|
2024 |
Number |
£ |
|
Company |
|
Ordinary share capital |
|
Issued and fully paid |
|
Ordinary shares of £1 each |
532,782 |
|
532,782 |
|
|
|
|
|
|
|
|
|
|
Preference share capital |
|
Issued and fully paid |
|
Preference shares of 0.01p each |
532,782 |
|
53 |
|
Preference shares classified as equity |
53 |
|
|
|
|
|
|
|
|
|
|
Total equity share capital |
532,835 |
|
|
|
|
|
|
|
|
|
|
During the year ended 30 June 2023 the company issued shares to the shareholders of Spring Finance Limited in exchange for shares in the company, and Spring Finance Limited distributed its shares in subsidiary undertakings to the company. |
|
15 |
Other financial commitments |
2024 |
|
2023 |
|
Group |
£ |
£ |
|
|
Total future minimum payments under non-cancellable operating leases falling due: |
|
within one year |
97,169 |
|
62,605 |
|
Within 1-2 years |
34,913 |
|
6,480 |
|
Within 2-5 years |
- |
|
838 |
|
|
|
|
|
|
132,082 |
|
69,923 |
|
|
|
|
|
|
|
|
|
|
16 |
Related party transactions |
|
Group |
|
Included in other debtors is an amount due from BF London Limited of £250,000. A Bloom is a director of BF London Limited. |
|
Included in other debtors are amounts due from Helix Loans Limited of £1,446,294. Included in turnover is interest receivable from Helix Loans Limited of £53,564 and amounts receivable under a servicing agreement with Helix Loans Limited of £318,796. A Bloom is a director of Helix Loans Limited. |
|
17 |
Related party exemption |
|
Company |
|
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
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18 |
Other information |
|
|
Spring Finance Group Limited ('the company') is a private company limited by shares, incorporated in England. Its registered office is: |
|
3 Theobald Court |
|
Theobald Street |
|
Borehamwood |
|
Herts |
|
WD6 4RN |