Company Registration No. 11270270 (England and Wales)
Arrow Capital Europe Limited
Annual report and financial statements
for the year ended 30 June 2024
Arrow Capital Europe Limited
Company information
Directors
Christian Bearman
Martyn McCarthy
Company number
11270270
Registered office
2nd Floor
41 Great Pulteney Street
London
W1F 9NZ
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
Arrow Capital Europe Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Income statement
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 - 25
Arrow Capital Europe Limited
Strategic report
For the year ended 30 June 2024
1
The directors present the strategic report for the year ended 30 June 2024.
Review of the business including principal risks and uncertainties
Arrow Capital Europe Limited (ACE) is a property investment and asset management company based in London and shareholder of three European subsidiaries with offices in Spain, the Netherlands and Germany. ACE oversees and manages all European investment activity on behalf of Arrow Capital Partners Group (ACP) headquartered in Sydney, Australia.
ACE provides services to various mandates including an investment platform investing in logistics/industrial real estate in European markets including the United Kingdom, Germany, Spain, the Netherlands, the Republic of Ireland, Poland and Denmark. During the year, this platform continued to invest across Europe, including investing in developments in core European markets. ACE manages the portfolio and leases space and overall income continued to increase and vacancy remained low.
ACE and its affiliates advise a sovereign fund separate account client and manage a newly developed logistics building in Wakefield, Yorkshire on its behalf.
In addition, ACE provides services to other funds and separate account mandates and receives income in the form of acquisition fees for new investments, as well as ongoing asset management fees and development management fees.
The capital markets landscape in the past financial year has changed as the interest rate tightening cycle appears to have ended and market participants expect lower rates in the future which should lead to increased transaction activity in real estate markets. Lower growth and inflation are still a concern in some European countries but investors and managers are keen to invest in an albeit ever changing market environment. ACE is in a good position and given its size is able to react swiftly to the changing market conditions and this is already evidenced with more pipeline activity in the current financial year. This is the most significant risk the business faces, but the business is well placed and nimble enough to deal with significant changes in its operating environment, allowing the company to maintain a positive income to fixed cost ratio.
In addition to market activity risks, the company is also focused on diversification in terms of mandates, sectors and clients. In the current financial year, the directors have made material investments in expanding the team by hiring senior investment professionals in the real estate and real estate credit areas with the aim of growing the business and adding new clients and new strategies to continue to diversify the business for the future.
Arrow Capital Europe Limited
Strategic report (continued)
For the year ended 30 June 2024
2
Financial key performance indicators
The most important measure of the company’s business from the directors’ and shareholders’ point of view is Profit after Taxation (PAT) to measure the company’s contribution to the overall Group’s PAT. In this respect the PAT of £913k is a positive indicator.
On a more granular level the directors measure revenue, recurring revenue and operating cost numbers on a monthly, quarterly and yearly basis with a view to driving the business to positive and increasing EBITDA and PAT.
The company measures itself based on AUM to monitor acquisition and disposal activity which is directly linked to various fees. This is also used as a means to review levels of staff numbers in Europe to ensure we are at an appropriate level of AUM per asset manager.
A financial target for the company is to be in a position where on-going recurring revenues cover all operating costs to ensure the business is not reliant on transaction fees to maintain liquidity and profitability. Given the current macro-economic market slowdown, this has been a key metric for the directors and shareholders to monitor.
ACE is a service company and its main cost base is its team of professionals in the UK and across its European subsidiaries. Ensuring the company has the appropriate team in place for current and future business is a key focus for the management team to ensure the company can be ready to take advantage of opportunities as markets change. During the course of the year, employee numbers reduced from 24 to 22 as at 30 June 2024.
References to and explanation of amounts included in the financial statements
For the year ended 30 June 2024 ACE had a turnover of £14.8m (2023: £15.5m) and profit after tax of £0.9m (2023: £1.2m).
The directors are satisfied that the company’s performance in terms of turnover and profits after tax has been acceptable given the challenging market environment during the year.
Christian Bearman
Director
17 March 2025
Arrow Capital Europe Limited
Directors' report
For the year ended 30 June 2024
3
The directors present their annual report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activity of the company is that of real estate investment management.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Christian Bearman
Martyn McCarthy
Auditor
Saffery LLP have expressed their willingness to continue in office.
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
Arrow Capital Europe Limited
Directors' report (continued)
For the year ended 30 June 2024
4
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Christian Bearman
Director
17 March 2025
Arrow Capital Europe Limited
Independent auditor's report
To the members of Arrow Capital Europe Limited
5
Opinion
We have audited the financial statements of Arrow Capital Europe Limited (the 'company') for the year ended 30 June 2024 which comprise the income statement, 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:
give a true and fair view of the state of the company's affairs as at 30 June 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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.
