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Registered number: 10600192 (England and Wales)
FINTECH PARTNERS LTD
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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COMPANY INFORMATION
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ZEDRA Corporate Reporting Services (UK) Limited
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CONTENTS
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Independent Auditors' Report
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Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2022
The Director presents the strategic report and consolidated financial statements of Fintech Partners Ltd ("the Company") and its subsidiary ("the Group") for the period ended 31 December 2022.
The Group is a wholly owned subsidiary of Financial Technology Partners LP (“FTP LP”). FTP LP is a limited partnership formed and domiciled in the United States of America (the “USA”).
The principal activity of the Group is to provide investment banking consulting services to its parent entity FTP LP and to its affiliate entity FTP Securities LLC ("FTP Securities").
FTP LP is a global investment banking advisory firm focused exclusively on the financial technology sector. FTP LP, together with its subsidiary FTP Securities, provides investment banking advisory services to clients in connection with mergers and acquisitions, private sales, financial restructurings, and capital raising advisory services pertaining to equity and debt including private placements.
The Group is compensated on a cost-plus basis for its service.
The Director has reviewed the Group’s financial position at the year-end. The Group had liquid assets of £6.7 million (February 2022: £7.4 million) and current liabilities of £3.9 million (February 2022: £6.3 million). The Director determined that the Group had sufficient financial resources to meet its liabilities as they fall due.
Principal risks and uncertainties
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The Director has the responsibility to identify risks and uncertainties that might adversely affect the Group's business. The Director has identified the following primary risks and taken steps to mitigate these risks:
Failure to maintain sufficient employees at appropriate levels of seniority and experience
Having sufficient employees at appropriate levels to undertake projects is critical to the continued success of the Group. The Group aims to hire and retain the most talented of people by providing competitive compensation and benefits packages, creating a sense of community across the group, and taking other steps to empower every employee to meet their full potential. The Director monitors people metrics, including retention statistics to identify any trends or issues.
Loss of IT systems and data
Implementing and maintaining robust IT infrastructure which incorporates effective security, data storage, and network is critical to the continued success of the Group. The Group has implemented appropriate disaster recovery and business continuity plans. Additionally, confidentiality of data is taken very seriously. Information security controls and procedures are overseen by senior executives.
Compliance risks
The Group operates in a highly regulated industry. The Company is an entity registered with the Financial Conduct Authority (“FCA”), with certain employees of the Group being registered representatives of an FCA registered entity. Additionally, FTP Securities, to which the Group provides services, is a regulated entity in the USA. In providing services to FTP Securities, the employees of the Group are required to comply with certain rules and regulations of the security industry in the USA. The Group provides various training and education to ensure that its employees understand and adhere to applicable rules and regulations.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
Due to the accounting reference date change, described below within the Director's report, the Group’s operating results discussed in this section pertain to the 10-month period ended 31 December 2022 and the year ended 28 February 2022.
The Group's reported turnover of £17.4 million (Year ended 28 February 2022: £12.5 million) and operating profit of £0.8 million (Year ended 28 February 2022: £0.6 million).
The increase in turnover and operating profit was driven by higher compensation and benefits costs for the 10-month period ended 31 December 2022 compared to the year ended 28 February 2022, driven by an increase in headcount.
The operating profit margin remained constant at 4.8% for both periods.
Key performance indicators
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The Director monitors several Key Performance Indicators (KPls). Since the Group’s turnover is calculated on a cost-plus basis, the KPIs monitored by the Director are primarily related to costs. In addition, the Director monitors KPIs related to employee retention. The KPls monitored by the Director include the following:
• Compensation and benefits cost
• Travel and entertainment cost
• Staff compensation market index
• Staff turnover
The Director is pleased to report that the Group’s performance with respect to all KPls monitored were satisfactory during the period.
This report was approved by the board and signed on its behalf.
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DIRECTOR'S REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2022
The Director presents his report and the financial statements for the period ended 31 December 2022.
In accordance with s414c (II) of the Companies Act 2006, certain information required to be included in the Director's Report has otherwise been included in the Strategic Report.
The Director who served during the period was:
Change in accounting reference date
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On 28 November 2023, the accounting reference date was shortened from 28 February 2023 to 31 December 2022 in order to align with the wider group. Therefore, the current reporting period is a short 10 month period and the financial statements are not entirely comparable for this reason.
The profit for the period, after taxation, amounted to £540,707 (Year ended 28 February 2022 - £473,222).
Director's responsibilities statement
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The Director is responsible for preparing the Group Strategic Report, the Director's Report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the Director to prepare financial statements for each financial year. Under that law the Director has elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the director is required to:
∙select suitable accounting policies for the Group's financial statements 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 Group will continue in business.