Arrow Capital Europe Limited
Independent auditor's report (continued)
To the members of Arrow Capital Europe Limited
6
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
Arrow Capital Europe Limited
Independent auditor's report (continued)
To the members of Arrow Capital Europe Limited
7
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
Arrow Capital Europe Limited
Independent auditor's report (continued)
To the members of Arrow Capital Europe Limited
8
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.
Roger Weston
Senior Statutory Auditor
For and on behalf of Saffery LLP
17 March 2025
Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
Arrow Capital Europe Limited
Income statement
For the year ended 30 June 2024
9
2024
2023
Notes
£
£
Turnover
3
14,823,723
15,461,719
Cost of sales
(8,362,331)
(9,250,251)
Gross profit
6,461,392
6,211,468
Administrative expenses
(5,377,080)
(4,721,704)
Operating profit
4
1,084,312
1,489,764
Interest receivable and similar income
7
170,391
52,189
Interest payable and similar expenses
8
(6,921)
(9,402)
Profit before taxation
1,247,782
1,532,551
Tax on profit
9
(335,083)
(318,693)
Profit for the financial year
912,699
1,213,858
The income statement has been prepared on the basis that all operations are continuing operations.
Arrow Capital Europe Limited
Statement of comprehensive income
For the year ended 30 June 2024
10
2024
2023
£
£
Profit for the year
912,699
1,213,858
Other comprehensive income
-
-
Total comprehensive income for the year
912,699
1,213,858
Arrow Capital Europe Limited
Statement of financial position
As at 30 June 2024
11
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
36,646
49,857
Investments
11
24,598
24,598
61,244
74,455
Current assets
Debtors
13
2,627,978
4,455,687
Cash at bank and in hand
7,668,239
5,469,844
10,296,217
9,925,531
Creditors: amounts falling due within one year
14
(6,941,375)
(7,496,599)
Net current assets
3,354,842
2,428,932
Net assets
3,416,086
2,503,387
Capital and reserves
Called up share capital
16
100
100
Profit and loss reserves
3,415,986
2,503,287
Total equity
3,416,086
2,503,387
The financial statements were approved by the board of directors and authorised for issue on 17 March 2025 and are signed on its behalf by:
Christian Bearman
Director
Company Registration No. 11270270
Arrow Capital Europe Limited
Statement of changes in equity
For the year ended 30 June 2024
12
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 July 2022
100
1,289,429
1,289,529
Year ended 30 June 2023:
Profit and total comprehensive income
-
1,213,858
1,213,858
Balance at 30 June 2023
100
2,503,287
2,503,387
Year ended 30 June 2024:
Profit and total comprehensive income
-
912,699
912,699
Balance at 30 June 2024
100
3,415,986
3,416,086
Arrow Capital Europe Limited
Statement of cash flows
For the year ended 30 June 2024
13
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
20
2,720,025
(790,160)
Interest paid
(6,921)
(9,402)
Income taxes paid
(417,393)
(124,126)
Net cash inflow/(outflow) from operating activities
2,295,711
(923,688)
Investing activities
Purchase of tangible fixed assets
(15,964)
(12,218)
Loans issued
(250,000)
Interest received
168,648
40,714
Net cash (used in)/generated from investing activities
(97,316)
28,496
Net increase/(decrease) in cash and cash equivalents
2,198,395
(895,192)
Cash and cash equivalents at beginning of year
5,469,844
6,365,036
Cash and cash equivalents at end of year
7,668,239
5,469,844
Arrow Capital Europe Limited
Notes to the financial statements
For the year ended 30 June 2024
14
1
Accounting policies
Company information
Arrow Capital Europe Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2nd Floor, 41 Great Pulteney Street, London, W1F 9NZ.
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. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements. Forecasts have been produced up to January 2026 and are based on a number of financial and operational assumptions that reflect the company will remain as a going concern for at least 12 months from the date the financial statements are signed.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Revenue is recognised for the recharge of costs plus mark-up in accordance with the intercompany pricing agreement entered into with its connected group entities. Revenue is recognised on an accruals basis when the expenses are incurred.
1.4
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.
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
1
Accounting policies (continued)
15
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:
Leasehold improvements
Straight line basis over 3-5 years
Fixtures and fittings
Straight line basis over 3-5 years
Computers
Straight line basis over 3-5 years
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.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
1
Accounting policies (continued)
16
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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 debtors, 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.
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 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.
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
1
Accounting policies (continued)
17
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 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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 if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors 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.
1.9
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.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
1
Accounting policies (continued)
18
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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
1.11
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 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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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 leases asset are consumed.
1.14
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.
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
19
2
Critical accounting 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
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Third party fees
4,950,997
5,471,689
Intercompany management fees
9,872,726
9,990,030
14,823,723
15,461,719
2024
2023
£
£
Turnover analysed by geographical market
UK
3,020,083
3,473,157
Rest of Europe
5,274,494
5,372,804
Rest of World
6,529,146
6,615,758
14,823,723
15,461,719
2024
2023
£
£
Other revenue
Interest income
170,391
52,189
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
126,447
(594,756)
Fees payable to the company's auditor for the audit of the company's financial statements
27,000
26,000
Depreciation of owned tangible fixed assets
29,175
29,918
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
20
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Employees
22
24
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,143,712
3,130,409
Social security costs
275,147
329,413
Pension costs
54,356
76,909
3,473,215
3,536,731
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
207,806
226,500
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
170,391
52,189
8
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Other interest
6,921
9,402
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
335,083
318,693
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
9
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:
2024
2023
£
£
Profit before taxation
1,247,782
1,532,551
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
311,946
314,110
Tax effect of expenses that are not deductible in determining taxable profit
17,679
1,244
Gains not taxable
768
(53)
Tax effect of utilisation of tax losses not previously recognised
(794)
Unutilised tax losses carried forward
6,969
Permanent capital allowances in excess of depreciation
4,690
(2,783)
Taxation charge for the year
335,083
318,693
10
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 July 2023
10,380
30,578
78,428
119,386
Additions
15,964
15,964
At 30 June 2024
10,380
30,578
94,392
135,350
Depreciation and impairment
At 1 July 2023
6,475
18,393
44,661
69,529
Depreciation charged in the year
3,073
7,857
18,245
29,175
At 30 June 2024
9,548
26,250
62,906
98,704
Carrying amount
At 30 June 2024
832
4,328
31,486
36,646
At 30 June 2023
3,905
12,185
33,767
49,857
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
22
11
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
12
24,598
24,598
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 July 2023 & 30 June 2024
24,598
Carrying amount
At 30 June 2024
24,598
At 30 June 2023
24,598
12
Subsidiaries
Details of the company's subsidiaries at 30 June 2024 are as follows:
Name of undertaking
Registered office
Nature of business
Class of shares held
% Held
Direct
Indirect
Arrow Capital Partners Espana SL
Spain
Real estate investment management
Ordinary
100.00
-
Arrow Capital Deutschland GmbH
Germany
Real estate investment management
Ordinary
100.00
-
Arrow Capital Europe Investments Limited
UK
Real estate investment management
Ordinary
100.00
-
Arrow Capital Partners Nederland B.V.
Netherlands
Real estate investment management
Ordinary
100.00
-
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
157,436
647,264
Amounts owed by group undertakings
561,409
1,763,937
Other debtors
305,128
124,627
Prepayments and accrued income
1,555,550
1,871,404
2,579,523
4,407,232
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
13
Debtors (continued)
23
2024
2023
Amounts falling due after more than one year:
£
£
Other debtors
48,455
48,455
Total debtors
2,627,978
4,455,687
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
75,082
48,834
Amounts owed to group undertakings
5,310,811
5,821,338
Corporation tax
175,756
258,066
Other taxation and social security
180,193
191,375
Other creditors
36,805
17,731
Accruals and deferred income
1,162,728
1,159,255
6,941,375
7,496,599
15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
54,356
76,909
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.
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
24
16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
Ordinary shares have attached to them full voting, dividend and capital distribution rights.
17
Operating lease commitments
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:
2024
2023
£
£
Within one year
161,643
175,259
Between two and five years
13,701
175,344
175,344
350,603
18
Related party transactions
On 24th June 2024 a director of Arrow Capital Europe Ltd received an unsecured, loan of £250,000 bearing interest at 2.25% per annum. At the period end the amount remained outstanding and is recorded in Other Debtors due within one year.
The company has taken advantage of the exemption available under Section 33 of the Financial Reporting Standard 102 not to disclose transactions with other members of the group.
19
Ultimate controlling party
The ultimate parent undertaking and controlling party is Arrow Capital Partners Pty Ltd with registered office 1 Market St, Sydney, NSW 2000, Australia.
Arrow Capital Europe Limited
Notes to the financial statements (continued)
For the year ended 30 June 2024
25
20
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit for the year after tax
912,699
1,213,858
Adjustments for:
Taxation charged
335,083
318,693
Finance costs
6,921
9,402
Investment income
(170,391)
(40,714)
Depreciation and impairment of tangible fixed assets
29,175
29,918
Movements in working capital:
Decrease/(increase) in debtors
2,079,452
(9,777)
Decrease in creditors
(472,914)
(2,311,540)
Cash generated from/(absorbed by) operations
2,720,025
(790,160)
21
Analysis of changes in net funds
1 July 2023
Cash flows
30 June 2024
£
£
£
Cash at bank and in hand
5,469,844
2,198,395
7,668,239
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