The Director is 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 the Group and to enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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FINTECH PARTNERS LTD
DIRECTOR'S REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
Disclosure of information to auditors
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The Director at the time when this Director's Report is approved has confirmed that:
∙so far as he is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙he has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FINTECH PARTNERS LTD
We have audited the financial statements of Fintech Partners Ltd (the 'parent Company') and its subsidiary (the 'Group') for the period ended 31 December 2022, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of 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, except for the possible effects of the matters described in the basis for qualified opinion section of our report, the financial statements:
∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2022 and of the Group's profit for the period 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.
Basis for qualified opinion
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We were not appointed as auditor of the Company until after 31 December 2022 and thus were unable to confirm the existence of the fixed assets at the period end. We were unable to satisfy ourselves by alternative means by using other audit procedures concerning the existence of tangible fixed assets held at 1 March 2022 or 31 December 2022, which were included in the balance sheet at £176,869 and £1,516,100 respectively. Consequently we were unable to determine whether any adjustments to these amounts were necessary.
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 qualified opinion.
Conclusions relating to going concern
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In auditing the financial statements, we have concluded that the Director's 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 Group's or the parent 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 Director with respect to going concern are described in the relevant sections of this report.
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FINTECH PARTNERS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FINTECH PARTNERS LTD (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The Director is 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.
Opinion on other matters prescribed by the Companies Act 2006
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Expect for the possible effects of the matter described in the basis for qualified opinion section of our report, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Director's Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Director's 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
∙the parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of Director's remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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FINTECH PARTNERS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FINTECH PARTNERS LTD (CONTINUED)
Responsibilities of directors
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As explained more fully in the Director's Responsibilities Statement set out on page 3, the Director is 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 Director determines 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 Director is responsible for assessing the Group's and the parent 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 Director either intends to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' 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 Group 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 approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙the responsible individual ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge and experience;
∙we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006, taxation legislation;
∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
∙identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
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FINTECH PARTNERS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FINTECH PARTNERS LTD (CONTINUED)
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures to identify any unusual or unexpected relationships;
∙tested journal entries to identify unusual transactions and;
∙investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙enquiring of management as to actual and potential litigation and claims; and
∙reviewing correspondence with HMRC, the Company’s legal advisors
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s 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 Auditors' 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.
Dominic King ACA (Senior Statutory Auditor)
for and on behalf of
Zedra Corporate Reporting Services (UK) Limited
Chartered Accountants and Statutory Auditors
Birchin Court
5th Floor
19-25 Birchin Lane
London
United Kingdom
EC3V 9DU
26 February 2024
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Period ended 31 December2022
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As restated year ended 28 February 2022
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the financial period
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Foreign exchange difference arising on translation of subsidiary
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Total comprehensive income for the period
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Profit for the year attributable to:
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Owners of the parent company
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The notes on pages 17 to 31 form part of these financial statements.
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FINTECH PARTNERS LTD
REGISTERED NUMBER:10600192
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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FINTECH PARTNERS LTD
REGISTERED NUMBER:10600192
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 31 form part of these financial statements.
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FINTECH PARTNERS LTD
REGISTERED NUMBER:10600192
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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FINTECH PARTNERS LTD
REGISTERED NUMBER:10600192
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COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2022
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Profit and loss account brought forward
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 31 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Movement on foreign exchange translation
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2022
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2022
Cash flows from operating activities
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Profit for the financial period
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Depreciation of tangible assets
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(Increase)/decrease in debtors
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Decrease/(increase) in amounts owed by groups
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(Decrease)/increase in creditors
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Net cash from investing activities
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Net (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at beginning of period
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Foreign exchange gains and losses
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Cash and cash equivalents at the end of period
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Cash and cash equivalents at the end of period comprise:
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The notes on pages 17 to 31 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
FinTech Partners Limited is a private company limited by shares incorporated in the United Kingdom and registered in England and Wales. The registered offices is 3rd Floor 1 Ashley Road, Altrincham, Cheshire, United Kingdom, WA14 2DT.
The principal activity of the Group is to provide investment banking consulting services to its parent entity FTP LP and to its affiliate entity FTP Securities LLC ("FTP Securities").
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
On 28 November 2023, the accounting reference date was shortened from 28 February 2023 to 31 December 2022 in order to align with the wider group. Therefore, the current reporting period is a short 10 month period and therefore the financial statements are not entirely comparable for this reason.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
The Group is in a net asset position of £2,109,351 primarily supported by amounts owed by group undertakings. Despite this position, due to the Group's business model being solely a transfer pricing agreement with the parent company, Financial Technology Partners LP, it is reliant on the continued support of that company in order to remain a going concern.
The Group has received written confirmation from the parent company that it will continue to provide financial support to the Group for a period of at least 12 months from the date of signing these financial statements. Furthermore, the director has assessed the ability of the parent company to provide the support based upon the cash flow forecast and has concluded that the parent will have sufficient working capital to provide the necessary support. For this reason, the director continues to adopt the going concern basis in preparing the financial statements.
Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Rendering of services
Turnover is recognised on a cost plus 5% basis, in line with the intercompany service agreement with the parent company. Intercompany turnover is recognised when all of the following conditions are satisfied:
∙the amount of turnover can be measured reliably;
∙it is probable that the Group will receive the consideration due under the intercompany service agreement;
∙the costs incurred under the intercompany service agreement can be measured reliably.
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Operating leases: the Group as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Amounts owed by group undertakings are intercompany loans measured at cost. These loans are unsecured, interest free and repayable on demand.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Short term creditors are measured at the transaction price. Amounts owed to group undertakings are intercompany loans measured at cost. These loans are unsecured, interest free and repayable on demand.
Creditors due after more than one year are measured initially at transaction price and then subsequently at amortised cost using the effective interest method.
Investments in subsidiaries are measured at cost less accumulated impairment.
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Foreigh currency translation
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Functional and presentation currency
The Group's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are transalated into the functional currency ausing the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated usting the exchange rate at the date of the transactions and non-monetary items measured at fair value are measured using the exchnage rate when fair value was determined.
Foreign echange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit and loss.
On consolidation, the results of overseas operations or domestic operations with a non-GBP functional currency are translated into Sterling, at rated approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting place. Exchange differences arisings on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Where the unavoidable costs of a lease exceed the economic benefit expected to be received from it, a provision is made for the present value of the obligations under the lease.
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Current and deferred taxation
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The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The Group only enters into basic financial instrument transactions that result in the recognition of
financial assets and liabilities like trade and other debtors and creditors, loans from banks and other
third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Financial instruments (continued)
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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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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of financial statements in conformity with FRS 102 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The estimates and assumptions that have a significant risk of causing material adjustment to the carrying
amounts of assets and liabilities are addressed below.
Depreciation and residual value of tangible fixed assets
The director has reviewed the asset lives and associated residual values of all fixed asset classes, and have concluded that asset lives and residual values are appropriate.
The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, management consider factors such as technological innovation, product life cycles and maintenance programs.
Dilapidation provision
The director has considered the potential obligations arising as a result of the terms of the lease agreement. The provision is based on the expected future cost of restoring its lease permises.
Onerous lease provisions
The director has considered the potential unavoidable costs of a lease to exceed the economic benefit expected to be received from it. A provision is recognised at the present value of the obligations under the lease.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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An analysis of turnover by class of business is as follows:
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Intercompany Service Revenue
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The operating profit is stated after charging
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Other operating lease onerous costs
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Other operating lease rentals
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Other operating lease dilapidation costs
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Staff costs were as follows:
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The average monthly number of employees during the period was as follows:
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The remuneration earned by the director in respect of the services performed in his capacity as director of Fintech Partners Limited was negligible and has been paid by another entity in the group.
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Interest payable and similar expenses
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Effective interest in relation to discounted cashflows
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Current tax on profits for the year
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
9.Taxation (continued)
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Origination and reversal of timing differences
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Taxation on profit on ordinary activities
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Factors affecting tax charge for the period/year
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The tax assessed for the period/year is lower than (28 February 2022 - higher than) the standard rate of corporation tax in the UK of 19% (28 February 2022 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for period/year in excess of depreciation
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Other timing differences leading to an increase in taxation
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Total tax charge for the period/year
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
9.Taxation (continued)
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Factors that may affect future tax charges
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On 24 May 2021, Finance Bill 2021 was substantively enacted. The result of this is that the main rate of corporation tax for the UK has increased to 25% from 1 April 2023.
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Parent company profit for the year
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The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the period/year was £538,760 (Year ended 28 February 2022 - £473,222).
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Long-term leasehold property
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Charge for the period on owned assets
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Investments in subsidiary companies
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Subsidiary undertaking
The following was a subsidiary undertaking of the Company:
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3rd Floor, 1 Ashley Road, Altrincham, England, WA14 2DT
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The capital and reserves of the subsidiary at 31 December 2022 totalled £1,947.
In accordance with Section 479A of the Companies Act 2006, ADV LendCo UK Limited was entitled to exemption from an audit of their individual financial statements. This guarantee is made by Fintech Partners Limited at the date of approval of these financial statements in relation to the period ended 31 December 2022.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Due after more than one year
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Other debtors due after more than one year comprise security deposits over leased premises. These are expected to be recovered during 2027. Management has considered the need to discount the amount due, but concluded that this would have an immaterial effect to the balance.
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Amounts owed by group undertakings
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Prepayments and accrued income
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Accruals and deferred income
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Financial assets measured at fair value through profit or loss
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Financial assets that are debt instruments measured at amortised cost
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Financial liabilities measured at fair value through profit or loss
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Financial assets measured at fair value through profit or loss comprise cash and cash equivalents.
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Financial assets that are debt instruments measured at amortised cost comprise amounts owed by group undertakings and other debtors where there is a contractual right to receive cash.
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Financial liabilities measured at amortised cost comprise of creditors where there is a contractual obligation to deliver cash.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Charged to profit or loss
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Fixed asset timing difference
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Short term timing difference
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